Search results

Independent directors are important corporate decision participants and makers. Based on the Chinese cultural background, this paper interprets the listing order of independent directors as independent directors’ status, exploring their influence on the corporate research and development (R&D) behavior.

This paper studies A-share listed firms in China from 2008 to 2018 as the sample. The main method is ordinary least square (OLS) regression. We also use other methods to deal with endogenous problems, such as the firm fixed effect method, change model method, two-stage instrumental variable method, and Heckman two-stage method.

(1) Higher independent directors’ status attribute to more effective exertion of supervision and consultation function, and positively enhance the corporate R&D investment. The increase of the independent director’ status by one standard deviation will increase the R&D investment by 4.6%. (2) The above effect is more influential in firms with stronger traditional culture atmosphere, higher information opacity and higher performance volatility. (3) High-status independent directors promote R&D investment by improving the scientificity of R&D evaluation and reducing information asymmetry. (4) The enhancing effect of independent director’ status on R&D investment is positively associated with the firm’s patent output and market value.

This paper contributes to understanding the relationship between the independent directors’ status and their duty execution from an embedded cultural background perspective. The findings of the study enlighten the improvement of corporate governance efficiency and the healthy development of the capital market.

This study aims to examine the impact of independent directors' ownership on corporate social responsibility (CSR) performance. In line with the stakeholder-agency paradigm's prediction, the authors propose that higher independent directors' ownership is associated with higher CSR performance. By drawing on the attention-based view, the authors further examine firm-level conditions that impact the situated attention of independent directors holding high equity ownership as they are active agents.

The authors collected data covering the years 2009–2013 for firms listed in the S&P 500 index. The authors tested the hypotheses using firm fixed-effects models.

The results show that higher independent directors' ownership is associated with higher CSR performance. Prior firm performance and available slack resources are found to have diverse impacts on the association between independent directors holding high equity ownership and CSR performance.

This study highlights the importance of examining the performance-based incentives of independent directors on firms' CSR performance. This study also provides a better understanding of factors impacting independent directors' situated attention as boundary conditions.

Although the literature on corporate governance and firm innovation finds that board independence is important, this paper proposes that the presence of independent directors alone is not enough to explain their impact on firm innovation. This study analyses if diversity among independent directors may affect the relationship between board independence and firm innovation.

A panel data on a sample of 124 Spanish listed companies for the period 2008–2019 used to test the hypotheses.

Results suggest that independent directors have a negative effect on firm innovation, measured as number of patents, but when there are high levels of gender and nationality diversity among such directors, this negative effect may be mitigated.

Considering that firm innovation is a complex process associated with decision-making and that board independence itself may be not enough, this study goes a step further and delves deeper into the characteristics of independent directors. As far as is known, this paper is the first theoretical and empirical study that considers that independent director diversity as a moderating variable between board independence and firm innovation. Besides, this research contributes to the debate on the role of independent directors in firm innovation and the results may also serve as a guideline for policy makers and firms for structuring boards that are pro-innovation.

This study aims to investigate the extent to which audit committee (AC) members who are formally independent are truly independent in practice, and what challenges they face that undermine their independence.

The study utilizes semi-structured interviews with 18 members of the AC in Jordan.

The responses indicate that AC is mostly labelled as independent but fails to play an effective monitoring role due to different institutional factors. These factors include family ownership, government ownership, culture, compensation package and the lack of qualified directors.

This research addresses this gap by presenting qualitative evidence from a civil law jurisdiction, featured by a developing financial market, a prevalence of family businesses, limited investor protection and a low risk of litigation. Additionally, this study aims to rectify the current imbalance between qualitative and quantitative studies on AC and bridge the gap between research conducted in developed countries and their developing counterparts.

This study offers valuable insights for regulatory authorities to engage in a more profound contemplation of extant governance regulations. Also, this study offers useful feedback for nomination committees of public companies, and it also has an implication for shareholders as they rely on independent directors to protect their investment. Furthermore, implications of the findings derived from this research possess the potential for generalization to other developing nations characterized by akin institutional contexts, notably encompassing the countries situated in the Middle East and North Africa (MENA) region.

This research introduces novel qualitative empirical evidence from a distinctive jurisdiction governed by civil law, thereby enriching the existing scholarly discourse. It also contributes to the AC literature by suggesting that it is not only the existence of conventionally independent ACs that affect the integrity of financial statements, but also the absence of social ties and other contextual obstacles.

Taking advantage of a unique measure of corporate culture obtained from advanced machine learning algorithms, this study aims to explore how corporate culture strength is influenced by board independence, which is one of the most crucial aspects of the board of directors. Because of their independence from the corporation, outside independent directors are more likely to be unbiased. As a result, board independence is commonly used as a proxy for board quality.

In addition to the standard regression analysis, the authors execute a variety of additional tests, i.e. propensity score matching, an instrumental variable analysis, Lewbel’s (2012) heteroscedastic identification and Oster’s (2019) testing for coefficient stability.

The results show that stronger board independence, measured by a higher proportion of independent directors, is significantly associated with corporate culture. In particular, a rise in board independence by one standard deviation results in an improvement in corporate culture by 32.8%.

Conducting empirical research on corporate culture is incredibly difficult due to the inherent difficulties in recognizing and assessing corporate culture, resulting in a lack of empirical research on corporate culture in the literature. The authors fill this important void in the literature. Exploiting a novel measure of corporate culture based on textual analysis, to the best of the authors’ knowledge, this study is the first to link corporate culture to corporate governance with a specific focus on board independence.

This study aims to investigate the mediating role of corporate social responsibility (CSR) in the link between board independence, board diversity and dividend payouts underpinning the agency theory perspective. As boards are ultimately responsible for decision-making, it includes CSR, dividend payouts and other strategic decisions.

Board independence and board diversity (female director, female independent director) are used as explanatory variables, CSR scores as a mediator and dividend payout explained variables. The relevant data were collected from 159 listed firms of the Pakistan Stock Exchange (PSX) from 2013 to 2019, consisting of 1,113 year-firm observations. For empirical estimation, the study used the Tobit regression analysis and Sobel test to check the significance of the mediation to confirm the hypothesis.

The results confirm that independence and diversity on the board are positively related to dividend payouts. Further, CSR partially mediates the link between independence and diversity on board-dividend payouts, which confirms the argument that firms with involvement in CSR practices are also associated with dividend payouts.

To the best of the authors’ knowledge, this study is novel to address whether CSR mediates the link of the board’s independence and diversity and dividend payouts in Pakistan’s setting. The results of this study have restricted generalizability due to the specific nature of the sample characteristics; future researchers can extend the research scope.

Theoretically practically, the results imply that CSR spending also enhances the distribution to firms' shareholders, thus becoming attractive to investors. This study enriches the literature on board attributes-dividend policy nexus, which strengthens through CSR practices and is relevant to practice in line with sustainable development in an emerging context.

CSR practices are an understudied but significant factor that links stakeholders' beliefs about firms' decision-making strategies, enhancing dividend announcements. In doing so, this study's findings contribute to the literature, regulators, shareholders and investor at various levels.

Employees play a vital role in the success of a corporation. While boards of directors are created to protect shareholders’ interests, it is unclear if these directors also ensure employee welfare. In this vein, our paper examines the relationship between board leadership structure and employee well-being.

The authors employ several analysis techniques, including univariate analysis, ordinary least squares (OLS) regressions, two-stage least squares (2SLS) regressions, propensity score matching methodology, the Heckman Selection model and difference-in-differences analysis. The sample comprises USA public firms for the period 1998–2018.

Our findings indicate that having an independent chairperson can significantly benefit the welfare of employees, especially for firms with overly powerful chief executive officers (CEOs) and during times of financial distress.

Independent leadership structure is one of the crucial board characteristics that have not been examined to explain employee welfare at firms. We find that an independent chairperson can mitigate the negative effect of overly powerful CEOs on employee benefits. Importantly, independent chairpersons are beneficial for employees in difficult times and when CEOs are busy with daily activities.

This study investigated the micro–macro link in the hospitality and tourism (H&T) sector, specifically considering whether the gender diversity, independence and board attendance rates of H&T firms' boards, alongside the moderation effect of board policies, played a significant role in tourism sector performance.

The 2011–2018 data were retrieved from the World Bank and the Thomson Reuters Eikon databases, and fixed effects panel regression was conducted.

While female directors were a significant driver of tourism sector performance in terms of tourist arrivals and tourism receipts, independent directors were effective in improving tourist arrivals only. Furthermore, moderation analyses demonstrated the inefficacy of board policies in enhancing these directors' contributions to the sector's development. Moreover, the findings revealed the inefficiency of board meetings.

Concerning the efficacy of board policies, the results suggest that firms' boards should review and revise their policies. Surprisingly, while board-diversity policies made no difference to female directors' role in the sector's development (although females were influential), board-independence policies produced unexpected results. In the absence of a board-independence policy, independent directors are influential, but if a policy exists, they are not.

Although prior firm-level studies tested whether board characteristics enhanced firms' performance in the H&T sector, they did not investigate whether board characteristics promoted tourism sector performance. Moreover, the moderating effect of board policies on boards' structures and tourism sector performance has not yet been examined.

Corporate governance research suggests that board structure can impact organizational outcomes such as financial performance and executive remuneration. Agency theory posits that a board composed of independent directors and chaired by an independent chairperson can provide effective control over agency costs, while stewardship theory suggests that effective decision-making is facilitated when the board is chaired by the CEO and majority of directors are from the executive team. Empirical research into the association between board structure and performance in Jordan has provided mixed results, with no consensus supporting either theory. This study takes a different approach to researching the assumed association between board structure and performance by surveying directors’ perspectives on such assumed relationship between financial performance and four of boards’ characteristics (i.e., board independence, CEO duality, board size, and female ratio on board). Findings of this research indicate that Jordanian directors perceive a medium to strong association between financial performance and each of board independence, independent chair of board, and female ratio on board. However, directors of Jordanian boards perceive no association between financial performance and board size.

This study aims to examine the role of royal family members’ board of directors, as a specific aspect of corporate governance, on the firm’s environmental, social and governance (ESG) disclosures. Many firms in the world enjoy special political connections, benefit from tax exemptions and favorable treatments that are largely responsible for their economic endurance and strong performance.

The authors collect data from Thomson Reuters database on Gulf Cooperation Council (GCC)-listed firms for 2010–2018. Royal family board directors’ data is manually collected using a systematic approach to ensure accuracy. Fixed effects’ panel regression model is used to estimate relationships. The authors interact variables to test the moderating effect of board independence and sustainability committee on the influence of royal family board directors.

This study finds that royal family directors on GCC boards negotiate fewer ESG reporting in firms. While board independence, board gender diversity, sustainability committee and governance committee increase the level of ESG-disclosures in the traditional way of reducing agency costs to stakeholders, this study finds that royal family board members convey beneficial consequences on firms without perceiving the need to disclose their ESG activities. Additionally, these firms do not show a spillover effect from the royal family members on the board’s independence or the existence of a sustainability committee; rather these members use a different channel for protecting and building the business value. These results are robust with respect to controls for company size, leverage, return on assets and growth. Instrumental variables are then introduced in the analysis to perform a sensitivity test.

The study results indicate the need to improve GCC market transparency over supplementary limitations that exist on their corporate governance condition. This may be consequential to regulators, lenders and investors. The results suggest the need to raise awareness of the importance of governance and balancing firms’ financial and social performance in the presence of royal family board directors. Policymakers and governance agencies are responsible for promoting the importance of forming sustainability committees and having a set of performance indicators that measure the effectiveness of their actions.