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Public listing of small and medium enterprises (SMEs) stimulates unremitting transformations into their corporate governance (CG) practices. These transformations in CG are likely to impact the financial performance (FP). The current study examines how individual corporate CG mechanisms and their mutual interactions (configurational approach) stimulate the FP of listed SMEs. The study selects promoters’ ownership (PO), the board (B-INX) and information disclosures (DISC) as individual CG mechanisms. In addition, market competition (COMP) is considered a form of external governance/regulation.

The study uses five years of panel data (2018–2022) of 80 SMEs listed on the Bombay Stock Exchange’s (BSE) SME listing platform in India. Panel data fixed effects and cluster robust standard errors estimated. In addition to the impact of individual CG mechanisms, their mutual interactions (configurational approach) are tested using moderated hierarchical regression and confirmed by slope tests.

The results signify the ineffectiveness of individual CG mechanisms when acting in silos. However, their mutual interactions drive the FP. A hierarchy of results is obtained. PO is the dominant form of internal CG, negatively influencing the relevance of B-INX and DISC. B-INX tends to adhere to good governance by positively moderating the impact of DISC on FP. Lastly, COMP acts as external governance that dominates the ownership effects. Findings reveal that the interactions among individual CG mechanisms are essential to the FP of listed SMEs. Such interactions adjust the agency theory dynamics of CG in these firms.

The study takes a holistic approach to investigate the agency theory dynamics via the mutual interactions among multiple CG forms. It highlights how the presence of a dominant form of CG can adjust the financial effect of others, thereby adjusting agency theory dynamics.

These results hold practical significance for SMEs in multiple ways. SMEs should embrace configurational approach to comprehend their agency dynamics. The configurational approach of CG mechanisms is the way forward for SMEs, which are known to be financially constrained. In other words, the fact that the resiliency of SMEs is very often questioned calls for the configurational approach, where different CG mechanisms coexist to drive FP.

The study is by far the first of its kind to investigate the CG of listed SMEs against the backdrop of the configurational approach. The findings will benefit industry practitioners, academics and regulatory bodies to visualize the governance practices through the lenses of configurational approach.

This study aims to examine the impact of board characteristics on debt choice.

The sample comprises of unique nonfinancial firms listed in the FTSE 350 over the period 2011–2018. This study uses Tobit and OLS regressions to check the impact of board characteristics on debt choice. The results are robust to the battery of robust checks.

This study finds that board size and board independence are positively associated with public debt. However, CEO duality and board meetings frequency are inversely associated with public debt. Overall, the findings are consistent with the “financial intermediation theory” that the firms with weak governance rely on bank financing, and firms with better corporate governance go for public debt.

This study offers significant insights for investors and policymakers.

This study offers new insights regarding the role of board characteristics in firms’ debt choice by showing the significant impact of board characteristics on debt choice. The findings indicate that the board’s efficient internal monitoring may substitute external monitoring by the bank.

Institutional investors are major shareholders in publicly traded firms and play crucial roles in the financial and governance aspects of these firms. Despite their importance, little is known about their role in internal auditing. This study aims to fill this gap by investigating the relationship between institutional investors’ ownership and investment in the internal audit function (IAF).

The study uses ordinary least squares regressions with two-way cluster-robust standard errors (firm and year) to estimate the relationship between institutional investors’ ownership and investment in IAF for Malaysian listed firms between 2009 and 2020.

The findings show that companies with higher levels of institutional ownership invest more in IAF, suggesting that institutional investors can effectively monitor managers due to their large holdings. Moreover, both transient and dedicated institutional investors are more likely to invest in IAF.

The results highlight the importance of institutional investors as a significant determinant of investment in IAF, which can aid regulators and managers in understanding the institutional investors’ role in governing and optimizing the efficient use of a firm’s resources. The findings also provide insight into institutional investors’ behavior regarding monitoring systems, which may inspire regulators and policymakers to consider increasing institutional investors’ participation to enhance governance structures.

This study aims to investigate the effects of peers on corporate payout policies in one of the largest emerging markets – India. It also examines the motives for mimicking payout decisions.

The sample is composed of 3,024 non-financial and non-government firms listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) for the period 1995 to 2020. To encounter the endogeneity problem, the instrumental variable technique based on peer firms' idiosyncratic risk is used to estimate the effects of peers on firms' payout policy. To define peer reference groups, the authors use the basic industry classification of the firms.

The results indicate a significant positive impact of peers on firms' dividend policies in India. A firm with all dividend-paying peers is more likely to declare dividends than the one with no dividend-paying peers. Further, peer effects are found to be more pronounced amongst larger and older firms, thus supporting the rivalry theory of mimicking.

To the best of the authors' knowledge, the present study is the first of its kind that attempts to understand peer effects on payout decisions in an emerging market India, that offers a unique institutional setting. Moreover, the authors extend the existing literature by investigating the peer effects on a firm's payout policies considering various firm-level characteristics, such as growth opportunity, cash holding, financial constraint and profitability, which previous studies have not taken into consideration. These results provide additional insights into the heterogeneity and motives behind peer effects.

Although nonwork mastery generates personal resources and improves employee well-being and performance, employees must invest personal resources to experience mastery during nonwork time. Drawing on conservation of resources theory and resource exchange perspectives, the purpose of this study is to examine the role of day-to-day provisions of affiliation resources by the leader in generating the personal resources necessary for employees to engage in nonwork mastery.

Daily diary data were collected from 198 employees (768 days). The proposed model was tested using Bayesian multilevel path analysis.

The results showed that on days when employees perceived that their leader provided more affiliation resources, they reported higher self-esteem and work engagement and, in turn, experienced higher levels of mastery. Furthermore, employees in high-quality (vs low-quality) leader–member exchange (LMX) relationships benefitted more from the affiliation resources provided by their leader in terms of work engagement.

The findings suggest that leaders can actively manage their employees' daily experience and functioning through seemingly ordinary demonstrations of warmth, care, and positive regard.

This study highlights the important role of leaders in improving employee daily work and nonwork experience and functioning and sheds light on the tangible resource provisions in the work context and the associated personal resources that account for daily variations in mastery. By distinguishing between daily affiliation resources and general perceptions of LMX relationship quality, this study contributes to a more nuanced understanding of the implications that resource provisions by the leader have for employees.

The potential applications of information and communication technologies in the workplace are wide-ranging and, especially since the COVID-19 pandemic, have increasingly found their way into the field of electronic performance monitoring (EPM) of employees. This study aims to examine the influence of EPM on individual performance considering the aspects of privacy invasion, organizational trust and individual stress within an organization. Thus, important insights are generated for academia as well as business.

A theoretical framework was developed which conceptualizes perceived EPM as independent variable and individual performance as dependent variable. Moreover, the framework conceptualizes three mediator variables (privacy invasion, organizational trust and individual stress). Based on a large-scale survey (N = 1,119), nine hypotheses were tested that were derived from the developed framework.

The results indicate that perception of EPM significantly increases privacy invasion, reduces organizational trust, increases individual stress and ultimately reduces individual performance. Moreover, it was found that privacy invasion reduces organizational trust and that this lowered trust increases individual stress. Altogether, these findings suggest that the use of EPM by employers may be associated with significant negative consequences.

This research enriches the literature on digital transformation, as well as human–machine interaction, by adopting a multidimensional theoretical and empirical perspective regarding EPM in the workplace context, in which the influence of EPM perceptions on individual performance is examined under the influence of different aspects (privacy invasion, organizational trust and individual stress) not currently considered in this combination in the literature.

This paper aims to examine the relationship between earnings quality and corporate cash holdings in an emerging economy. Existing literature posits that earnings quality is a result of information asymmetry and firms with lower earnings quality increases cash holdings, to shield the firm from future uncertainties. In this paper, the authors propose a ‘private benefits hypothesis’, which suggests that lower earnings quality is an indicator of opportunism and expropriation of resources in the firm, through tunneling or excessive executive compensations. As a result, firms with lower earnings quality increase cash holdings in their control, to increase their private benefits and to avoid the scrutiny of the external stakeholders. The authors further examine the monitoring role played by institutional investors on cash holdings, with varying degrees of earnings quality.

This study uses an unbalanced panel data sourced from Prowessdx, from 2000 to 2019. The analysis employs 20,231 firm-year observations from 2,421 firms. Earnings quality is calculated following Dechow and Dichev (2002).

Empirical analysis confirms that the firms with higher earnings quality reduce cash. Further, institutional investors reduce the cash holdings in firms with higher earnings quality. Institutional investors effectively reduce the cash only in firms with at least 10% of equity shareholding. The results are robust to alternative measures of earnings quality and endogeneity concerns.

This study diverges from the information asymmetry hypothesis in the existing literature on earnings quality and cash holdings and highlights the underlying private benefits hypothesis, that will impact cash holdings. Next, the 10% institutional shareholding is important in the Indian context as it represents the minimum threshold at which block holders can request extraordinary general meetings (Section 100 of the Companies Act 2013) or the involvement of the National Company Law Tribunal (NCLT) (Section 213 of the Companies Act 2013). This study highlights that unlike in Anglo-Saxon economies, institutional investors or other minority shareholders are empowered by the Companies Act 2013 to play a vital role in corporate governance with a mere 10% equity.

This paper aims to investigate the impact of the revised Code of Corporate Governance 2017 (CCG-2017) clauses pertaining to board independence, mandatory inclusion of female directors, audit committee (AC) chair independence and directors’ expertise on earnings manipulation.

Using an unbalanced panel of 323 listed companies from 2015 to 2019, this study uses panel data regression models with a robust methodology called difference-in-differences to tackle the potential endogeneity.

This study’s findings show that, as compared to the pre-CCG-2017 period, board- and AC-related variables increased significantly in the post-CCG-2017 period. Furthermore, financial experts on the board and board independence have a negative effect on discretionary accruals (DAs), whereas female directors and DAs are positively related, as is real activity manipulation. The AC-related variables, such as AC independence, expertise in AC, and AC chair independence, are significantly different from the preperiod to the postperiod, whereas their relationship is not according to the hypotheses of the study. Moreover, these results are robust to additional analysis of the alternative proxies for female directorship and the endogeneity problem.

The findings of this study have implications for regulators and practitioners who are concerned with the functions of the board of directors (BOD). The findings of this research study show that earnings management (EM) may be reduced by independent and expert directors. However, board gender diversity is not reducing the EM. Therefore, the decision to appoint female directors to the board should be based on their business and professional attributes rather than simply filling quotas or blindly adhering to regulations. Moreover, the findings of this research may assist the regulator in encouraging listed firms to enhance board governance via independence, diversity and competency, which are useful for effective monitoring.

This study fills a gap in the literature by providing the first evidence of country-specific regulation (CCG-2017), concerning the BOD and AC-related clauses on EM in Pakistan, which is missing in the relevant literature general and in Pakistan in particular.

Algorithms are widely used to manage various activities in the gig economy. Online car-hailing platforms, such as Uber and Lyft, are exemplary embodiments of such algorithmic management, where drivers are managed by algorithms for task allocation, work monitoring and performance evaluation. Despite employing substantially, the platforms face the challenge of maintaining and fostering drivers' work engagement. Thus, this study aims to examine how the algorithmic management of online car-hailing platforms affects drivers' work engagement.

Drawing on the transactional theory of stress, the authors examined the effects of algorithmic monitoring and fairness on online car-hailing drivers' work engagement and revealed the mediation effects of challenge-hindrance appraisals. Based on survey data collected from 364 drivers, the authors' hypotheses were examined using partial least squares structural equation modeling (PLS-SEM). The authors also applied path comparison analyses to further compare the effects of algorithmic monitoring and fairness on the two types of appraisals.

This study finds that online car-hailing drivers' challenge-hindrance appraisals mediate the relationship between algorithmic management characteristics and work engagement. Algorithmic monitoring positively affects both challenge and hindrance appraisals in online car-hailing drivers. However, algorithmic fairness promotes challenge appraisal and reduces hindrance appraisal. Consequently, challenge and hindrance appraisals lead to higher and lower work engagement, respectively. Further, the additional path comparison analysis showed that the hindering effect of algorithmic monitoring exceeds its challenging effect, and the challenge-promoting effect of algorithmic fairness is greater than the algorithm's hindrance-reducing effect.

This paper reveals the underlying mechanisms concerning how algorithmic monitoring and fairness affect online car-hailing drivers' work engagement and fills the gap in the research on algorithmic management in the context of online car-hailing platforms. The authors' findings also provide practical guidance for online car-hailing platforms on how to improve the platforms' algorithmic management systems.

The purpose of the paper is to explore the long-run impact of board governance and bank performance on executive remuneration. More specifically, the study addresses two objectives. First, the authors investigate the long-run relationship between pay and performance hold for the Indian banking industry. Second, the authors explore the moderating role of the board in explaining the relationship between executive pay and performance.

The study uses multivariate panel co-integration approaches, i.e. fully modified and dynamic ordinary least square, to explain the co-integrating relationship between executive pay, governance and performance of Indian banks. The analysis is conducted for the period from 2005 to 2018.

The results of co-integration tests reveal a long-run relationship between executive pay, board governance and bank performance. The long-run estimates produce evidence in favour of the dynamic agency theory, suggesting that the implications of asymmetric information can be mitigated by associating the current executive pay with the bank performance in the previous periods. The finding of this study reveals that improvements in the board quality serve as a monitoring tool to constrain excessive pay and moderate the executives’ pay. Furthermore, the interaction of performance and board governance negatively impacts pay, supporting a substitution approach. It implies that setting optimal pay packages for executives necessitates enhanced and efficient board governance practices.

The study recommends significant policy implications for regulators and the board of directors that executive pay significantly responds to the bank’s performance and good board governance practices in the long run.

This paper provides novel evidence of long-run pay-performance-governance relation using a panel co-integration approach.