Corporate Governance: An International Review 

About: Corporate Governance: An International Review is an academic journal published by Wiley-Blackwell. The journal publishes majorly in the area(s): Corporate governance & Shareholder. It has an ISSN identifier of 0964-8410. Over the lifetime, 1142 publications have been published receiving 75276 citations. The journal is also known as: Corporate Governance (Oxford).

The Gender and Ethnic Diversity of US Boards and Board Committees and Firm Financial Performance

Abstract: Manuscript Type: Empirical Research Question/Issue: We examine the business case for the inclusion of women and ethnic minority directors on the board. Specifically, we investigate the relationship between the number of women directors and the number of ethnic minority directors on the board and important board committees and financial performance measured as return on assets and Tobin’s Q. Research Findings/Insights: We do not find a significant relationship between the gender or ethnic diversity of the board, or important board committees, and financial performance for a sample of major US corporations. Our evidence also suggests that the gender and ethnic minority diversity of the board and firm financial performance appear to be endogenous. Theoretical/Academic Implications: Reasonable theoretical arguments drawn from resource dependence theory, human capital theory, agency theory, and social psychology suggest that gender and ethnic diversity may have either a positive, negative, or neutral effect on the financial performance of the firm. Our statistical analysis supports the theoretical position of no effect, either positive or negative. Our results are consistent with a contingency explanation because the effect of the gender and ethnic diversity of the board may be different under different circumstances at different times. Over several companies and time periods, the results could offset to produce no effect. Practitioner/Policy Implications: The results of our analysis do not support the business case for inclusion of women and ethnic minorities on corporate boards. However, we find no evidence of any negative effect either. Our evidence implies that decisions concerning the appointment of women and ethnic minorities to corporate boards should be based on criteria other than future financial performance.

Board of Director Diversity and Firm Financial Performance

Abstract: This study examines the relationship between demographic diversity on boards of directors with firm financial performance. This relationship is examined using 1993 and 1998 financial performance data (return on asset and investment) and the percentage of women and minorities on boards of directors for 127 large US companies. Correlation and regression analyses indicate board diversity is positively associated with these financial indicators of firm performance. Implications for both strategic human resource management and future research are discussed.

Women Directors on Corporate Boards: A Review and Research Agenda

Abstract: Manuscript Type: Conceptual (Review) Research Question/Issue: This review examines how gender diversity on corporate boards influences corporate governance outcomes that in turn impact performance. We describe extant research on theoretical perspectives, characteristics and impact of women directors on corporate boards (WOCB) at micro, meso and macro levels: individual, board, firm and industry/environment. Research Finding/Insights: To the best of our knowledge, this is the first comprehensive review of WOCBs, incorporating and integrating research from over 400 publications in psychology, sociology, leadership, gender, finance, management, law, corporate governance and entrepreneurship domains. In addition, we organized our findings to provide a new lens enabling the field to be readily examined by level and by theoretical perspective. The review indicates that WOCB research is about improving corporate governance through better use of the whole talent pool’s capital, as well as about building more inclusive and fairer business institutions that better reflect their present generation stakeholders. Theoretical/Academic Implications: With only one in ten papers addressing theoretical development, the predominant perspectives are human and social capital theories and gender schema at individual level; social identity, token and social networks theories at board level; resource dependency, institution and agency theories at firm level, and institutional, critical and political theories at environmental level. We provide a short synopsis of findings at each level, and conclude with an outline of fruitful directions for future research. Practitioner/Policy Implications: There are increasing pressures for WOCBs, from diverse stakeholders such as the European Commission, national governments, politicians, employer lobby groups, shareholders, Fortune and FTSE rankings, best places for women to work lists as well as expectations from highly qualified women who are likely to leave if they see no women board members. Rationales generally draw on the business case, however the moral justice case is also used by those who seek a fairer gender balance in all aspects of society. From our review, the ‘Impact’ section charts the effect of WOCB at all four levels of analysis.

Does female board representation influence firm performance? The Danish evidence

Abstract: Board diversity has become a major issue within corporate governance where a number of studies seek to explore the impact of diversity on firm performance. The debate focuses on questions such as whether a corporation’s board should reflect the firm’s stakeholders or be more in line with society in general. This article uses a sample of listed Danish firms during the period of 1998–2001 in a cross sectional analysis. Despite that fact that Denmark has gone very far in the liberalisation of women, Danish board rooms are still to a large extent dominated by men. Contrary to a number of other studies, this article does not find any significant link between firm performance as measured by Tobin’s Q and female board representation. This is also the case for board members’ educational background as well as the proportion of foreigners. It is argued that board members with an unconventional background are socialised unconsciously adopting the ideas of the majority of conventional board members, which entails that a potential performance effect does not materialise.

Factors Influencing Voluntary Corporate Disclosure by Kenyan Companies

Abstract: There has been considerable research in respect of voluntary disclosure by companies and factors that may explain such disclosure. However, most of the research has been centred in developed countries. This study extends the previous literature by examining voluntary disclosure in a developing country, namely Kenya. Over the last decade, the Kenyan Government has initiated several far-reaching reforms at the Nairobi Stock Exchange (NSE) in order to mobilise domestic savings and attract foreign capital investment. These measures include privatisation of state corporations through the stock exchange and allowing foreign investors to own shares in the listed companies. This study provides a longitudinal examination of voluntary disclosure practices in the annual reports of listed companies in Kenya from 1992 to 2001. The study investigates the extent to which corporate governance attributes, ownership structure and company characteristics influence voluntary disclosure practices. Our results suggest that the extent of voluntary disclosure is influenced by a firm's corporate governance attributes, ownership structure and company characteristics. The presence of an audit committee is a significant factor associated with the level of voluntary disclosure, and the proportion of non-executive directors on the board is found to be significantly negatively associated with the extent of voluntary disclosure. The study also finds that the levels of institutional and foreign ownership have a significantly positive impact on voluntary disclosure. Large companies and companies with high debt voluntarily disclose more information. In contrast, board leadership structure, liquidity, profitability and type of external audit firm do not have a significant influence on the level of voluntary disclosure by companies in Kenya.