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Police training is in a period of transition, requiring new recruits to already have, or work towards, a policing degree. However, recruitment procedures have not significantly changed in the past few decades. With psychometric testing commonplace in North America and Australasia to help ensure the right recruits are selected, this research seeks to understand if police trainers feel there is scope for a similar process in the United Kingdom (UK).

Twenty-five police training staff across four different police forces took part in a total of six focus groups to discuss views on this and other areas of recruitment.

Results indicated that police trainers are concerned about the quality and aptitude of recruits. Support was given for the introduction of formal psychometric testing to prevent unsuitable candidates from successfully joining and/or to give trainers better insight into the personalities of their students.

There was general concern from female trainers that the police environment new recruits entered still bore elements of covert sexism. Trainers' views on reforms to police recruitment, the implications of this and areas for future study are discussed.

We investigate the association between attributes of the audit committee of a firm and the likelihood of negative events occurring in the firm’s life in Israel. The mandate of the audit committee in Israel is substantially different from its mandate in the US. The responsibilities of the committee in the US are divided between two committees in Israel, one of which deals with reviewing the financial statements and the other one, titled “audit committee,” is in charge of the remaining tasks of the US-type audit committee. This allows us a unique opportunity to focus on the roles of the audit committee other than reviewing the financial statements. Using hand-collected data on firms traded on Tel Aviv Stock Exchange in 2010–2014, we find that the larger the audit committee size, the larger the likelihood of negative events, consistent with the cumbersome workings and potential conflicts of interests characterizing a large committee. The percentage of directors with accounting and financial expertise on the audit committee is associated with a lower likelihood of negative events, in line with the value of such experts in tasks beyond reviewing the financial statements. The fraction of independent directors on the audit committee is not found to be significantly related to the likelihood of negative events. This is consistent with the notion that some independent directors are independent in form but not necessarily in substance, which is surprising in light of the comprehensive regulation regarding audit committee independence imposed by the Israeli regulator.

Numerous empirical studies have been conducted to analyze the impact of board gender diversity (BGD) on firm performance without being able to establish a clear relationship. In this paper, we reassess the relationship between BGD and firm performance by using a quantile regression approach. Our results indicate that BGD matters only across a subset of the firm performance distribution. Moreover, when the possible endogeneity of the relationship between BGD and firm performance is taken into account, there are some conditions under which a positive and significant relationship is observed for the eight lowest quantiles.

The Canadian mutual fund setting is unique in that two governance mechanisms – corporate and trust – coexist. This study empirically examines the impact of each mechanism on fund fees and performance. We find that corporate class funds charge higher fees but deliver superior fee-adjusted returns than trust funds. We then analyze the impact of various board characteristics on fees and performance for corporate class funds. We find that a board with smaller size, CEO duality, and a higher percentage of independent directors is more likely to charge lower fees. In addition, smaller boards are strongly associated with higher fee-adjusted performance. Our study supports agency theory over stewardship theory and provides valuable guidelines for Canadian investors and regulatory agencies.

As one of the most influential theories in strategic management, Hambrick and Mason’s Upper Echelons Theory has yielded significant conceptual and empirical advancements linking executive characteristics and perceptions to decision-making. Specifically, work on this theory consistently shows that CEOs’ decisions are biased by personal characteristics to the benefit and detriment of firms. While this stream of research links executive decision processes to outcomes such as executive dismissals, analyst evaluations, and press coverage, surprisingly little is understood about if and whether the information CEOs convey is subject to the same filtering process by a firm’s key evaluators. Thus, in this chapter, we aim to extend Upper Echelons Theory by positing that a double filtering process occurs whereby the cognitive aids CEOs use can be informed by not only their cognitive base and values but also the characteristics and priorities of those who evaluate the nonverbal and verbal signals they send. To do so, we build on recent conceptual and empirical advancements to make a case for the decision-making biases and tendencies that influence signal interpretation by three key evaluator groups internal and external to the firm: boards of directors, financial analysts, and the media. We conclude by considering the implications of evaluators’ information filtering and how this more holistic view of Upper Echelons decision-making can enable executive teams to be strategic with the cognitive aids they use to influence evaluations.

We document the emergence of the Lead Independent Director (LID) board role in a sample of U.S. firms from 1999–2015. We find that firms that adopt an LID board role are larger and have more independent boards, higher institutional investor holdings, and an NYSE listing. Firms with greater anticipated benefits from monitoring also adopt an LID role, e.g., firms with dual CEO-Chairman, with more takeover defense mechanisms, and with higher cash holdings. Using an event study methodology, we find that investors respond positively to the adoption of an LID board role. Lastly, using instrumental variables to address endogeneity in the LID board role, we find that firms with an LID are more likely to terminate poorly performing CEOs. Taken as a whole, these results suggest that the LID board role enhances firm value and improves the quality of corporate governance.

To explore the importance of the board of director nomination process (that is, who nominates a given director for a position on the firm’s board) for the voting outcomes, disciplining of management, and overall monitoring quality of the board of directors.

We exploit a recent regulation passed by the US Securities and Exchange Commission (SEC) requiring disclosure of the board nomination process. In particular, we focus on firms’ use of executive search firms versus allowing internal members (often simply the CEO) to nominate new directors to serve on the board of directors.

We show that companies that use search firms to find board members pay their CEOs significantly higher salaries and significantly higher total compensations. Further, companies with search firm-identified independent directors are significantly less likely to fire their CEOs following negative performance. In addition, companies with search firm-identified independent directors are significantly more likely to engage in mergers and acquisitions (M&A) and see abnormally low returns from this M&A activity. We instrument the endogenous choice of using an executive search through the varying geographic distance of companies to executive search firms. Using this instrumental variable framework, we show search firm-identified independent directors’ negative impact on firm performance, consistent with firm behavior and governance consequences we document.

Given the recent law passage, we are the first to directly analyze the nomination process, and show a surprisingly large predictive effect of seemingly arm’s-length nominations. This has clear implications for thinking carefully through how independence is defined in the director nomination process.

A persistent and increasing pattern in cash holdings was notable in the aggregate behaviour of Indian corporations around the period from 2007–2008 to 2012–2013. Extant literature suggests that agency conflicts and financing frictions are important determinants of cash holdings. In this chapter the author aims to shed light on the role of corporate governance (CG) in the determination of cash holdings and examined how ownership structure, board and audit-related attributes (used as proxies for the nature of CG) impact cash holdings in the context of an emerging economy, like India. The author employed four different measures of cash and liquidity and 24 structural indicators of CG. Using principal component analysis, the author offers an exploratory inquiry into the dimensions of CG. Thereafter, multiple regression was used to delve into the association between cash holdings (the dependent variable) and CG. Using a sample of 58 top-listed companies the results revealed that the quality of firm-level CG is important in deciding corporate cash holdings. The author reported that firms with stronger CG tend to reduce cash balances and have higher capital expenditures, while in firms with entrenched managers having high cash reserves invest more in current assets. Firms also hold cash for financial flexibility and to take advantage of strategic opportunities as they present themselves. Parallel to this point is the fact that larger balances help firms to avoid uncertainty and hedge themselves against the difficulty of accessing external funds.

Board size has received significant attention among researchers and regulators. However, the advisory role of boards has not been studied much. In this study I examine the notion that investors value larger boards for their advisory capabilities. Prior studies examine board size in the context of monitoring role of corporate boards and find opposite effects on debt holders and equity holders. Using market-based measures of total firm performance, which take both equity and debt into account; I find that larger boards are associated with greater economic value added (EVA). Using a sample of S&P 1500 firms from 2000 to 2003 and controlling for various firm and industry characteristics, I also find that the board size is positively associated with firm productivity and various other efficiency measures such as return on assets (ROA), return on equity (ROE) and Sales-Turnover ratio. I argue that firms with larger boards, valuing the advisory role of directors offer greater compensation to the directors. Overall the results indicate that large board size has a positive impact on firm's performance. The results are robust to alternative measures of firm performance and other key variables.

Poison pill securities can be used to deter takeover activity by making the acquisition cost prohibitive or to increase bargaining power of target firms. Poison pills, which are also known as shareholder rights plans, are typically used in conjunction with other takeover defense mechanisms, such as anti‐takeover charter amendments or dual classes of stock. This study examines the role that debt plays as an anti‐takeover strategy in the presence of poison pills. The results show that, on average, capital markets have little reaction to poison pill announcements. A regression equation, however, shows that announcement period abnormal returns are positively related to leverage ratios. This paper provides empirical evidence that the capital structure of firms plays an important role in the perceived strength of poison pills.