Search results

The purpose of this study is to analyse the level of online disclosure of firms in the USA and to evaluate the impact of diversity in terms of director nationality (boardroom internationalisation) on online disclosure.

The authors apply, for the first time, a new modified scoring system to measure online disclosure levels by securing more detailed information on each of the items in the voluntary disclosure index. Regarding the percentage of foreign board members, unlike in previous research, the authors calculate two additional proxies to more accurately specify the level of international diversity on the board: the Blau Index and the Shannon Index. Moreover, the authors use a cross-sectional model for the sampled non-financial S&P500 firms using both ordinary least squares (OLS) and heteroskedasticity-corrected estimates to analyse the impact of boardroom internationalisation on the level of online disclosure.

The findings reveal that the average online disclosure level for the sample in question is 64% for the 0–1 index and 57% for the 0–4 index. In addition, the results of the regression analysis confirm the study’s proposed hypothesis, which is that the presence of international board members correlates with an improvement in the level of online disclosure. This can be attributed to the fact that foreign directors bring unique skills and knowledge from their home countries and thus, increase board discussion, creativity and innovation, which has a positive impact on the level of online disclosure.

Financial firms are subject to capital requirement regulations; consequently, disclosure practices can be influenced. Therefore, these firms were excluded from the sample of the study.

This research contributes to the body of literature on nationality diversity of firm boards and corporate online disclosure in several respects. Firstly, the study adds an international dimension to the existing literature. Secondly, this study provides new evidence that foreign diversity on the board can improve firm value, insofar as the corresponding enhancement of online disclosure leading to positive capital market implications. Thirdly, the authors use, for the first time, a new scoring system approach to measure the level of online disclosure. Finally, it contributes to the corporate governance literature by basing its analysis on a multi-theoretical approach.

This study aims to investigate how audit committee members’ geographical location relative to corporate headquarters affects audit fees. The motivation for the paper rests on the observation that regulatory and market trends have significantly affected the composition of boards of directors and audit committees. To ensure that audit committees play their monitoring role, regulations now require directors’ independence and some level of financial expertise. The need to find directors who meet these requirements, as well as the advent of globalization and technological improvements lead firms to expand their reach when looking for directors.

The authors use a sample of 1,517 firm-year observations of Canadian firms from 2008 to 2017. The study relies on multivariate analyses.

The results show that, among nonlocal audit committee members, the presence of foreign directors is associated with higher audit fees. In contrast, other nonlocal audit committee members do not have a differential impact on audit fees. This effect is more prevalent in large firms. Moreover, having a foreign chair of the audit committee as well as foreign audit committee members who are not accounting experts appear to accentuate the increase in audit fees. A possible explanation for the finding is that, from the supply side, auditors assign a higher risk to firms with a higher percentage of foreign audit committee members. Alternatively, from the demand side, firms with foreign audit committee members may ask for more audit effort. Further analysis indicates that having a higher percentage of foreign audit committee members is associated with a higher likelihood of restatements, an indication of low audit quality.

To the best of the authors’ knowledge, this study is the first to document that auditors price the location of audit committee members and consider it when planning for their audit.

The 1997 financial crisis in Asia has entailed significant changes and governance reforms in the Korean banking industry. This study investigates the impact of corporate governance on the risk and return of Korean banks during the 10 years that followed the financial crisis era. In particular, we investigate the ownership structure of banks, the extent of involvement of foreign institutions and investors in ownership and board membership of Korean banks, and the heterogeneity of board structure on bank performance. Our findings indicate that foreign ownership, the extent of external board involvement, and the presence of foreign directors on the board are associated with significantly higher bank returns. Although foreign ownership and the number of outside board directors are associated with lower risk, the involvement of foreign board members is positively associated with risk. The results are fairly robust to a battery of tests and control variables, and offer the first detailed empirical documentation of the Korean banking governance reform and its achievements since 1997.

This paper seeks to explore such questions as: “What are the impacts of foreign investors and what are the channels through which foreign investors contribute to or detracts from firm value in Korea?” It aims to discuss how foreign investors and foreign outside directors interact to enhance firm value.

Using longitudinal data from the KOSPI200 index in Korea during 2004‐2007, the study examined the direct and interaction effect of foreign blockholders and foreign board members. To address the representativeness of foreign investors, the authors verified the mandates of foreign board members though telephone interviews.

Foreign block shareholders and foreign outside directors respectively provide expertise and independent monitoring over management. Foreign blockholders' management control via board membership is likely to mitigate leverage of value enhancement when foreign outside directors represent private interests of foreign blockholders. The moderating effect is also supported since foreign ownership concentration has an inverted U‐shaped relationship with value enhancement. The paper confirms that board independence reinforces the positive impact of foreign outside directors on firm value.

This study offers a key to understanding corporate governance in that mutual monitoring and a balance among various types of stakeholders are crucial to value enhancement.

The paper provides clues to the extant diverse findings concerning the impact of foreign investors on firm value. It applies an integrated perspective to the empirical analyses of the impact of foreign investors by giving consideration to the agency – foreign outside directors – to implement management control on behalf of foreign blockholders.

This study aims to understand whether board diversity has a direct effect on “corporate social responsibility (CSR)” performance of companies or not. In addition, this study also aims to examine the moderation effect of age and education level of female board members on the relationship between board gender diversity and CSR performance.

A “corporate social performance (CSP)” measurement instrument was designed to conduct a content analysis that analyzes the CSR disclosure in the annual reports of Turkish companies listed on the “500 biggest Turkish companies” report of “Istanbul Chamber of Industry (ISO)” in 2015. The data coming from content analysis of 117 company reports were analyzed by using hierarchical regression analysis.

Despite of supporting the increase in CSR performance when there is a greater presence of independent board members in an organization, evidence supports that ratios of female and foreign board members do not have any significant effect on CSR performance.

The study contributes to previous literature on board diversity and CSR performance as follows. First, this paper contributes to previous literature by examining and testing independent, female and foreign board members as a new antecedent of CSR performance in research on Turkey; second, by examining a sample of the “500 biggest Turkish companies” and providing some tips about both Turkey and other developing countries; third, by reopening the debate about the positive impact of a greater presence of independent directors on board on CSR performance and the non-effect of female and foreign board members. Finally, it also offers a partially new CSP measurement instrument based on content analysis.

Based on the agency and resource dependence theories, this study aims to investigate whether nomination committee (NC) characteristics could serve as key attributes for reducing environmental, social and governance (ESG) disputes and whether NC composition affects the appointment of ESG-friendly directors to the board.

This study focuses on a sample of 30 global systemically important banks from 2015 to 2021. The authors estimate panel data models with fixed effects, clustering heteroskedastic standard errors at the bank level to account for the serial correlation of the dependent variables for each bank.

Banks’ exposure to ESG controversies can be reduced when NC members have specific skills, in particular when at least one member of this committee also belongs to the sustainability committee and is a foreign director. Moreover, banks’ ESG disputes decrease when the NC members are younger, while the share of independent NC members has a negative impact. Finally, a positive influence of NC composition and its members’ features as well as the appointment of ESG-friendly directors on the board is found.

The findings are particularly useful during periods such as the current one, when there is growing attention to both banks’ corporate governance, the subcommittees’ role and functioning and social and environmental issues. This study shows that the NC is important in reducing the likelihood of banks incurring ESG disputes and in appointing more ESG-friendly directors. NC effective functioning and its members’ qualities serve as a key attribute for fulfilling objective assessment and improving board effectiveness.

The purpose of this paper is to examine the effects of board composition on the profitability of banks in Tanzania. First, it examines the differences between local and foreign-owned banks in terms of their boards and profitability, and then the contribution of board composition to banks’ profitability.

The paper utilizes a secondary panel data set of information on the boards, their operations and financial statements of 35 banks. The data were collected between 2009 and 2013. The authors tested the stated hypotheses using descriptive and econometric analyses.

The results show a significant difference in board composition and profitability between local and foreign-owned banks. Local banks have a higher income and profits. With their contextual knowledge they are able to attract diverse board directors who contribute positively to their performance. The paper also found that large boards and those with women on them were associated with high profitability.

The study focused on three aspects of boards, which are size, foreign directors and women’s representation. The paper is limited in the sense that other aspects of composition that also affect performance are not included in the study.

The paper suggests that in order to maximize profitability, banks should increase the number of directors. Many board members can share skills and knowledge, which can improve performance. Women are underrepresented on boards. With current changes in policy and education in emerging countries, there is a need to increase their representation.

This study contributes to the agency theory by showing that large boards are indeed efficient at monitoring and bringing in profits, especially in an emerging economy where there are multifaceted risks at country and company level. These risks require shareholders and investors to have a much better understanding of the banks and that is where a large board plays a key role.

In this chapter we study the intra-group transactions between the parent bank and its foreign subsidiaries in European Union (EU) countries during the crisis. We use hand-collected data from annual statements on related party transaction and find that they may create a serious problem for the stability of the foreign banks’ subsidiaries. Moreover, as some of those subsidiary banks were large by assets in some of the member states the related party transactions with the parent bank created a serious threat to the host countries’ financial system stability. We attribute this transaction to the weak governance in foreign subsidiaries. We suggest improvements in governance as well as greater disclosure of related party transactions in bank holding companies in Europe.

Many organizations around the world currently are facing board diversity issues and challenges. Hence, this empirical paper investigates the relationship between board diversity and firm’s financial performance. We use a sample of 35 companies from five countries in Southeast Europe (Macedonia, Croatia, Serbia, Bosnia and Herzegovina, and Greece) for the period between 2008 and 2012 to find that, on average, companies with well-educated board members are more profitable and overvalued on the market. When running the regression again to test the levels of heterogeneity, we also find that the companies with more women on board tend to be overvalued on the market, while those with more foreigners on board are subject of undervaluation. The paper mostly contributes to the literature on corporate governance and board diversity. First, we postulate the impact of each of the board diversity variables on the financial performance and then show the extent of this impact and its economic interpretation. Our findings have important practitioners’ implications for corporate regulators and policy-makers since the demonstrated positive impact of the well-educated board members on firm’s financial performance gives a new impetus in building a corporate strategy that will intend to engage more people holding PhD on board.

Drawing on new insights from the perspectives and experiences of board members, the purpose of this study is to determine the board attributes that influence board roles in improving the integration of corporate social responsibility (CSR) into corporate governance structures. In total, 10 in-depth semi-structured interviews were conducted with directors of listed Jordanian companies to explore their perceptions of the effect of board of directors' composition on CSR and CSR disclosure (CSRD). The key findings show that boards with a diverse range of directors is essential independent/nonexecutive members, directors with business and/or accounting backgrounds, and foreign members to determine if they aim to better manage their CSR. To take CSR to the next level in the Arab region, we need to strengthen corporate governance mechanisms, and put more pressures on companies to make changes in board composition. For example, we suggest that companies that appoint business-educated and foreign members to their boards tend to engage in more impactful social and environmental-related activities and reflect their sustainable development more effectively. The study responds to calls for further research adopting qualitative methods, such as case studies and interviews in order to obtain a complete and in-depth understanding of the influence of board composition on CSR/CSRD. The findings provide useful insights for practice, policymakers, and future research.