Board Independence Research Papers - Academia.edu (original) (raw)

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- Business, CEO compensation, Malaysia, Firm Performance

This study seeks to determine whether characteristics of Members of Board are associated with Audit Report Lag (ARL) among Malaysian Public Listed companies. The punctuality of the audit report is also an indicator that the issued audit report is of excellent quality, benefiting investors and stakeholders in turn (Habib et al., 2018). The audit report delay was at first a measurable external focus point, according to Habib and Bhuiyan (2011), which gradually became a reliable and factual indicator of audit performance. The panel regression analysis reveals that financial expertise is linked to shorter audit report lag. This provides a suggestion to the legislation mandating board financial expert effectiveness in enhancing the punctuality of financial reporting.

- by IAEME Publication
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- Audit Report Lag, Board Independence, Fixed effects model, Board Size

The purpose of this article is to find the link between board
independence, board size and BPD (regional development bank)
performance for describing the corporate governance in regional
development bank. The sample of firms consists all 26’s BPD in
Indonesia in the period 2010-2014; we take secondary data from
the annual report of each BPD, total 203 top executives who are
members of the boards of all BPD in Indonesia. The results are the
influence of the board independence and board size on the BPD
performance. The sample employed all the members of the boards
of BPD in Indonesia giving us a confidence in generalization our
findings. The statistical method used to test the hypotheses is OLS
regression. This method was applied to measure the relationship
between board independence, board size and BPD performance.
The results suggested that there is a positive relationship between
board independence, board size and BPD performance.

This study primarily purposes to empirically examine the impact of stakeholder engagement mechanism in the form of professional shareholders on the corporate social responsibility (hereafter CSR) disclosure and how the previous nexus is shaped and moderated by the level of board independence within a dynamic framework. An agency theory framework is adopted to understand the extent to which professional shareholders, such as government, institutional, and foreign, influence the firm's CSR reporting. To the best of our knowledge, most of the prior studies in the CSR field have not yet provided a profound analysis of the moderating effect of board independence on the relationship between ownership structure and CSR disclosure. Hence, working on this sensitive issue merits our attention and deserves our recognition. Due to endogeneity bias, our reported results vary in their significance level across the three econometric models: pooled ordinary least square, fixed effects, and two-step system generalized method of moments. The findings unveiled that the effect of government, institutional, and foreign investors on CSR disclosure is more positive under conditions of the high level of board independence. The study sheds new light onto the paradoxical empirical findings of the prior research that has tried to link ownership structure to CSR disclosure directly by analyzing the significant role of independent directors on the aforementioned nexus. Further, this study pays rigorous attention to provide multidimensional insights for responsible parties to support the notion of stakeholder engagement mechanism beyond the current boundaries. K E Y W O R D S agency theory, board independence, corporate governance, corporate social responsibility disclosure, ownership structure, stakeholder engagement

This study seeks to examine board structure and its relationship and impact on the listed companies’ performance in USA. A cross-sectional and correlational research design with a sample of 100 listed companies in USA was used. Correlation analysis was carried out to establish the relationship between the variables. Multiple regression analyses were used to determine the extent to which variations in performance of companies are explained by the board structures. The findings portrayed that high frequency of meetings adversely affects the company performance, whereas combined board leadership structure positively contributes to company performance which is contrary to the agency theory expectations. Other than that, it can be concluded that financial performance is independent of board size and composition. It is highly recommended that future research should be focused on non financial aspects of performance in order to get a holistic performance view rather than restricting to accounting-based performance, which is based on accounting principles and assumptions since this provides evidence for future success through overall stakeholder satisfaction. Furthermore, an intense understanding of corporate governance structures and their relations with company performance has the potential to assist practitioners, both policy makers and researchers, to improve governance.

- by Dr. Shweta Mehrotra
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- Corporate Governance, Firm Performance, Board Independence

Owing to inconclusive results on the relationship between capital structure and profitability world over, there is need to take into consideration a moderating variable to strengthen the relationship. This study therefore, introduces board independence as moderator to examine its effect on the relationship between capital structure and profitability of listed industrial goods companies in Nigeria for the period 2006-2018. The population of the study comprises of all the twenty one (21) listed industrial goods companies in Nigerian Stock Exchange (NSE) as at December, 2018. Out of which ten (10) companies constitute the sample of the study. The study utilized documented data collected from annual reports and accounts of the sampled companies, data was first analysed by means of descriptive statistics to provide summary statistics for the variables subsequently, correlation analysis was carried out using Pearson correlation technique for the correlation between the dependent and independent variables and OLS regression technique was employed. The results revealed that capital structure proxy by debt to equity ratio has a significant positive impact on profitability while board independence provides negative and significant effect on the relationship between capital structure and profitability of listed industrial goods companies in Nigeria. Based on these findings the study recommends that policy makers as well as the management of industrial goods companies should identify the optimal capital structure as well as complying with the code of corporate governance in ensuring perfect mixture of board independence as some of the companies are not abiding by the 50% mixture between the executive and non-executive directors in the board.

- by Habib Abdulkarim and +1
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- Capital Structure, Profitability, Board Independence

Purpose-This study seeks to provide valuable new insight into the timeliness of corporate internet reporting (TCIR) by a sample of Irish-listed companies. Design/methodology/approach-The authors apply an updated version of Abdelsalam et al. TCIR index to assess the timeliness of corporate internet reporting. The index encompasses 13 criteria that are used to measure the TCIR for a sample of Irish-listed companies. In addition, the authors assess the timeliness of posting companies' annual and interim reports to their web sites. Furthermore, the study examines the influence of board independence and ownership structure on the TCIR behaviour. Board composition is measured by the percentage of independent directors, chairman's dual role and average tenure of directors. Ownership structure is represented by managerial ownership and blockholder ownership. Findings-It is found that Irish-listed companies, on average, satisfy only 46 per cent of the timeliness criteria assessed by the timeliness index. After controlling for size, audit fees and firm performance, evidence that TCIR is positively associated with board of director's independence and chief executive officer (CEO) ownership is provided. Furthermore, it is found that large companies are faster in posting their annual reports to their web sites. The findings suggest that board composition and ownership structure influence a firm's TCIR behaviour, presumably in response to the information asymmetry between management and investors and the resulting agency costs. Practical implications-The findings highlight the need for improvement in TCIR by Irish-listed companies in many areas, especially in regard to the regular updates of information provided on their web sites. Originality/value-This study represents one of the first comprehensive examinations of the important dimension of the TCIR in Irish-listed companies.

- by Imran Bashir
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- Corporate Governance, Risk Management, Good Corporate Governance, Sarbanes Oxley Act

Objective: The purpose of this study was to examine the impact of political connection and some key corporate governance proxies, such as independence of the board of directors, institutional shareholders ownership on tax aggressiveness, and the impact of these proxies on the relationship between political connection and tax aggressiveness. Method: The panel data model was used to test and analyze the research hypotheses, and tax aggressiveness was measured by the difference between temporary and permanent book taxes. After applying some restrictions, 121 companies listed in the Tehran Stock Exchange were selected as the sample of the research in 2012-2017. Results: The findings of this study indicated that having a political connection with the government has positive and significant effects on tax aggressiveness, and that the existence of independent board of directors and the amount of institutional shareholders in the company have negative and significant effects on tax aggressiveness. Also, the findings showed that the independence of the board of directors and institutional shareholders reduce the positive relationship between political connection and tax aggressiveness. Conclusion: It can be concluded that because of the advanteges of having relationship with government, companies that have political connection with the government have a high level of tax aggressiveness that can be reduced by using corporate governance mechanisms such as independence of the board of directors and presence of institutional shareholders. These mechanisms may reduce the positive impact of political connection on tax aggressiveness.

- by Michael Adusei
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- Finance, Econometrics, Accounting, Board Independence

Abstract This paper investigates the liaison between taxation and corporate governance issues of listed multinational firms and the core characteristics of their boards’ functioning. The aim is to capture the determinant factors of board independency of listed firms as well as taxation, through a multiple regression analysis. For this reason, two models are examined, in order to get the impact of financial and non-financial factors in board independence and taxation, such as the number of directors and/or managers, the number of recorded shareholders and subsidiaries. In order to confirm results, taxation, as a compulsory expense, is examined so as to identify whether and in what extent impacts to board independency. Corporate governance indicators are also used as financial factors that relate directly with the viability and efficiency of a firm. The sample data is comprised of 918 listed European companies, over the period 2006–2015. Country determinant, as a supportive element in this research, enhances understanding of the core topic, that of board independency and taxation. Results are very promising regarding corporate governance practices, implemented by sample firms, providing at the same time evidence about their corporate profile and the possibility of overtrading.

Purpose The purpose of this paper is to examine the effect of the presence of independent board directors on financial performance in India. Design/methodology/approach This study used panel regression models on large listed Indian firms to investigate the impact on financial performance owing to the presence of independent directors. Findings The findings suggest that independent board directors in Indian contexts do not significantly affect financial performance. Practical implications This study has implications for the formulation of regulation related to appointment of independent directors and the extent of their representation on the board for them to be effective. Social implications The proportion of independent directors on the board of the firm is influenced by the trade-off between the cost of having independent directors on the board versus the benefits to the firm and society. Originality/value The impact of the presence of an independent director on financial performa...

- by Reeta Shah
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- Corporate Governance, Corporate Finance, India, Business and Management

The purpose of this article is to find the link between board independence, board size and BPD (regional development bank) performance for describing the corporate governance in regional development bank. The sample of firms consists all 26’s BPD in Indonesia in the period 2010-2014; we take secondary data from the annual report of each BPD, total 203 top executives who are members of the boards of all BPD in Indonesia. The results are the influence of the board independence and board size on the BPD performance. The sample employed all the members of the boards of BPD in Indonesia giving us a confidence in generalization our findings. The statistical method used to test the hypotheses is OLS regression. This method was applied to measure the relationship between board independence, board size and BPD performance. The results suggested that there is a positive relationship between board independence, board size and BPD performance.

The purpose of this paper is to evaluate the relationship between the characteristics of the audit committee and the board and profitability among the companies listed on the Tehran Stock Exchange (TSE) in Iran. In this study, the companies listed on the TSE during the period from
2010 to 2015 are investigated. The Linear panel regression method is employed for this purpose. The independent variables of the study are composed of some corporate governance mechanisms including
audit committee size, audit committee expertise, board size, board independence, chief executive officer (CEO) duality, and institutional ownership. In spite of the fact that there does not exist any significant association between audit committee size and corporate financial performance, the results indicate that there is a positive and significant relationship between audit committee financial expertise and profitability. The authors found that the number of board members cannot affect corporate performance; moreover, duality of CEO role in Iranian companies does not affect company performance. However, the outcomes showed a positive and significant association between the proportion of outside directors on the board (board independence) and profitability at 99 percent confidence level. This implies that the role of non-executive directors in Iran is inconsistent with the stewardship theory. This is due to the fact that independent directors understand the status of business and market better than the board’s executive members. Finally, the results indicated that there is no significant association between institutional owners and Iranian companies’ performance.

- by Hossein Tarighi
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- Corporate Governance, Board Independence, CEO Duality, Board Size

This paper investigates the liaison between taxation and corporate governance issues of listed multinational firms and the core characteristics of their boards' functioning. The aim is to capture the determinant factors of board independency of listed firms as well as taxation, through a Multiple Regression Analysis. For this reason, two models are examined, in order to get the impact of financial and non-financial factors in Board Independence and Taxation, such as the number of directors and/or managers, the number of recorded shareholders and subsidiaries. In order to confirm results, taxation, as a compulsory expense, is examined so as to identify whether and in what extent impacts to Board Independency. Corporate governance indicators are also used as financial factors that relate directly with the viability and efficiency of a firm. The sample data is comprised of 918 listed European companies, over the period 2006-2015. Country determinant, as a supportive element in this research, enhances understanding of the core topic, that of board independency and taxation. Results are very promising regarding corporate governance practices, implemented by sample firms, providing at the same time evidence about their corporate profile and the possibility of overtrading.

This paper attempts to examine the efficacy of the presence of independent board directors on financial performance in India.The study utilised panel regression models on large listed Indian firms to investigate the impact on financial performance due to the presence of independent directors.The findings suggest that independent board directors in Indian contexts do not significantly affect financial performance.The study has implications for the formulation of regulation related to appointment of independent directors and the extent of their representation on the board for them to be effective. The proportion of independent directors on the board of the firm is influenced by the trade-off between the cost of having independent directors on the board versus the benefits to the firm and society. Impact of independent director on financial performance in highly concentrated ownership remains ambiguous

- by Reeta Shah
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- Corporate Governance, Corporate Finance, India, Business and Management

This study postulates the relationships between earning quality and investment efficiency among Tehran Stock Exchange-listed companies with an emphasis on the moderating role of board characteristics including independence, the duality of executives and the financial expertise of members. The research is applied in terms of purpose and takes a correlative-descriptive approach. The statistical population is comprised of TSE listed companies from 2008 to 2018 and, the final sample consisting of 78 companies was selected using systematic (purposeful) elimination. To test the hypotheses, two regression models were estimated using Ordinary Least Squares method through Eviews software. The empirical results revealed a positive and significant relationship between the quality of earning and investment efficiency in TSE publicly-traded companies. As well as, the board members' independence and financial background can significantly exaggerate such a relationship. Based on our findings, capital market legislators, regulators, and policymakers may reinforce the governance role of the board of directors in monitoring the behavior of firms, and as a result, increase the efficiency of allocating capital among companies listed in TSE and also in macroeconomic levels. The findings can persuade corporate shareholders to pay more attention to the degree of independence and expertise

- by Iranian Journal of Finance and +1
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- Board Independence

The communique issued by Capital Markets Board of Turkey (CPM) in 2011 requires the attendance of independent board members of public companies. This study examines the relationship between the presence of independent board member and financial performance. The sample of the study consists of the companies listed on Borsa Istanbul (BIST) 100 Index. The relationship between the board independence and accounting based, market based and cash based financial performance indicators is examined. The result of regression analysis indicates that the board independence affects Tobin's Q positively and ROE and Cash Flow negatively. This study implicates that the presence of independent board member has caused an increase in market based financial performance of companies. TÜRKIYE'DE YÖNETIM KURULU BAĞIMSIZLIĞI VE FINANSAL PERFORMANS İLIŞKISI: BİST 100 ÜZERINE BIR ARAŞTIRMA ÖZ SPK'nın 2011 yılında yayınladığı tebliğ ile halka açık şirketlerin yönetim kurullarında bağımsız üye bulundurması zorunlu hale gelmiştir. Bu çalışma, yönetim kurullarında bağımsız üye bulunmasının finansal performans üzerindeki etkisini arştırmaktadır. Çalışmanın örneklemini BİST100 Endeksi'nde yer alan şirketler oluşturmaktadır. Çalışmada yönetim kurulu bağımsızlığı ile muhasebe temelli, piyasa temelli ve nakit temelli finansal performans ölçütleri arasındaki ilişki incelenmiştir. Uygulanan regresyon analizinin sonuçlarına göre yönetim kurulu bağımsızlığının, Tobin'in q oranı üzerine olumlu yönde, özsermaye kârlılığı ve nakit akışları üzerinde olumsuz yönde etkisi olduğu gözlemlenmiştir. Bu çalışma yönetim kurullarında bağımsız üye bulunmasının piyasa temelli finansal performans ölçütleri üzerinde bir artış meydana getirdiğini göstermiştir.

- by Arunima Haldar
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- Accounting, Corporate Governance, Corporate Finance, India

- by Dr. Habib Abdulkarim
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- Business, Capital Structure, Profitability, STOCK EXCHANGE

- by saleh Bahamman
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- Business, Capital Structure, Profitability, STOCK EXCHANGE

This work examines the effect of the CEOs’ age on the likelihood of pursuing legacy enhancing activities. The premise is that aging CEOs, who have a high level of entrenchment, are more likely to invest in legacy enhancing activities. While some aging CEOs cement their legacy by pursuing empire building activities, others choose to focus on corporate social responsibility (CSR) that also benefits the firm financially. The presence of an independent board can influence the type of legacy the CEOs may pursue, especially if the chairman of the board is not the CEO themselves. Celebrity CEOs, who have been awarded various honors for their perceived accomplishments, have a high level of power, overconfidence and hubris, and are thus more likely to invest heavily into building their legacy.

- by IAEME Publication
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- Strategic CSR, Empire State Building, Board Independence, Celebrity CEO

This paper attempts to examine the efficacy of the presence of independent board directors on financial performance in India.
The study utilised panel regression models on large listed Indian firms to investigate the impact on financial performance due to the presence of independent directors.The findings suggest that independent board directors in Indian contexts do not significantly affect financial performance.The study has implications for the formulation of regulation related to appointment of independent directors and the extent of their representation on the board for them to be
effective.The proportion of independent directors on the board of the firm is influenced by the trade-off between the cost of having independent directors on the board versus the benefits to the firm and society.Impact of independent director on financial performance in highly concentrated ownership remains ambiguous.

- by Arunima Haldar and +2
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- Corporate Governance, India, Financial Performance, CORPORATE GOVERNANCE AND FINANCIAL PERFORMANCE