bluuebunny/crossref_metadata_2025 huggingface dataset:
Breach of duty: Power of shareholders to ratify directors fraudulent dealings
Authors: Nwafor Anthony O. , Nwafor Gloria C.
Published: December 2016

Company directors owe duty of loyalty to the company which prohibits them from fraudulent dealings in the course of conducting the affairs of the company. Although the shareholders could, in the exercise of their voting powers, grant relieves to the directors from liabilities arising from a breach of duty that amounts to fraud, the extent and capacity in which the shareholders could exercise such powers is confounded by the elusive attempts by the courts in defining fraud. The paper argues that without a definite meaning ascribed to fraud, the power and capacity in which the shareholders could ratify a breach of duty arising from self-dealing and expropriation of corporate opportunities by directors cannot be predetermined, but that each case would be based on the peculiarities of its own facts.
Director remuneration, corporate governance and performance: A comparison between government linked companies vs non government linked companies
Authors: Ab Razak Nazrul Hisyam
Published: December 2016

This study has examined the relationship between director’s remuneration, corporate governance structure and performance of a sample of 150 companies listed on the Bursa Malaysia from year 2008 until 2013. The sample was selected to provide matched-pair of government linked companies (GLCs) and non-government linked companies (non-GLCs), as it was anticipated that these group would have different governance structure, the key difference being government ownership. The result holds even when we control for company specific characteristic such as corporate governance, company size, leverage, director’s remuneration, board size and auditors. This study uses panel based regression model to examine the impact of government control mechanism on company performance using two important measurers. These are accounting based measure proxies by ROA and non-accounting based measures by Tobin’s Q. Statistically significant relationships were found across the groupings and for different performance measures. Findings appear to suggest that there is a significant impact of government ownership on company performance after controlling for company specific characteristics.
From corporate social responsibility (CSR) to sustainability – Trend of social reporting in banking organization
Authors: Yeung Shirley Mo-Ching
Published: December 2016

Riding on the key findings of Yeung (2011) for the four main factors for a framework of CSR for banks: (1) internal management –implementing meaningful strategy, (2) external management – accountability for creditability, (3) internal management - process and people management; and (4) external management – consideration of stakeholders, this paper has reviewed the sustainability-related activities of a major bank in Hong Kong for the past eight years to build a framework for sustainability via qualitative and quantitative analysis of N’ vivo in this research. Five main dimensions are identified for fulfilling the principles of sustainability and the seven dimensions of CSR: 1) community – caring and disclosure, 2) consumers – products and services, 3) environmental issues – certification and schemes, 4) staff issues – talent development and 5) supply chain – performance. There is a growing emphasis on community issues of caring which embed talent development of staff issues (e.g. impacts on skill strengthening) and supply chain issues of performance which embed the environmental concerns and services issues (e.g. impacts on safety and risk-reducing policy). By understanding the reporting elements of sustainability-related reports, it is expected that transparency of community, staff and supply chain issues is needed to gain trust from the public for sustainability. This research is managerially and strategically relevant and topical. However, more sustainability-related reports from banks of other countries are required to generate a holistic picture for managing and reporting sustainability and CSR related activities.
Estimating the individual-specific predictors of volunteers in South Africa
Authors: Niyimbanira Ferdinand
Published: December 2016

Volunteerism is topical in applied economics in developed economies, especially in assisting to understand its contributions to the economy. However, even though the contribution of volunteerism to the economy may be remarkable and is receiving more attention in many countries, little research has been done on this topic in developing countries. This paper uses a Logit regression with volunteer work being an independent variable to examine the correlates of volunteerism. Explanatory variables are gender, age group, population group, highest education level, own business, work status, and income category. The results show that all estimated coefficients have expected signs. Females are more likely to do volunteer work more than males, older people are more likely to participate in voluntary activities than middle age and younger ones. Results also reveal that the higher the level of education, the more likely for the person to do volunteer work. This is the same with income, the higher the income individuals earn, and the more likely they are to do volunteer work.
Corporate control, agency problem and board composition: Evidence from Indonesia
Authors: Haryono Tulus , Rahmawati  , Purwaningsih Yunastiti , Agung Prabowo Muhammad , Suratman Eddy
Published: December 2016

The study investigates the impact of agency problem and the distribution of corporate control on board composition using a dataset consisting of 190 listed firms in Indonesia. The conceptual framework is derived from agency theory assuming that board composition is endogenously determined by firm’s specific environment. The study reveals that corporate control drives the composition of the board. The different types of large shareholders are found to pursue different strategies in relation to the board composition. While domestic and foreign investors rely on independent board, controlling family prefer to structure a less independent board. This suggests that the battle for corporate control between controlling family, in one side, and unrelated domestic and foreign investors begins with the structure of board. The findings imply that the type of large shareholder does matter in determining the device of corporate control.
How long a tenure is long enough: CEOs tenure and its impact on firm’s performance.
Authors: Ahamed Naseem
Published: December 2016

In a typical corporate setting, a CEO is analogous to the captain of a ship with ultimate authority vested in him by the board of directors, which in turn is elected by the owners (shareholders) of the firm (Fama, E. F., & Jensen, M. C. 1983). During the period he heads the firm, it is expected from him to take wise decisions which benefits the firm in long/short term and the stakeholders of the firm become well off. However, the length of the tenure varies to a great degree from firm to firm. This paper attempts to find out the impacts of these different tenures on the performance of the firm per se. In addition to that it tries to unearth any possible discernible pattern in the CEO tenure over the time. It also looks if the remuneration generally increases with the number of years spent in a firm or is it attached to performance and tenure is meaningless for remuneration. Do CEOs with long tenure try to tweak with the firm’s capex (expenditure policy), existing dividend policy etc. are few of the questions attempted to be addressed in here. A change in the previously mentioned characteristics of the firm, would lead to a radical transformation in the fundamental structure of the same. Hence, the article asks if CEOs turn the firm into a completely different entity from what they took over, when given long tenure. The study utilizes data from the Compustat/Execucomp database from a period ranging back to 1990 till date. However, it also analyses data before 1990, as it was found that CEOs held their positions for considerably longer tenure before the introduction of SOX in 2002. That analysis gives a first-hand experience of the changes experienced by the firms in the event of CEO change. The findings indicate, that the CEOs take some time to settle themselves in and subsequently increase their bargaining power with the board. Subsequent to which CEOs, who enjoy longer tenure tweaks with the firm’s existing policies and practices.
Corporate governance mechanisms and unmanaged earnings: Empirical evidence from Malaysian government linked companies
Authors: Shawtari Fekri Ali , Sani Mohammed Muslim Har , Majdi Abdul Rashid Hafiz , Salem Milad Abdelnabi
Published: December 2016

The aim of this paper is to examine the effectiveness of board monitoring mechanisms in Government Linked Companies (GLCs) in Malaysia. Mainly it focuses on how the introduction of the transformation policy, which emphasizes strengthening the board effectiveness, would lead to an improvement in the performance of GLCs. Our study goes further to explain the impact of earnings management on performance as it is opined that the performance of the firm could be affected by the earnings management (EM) practices, and, hence, looking at the performance after stripping away the managed portion of performance could provide more accurate results concerning the impact of corporate governance on performance. Using regression analysis, the findings of the study showed that the adjusted R2 increased from 14.8% to 26.8% (between the pre-transformation and post-transformation models). In addition, more corporate governance variables were found to be significant in the post-transformation model (i.e. board independence and board meetings). More importantly, the significance of the variables are as predicted in the hypotheses, thus lending support for the argument of the agency theory. This study has recognized a few limitations. First, the main limitation of the study is that the data were collected through publicly available data which include annual reports and other databases such as Bloomberg. Other data such as qualitative information could be helpful to gain more insight concerning the issue of the effectiveness of the transformation policy. Second, although we are using all available data for the Malaysian GLCs, the sample size of 35 companies could still be considered as a small sample size for generalization purpose. The government, in its role of regulating the corporate governance for GLCs, could gain an insight from the results of the study, thereby providing empirical support for the development of new regulations and recommendations, and takes the necessary corrective decisions regarding the effectiveness of the transformation policy. The paper provides further evidence concerning the relationship between performance and corporate governance mechanisms. Specifically, it looks into such a relationship within the Malaysian GLCs after the introduction of the transformation programme. The results of the study are more accurate for interpretation as the measure of performance has deducted the portion of managed earnings.
Different board structures and R&D: Evidence from Japanese corporation
Authors: Nishi Takahiro
Published: December 2016

This study examines the effect of different board style and ownership, and board composition on R&D investment in Japanese corporation. I explore how different board structure contribute to R&D investment in varied way and the impact of different type of governance on R&D investment incorporation. I analyze it with 2010-2014 panel data regarding Japanese corporate governance. I found that different type of corporate governance make impacts on R&D in corporations indicating the specific relationship between corporate governance and R&D, not explained by agency theory. This study observed that Board composed of insider avoid interference of institutional investors by caring about investor’s interests.
Boardroom gender diversity in JSE-listed South African mining companies
Authors: Violet Moraka Nthabiseng
Published: December 2016

Despite the socio-political, ethical and business case for female board membership, women remain underrepresented in company boards. Using theories that support the membership of women on boards, this article presents the case for gender diversity in the boardroom. By employing a sample of 506 directors from 56 JSE-listed mining companies this article reports on the demographic characteristics, percentage of women in mining boards, and attributes that are predictive of women’s membership on boards. Results show that women serving on mining boards possess specialised knowledge in combination with advanced education. They either bring external support as outsiders, or are support specialists with financial, legal, arts and economics backgrounds. This study recommends the development of a talent management framework of women directors focused on their recruitment, development and retention.
Board role on the quality of the service, customers’ satisfaction and customers’ loyalty in restaurant firms: Story from Indonesia
Authors: Cholil Muhammad
Published: December 2016

The objective of this research is to test and conducting an analysis in sequence, on the effect of exchange of superior-subordinate relationship on: the quality of the service, customers’ satisfaction and customers’ loyalty: Case study on a restaurant in Surakarta Indonesia. The samples used in this research are 430 staffs and 430 customers taken with convenient method. The technique used to test the hypothesis is SEM analysis (Structural Equation Model). The validity test result shows that there are several items on this research which extracted and finally used as the base for item analysis that meets the criteria, while the reliability test result shows that all the variable meets the requirements, and the research model required can be found. The analysis result of this research shows that: First, the exchange of superior-subordinate relationship shows positive effect on the service quality, but shows no effect on the customers’ satisfaction. Second, the service quality gives positive effect on customers’ satisfaction, but shows no effect on customers’ loyalty. Third, customers’ satisfaction gives positive effects on customers’ loyalty. The existing research implications and limitations need to be studied in future researches
Property relationships in virtual worlds – A return to the feudal system?
Authors: Erlank Wian
Published: December 2016

There are a number of ways to explain how the property system in a virtual world works. Various explanations are proposed in this paper to explain this phenomenon. Some people argue that property in virtual worlds is purely based on contract and as such can be explained as merely licensing players to use the virtual worlds. Other explanations include the arguments that virtual property is based purely on intellectual property, actual (real) property or even does not exist at all. However, one alternative to accepting that virtual property is actual property, is by viewing the property relationship as a system as feudal ownership or estates. This model of explaining virtual property manages to incorporate many, if not all of the current explanations for the existence of virtual property. As such, it can be argued that even if virtual property is based solely on contract and that the developer therefore maintains his or her position as owner, the player in fact, also has a stake in the virtual property. The developer can be regarded as lord with the user’s interest being regarded as seisin rather than ownership. Alternatively, the developer is regarded as having dominium directum, while the player is regarded as having dominium utile, due to the fact that in most cases the developer has little or no actual interest in the ownership of a specific object of virtual property. This paper will analyse the possibilities of this explanation.
Relationship between directors’ compensation and business performance: One issue to debate
Authors: Manzaneque Montserrat , Merino Elena , Ramírez Yolanda
Published: December 2016

The compensation received by directors has attracted the interest on good corporate governance practices related to remuneration matters, with particular emphasis on the need to link the remuneration of directors and the business performance. However, the question remains whether this relationship is being implemented or, on the contrary, we must address through other measures that encourage directors’ remunerations more in line with the shareholders’ interests. The analysis of a sample of 76 Spanish firms over the period 2004-2009 shows the existence of this relationship if book based indicators are taken as a reference. However, this relation does not exist with those indicators made according to market data. These results should make researchers and regulators think about the need for new ways of remuneration that convey confidence to compensation systems.
The nomination committee and firm performance: An empirical investigation of UK financial institutions during the pre/post financial crisis.
Authors: Agyemang-Mintah Peter
Published: December 2016

This study looks at the relationship between nomination committee (NC) and the financial performance of firms among United Kingdom (UK) financial institutions. The result indicates a positive and statistically significant association between the NC of a firm and its Market Value (MV). The relationship between NC and the Return on Asset (ROA) of the firm as a measure of financial performance was positive. The second study examines the impact of NC on UK financial firms during the 2007/2008 global financial crises. The empirical evidence gleaned highlights that firms adopting NC for corporate boards witness a positive and statistically significant impact on the ROA of the firms. There was also an inverse relationship demonstrated, in terms of financial performance on the MV of the firms during the pre- and post-global financial crisis.
Devolution of corporate managerial powers: A critical analysis
Authors: Onamson Friday Okafor
Published: December 2016

Generally, corporate managerial powers which, among others, entail powers to manage the company as a going concern, to exercise good faith and to act within powers are devolved to the corporate management. The corporate board may be negatively or positively active in the exercise of its powers. For third parties, the law made adequate protection for third parties which shield them from harm of agency problems. But the same cannot be said of the company. In certain cases where the board is positively active, this may unwittingly result in Longe Effect. Where the company suffers due to managerial slack it is the minority that bears the brunt. The enlightened shareholder value precept, albeit still evolving, can address these risks
Why Anglo corporations should not be trusted: And how they could be trusted
Authors: Turnbull Shann
Published: December 2016

This paper identifies eight reasons why it is rational not to trust large complex Anglo corporations and how these reasons could be removed. Two reasons are that directors are overloaded with information but also lack information independent of management to evaluate management and the business. A third reason is that directors do not have systemic processes to discover if their trust in management is misplaced. A fourth and fifth reason is that directors have absolute power to manage their own conflicts of interest and a dominant shareholder can enter into related party transactions that can unfairly extract value. The sixth and seventh reasons are the incentive for directors not to blow the whistle on their colleagues and the impotence of a director to act alone. The eighth reason is that shares can be manipulated and traded covertly. Four changes in corporate constitutions are identified that could remove these concerns. These are to establish a watchdog board, introduce cumulative voting for directors, establish stakeholder councils and introducing sunlight share trading.
The Kostyuk report: Corporate board practices in Ukraine
Authors: Kostyuk Alexander
Published: December 2016

The author reports on the corporate board practices in Ukraine. The roles of board of directors are mainly about control. The strategic and advisory roles are not developed. The mode of strategic involvement of the members of supervisory boards in Ukraine is mainly about reviewing and approving. Thus, the board of directors in Ukraine is "a rubber stamp". The degree of independence of directors is very low. Major board practices in Ukraine are: small number of independent directors on the board; low frequency of meeting of the board; small number of committees on the board; the management board influences the supervisory board. Board practices in Ukraine need a sort of recommendations, similar to those, made in UK at the end of 1990s, and at the start of the third millennium.
Do ownership and board composition matter? Efficiency and corporate governance in some UK privatised firms
Authors: D’Orio Giovanni
Published: December 2016

The main aim of this paper is to analyse the role of privatisation and corporate governance reform and modification in the firm’s organisation for the efficiency of the sample firms. Data Envelopment Analysis estimation will be used to understand the level of efficiency achieved by the Management Decision Unit and the stochastic frontier approach will analyse inefficiency in its components (i.e. if inefficiency is due to an adverse state of the world - statistical noise - or if it can be explained with the determinant of other factors such as corporate governance).
Voluntary decisions on audit committee composition and expertise and the influence of board of director characteristics: Further evidence from Singapore
Authors: Van der Zahn Mitchell , Singh Inderpal
Published: December 2016

Our study empirically examines the association between four board of director characteristics and two audit committee dimensions. The audit committee dimensions are the level to which Singapore publicly listed firms voluntarily (1) include more independent directors on their audit committee beyond the mandatory minimum majority of independent directors and (2) improve the collective knowledge and experience of this standing committee by including suitably qualified independent directors. Our analysis is based on hand collected data from 430 domestically incorporated firms listed on the Singapore Stock Exchange (SGX) at the end of 2003. We find Singapore publicly traded firms are likely to voluntarily include more independent directors on their audit committees beyond the mandated minimum majority when (1) the size of the board of directors increases, (2) firms segregate the positions of Chief Executive Officer (CEO) and Chairperson of the board, and (3) the proportion of independent directors serving on the board of directors increases. The percentage of independent directors with directorate interlocks appears not to influence a firm’s decision to voluntarily include more independent directors on their audit committees. We also find a statistically significant association between (1) duality (negative) and (2) percentage of independent directors with directorate interlocks (positive) and propensity for Singapore firms to voluntarily increase the collective knowledge and experience of the audit committee’s independent directors. Contrary to expectations board size and the proportion of independent directors are not significant determinants.
An exploratory study on the executive recruitment and performance in Greece
Authors: Koufopoulos Dimitrios N. , Balta Maria Elisavet
Published: December 2016

Based on 42 succession events in Greek organizations, the study aims to examine the relationship between antecedent organisational characteristics such as size and performance of the firm and the source of successor (insider versus outsider). In addition, Chief Executive Officer’s (CEO’s) demographic characteristics such as age, functional and educational background as well as industry, organization and position/job tenure- are discussed in relation to organisational effectiveness.
Board size and composition: The main tradeoffs
Authors: Kostyuk Alexander N. , Koverga Victoria , Kostyuk Helen V.
Published: December 2016

The purpose of this research is to find the factors influencing size and composition of the supervisory boards in a transition economy with application to Ukraine. This paper is based on the research of 50 largest companies in Ukraine. Period of research is 1998-2005. Methodology of research is based on observations (the first stage) and questionnaires (the second stage). The research found that there is strong dependence of the size of supervisory boards in Ukraine on the degree of concentration of corporate ownership and origin of the controlling shareholder. Size of the company has a very conditional influence on the board size. Professional skills diversification as a fact that could contribute to the efficient work of the supervisory board is still very weakly developed in Ukraine. Particularly this concerns such expertise as auditing, finance, executive compensation. Experience of the supervisory board members in Ukraine is quite poor. Only 24 percent of members of supervisory boards have a five and more year experience as supervisory board members. the supervisory board members had the strong links with the company in the past as executives. Thus, about 74 per cent of members of the supervisory boards in Ukraine worked as executives of the same company at least during a year for the last ten years. This makes the negative impact on the independence of the members of the supervisory boards.
Conditions of vacuous voting in the boardroom
Authors: Andert Darlene M.
Published: December 2016

The issue of U.S. corporate governance has been approached as a management structure without regard for the non-hierarchical oversight qualities that are embedded in the legal foundation of its birth. This paper reviews the: (1) U.S. federal Model Business Corporation that unifies the individual state corporate enabling statutes; and (2) The Delaware General Corporation Law that applies to over half of the U.S. Fortune 500 companies and posits the structure of U.S. corporate governance is nonhierarchical, though practiced hierarchically. Further, it is not always the full board that creates board action, and asymmetrical communication and asymmetrical member action create the conditions for vacuous voting.
Women in boards: Dichotomising the glass ceiling
Authors: Krambia-Kapardis Maria
Published: December 2016

This paper identifies the reasons why glass ceiling and in the case of Cyprus “concrete ceiling” exists in both the private and public sectors despite enacted relevant legislation to ensure equality in work. Initially a qualitative research was carried out with the use of focus groups to identify the issues at hand. Following the results of the qualitative research, a questionnaire was prepared and distributed to the CEOs or the highest rank official of 120 organisations, 38% of those responded. This research, the first of its kind, addressed both the private and public sectors and confirms what has already been addressed in literature in other countries, namely that the main barrier hindering the career prospects of women is the family factor. In the public sector however where human intervention is eliminated women are better represented in the top-level positions.
Board changes and the efficiency of the Nigerian stock market
Authors: Adelegan Olatundun
Published: December 2016

This study provides some evidence on shareholders wealth effects of management board changes in Nigeria from 1997 to 2005. The study presents the total wealth effect and also distinguishes the wealth effects of announcements of new appointments, board resignations and retirements, death and mixed announcements.
An examination of board size effect in a relationship-oriented system: Evidence from Japan
Authors: Sakawa Hideaki , Watanabel Naoki
Published: December 2016

This paper examines whether or not board size effect hypothesis exist in Japan. We make two points about it. First, board size effect exists in Japanese firm which adopt the relationshiporiented system. Second, banks take a part of effective monitoring as stockholder, but do not take it as outside directors.
Board diligence, director business and corporate governance
Authors: Ghosh Saiba
Published: December 2016

The paper examines the association between financial performance and boards of non-financial firms. Using data on over 200 listed manufacturing firms in India for 2005, the findings indicate that, after controlling for various firm-specific factors, board diligence as well as director busyness exerts a positive influence on corporate performance.
Shareholders proposals, vote outcome, and board composition
Authors: Bouresli Amani Khaled , Davidson III Wallace N.
Published: December 2016

This paper examines the variables that affect vote outcome in shareholder proposals. We found that sponsor identity, proposal type, and board composition play a significant role in determining vote outcome. Furthermore, we found that the interaction between the prior performance with board composition is significant and has a negative coefficient. We conducted nonparametric tests to investigate changes in board’s major characteristics before and after targeting. The results indicate that some changes in management and boards occur after shareholder proposals. These changes, however, are unrelated to variables that impact vote outcome. We conclude that shareholders proposals are not effective at changing company behavior or corporate governance.
Are board meetings proactive or reactive to performance?
Authors: Wang Yi
Published: December 2016

The purpose of this paper is to investigate the relationship between the intensity of board activity, as represented by board meeting frequency, and firm financial performance, using data from the top 500 Australian companies. Firm performance measures include return on assets, return on equity and shareholder return; several control variables are introduced in the analysis. The results indicate that board meeting frequency has a positive impact on subsequent shareholder return. Regarding the explanatory factors for the level of board activity, it is reported that firms with more board committees tend to have relatively more board and committee meetings; firms with larger boards have less board meetings. In addition, lower managerial ownership leads to more committee meetings.
Board composition, mimetic behaviour and corporate voluntary disclosures
Authors: Arshad Roshayani , Darus Faizah , Taylor Dennis
Published: December 2016

This study examines the effects of board composition and mimetic behaviour on the extent and credibility of corporate voluntary disclosure. The investigation is based on the annual reports of 155 Malaysian listed companies during the period when these companies faced new corporate governance regulation. This study provides evidence that under the influence of dominant owners on board, management voluntary disclosure decisions are driven by incentives to conform when their company is structured to meet expectations of good corporate governance. Such incentive seems to override incentives to disclose credible information to outside investors.
The formation of boards of directors as a contingent response to environmental uncertainty – Evidence from emerging economies
Authors: Rice John , Martin Nigel
Published: December 2016

This paper provides some strong support for existing literature in an under-researched context (the emerging economies of the former Soviet Union and Central and Eastern Europe). We develop and apply a model linking Board formation and environmental uncertainty, finding some partial support for our anticipated relationships in the area of Board establishment and perceived financial sector uncertainly, although no support for our anticipated relationship between governmental sector uncertainty and Board formation. research is supportive of the broad assertion that strategy in emerging economies is different and a ‘one size fits all’ (generally American) approach to the questions we ask regarding strategy in emerging regions will rarely provide accurate insights for management academics and practitioners with an interest in understanding and improving management decisions in the context of emerging economies.
Effectiveness of corporate governance structure: An alternative metric on the performance of listed Chinese companies
Authors: Shan Yuan George , McIver Ron P.
Published: December 2016

We analyse a panel data set covering the years 2001 to 2005 and comprised of a stratified sample of A, AB and AH non financial companies listed on China’s Shanghai and Shenzhen stock exchanges to provide empirical evidence on the influence of corporate control and governance characteristics on the quality and independence of corporate decision making in these companies. The characteristics considered are the level of concentration in and type of ownership of the companies, particularly high levels of government and foreign ownership, and the composition (expertise) and size of the companies’ two boards. Performance outcomes, and by association the quality and independence of corporate policy decisions, are measured in the form of firm bad debt to accounts receivable ratio (BD/AR). We find that for our sample firms’ concentration of ownership, including state and foreign ownership, and board size and independence are significant factors in determining the levels of the bad debt ratio.
Is there an optimum grant size and exercise price for incentivizing executives?
Authors: Canil Jean M. , Rosser Bruce A.
Published: December 2016

This study tests the Hall and Murphy (2000, 2002) propositions using a dataset wherein in-the money and out-of-the-money option grants are just as prevalent as at-the-money option grants. The choice of grant size and exercise price in determining optimal pay-performance sensitivity, reveals an over prescription of at-the-money options at the expense of in-the-money options, particularly for high risk-averse CEOs. Also, pay-performance sensitivity is found unexpectedly negatively related to the exercise price, which is attributed to an equally unexpected inverse relation between risk aversion and grant size.
The social network of New Zealand directors: An exploratory study
Authors: Samkin Grant , Allen Brennan , Munday David
Published: December 2016

The paper has two primary aims. First, to develop an appropriate network analysis to investigate whether any individual directors comprising the social network of New Zealand company directors is sufficiently connected so as to be in a position to exercise any form of cohesion, control or exertion of power. Second whether any directors could be identified as being in a position of power to take advantage of the network? This paper uses social network analysis to map and measure the structural features and patterns of relationships of the directors of companies listed on the New Zealand stock exchange and alternative exchange. The social network analysis was performed using the social network software Pajek™. The techniques used in the study reveal that the vertices (directors) in the network are moderately connected. The findings suggest that there is a small group of directors who are in a position to exercise cohesion, control and power over the network.
The independence of the Shari’a supervisory board in the Islamic financial institutions of the GCC countries
Authors: Garas Samy Nathan , Pierce Chris
Published: December 2016

Islamic Financial Institutions (IFIs) are governed by two boards: the Board of Directors (BoD) and the Shari’a Supervisory Board (SSB). The SSB is a panel of Shari’a scholars who act independently from other governance organs. This paper discriminates between dependent SSBs and independent SSBs by using twenty one variables, which are classified into three groups: the implementation of governance best practices, the recruitment of SSB members, and the relationship between the SSB members and other governance organs. This study is one of the first studies that provide empirical results about the SSB independence. Nevertheless, the research focuses exclusively on the Gulf Cooperation Council (GCC) countries and excludes the other countries where Shari’a supervision might have different forms. The study has developed a hypothesis, which was tested by a questionnaire. Data was collected from 76 Shari’a Supervisory Boards, 73 Boards of Directors, and 59 shareholders of IFIs in the GCC countries (Bahrain, Kuwait, Qatar, Saudi Arabia, and UAE) during 2009. The discriminant analysis has been used in identifying both dependent and independent SSBs. The paper finds five variables relevant in discriminating the two groups. These variables are the incentives provided to the SSB; the average remuneration to the SSB members; the existence of the policy of penalties for violating the code of conduct; the relation between the SSB members and the BoD; and the role of executive management in recruiting SSB members.
Board size and firm performance: A comparative and comprehensive analysis by using organizational theories and correct proxies
Authors: Rashid Kashif , Islam Sardar M. N.
Published: December 2016

An organization’s board is an important governance mechanism to incorporate corporate governance provisions in financial markets. Previous studies on board size and the value of a firm relationship (BVF) are inconclusive and lack a comparative and comprehensive analysis of this relationship which incorporates the role of additional factors present in the developing financial market. This study bridges the gap in the literature by providing some additional empirical evidence about the BVF relationship. This evidence is provided by performing a comparative and comprehensive analysis of the firms in developing and developed financial markets. Based on a sophisticated data set for the selected markets, two separate models are run and their results are compared. The results for this study suggest that in the developing market a bigger board improves the value of a firm, supporting the relevance of stewardship theory. On the contrary, in the developed market a smaller board improves shareholders’ value, supporting the agency theory. The study has reflected the differences in the efficiency of institutional framework and the sophistication of financial development in a selection of countries, in the results on the BVF relationship. Furthermore, these results make the applicability of different business theories explaining market operations in these markets different from each other. The results are innovative and valuable to academics, analysts and industry professionals in both developing and developed financial markets.
The effect of Delaware law on firm value: Evidence from poison pill adoptions
Authors: Campbell IIa Terry L. , Varma Raj
Published: December 2016

As the leading location for firm incorporations and corporate law, Delaware occupies a unique place in corporate governance and control. In this paper, we provide fresh evidence on whether Delaware’s dominance arises from its takeover laws being in the best interest of shareholders versus managers by investigating the role of the state in which a firm is incorporated on the firm’s adoption of a poison pill. Our results indicate that announcements of adoptions of poison pills by Delaware firms are associated with returns not significantly different from those for non-Delaware firms. Moreover, Delaware firms that adopt poison pills are no more likely to receive a takeover bid, be successfully acquired, or receive better merger terms than non-Delaware firms. Overall, it appears that Delaware law, with regards to takeovers, promotes an environment consistent with a “race to the middle” philosophy, neutral to management and shareholders.
Governance and performance in compliance versus non-compliance Chinese listed companies
Authors: Tam On Kit , Guo-Sze Tan Monica , Wei Hu Helen
Published: December 2016

Cases of corporate scandals and the misconduct of publicly listed companies (PLCs) are growing amid rapid economic development in China. Systematic research on governance factors affecting these corporate misconducts and their consequences is however scant. This study compares the key governance characteristics of Chinese PLCs that were found to have contravened regulatory compliance requirements (i.e., “non-compliance” PLCs) to those that were not (i.e., “compliance” PLCs). Based on a comparison between 53 pairs of compliance - and non-compliance-PLCs over the period from 2001 to 2006, our results show that there are significant differences between the two. We found that ownership concentration is higher in compliance firms that also compensate their directors and executives at higher levels. Furthermore, the results suggest that sound governance practices benefit firms socially and financially, and an effective internal monitoring mechanism can further differentiate good companies from bad companies such that the good companies perform better.
Pivotal questions in separating the chairman from the chief executive role
Authors: Dailey Patrick R.
Published: December 2016

Separation of the Non-Executive Chairman role from the Chief Executive role continues to gain global acceptance. Prescriptions for separating these roles are most entirely focused on policy and structural matters. Little attention has been focused upon the interpersonal dynamics which determine the initial acceptance of the separation and its ongoing success. Pivotal Questions focuses upon a Board’s interpersonal dynamics crucial to the role separation. Pivotal Questions supplies guided questions that are the catalysis to dialogue that if not considered, might derail the intended success of the separation.
Performance management and the balanced scorecard in the modern non-profit organisation
Authors: O’Boyle Ian
Published: December 2016

Performance management is a process that has been used in the for-profit business environment for many years and has had significant benefit for that sector. As the not for- profit organisation enters new dimensions of competitiveness, increased professionalism and a call for greater transparency, the utility of a performance management approach within the not for profit environment and its potential benefit for such an organisation is explored. The application and appropriateness of the balanced scorecard as a measurement tool is analyzed within the article and it becomes apparent that such a tool can have a direct impact on the performance of the modern not for-profit entity.
Defining directors’ conflict of interests in code of ethics
Authors: Di Carlo Emiliano , Testarmata Silvia
Published: December 2016

We propose a definition of directors’ conflict of interests (CoI) by critically reviewing the academic literature. Then, we present an exploratory study, based on a content analysis of the leading Italian listed companies that sought to empirically assess the directors’ CoI definitions provided by corporate codes of ethics. We found that despite the presence of CoI statement within corporate codes of ethics, CoI definition is often absent, when present it is not always clear, and differs widely among firms. The consequence is that CoI recognition could be not easy and remedies to prevent and resolve directors’ CoI lose their practical utility.
What competencies should directors possess? Malaysia perspective
Authors: Wan Fauziah Wan Yusoff , Armstrong Anona
Published: December 2016

Directors’ competencies are seeing to be of importance to corporate governance. As this issue has not yet being studied extensively in Malaysia, this study determines the key competencies of Malaysian company’s directors using qualitative approach involving two stages of Delphi Technique. In the first stage all information pertaining to directors’ competences in the literature had been reviewed. In the second stage, the key competencies identified in stage one were the criteria for developing a semi structured questionnaire. Participants were asked to rank the competencies in term of their importance for directors’ performance. Based on personal interviews with 41 participants eight types of competencies were found to be essential for Malaysian companies’ directors. Financial competencies received the highest responses, followed by corporate planning, business forecasting, legal, risk management, marketing, human resource and international business. This paper provides important evidence to support the conclusions drawn from the study about the importance of relevant directors’ competencies
for board and corporate effectiveness.
Family presence and financial performance in large listed companies in India
Authors: Pandey Rakesh , Taylor Dennis , Joshi Mahesh
Published: December 2016

This study investigates the impacts of family presence and board independence on corporate financial performance in 131 large listed firms from India, an emerging economy dominated by the presence of large business groups having concentrated ownership. Family presence includes the extent of family ownership and appointment of family CEO and family chairperson. Employing a multiple linear regression model, this study first detects a positive relationship between family ownership and financial performance. Second, a negative relationship is found between family CEO and firm performance, indicating that family firms with non-family CEOs perform better than firms having family CEOs. Third, the proportion of Board outsiders ‟ (i.e. independent non-family directors) is found to have no significant relation to financial performance, thus challenging agency theory‟s need for independent monitoring in family firms to enhance performance. These results are interpreted in the context of historical Indian family business practices and modern changes.
Board of director characteristics and audit report lag: Australian evidence
Authors: Singh Harjinder , Sultana Nigar
Published: December 2016

This study examines whether board of director’s independence, financial expertise, gender, corporate governance experience and diligence impact the audit report lag exhibited by Australian publicly listed firms. Using a pooled sample of 500 firm-year observations obtained from the Australian Securities Exchange for the period 2004 to 2008, this study finds evidence that board member independence, board member financial expertise and, to a lesser extent, board member corporate governance experience are the most significant predictors associated with shorter/reduced audit report lag. Main findings are robust to alternative measures of audit report lag, board characteristics and control variables. Findings from this study clearly imply that boards play a substantial role in reducing audit report lag. Results imply that legislative and regulatory requirements, both in Australian and overseas, stipulating board member independence and financial expertise requirements are effective in improving the integrity of financial reporting, a key component of which is timeliness of financial reporting (encapsulated by audit report lag). In addition, an additional board characteristic that regulators should consider promoting among firms is board member corporate governance experience. Results from this study, therefore, have clear implications not only for regulators but also for key stakeholders such shareholders and management.