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Book part
Publication date: 7 May 2019

Carolina Herrera-Cano and Maria Alejandra Gonzalez-Perez

This chapter aims to evaluate the relationship between the representation of women on corporate boards of directors and its impact on firm financial performance.

Abstract

Purpose

This chapter aims to evaluate the relationship between the representation of women on corporate boards of directors and its impact on firm financial performance.

Design/Methodology/Approach

This study utilized both a systematic review and a meta-analysis, using a sample of 40 published studies, which gleaned financial indicator and observation data from 28 different countries.

Findings

As indicated in previous studies, while positive, there was no significant correlation found between the number of women serving on the boards of directors and firm financial performance.

Research Limitations/Implications

The heterogeneity between the various studies analyzed may present difficulties in making general conclusions. The chapter could also be subject to publication bias, as the selection criteria included may indicate a need for further peer review. Future meta-analyses should include data associated with other financial indicators.

Practical Implications

This study shows how composition ratios of men/women serving on corporate boards should be addressed in terms of proving for a greater diversity of leadership perspectives.

Originality/Value

Previous systematic reviews and meta-analyses have analyzed country environments as moderators for the relationship between the representation of women on corporate boards and firm financial performance. The present study evaluates possible differences between the impact of the number of women serving on the board of directors on a variety of financial indicators (ROA, ROE, and Tobin’s Q).

Article
Publication date: 25 September 2023

Garima Kumari and Yatish Joshi

The past years have seen more studies exploring corporate sustainability performance (CSP) and firm performance nexus, but there has been a lack of analysis using bibliometric…

Abstract

Purpose

The past years have seen more studies exploring corporate sustainability performance (CSP) and firm performance nexus, but there has been a lack of analysis using bibliometric studies. This study aims to provide a structure for the CSP-firm performance relationship to gain valuable insights for further research.

Design/methodology/approach

Bibliometric analysis was carried on 462 articles from the Scopus database spanning 1987–2022 using VOSviewer and R software Bibliometrix.

Findings

The study overviews the most notable articles, authors, journals, countries and institutions. Four main clusters are identified to determine research themes using bibliographic coupling (documents). Additionally, co-occurrence analysis (keywords) reveals three themes indicating current and future research trends.

Originality/value

The study presents an overview of the evolution of research on CSP-firm performance nexus. This work consolidates bibliometric analysis and systematic literature review on CSP and firm performance, covering all significant work on the topic and presenting the field's knowledge map and future research directions.

Details

Benchmarking: An International Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1463-5771

Keywords

Article
Publication date: 20 April 2023

Charles Baah, Yaw Agyabeng-Mensah, Ebenezer Afum and Johana Andrea Lascano Armas

Environmental degradation in emerging economies has induced stakeholder pressures on diverse firms to ensure sustainable business performance. Consequently, firms are adopting…

Abstract

Purpose

Environmental degradation in emerging economies has induced stakeholder pressures on diverse firms to ensure sustainable business performance. Consequently, firms are adopting environmentally ethical cultures and reinforcing green creativity to satisfy stakeholders' environmental needs while attaining green competitive advantage, sustainable production and higher financial performance. The purpose of this study is to investigate whether corporate environmental ethics and green creativity serve as antecedents to higher competitiveness, sustainable production and financial performance, and also examine if green competitive advantage and sustainable production mediate the relationships between corporate environmental ethics, green creativity and financial performance in the context of an emerging economy.

Design/methodology/approach

This study using a survey approach examined data from 290 manufacturing small and medium-sized enterprises. Data were analyzed and interpreted using SmartPLS 3.0 software, a variance-based structural equation modelling technique. This modelling technique was adopted due to its suitability for predictive research models.

Findings

The findings show that corporate environmental ethics and green creativity are critical antecedents to green competitive advantage, sustainable production and financial performance. The results connote that while corporate environmental ethics and green creativity directly and robustly influence green competitive advantage, sustainable production and financial performance, their effect on financial performance is strengthened via the indirect effects of green competitive advantage and sustainable production. Contrasting past findings, corporate environmental ethics negatively related to financial performance in this study context. The findings indicate that the integration of environmental ethics and green creativity can be a unique strategy for mitigating environmental negative risks while improving green competitive advantage, sustainable production and financial performance.

Originality/value

The study is among the few that draws insights from organizational ethics and the natural resource-based view (NRBV) to examine the interactions between corporate environmental ethics, green creativity, green competitive advantage, sustainable production and financial performance. Drawing insights from the findings, the study provides suggestions for managers, academicians, policymakers and governments as well as highlights implications and directions for future research.

Details

Benchmarking: An International Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1463-5771

Keywords

Open Access
Article
Publication date: 27 January 2023

Alex Almici

This paper aims to verify whether the integration of sustainability in executive compensation positively affects firms’ non-financial performance and whether corporate governance…

3297

Abstract

Purpose

This paper aims to verify whether the integration of sustainability in executive compensation positively affects firms’ non-financial performance and whether corporate governance characteristics enhance the relationship between sustainability compensation and firms’ non-financial performance and to expand the domain of the impact of sustainability on non-financial performance.

Design/methodology/approach

This analysis is based on a sample of companies listed on the Milan Italian Stock Exchange from the Financial Times Milan Stock Exchange Index over the 2016–2020 period. Regression analysis was used by using data retrieved from the Refinitiv Eikon database and the sample firms’ remuneration reports.

Findings

The findings of this paper show that embedding sustainability in executive compensation positively affects firms’ non-financial performance. The results of this paper also reveal that specific corporate governance features can improve the impact of sustainability on non-financial performance.

Research limitations/implications

This analysis is limited to Italian firms included in the Financial Times Milan Stock Exchange Index; however, the findings are highly significant.

Practical implications

The findings provide regulators with useful insights for considering the integration of sustainability goals into executive remuneration. Another implication is that policymakers should require – at least – listed firms to fulfil specific corporate governance structural requirements. Finally, the findings can provide investors and financial analysts with a greater awareness of the role played by executive remuneration in the long-term value-creation process.

Originality/value

This paper contributes to addressing the relationship among sustainability, remuneration and non-financial disclosure, drawing on the stakeholder–agency theoretical framework and focusing on Italian firms. This issue has received limited attention with controversial results in the literature.

Details

Meditari Accountancy Research, vol. 31 no. 7
Type: Research Article
ISSN: 2049-372X

Keywords

Article
Publication date: 3 March 2023

R.M. Ammar Zahid, Alina Taran, Muhammad Kaleem Khan and Can Simga-Mugan

This study investigates the influence of ownership composition on market-based and accounting-based financial performance in the European frontier markets (EFMs), a target region…

Abstract

Purpose

This study investigates the influence of ownership composition on market-based and accounting-based financial performance in the European frontier markets (EFMs), a target region for global investors.

Design/methodology/approach

Ownership composition is defined as shareholders' concentration and structure (i.e. foreign, domestic, state and free-float), whereas financial performance is measured as Tobin's Q and return on assets. The system generalised method of moments panel data estimation technique is employed on a sample of 241 companies.

Findings

Findings reveal that companies from European Union (EU) frontier markets are controlled, on average, by one to five large shareholders. Being a signal of expropriation rationale of majority shareholders regardless of the capital structure, this highly concentrated ownership and decision-making model negatively affects the market-based and accounting-based financial performance of the companies and thereby supports the agency theory in the frontier markets.

Research limitations/implications

The findings provide empirical evidence for authorities, investors, analysts and corporations regarding the effect of ownership percentage and structure in the Eastern European region, assisting also other frontier and emerging markets in corporate governance and other regulatory decisions.

Originality/value

The ownership–performance relationship varies from developed to emerging markets with conflicting results. This study provides evidence on monitoring and expropriation effects of majority shareholders in the context of different categories of shareholders. In doing so, it combines the analysis of both ownership concentration and structure in the EFMs.

Details

Baltic Journal of Management, vol. 18 no. 2
Type: Research Article
ISSN: 1746-5265

Keywords

Article
Publication date: 19 July 2022

Mohammed Sulaiman Hassan Kasbar, Nicholas Tsitsianis, Androniki Triantafylli and Colin Haslam

The study aims to predict and understand the conditions under which the association between corporate governance and a company's financial performance is positive or meaningful by…

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Abstract

Purpose

The study aims to predict and understand the conditions under which the association between corporate governance and a company's financial performance is positive or meaningful by empirically accounting for agency conflicts. This study is motivated by the fact that the separation between ownership and control creates agency conflicts between company owners and managers. Therefore, strong corporate governance systems are expected to align the interests of conflicting parties whereby companies become more likely to improve their financial performance. However, previous research did not yield consistent results in this regard.

Design/methodology/approach

Given the latent nature of corporate governance and agency conflicts, this study uses principal component and exploratory factor analyses to proxy for corporate governance and agency conflicts, respectively. Using dynamic panel data modelling, the authors estimate the change in the relationship between corporate governance and a company's financial performance as a function of the change in the level of agency conflict using data from the UK on 78 non-financial companies listed in the Financial Times Stock Exchange 100 (FTSE100) index between 1999 and 2014.

Findings

The corporate governance quality of companies is significantly differed. Moreover, companies operating at high levels of agency conflict outperform the companies' counterparts operating in low levels of agency conflict only when the former improves the corporate governance quality. This implies that financial performance improves by approximately 11% if companies improve corporate governance quality due to an increase in the level of agency conflicts.

Research limitations/implications

Lack of data on ownership structure for the study period (1999–2014) was the main reason the authors excluded it from the analysis. Additionally, the lack of reliable and quantifiable corporate governance data on small-medium sized enterprises limits findings on large non-financial companies.

Practical implications

The authors propose a framework/tool for the impact of the level of corporate governance compliance on financial performance conditional upon the level of agency conflicts whose importance has largely been neglected by the empirical literature. By providing the right “lens” to de-fragmentise the corporate governance mechanisms and estimate empirically the unobserved agency conflicts, researchers, practitioners and investors are able to get further insights on the composing elements of financial performance and evaluate it more objectively. Managers can allocate companies' resources more efficiently and thus improve financial performance. The auditors can get further background information when they compile their report on company's directors. The study's findings offer valuable suggestions for accounting and corporate governance regulators to further put forward and improve accounting standards so as to enhance existing regulations and internal mechanisms which, in turn, could decrease the scope for managerial opportunistic behaviour as the latter can be empirically estimated through our framework.

Social implications

The findings point out the need for a revised framework accounting for the principal-agent (mis)alignment and the engrained information asymmetries. By acknowledging the level of corporate governance compliance and agency conflict, managers and shareholders should actively strive for the effectiveness of companies, the efficiency of the stock markets and the minimisation of the agency costs. Furthermore, policymakers can look into the development of a code of corporate governance to effectively regulate firms rather than enforcing rigid laws that may not be value relevant. With all these settings in place, the likelihood of corporate failures, corporate scandals as well as corporate violations with the ensuing penalties is set to be reduced. Hence, valuable resources, social capital and effort can be directed into more productive activities.

Originality/value

This study adds to the existing literature by offering empirical and explicit evidence on the dynamic association between corporate governance, agency conflicts and financial performance against a backdrop of high demand for strong corporate governance practices/codes. To the best of the authors' knowledge, there is no study that has yet empirically examined the moderating effect of the level of agency conflicts, given the level of corporate governance compliance on financial performance for listed and internationally aligned companies.

Details

Journal of Applied Accounting Research, vol. 24 no. 2
Type: Research Article
ISSN: 0967-5426

Keywords

Article
Publication date: 9 October 2019

Salma Chakroun, Bassem Salhi, Anis Ben Amar and Anis Jarboui

The purpose of this paper is to investigate the relationship between the ISO 26000 (global corporate social responsibility standard) adoption and financial performance. The…

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Abstract

Purpose

The purpose of this paper is to investigate the relationship between the ISO 26000 (global corporate social responsibility standard) adoption and financial performance. The current study aims to explore whether ISO 26000 social responsibility standard adoption has an impact on financial performance.

Design/methodology/approach

The study is based on a sample consisting of French companies listed on the CAC-All-Tradable index for the period 2010-2017. This study is motivated by using panel data estimated feasible generalized least squares method.

Findings

The results show that that good corporate governance can improve the financial performance. This positive impact is also noticed in the case of labor relations and conditions, environment and community involvement. However, it does not apply to human rights, fair operating practices and consumer issues, as there is no significant relationship between these dimensions and the financial performance.

Practical implications

The findings may be of interest to the academic researchers, investors and regulators. For academic researchers, it is interested in discovering how the adoption of ISO 26000 can improve financial performance. For investors, the results show that it is appropriate for different countries to adopt the ISO 26000 guidelines and introduce societal practices in their activities.

Originality/value

This paper extends the existing literature by examining the effect of the ISO 26000 standard for financial performance in the French context. The study of corporate social responsibility through its seven societal dimensions has enabled us to understand the guidelines relating to the ISO 26000 standard.

Article
Publication date: 2 September 2020

I. Wayan Widnyana, I. Gusti Bagus Wiksuana, Luh Gede Sri Artini and Ida Bagus Panji Sedana

This study aims to analyze and explain the effect of financial architecture (with three dimensions: ownership structure, capital structure and corporate governance) and intangible…

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Abstract

Purpose

This study aims to analyze and explain the effect of financial architecture (with three dimensions: ownership structure, capital structure and corporate governance) and intangible assets on performance financial and corporate value in the Indonesian capital market.

Design/methodology/approach

This research was conducted on nonfinancial sector companies that were registered in the Indonesian capital market, namely Indonesia Stock Exchange (IDX) in 2015. This study used quantitative data and used secondary data sources, meaning that data were obtained, collected and processed from other parties. In this study, the hypothesis testing of the effect of financial architecture (included the dimensions of ownership structure, capital structure and corporate governance) and intangible assets on financial performance and corporate value using path analysis was performed.

Findings

The results of this study have provided findings that follow the research model that has been built (1) This research has been able to provide a theoretical model of the influence of financial architecture (with dimensions of ownership structure, capital structure and corporate governance), intangible assets, board processes on financial performance and company value in the Indonesian capital market. (2) To develop a theoretical model about the effect of corporate governance on financial performance in accordance with the two-tier system adopted by Indonesia. (3) An empirical study of the concept of financial architecture put forward by Myers (1999).

Originality/value

This research update lies in the research variable, which determines one value of the financial architecture variable comprehensively, combines the financial architecture variable and intangible assets to then be tested for its effect on company value and the use of the financial process variable as a board process as an intervening variable.

Details

International Journal of Productivity and Performance Management, vol. 70 no. 7
Type: Research Article
ISSN: 1741-0401

Keywords

Article
Publication date: 12 November 2021

Albert Ochien’g Abang’a, Venancio Tauringana, David Wang’ombe and Laura Obwona Achiro

This paper aims to report the results of an investigation into the effect of aggregate and individual corporate governance factors on the financial performance of state-owned…

2533

Abstract

Purpose

This paper aims to report the results of an investigation into the effect of aggregate and individual corporate governance factors on the financial performance of state-owned enterprises (SOEs) in Kenya.

Design/methodology/approach

The paper uses balanced panel data regression analysis on a sample of 45 SOEs in Kenya for a four-year period (2015–2018).

Findings

The panel data analysis results show that board meetings, board skill and gender diversity individual provisions of corporate governance are significantly and positively associated with capital budget realization ratio (CBRR). Moreover, the study finds that aggregate corporate governance disclosure index, board sub-committees, board size and independent non-executive directors are positive but insignificantly related to CBRR.

Research limitations/implications

The current study is based on secondary data, other methods of knowledge inquiry such as interviews and questionnaires may provide additional insights on the effectiveness of corporate governance on financial performance.

Practical implications

Overall, the results imply that corporate governance influences the performance of SOEs in Kenya. The results suggest that Mwongozo Code of Corporate Governance provisions should be changed to increase the number of women representations on board and the number of directors with doctoral qualifications because of their positive impact on the financial performance of SOEs in Kenya. Also, policymakers with remit over SOEs should re-evaluate why other corporate governance appear not to have an impact with a view of making the necessary changes.

Originality/value

The paper contributes to the dearth of literature on the efficacy of corporate governance on the financial performance of SOEs in developing countries.

Details

Corporate Governance: The International Journal of Business in Society, vol. 22 no. 4
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 3 April 2017

Rezaul Kabir and Hanh Minh Thai

The theoretical and empirical relationships between corporate social responsibility (CSR) and corporate financial performance are not without controversy. Yet, CSR activities are…

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Abstract

Purpose

The theoretical and empirical relationships between corporate social responsibility (CSR) and corporate financial performance are not without controversy. Yet, CSR activities are increasingly undertaken by a large number of firms, not only in developed countries but also in emerging countries. This paper aims to investigate the moderating effect of different aspects of corporate governance, which are foreign and state ownership, board size and board independence, on the relationship between CSR and financial performance.

Design/methodology/approach

A sample of Vietnamese listed firms is analyzed. Robust regression analysis is performed using ordinary least squares as well as fixed-effects and two-stage least squares model.

Findings

Ordinary least squares regression results show that CSR activities affect the financial performance of firms positively. Furthermore, corporate governance features like foreign ownership, board size and board independence strengthen the positive relationship between CSR and financial performance, but there is no such impact of state ownership.

Originality/value

Previous studies mostly investigate the direct effect of CSR on financial performance. A few studies examine the moderating effect of corporate governance, which is ownership concentration and board gender diversity. As an emerging country, Vietnam has some specific characteristics on corporate governance. This paper contributes by investigating the moderating effect of few major aspects of corporate governance, which are foreign and state ownership, board size and board independence.

Details

Pacific Accounting Review, vol. 29 no. 2
Type: Research Article
ISSN: 0114-0582

Keywords

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