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Article
Publication date: 25 April 2022

Widyahayu Warmmeswara Kusumastati, Sylvia Veronica Siregar, Dwi Martani and Desi Adhariani

Diversity in the boardroom is a social factor that spurs public debate in academic and practical arenas. In a two-tier governance system, the question lingers on the…

Abstract

Purpose

Diversity in the boardroom is a social factor that spurs public debate in academic and practical arenas. In a two-tier governance system, the question lingers on the impact of board of commissioners and board of directors’ diversity on a company’s performance. This study aims to investigate this issue based on a comprehensive set of diversity variables, namely, age, tenure, gender, education level, culture, functional expertise, industry experience, school of origin and “busyness.”

Design/methodology/approach

The authors constructed diversity indices for board of directors and board of commissioners and used multiple linear regressions to test the hypotheses using samples of companies listed on the Indonesian Stock Exchange from 2014 to 2018.

Findings

Board of director (commissioner) diversity has no significant (a positive) impact on corporate performance. However, the latter does not moderate the relationship between board of director diversity and company performance.

Research limitations/implications

Although the theories of human capital and upper echelons are applied here, the results more likely support a contingency argument, as the effect of diversity may vary by company and period, hence leading to offsetting effects. Thus, the impact of diversity on corporate performance might be better observed through in-depth case studies.

Practical implications

The positive impact of the board of commissioners’ diversity on firm performance might indicate the importance of close monitoring by this board. The results further suggest that appointment decisions of directors and commissioners from diverse backgrounds should be based on criteria other than financial performance.

Originality/value

No study has constructed comprehensive diversity indices of the board of commissioners and directors in a two-tier governance context. The study fills this gap.

Details

Team Performance Management: An International Journal, vol. 28 no. 3/4
Type: Research Article
ISSN: 1352-7592

Keywords

Article
Publication date: 22 September 2022

Arik Susbiyani, Moh Halim and Animah Animah

This paper aims to examine the effect of the independent board of commissioners and profitability on Islamic social reporting (ISR) disclosure implemented in companies…

Abstract

Purpose

This paper aims to examine the effect of the independent board of commissioners and profitability on Islamic social reporting (ISR) disclosure implemented in companies that belong to the group category of Indeks Saham Syariah Indonesia (ISSI). This study also examined the advanced effect of ISR disclosure as a company strategy to obtain a firm’s value.

Design/methodology/approach

The data of the independent board of commissioners, profitability, ISR disclosure and firm’s value were obtained from the annual reports of companies whose shares belong to the calculation of ISSI, totaling 24 companies. The ISR disclosure was measured using the content analysis method. While the research model used path analysis.

Findings

This study found that the independent board of commissioners directly affects the ISR disclosure while indirectly affects the firm’s value as mediated by the ISR disclosure. This finding indicates that the independent board of commissioners is regarded as capable of protecting investors’ interests from problems that may be incurred from asymmetry information. However, this study failed to prove that profitability directly affects the ISR disclosure.

Research limitations/implications

A list of ISR disclosure items in this research adopted the list developed by Haniffa and Othman, without any additional items. While the measurement of ISR disclosure used the content analysis, therefore there may be subjectivity issues accidentally done while scoring.

Practical implications

This study recommends management of companies which belong to ISSI to optimize their independent board of commissioners because it has been proven in this study that their presence can significantly encourage a more independent, objective and fair climate while one of its main principles is to pay attention to the interests of minority shareholders and other stakeholders. Besides, the findings can be used to increase awareness of the company management about the importance of transparency in managing a company because the ISR disclosure has received positive responses from investors.

Social implications

The findings of this study encourage companies to be more transparent in presenting information. An appropriate disclosure will provide a sense of security so that the investors can account for such earthly issues before Allah SWT, thus their spiritual satisfaction can be achieved.

Originality/value

This paper investigated further the effect of ISR disclosure on firm’s value which has never been performed by previous scholars. The ISR disclosure is a strategy to obtain legitimacy from investors, which was analyzed using the legitimacy theory.

Details

Journal of Islamic Accounting and Business Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1759-0817

Keywords

Article
Publication date: 8 February 2022

Irwan Trinugroho, Tastaftiyan Risfandy, Mamduh M. Hanafi and Raditya Sukmana

Using the Indonesian setting where the government formally limits the presence of busy commissioners, the authors investigate whether a board containing busy commissioners

Abstract

Purpose

Using the Indonesian setting where the government formally limits the presence of busy commissioners, the authors investigate whether a board containing busy commissioners could be beneficial or detrimental for firm performance.

Design/methodology/approach

The authors propose an econometric model focusing on the impact of busy commissioners on the firm's profitability. The authors are also interested in investigating whether the effect is different between small and large firms and between mature and non-mature firms. A sample of 392 Indonesian listed firms from 2014 to 2020 is used in this study.

Findings

The authors find a negative association between busyness and performance and this result is robust across different estimations and econometrics strategies. The authors also document that the negative impact of busy directors diminishes particularly in young and small firms. The authors also find that the impact is more pronounced in state-owned firms.

Practical implications

From a firm point of view, the result suggests that the companies should be aware that appointing busy commissioners in the board structure can detriment market-based performance. The listed firms should also understand that busy commissioners are inefficient, especially if these firms are large, mature and state-owned.

Originality/value

To the best of the authors’ knowledge, this is the first study investigating the relation between busy commissioners and performance by considering age, firm size and state-owned firms as a moderator in a sample of Indonesian listed firms.

Details

International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

Keywords

Article
Publication date: 3 May 2022

Nur Asni and Dian Agustia

This study aims to investigate the effect of corporate governance (CG) mechanisms (board size, independent commissioner and ownership concentration) on green innovation…

Abstract

Purpose

This study aims to investigate the effect of corporate governance (CG) mechanisms (board size, independent commissioner and ownership concentration) on green innovation (GI) in publicly traded companies of Indonesia as an emerging market.

Design/methodology/approach

Archival data relating to CG and GI were collected for five years (2016–2020). A total of 640 observations were obtained and analyzed using a random effect model.

Findings

The results indicate that effective governance mechanisms can encourage GI implementation to promote company sustainability. Respectively, the board size, independent commissioner and ownership concentration positively and significantly affect GI. These results imply that the optimal board size will result in effective coordination and cooperation in making GI decisions. Likewise, the proportional independent commissioners in the board structure will serve an effective oversight function. And concentrated ownership can influence executives to prefer innovation policies, such as GI.

Research limitations/implications

First, only a few CG mechanisms were used in this investigation. Therefore, further research needs to consider other mechanisms such as the number of commissioners, internal and external commissioners. Second, this research focused solely on Indonesia as an emerging market. Future research can be expanded to include countries with other emerging market characteristics. Third, different GI measurements from this study should be considered in future studies.

Practical implications

Practically, the results of this study are expected to provide policy recommendations, including optimizing the CG mechanisms as a control tool to achieve organizational sustainability through GI according to stakeholder expectations. This can be achieved by optimizing the size of the board of directors. The low value of the board size coefficient implies that optimization of board size is needed to encourage GI. The company can gain directors’ competence, experience and skill to increase innovation performance. In addition, maximizing the role of independent commissioners in overseeing is required for continuous innovation activities. Finally, the control of large shareholders is also necessary to encourage the implementation of GI because they could influence management to make innovative decisions.

Originality/value

This study extends and contributes to the extant CG and GI literature. There is little evidence that reveals how CG mechanisms affect GI, particularly in emerging market settings. The findings offer some important evidence for improving CG in driving GI implementation.

Details

Corporate Governance: The International Journal of Business in Society, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 2 September 2020

I. Wayan Widnyana, I. Gusti Bagus Wiksuana, Luh Gede Sri Artini and Ida Bagus Panji Sedana

This study aims to analyze and explain the effect of financial architecture (with three dimensions: ownership structure, capital structure and corporate governance) and…

1490

Abstract

Purpose

This study aims to analyze and explain the effect of financial architecture (with three dimensions: ownership structure, capital structure and corporate governance) and intangible assets on performance financial and corporate value in the Indonesian capital market.

Design/methodology/approach

This research was conducted on nonfinancial sector companies that were registered in the Indonesian capital market, namely Indonesia Stock Exchange (IDX) in 2015. This study used quantitative data and used secondary data sources, meaning that data were obtained, collected and processed from other parties. In this study, the hypothesis testing of the effect of financial architecture (included the dimensions of ownership structure, capital structure and corporate governance) and intangible assets on financial performance and corporate value using path analysis was performed.

Findings

The results of this study have provided findings that follow the research model that has been built (1) This research has been able to provide a theoretical model of the influence of financial architecture (with dimensions of ownership structure, capital structure and corporate governance), intangible assets, board processes on financial performance and company value in the Indonesian capital market. (2) To develop a theoretical model about the effect of corporate governance on financial performance in accordance with the two-tier system adopted by Indonesia. (3) An empirical study of the concept of financial architecture put forward by Myers (1999).

Originality/value

This research update lies in the research variable, which determines one value of the financial architecture variable comprehensively, combines the financial architecture variable and intangible assets to then be tested for its effect on company value and the use of the financial process variable as a board process as an intervening variable.

Details

International Journal of Productivity and Performance Management, vol. 70 no. 7
Type: Research Article
ISSN: 1741-0401

Keywords

Article
Publication date: 27 April 2022

Saarce Elsye Hatane, Jennie Winoto, Josua Tarigan and Ferry Jie

This study examines the effect of working capital management and board diversity on firm profitability and firm value for a sample of Indonesian firms listed in the LQ45…

Abstract

Purpose

This study examines the effect of working capital management and board diversity on firm profitability and firm value for a sample of Indonesian firms listed in the LQ45 index. The interaction of board diversity components with working capital management adds a comprehensive discussion to enhancing working capital management efficiency.

Design/methodology/approach

This study engages a panel multiple regression method. Data from a sample of LQ45 companies from 2010 to 2016 are analysed using a fixed and a common effect model. Board diversity is further analysed in interaction variables, whether it holds the moderating role in the relationship of working capital and firm performances. This study operates return on capital employed (ROCE) as the proxy of profitability performance and EVA-Spread for the firm's value performance. The simultaneous effect test is used for the robustness test.

Findings

The results indicate that working capital management and board diversity have no significant impact towards profitability. However, they significantly positively impact firm value, meaning that the market is attracted by effective working capital management and board diversity. However, the interaction variable analysis shows that gender diversity and education level diversity weaken the impact of working capital management towards firm value.

Research limitations/implications

This study is not limited to one industry; therefore, future studies may focus on one industry and detect the pattern of working capital components in the particular industry. This study focuses on quantitative numbers to explain board diversity's interaction in working capital management to maximise shareholders' wealth. Future studies may consider a qualitative discussion to describe the quality of women's presence on the board, education level and educational background of board members.

Originality/value

Unlike most studies in which authors relate working capital and board diversity to firm performances separately, this study combines both components and analyses whether board diversity can act as a moderator effect. As part of corporate governance, it is expected that board diversity can enhance working capital management efficiency.

Details

Journal of Accounting in Emerging Economies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2042-1168

Keywords

Article
Publication date: 12 June 2017

Martin Campbell

The purpose of this paper is to qualitatively analyse the inspection and regulation of care for people with learning disabilities and mental health problems in Scotland…

Abstract

Purpose

The purpose of this paper is to qualitatively analyse the inspection and regulation of care for people with learning disabilities and mental health problems in Scotland, in two time periods.

Design/methodology/approach

The paper uses comparative historical research drawing on primary sources from 1857 to 1862 in the form of Annual Reports of the General Board of Commissioners in Lunacy for Scotland and associated papers, to compare inspection methods, quality standards and to identify persistent challenges to effective inspection.

Findings

Political, clinical and public awareness led initially to criticisms of existing care and eventually to the development of the “The Lunacy Act” of 1857. This Act resulted in the first attempts to set minimum standards of care for individuals at risk, with enforceable regulation. Some factors recur as challenges to effective practice in the inspection and regulation of care today.

Practical implications

There are problems of definition, reliable monitoring of quality standards and adequate, independent inspection of services that respond to unacceptable standards of care. There is a growing evidence base about best methods of inspection of services for people in care who are most at risk. These methods attempt to strike a balance between evidence- and value-based judgments. Perspectives from history may help focus resources.

Originality/value

This paper compares common and common challenges in two time periods to investigate what can be learned about the development of policy and practice in inspection and regulation of care.

Details

The Journal of Adult Protection, vol. 19 no. 3
Type: Research Article
ISSN: 1466-8203

Keywords

Abstract

Details

Teacher Preparation in Northern Ireland
Type: Book
ISBN: 978-1-78754-648-6

Open Access
Article
Publication date: 29 February 2016

Vivi Adeyani Tandean and Winnie Winnie

This study aims to obtain an empirical evidence about the effect of good corporate governance on tax avoidance which becomes a proxy of current ETR (Effective Tax Rate)…

4142

Abstract

This study aims to obtain an empirical evidence about the effect of good corporate governance on tax avoidance which becomes a proxy of current ETR (Effective Tax Rate). The samples of this study were 120 manufacturing companies listed in Indonesian Stock Exchange in 2010 – 2013. The hypothesis testing used multiple regression analysis. The result of this study show that audit committee has a positive effect on tax avoidance in partial but the executive compensation, executive character, company size, institutional ownership, boards of commisioners' proportion, audit committee and audit quality have simultaneous effect to define tax avoidance.

Details

Asian Journal of Accounting Research, vol. 1 no. 1
Type: Research Article
ISSN: 2459-9700

Article
Publication date: 11 April 2016

Martin Campbell

The purpose of this paper is to compare recent developments in adult protection legislation, policy and practice in Scotland in 2015 with the first attempts at protection…

Abstract

Purpose

The purpose of this paper is to compare recent developments in adult protection legislation, policy and practice in Scotland in 2015 with the first attempts at protection of adults at risk of harm, in 1857-1862, with a particular focus on people with learning disabilities.

Design/methodology/approach

The paper uses comparative historical research, drawing on primary archive material from 1857 to 1862 in the form of Annual Reports of the General Board of Commissioners in Lunacy for Scotland and associated papers.

Findings

Growing public awareness of the extent of neglect and abuse, and the need for overarching legislation were common factors in the development of both the “The Lunacy Act” of 1857 and the Adult Support and Protection (Scotland) Act of 2007. Both pieces of legislation also had the common aim of “asylum”, and shared some other objectives.

Practical implications

Total prevention of abuse of vulnerable adults is an aspiration in law and in policy. There is an evidence base of effectiveness, however, in protecting adults at risk of harm from abuse. Some ecological factors recur as challenges to effective safeguarding activity. These include problems of definition, uncovering abuse, enforcing legislation, evaluating impact and protection of people who are not a risk of harm to others.

Originality/value

This paper compares common themes and common challenges in two separate time periods to investigate what can be learned about the development of legislation and practice in adult protection.

Details

The Journal of Adult Protection, vol. 18 no. 2
Type: Research Article
ISSN: 1466-8203

Keywords

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