Corporate Governance, Board Diversity, and Firm Value

The purpose of this paper is to investigate the effect of board diversity on firm performance.,From different theories perspective and based on data collected about the composition of board of directors in Spanish non-financial firms, the paper determines statistically the relationship between board diversity and performance for the period 2005-2015.,The results reveal differences between inside and outside board members in terms of the performance impact of board diversity. Thus, while age diversity has a positive effect on firm performance in both, insider and outsider directors, nationality mix is associated with higher performance levels just in the case of insiders. In addition, educational diversity seems to have a negative effect on performance for supervisory directors. On the contrary, the authors do not find any evidence about a possible influence of gender diversity on performance.,The authors are just taking some board’s attributes, but the concept of board diversity is a very wide one. In this regard, less traditional methodologies that do not rely on extant archival databases may be necessary to get a deeper understanding of the impact of boards on firm’s performance.,This study demonstrates that the claim of “one size fits all” often implicitly stated by regulators and advisors is misleading. Board’s attributes analysis over the boardroom as a whole turns out in too simplistic conclusions. This is particularly important for regulators: a rigorous analysis should be performed before including general recommendations about, for instance, the age or the board tenure in corporate governance codes.,As diverse boards contribute to a greater social value, the paper analyses the performance consequences of demographic diversity.,The paper analyses the firm performance impact of diversity among insider directors, on the one hand, and outsider directors, on the other. Although there is a clear difference between the roles assigned to insider and outsider directors, to the authors’ knowledge, there has been no analysis of the firm performance effect of the diversity of each type of director using the same sample and methodology.

Types of director, board diversity and firm performance

Purpose - This study investigates the impact of board characteristics on the financial performance of listed firms in Tanzania. Board characteristics, including outside directors, board size, CEO/ Chair duality, gender diversity, board skill and foreign directors are addressed in the Tanzanian context by applying two corporate governance theories: namely, agency theory; and resource dependence theory.
Design/methodology/approach - The paper uses balanced panel data regression analysis on 80 firm-years observations (2006-2013) from annual reports and semi-
structured interviews were conducted with 12 key stakeholders. The study uses also a mixed methods approach and applies a convergent parallel design (Creswell, 2011) to
integrate quantitative and qualitative data.
Findings - It was found that in terms of agency theory, while the findings support the separation of CEO/Chairperson roles; they do not support outside directors-financial performance linkage. With regard to resource dependence theory, the findings suggest that gender diversity has a positive impact on financial performance. Furthermore, the findings do not support an association between financial performance and board size,
PhD qualification, and foreign directors.
Theoretical and Practical Implications - The study contributes to the understanding of board-performance link and provides academic evidence to policy makers in Tanzania for current and future governance reforms.
Originality/value - The findings contribute to the literature by providing new and original insights that, within a developing setting, extend current understanding of the association between corporate governance and financial performance. This is predicated, also, on the use of uncommon mixed methods approach.

/pdf/the-impact-of-board-characteristics-on-the-financial-2ts8htvne7.pdf

The impact of board characteristics on the financial performance of Tanzanian firms

This is the pre-peer reviewed version of the following article: Ownership structure, stakeholder engagement, and corporate social responsibility policies: The moderating effect of board independence, which has been published in final form at https://doi.org/10.1002/csr.1888. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions.

/pdf/ownership-structure-stakeholder-engagement-and-corporate-2ucc79vw0w.pdf

Ownership structure, stakeholder engagement, and corporate social responsibility policies: The moderating effect of board independence

This study aims to examine the relationship between board diversity and quality of corporate social responsibility (QCSR) disclosure.,The study estimates seven dimensions of board diversity including age, gender, nation, ethnicity, educational level, educational background and tenure by applying Blau’s index. The relationship between board diversity and QCSR disclosure from the perspective of the resource-based view theory is estimated by using panel random effects regression across 57 firms producing exclusive sustainability reports listed in the Pakistan Stock Exchange from 2010 to 2017. The robustness of the results has also been checked through alternative measurements of the variables under study.,The regression results reveal that gender and national diversities are the firms’ valuable resources, having the potential to promote QCSR disclosure. However, age diversity was found to be negatively associated to QCSR disclosure. Furthermore, educational level, educational background, ethnicity and tenure were insignificant on QCSR disclosure. The sensitivity analysis supports the findings of the baseline model.,Pakistani firms need to improve the level of board diversity through encouragement of the inclusion of diverse forces of gender and nationality to enhance disclosure on CSR practices.,This is the first study on board diversity and QCSR in the case of Pakistan.

Board diversity and quality of CSR disclosure: evidence from Pakistan

Purpose




The purpose of this paper is to examine the relationship between corporate governance and firm performance of listed Ghanaian companies.




Design/methodology/approach




The paper adopts a longitudinal and cross-sectional data set of 20 sampled companies over a period of five years. The data were analyzed using a panel regression and ANOVA analysis to establish the relationship between corporate governance and firm performance. Corporate governance is defined in terms of three indices – board structure, ownership structure and corporate control, while firm performance is measured by return on assets, return on equity, net profit margin and Tobin’s Q.




Findings




The empirical results show that ownership concentration and female representation on board have a positive impact on performance. Although the results revealed no evidence to support the impact of board size and audit committee size on performance, there is significant evidence to support the fact that independent directors and audit committee frequency both adversely affect firm performance.




Research limitations/implications




The scope of this paper can be expanded to include non-listed firms. In addition, other corporate governance mechanisms could be considered to broaden the scope of the paper.




Originality/value




This paper contributes to the scarce literature on corporate governance and firm performance in developing countries, especially in sub-Saharan Africa. The paper provides useful information that is of great value to policymakers, academics and other stakeholders.

/pdf/corporate-governance-the-impact-of-director-and-board-1fkw4ojgn6.pdf

Corporate governance: the impact of director and board structure, ownership structure and corporate control on the performance of listed companies on the Ghana stock exchange

Josephine Darko

Papers

Corporate governance: the impact of director and board structure, ownership structure and corporate control on the performance of listed companies on the Ghana stock exchange