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This study aims to empirically examine whether there is any optimal Shari’ah supervisory board’s (SSB) size that maximizes performance of Islamic banks (IBs). Apparently, IBs adopt different SSB size based on their different regulations across jurisdictions, and then it is still questionable whether there is any optimal SSB size that can fit all and be recommended to IBs.

The paper investigates the impact of different SSB size on IBs performance using a sample of 113 banks over 23 countries for the period 2007-2015 based on the generalized method of moments estimator.

The empirical evidence documented in this study strongly highlights the importance of small SSB size in enhancing the performance of IBs as compared to the large board size. The findings confirm that the SSB size of IBs should neither be lesser than three nor greater than six. More specifically, it is found that the optimal SSB size seems to be five.

First, the study does not investigate whether the findings are constant during crisis and non-crisis periods. Second, the optimal SSB size in IBs should be confirmed from the risk-taking perspective besides performance.

For both the IBs and the regulators, they should give due importance to small SSB size as an important element for improving the IBs performance. It is strongly recommended for the IBs to have a SSB size between three and six, and five is the most recommended. The Accounting and Auditing Organization for Islamic Financial Institutions also should revise their existing standards that only suggest the minimum SSB size of three to include the maximum size of six and the optimal size of five.

Despite the SSB size plays an important role in affecting the performance of IBs, it seems there are no empirical studies attempting to address whether there is any optimal SSB size that can enhance the IBs performance so far.

This paper aims to examine whether board-related characteristics matter for cost efficiency in banking sector.

This study uses a sample of publicly traded US commercial banks and savings institutions to estimate a relationship between cost efficiency measured by stochastic frontier analysis and a set of board-related characteristics for the period 2007-2013.

An inverted U-shape relation is found between board size and efficiency. Thus, there is a trade-off between costs and benefits of larger boards. Optimal board size is higher for banks with more complex operations. This study also observed an inverted U-shape relation between board independence and cost efficiency. The banks where the Chairman also executes the CEO responsibility show lower efficiency. However, a higher proportion of independent board members in banks with unitary leadership structure may mitigate the conflict of interest and lower efficiency stemming from CEO duality.

This study’s evidence supports the Basel Committee on Banking Supervision emphasis on advising a board composition that provides for a sufficient degree of director independence.

The results are relevant for banks and their external and internal stakeholders. Banks may adjust their current board characteristics to increase the board effectiveness. Externally, potential investors can evaluate the quality of corporate governance of banks before making investment decisions. The empirical findings can also be useful for regulators imposing corporate governance codes in banking.

To the best of the authors’ knowledge, this is the first paper to provide empirical evidence on the impact of board characteristics on bank efficiency for a wide panel of US banks. Additionally, a comprehensive set of board-related variables is used.

Demographic faultlines are associated with negative group processes and low performance. Little is known about the formation of faultlines in boards and how they can be weakened to capitalize on the positive effects of diversity.

This study draws on social identity theory and faultlines theory to provide insights into how gender and age faultlines are formed in a board. Subsequently, it proposes and tests a U-shaped board size–faultlines strength relationship. Archival data were collected on 288 organizations listed on the Australian Securities Exchange.

Hierarchical regression analyses indicate that small- and large-sized boards experience stronger faultlines than medium-sized boards.

This study provides pioneering evidence for a U-shaped relationship between board size and demographic faultlines strength. These findings inform practice by suggesting an optimal board size.

The purpose of this paper is to examine the impact of mandatory regulatory provisions on board structure and the influence of such board structure on institutional holdings.

The study uses unique hand-collected data set of Indian IPOs during the 2004-2012 period after the corporate governance reforms with the introduction of clause 49 in the listing agreements in 2001. Using OLS regression, the paper empirically analyses the determinants of board size and board independence at the time of the IPOs and the influence of such a board structure on shareholdings by domestic and foreign institutional investors.

The authors find that complying with mandatory regulatory provisions does not impede firms from structuring their boards to reflect the firms’ advising and monitoring needs. The authors also find that complying with provisions have positive implication for the firm, as firms with greater board independence appear to attract more foreign institutional investors.

To the authors’ best knowledge, this is the first study to examine the issue in a regime where regulation mandates the composition of the board of directors. The paper also extends the literature on institutional holdings by providing evidence on the impact of board structure on institutional ownership at a critical time in a firm’s life cycle when concerns for endogeneity for empirical investigations are weaker.

The purpose of this paper is to examine the performance implications of board size, composition and frequency of board meetings on the performance of banks.

The performance of banks is assessed on various parameters such as return on assets (ROA), Tobin’s Q, non-performing asset ratio (NPA ratio) and the net write-off ratio (NWO ratio). The effects of changes in board size and composition and frequency of meetings on the performance of banks are investigated using feasible generalized least square (FGLS) estimation of panel data covering a time span of five years concerning 40 banks incorporated in India. Frequency of board meetings is taken as a proxy for board activity and involvement. The authors have also tested for endogeneity issues in the model.

A curvilinear relationship was found between the board size and performance of banks. The authors have modelled a cubic form of the relationship for Indian banks. The authors’ findings indicate that an increase in board size is associated with better bank performance within both low and high board size ranges. Alternatively, increased board size is negatively associated with bank performance in the intermediate board size range. The study did not find any significant relationship between performance and frequency of board meetings and board composition.

The behavioural variables reflecting the involvement of the board have not been incorporated in the model to determine the impact of board involvement on the performance of banks owing to the availability of data. It is hoped that this paper will be useful for major regulatory bodies such as the Ministry of Corporate Affairs (MCA), Securities and Exchange Board of India (SEBI), Company Law Board (CLB) and stock exchanges in India and other emerging economies in devising listing norms and other governance-related aspects.

Non-linear relationships between the board size and performance are not normally prevalent in emerging economies, especially in the banking sector. However, such a relationship exists among the Indian banks. This paper is the first of its kind to identify and address the same.

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.

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.

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.

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.

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.

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.

This study aims to examine the impact of agency cost, Islamic board characteristics and corporate governance on the performance of Islamic institutions.

Based on the selected criteria, 92 Islamic banks (IBs) from 20 countries were selected for further research. The authors used generalized method moments (GMM) estimation method. The agency cost and Shariah board characteristics are the explanatory variables. The author uses the age of the bank and the size of the bank for variable control.

Empirical results indicate that first, agency costs represented by cast/total assets negatively affect IBs’ return on equity and net income. As agency costs rise, IBs’ financial performance declines. Second, Shariah supervisory board (SSB) size and board independence affect IB performance. The study found that SSB size positively affects IB performance.

This research contributes to the literature on IBs in different countries, which policymakers and practitioners can use to improve agency cost functions and Shariah board characteristics. Second, this analysis shows that IBs require specific attention for agency charges, given their operations and business structures. This study contributes to agency theory, which requires Islamic banking information and practices. Finally, the author has aided regulators and IBs by identifying the sources of agency cost practices that can be resolved. The other bank governance contribution is twofold. First, the author studied dual board governance in IBs (SSB and ordinary boards of directors). Second, the author examines how SSB and traditional board governance affect IB performance. This research focuses on banks listed on stock exchanges in the 20 countries analysed.

The research has policy and practical implications for central banks and IBs. By outlining appropriate regulatory guidelines and reporting systems, regulatory authorities can ensure Sharia compliance and protect the independence of IB Shariah department officers. Regulators and relevant stakeholders must ensure Sharia compliance, audits, inspections, reporting and accurate disclosure for IBs.

This paper offers original contributions to professionals in the field of IBs and stakeholders investigating the relationship between agency costs, governance of IBs, characteristics of Islamic supervisory boards and the performance of IBs.

This study aims to examine the significance of the non-linear relationship of board size and board independence on the financial performance of listed non-financial firms in India.

The study draws the sample of the listed non-financial firm in the Indian market from the year 2011–2018 and applied panel least squares regression with and without industry fixed effects on the model with quadratic equation. Quantile regression is also used to test the robustness of the results. The financial performance is measured through one accounting measure (i.e. return on assets [ROA]) and one market-based measure (i.e. Tobin’s Q). The empirical model also controls firm-specific variables which are expected to have an impact on financial performance.

The study found that the relationship of board size and board independence with the financial performance of a firm is in a non-linear inverted U-shape. The results are qualitatively similar for both ROA and Tobin’s Q after controlling industry fixed effects.

This is the first study in India which tests the non-linear relationship of board size and board independence with the financial performance of the firm. The study contributes to the limited literature on the implications of board characteristics on the performance of the firms in India.

This paper aims to explore the relationship of promoter ownership and board structure with firm performance for Indian companies.

Corporate governance structures of 391 Indian companies out of CRISIL NSE Index (CNX) 500 companies listed on national stock exchange (NSE) have been studied for their impact on performance of companies. Panel data regression methodology has been used on data for five financial years from 2010 to 2014 for the selected companies. Performance measures considered are market-based measure (Tobin’s Q) and accounting-based measure (return on assets [ROA]).

The empirical findings indicate that market-based measure (Tobin’s Q) is more impacted by corporate governance than accounting-based measure. There is significant positive association between promoter ownership and firm performance. It is also indicated that the relationship between promoter ownership and firm performance is different at different levels of promoter ownership. Board size is found to be positively related to ROA; however, board independence is not found to be related to any of the performance measures.

Limitations of the study are in terms of data methodology and possible omission of some variables. It is felt that endogeneity and reverse causality might be better addressed using simultaneous equation methodology.

The paper adds to the emerging body of literature on corporate governance performance relationship in Indian context using a reasonably wider and newer data set.

This study aims to explore the moderating impact of governance structure, that is, board characteristics including board size, board independence, board committees and ownership structure like ownership concentration, on the underpricing of small- and medium-sized enterprise (SME) initial public offerings (IPOs) in the context of an emerging economy such as India.

Using a sample size of 403 SME IPOs listed on Bombay Stock Exchange SME platform and National Stock Exchange EMERGE, this study uses moderated hierarchical regression analysis to investigate these relationships.

The findings highlighted that board independence, board committees and ownership concentration negatively influence underpricing measured using market-adjusted excess returns. While analysing the moderating relationship, this study finds that ownership concentration positively moderates the relationship between board independence and underpricing, as well as the relationship between board committees and IPO underpricing.

This study is limited to a single country only. Although perfectly suitable for our research inquiry, it is imperative to check the validity of the findings by extending it to other emerging countries with similar socio-economic characteristics. Furthermore, this study tested the hypotheses concerning three board characteristics only. Hence, it could be extended to explore additional governance characteristics for a more comprehensive understanding.

This study provides a foundation for managers to adopt a fine-grained approach to effectively design the board structure ahead of an IPO event. Additionally, the findings may assist policymakers in formulating various policies and guide regulators in regulating the limit on ownership held by various shareholders to prevent their opportunism. The results of this study may further advise potential investors interested in SME IPO firms to critically consider the ownership concentration as a driving factor when scrutinizing their investment portfolios.

This study is unique as it advances the debate on the importance of a governance characteristic, that is, ownership concentration, as a moderating variable in the underexplored context of IPO underpricing of small- and medium-sized firms in India.