Board composition and corporate reporting on internet: Indian evidence

The impact of board and audit committee characteristics on voluntary disclosure: A meta-analysis

Corporate governance and working capital management (WCM) are treated as essential subjects in financial management. Many researchers have studied the influence of corporate governance, but only a few of them have connected it with WCM efficiency. Particularly in Malaysia, there has been little concentration given to the relationship between corporate governance attributes and the WCM of the companies. Therefore, the present study intends to analyse the impact of corporate governance represented by CEO tenure, CEO Duality, Board size and Audit Committee on WCM represented by the current ratio of 35 Selangor-based companies which are listed under the FTSE Bursa Malaysia Top 100 Index.The results from this study show that CEO tenure has a significant negative impact on the current ratio, while CEO duality has a positive impact on the current ratio. Moreover, board size has no significant impact on the current ratio, and the audit committee has a significant positive impact on the current ratio. These findings imply that effective corporate governance mechanisms can significantly affect WCM. The result is expected to enable the owners of the firms to improve their corporate governance practices to enhance WCM efficiency and, furthermore, contribute to the enhancement of the profitability of the firms and maximise shareholders' wealth indirectly. Additionally, the findings from this study can also be a guide for good corporate governance' criteria that significantly affect the efficiency of WCM to be practised by other companies, including SMEs and other organisations.

PurposeThe purpose of this study is to investigate the effect of board and audit committee characteristics on corporate social responsibility (CSR) in Iranian companies listed in stock exchanges.Design/methodology/approachThis is a descriptive-correlational and an applied research. The statistical population of this research is all companies listed in Tehran Stock Exchange and the research period is from 2012 to 2018. Using screening method a sample of 150 companies was selected. Multivariate regression and the software Eviews 10 were used for data analysis and hypothesis testing.FindingsThe results indicated that board size had a significant effect on CSR; board independence had a significant effect on CSR; managerial ownership did not have a significant effect on CSR; CEO duality did not have a significant effect on CSR; audit committee size had a significant effect on CSR; audit committee independence had a significant effect on CSR; and financial expertise of audit committee members had a significant effect on CSR.Originality/valueThe present study is the first research performed on the effect of board and audit committee characteristics on CSR in Iran. The results of this study contribute to the literature on the effect of board and audit committee characteristics on CSR and provide suggestions for capital market participants. CSR helps reduce asymmetric distribution of information among the internal and external organizational entities and reduce agency problems and conflicts among different groups. Based on the results, an effective audit committee as an effective mechanism enhances the credibility of financial and non-financial reporting such as social responsibility, which means that an effective audit committee can improve the level of voluntary disclosure of information through effective oversight of the reporting process. It is also suggested that companies focus on audit committee characteristics to increase the level of CSR.

PurposeThis study aims to examine the link between boards and audit committees and firm performance in Kuwaiti listed firms in the context of recent and extensive corporate governance regulatory reform.Design/methodology/approachPanel data regression analysis with fixed effects and clustered standard errors of firm performance for 61–97 listed industrial and services firms in Kuwait over a seven-year period. The dependent variables are the returns on assets and equity, the debt-to-equity ratio and leverage and Tobin’s Q and the independent variables comprise board of directors and audit committee characteristics, including size, the number of meetings and the numbers of independent and outside board and expert committee members. Firm size, subsidiary status and cash flow serve as control variables.FindingsMixed results with respect to the characteristics of the board of directors. Board size and independent and outsider board members positively relate only to Tobin’s Q and insiders only to debt to equity. For audit committee characteristics, committee size, independence and expertise positively relate to the return on equity and committee size and expertise only to Tobin’s Q. Of the five performance measures considered, board and audit committee characteristics together best determine Tobin’s Q.Research limitations/implicationsData from a single country limits generalisability and control variables necessarily limited in a developing market context. Need for qualitative insights into corporate governance reform as a complement to conventional quantitative analysis. In combining accounting and market information, Tobin’s Q appears best able to recognise the performance benefits of good corporate governance in terms of internal organisational change.Practical implicationsThe recent corporate governance code and guidelines reforms exert a mixed impact on firm performance, with audit committees, not boards, of most influence. But recent reforms implied most change to boards of directors. One suggestion is that non-market reform may have been unneeded given existing market pressure on listed firms and firms anticipating regulatory change.Social implicationsKuwait’s corporate governance reforms codified corporate governance practices already in place among many of its firms in pursuit of organisational legitimacy, and while invoking substantial change to audit committees, involved minor change to firm performance, at least in the short term. Some firms may also have delisted in expectation of stronger corporate governance requirements. Regardless, these direct and indirect processes both improved the overall quality of listed firm corporate governance and performance in Kuwait.Originality/valueSeminal analysis of corporate governance reforms in Kuwait, which have rapidly progressed from no corporate governance code and guidelines to an initially voluntary and then compulsory regime. Only known analysis to incorporate both board of directors and audit committee characteristics. Reveals studies of the corporate governance–firm performance relationship may face difficulty in model specification, and empirical significance, given the complexity of corporate governance codes and guidelines, leads in changing firm behaviour and self-selection of firms into and out of regulated markets.

PurposeThis study aims to investigate the influence of corporate governance structures of non-bank financial institutions (NBFI) on their profitability.Design/methodology/approachThe analysis is performed using data derived from the Bank of Ghana database during a nine-year period, 2006-2014. Correlated panels corrected standard errors model is used to estimate the regression equation. The study uses board size, board independence, gender diversity, CEO duality and tenure and board meetings as proxies for corporate governance. Audit committee size, independence and meetings are used as measures of audit committee activity. The study also uses the return on assets as measures of NBFI profitability.FindingsResults of the study show that there exists positive relationship among board size, audit committee size, meetings of the audit committee and profitability. However, board composition, gender diversity, board meetings and audit committee independence show a negative relationship with NBFI performance. From the findings of the study, it is evident that there are mixed results regarding corporate governance mechanisms and profitability of Ghanaian NBFIs. The results imply that the Ghanaian NBFI industry have unique characteristics and may react differently to corporate governance structures.Originality/valueThe value of this study is in its contribution to the extant literature on corporate governance and profitability of NBFIs.

There is a distinct lack of research into the relationship between corporate governance and corporate social responsibility (CSR) in the banking sector. This paper fills the gap in the literature by examining the impact of corporate governance, with particular reference to the role of board of directors, on the quality of CSR disclosure in US listed banks’ annual reports after the US sub-prime mortgage crisis. Using a sample of large US commercial banks for the period 2009–2011 and controlling for audit committee characteristics, board meeting frequency, and banks’ profitability, size and risk, we find evidence that board independence and board size, the two board characteristics usually associated with the protection of shareholder interests, are positively related to CSR disclosure. This indicates that, with regard to CSR disclosure, more independent boards of directors and larger boards are the internal corporate governance mechanisms which promote both shareholders’ and other stakeholders’ interests. Contrary to our expectations, CEO duality also impacts positively on CSR disclosure. From an agency-theoretical viewpoint, this suggests that powerful CEOs may promote transparency about banks’ CSR activities for their private benefits. While this could indicate that powerful CEOs are under particular pressure to appease stakeholders’ concerns that they might abuse their power by providing a high degree of CSR disclosure, it could also be a sign of managerial risk aversion or managers’ private reputational concerns.

This study focuses on the role of corporate governance in predicting financial distress of companies in the finance sector in Sri Lanka. Over the past two decades, several finance sector companies collapsed in Sri Lanka affecting numerous victims with no proper compensation payments. The study aims to unveil the impact of corporate governance on financial distress of companies in the financial sector. A number of key variables included to measure the corporate governance such as board size, board gender diversification, frequency of board meetings, audit quality, board member remuneration, CEO duality, education level of the board members, and board independence. As control variables firm size, profitability, and financial leverage are considered. Financial distress is operationalized through the measures of institutions negative profit, cash flow, or worth for three consecutive years. Data from 54 listed financial institutions in Sri Lanka were collected from 2017 to 2022. Descriptive analysis, Pearson correlation analysis, corporate governance comparison model, and regression analysis were employed for data analysis. The findings indicate that board size, board gender diversification, frequency of board meetings, higher audit quality, education level of the board, board independence, and return on equity have a significant negative impact on financial distress. These findings can help identify at-risk financial institutions, support decision-making for investors and stakeholders, guide the implementation of corporate governance policies, and inform policymakers in developing new governance policies.

Background: Corporate governance (CG) is crucial for ensuring transparency and accountability in firms. This study explores the relationship between CG mechanisms and financial performance (FP) in Indian listed companies. CG focuses on Inside Directors (ID), Outside Directors (OD), Audit Committee (AC), CEO Duality (CEO), and Frequency of Board Meetings (FBM) Objectives: The study aims to evaluate how these governance mechanisms influence FP, measured through Return on Assets (ROA), Return on Equity (ROE), Net Profit Ratio (NPR), Equity Multiplier (EQM), and Total Asset Turnover Ratio (TATR) Methodology: A quantitative approach was employed, analyzing data from Indian listed companies for the period 2014-2020. Statistical techniques such as Descriptive statistics, Correlation analysis, and Regression analysis were used to assess the impact of ID, OD, AC, CEO, and FBM on the FP of the listed companies. Findings: The study finds that in Indian-listed companies, CEO characteristics significantly influence FP, particularly asset turnover, while other governance factors show mixed or insignificant effects. FP metrics like ROA and ROE exhibit strong correlations, but leverage negatively impacts profitability. Governance's impact varies across industries, emphasizing its complex role. Implications: The study implies that enhancing CG mechanisms, particularly board composition and oversight, can significantly improve FP in Indian-listed companies. Effective governance structures are crucial for optimizing asset utilization and profitability, thus contributing to overall financial health.

This study is novel research aims to investigate the impact of corporate governance mechanisms on stock price volatility in the Egyptian stock exchange through the role of the dividend policy as a mediating variable. The study examines certain corporate governance mechanisms such as: board independence, board size, number of board meetings, CEO duality, and audit committee. The study used quarterly data on EGX 30 for the period 2012-2021. It was based on a sample of 25 stocks traded in the Egyptian stock exchange, not including the stocks of the financial sector. Leverage and size used as a controllable variables. Results revealed that corporate governance has an impact on stock price volatility and dividend policy. Board independence, board size, board meetings and audit committee have a significant negative impact on stock price volatility of listed Egyptian companies. A good corporate governance practices is a good sign to reduce the fluctuations in stock prices. However, CEO duality and size has no impact on stock price volatility. Leverage has a positive significant impact on stock price volatility. Accordingly, CEO duality and leverage is a sign of poor corporate governance. Egyptian investors need to consider the issue of corporate governance practices alongside with the risk associated with expected return when taking investment decisions. A new dimension which added to investigate the interrelationship between corporate governance mechanisms and stock price volatility is dividend policy as mediator factor. Dividend policy is the outcome of good corporate governance practices and has an impact on stock price volatility. Corporate governance is important for stimulating the dividend payments which in turn affect stock price volatility.

This study investigates the effect of corporate governance mechanisms on financial reporting quality of listed deposit money banks in Nigeria. Discretionary accruals was used as proxy for financial reporting quality. The objectives are to evaluate the influence of board independence, assess the role of audit committee effectiveness, examine the effect of ownership structure, and analyze the impact of CEO duality on DA. A quantitative research design is adopted, utilizing secondary data from 12 listed deposit money banks on the Nigerian Exchange Group (NGX) over the period 2015–2024. Data are sourced from annual reports, NGX filings, and Central Bank of Nigeria (CBN) reports, and analyzed using panel regression with fixed effects. Findings indicate that board independence, audit committee effectiveness, and concentrated ownership significantly reduce DA, while CEO duality increases it. The study concludes that robust corporate governance is essential for minimizing earnings manipulation and enhancing financial reporting quality. Recommendations include strengthening board independence, enhancing audit committee expertise, promoting institutional ownership, and eliminating CEO duality to foster accountability and investor confidence in Nigeria's banking sector.

This study examined the effect of corporate governance mechanism and shareholders wealth maximization of quoted commercial banks in Nigeria. The purpose is to examine how corporate governance variables affect shareholders wealth of quoted commercial banks in Nigeria. Panel data was sourced from financial statement of the quoted commercial banks from 2011 to 2020. Return on equity and return on assets were modeled as a function of board size, board composition, board independence and directors shareholdings. Panel data Ordinary least square method was used as data analysis technique. The study found that 65.7 and 70 percent of return on equity and return on assets were explained by variation in corporate governance variables. Beta coefficient of the variables found that board size and board composition have positive but no significant effect on return on equity of the quoted commercial banks while board independent and directors equity holding have negative effect on the return on equity of the quoted commercial banks. The study found that the independent variables have positive effect on return on assets of the quoted commercial banks except directors’ equity holding. From the findings, the study concludes that corporate governance variables have greater effect on return on assets than return on equity of the quoted commercial banks. From the findings, the study recommends the all corporate governance code from the regulatory authorities should well complied with by the management of the commercial banks. Directors equity holding should be reduce and its objectives integrated with the management objective of maximizing shareholders wealth

The term "corporate governance" has recently gained popularity in the business world. It is regarded as a moral obligation. It entails promoting adherence to the law in letter and spirit and illustrating ethical behavior. Corporate governance is a critical procedure that influences an organization's financial performance. The main aim of this paper is to investigate the impact of corporate governance on the financial performance of the leading IT sector companies in India. For this purpose five leading IT sector companies (on the basis of market share) have been selected namely TCS, Wipro, Infosys, HCL Tech and Tech Mahindra. The present study is based on Secondary Data. Data of five years (from 2018-19 to 2022-23) have been analyzed through panel data regression. In this study, ROA and ROE are taken as performance indicators and Board Size, Board Composition, CEO Duality, Promoter’s Holding, Size and Age have been selected as independent variables. The outcome of regression analysis showed that only promoters holding and Size have significant positive influence on the ROA and ROE whereas, Age is having significant negative impact on them. Further, it is also concluded that corporate governance variables such as board size, board composition and duality have no significant impact on the performance of the leading IT companies in India.

Purpose: This study attempts to analyze the influence of board structure (board size, board independence, CEO duality, insider ownership) on performance of Bangladeshi listed nonfinancial firms during the post-shock period of stock prices. Methodology: Putting stress on the issue of controlling for any possible endogeneity problems prevails in the effects of structure of board on corporate performance this study employed the Durbin-Wu-Hausman test as the presence of endogeneity severely makes the OLS estimates biased. Therefore, satisfying endogeneity and overidentification tests the observed data have been analyzed by 2SLS as well as OLS regression models. In an attempt to choose the consistent coefficients between OLS and 2SLS a Hausman test was applied. Findings: Results of the study suggest that a board featuring more directors improve accounting measures of performance and a board having more independent directors also significantly assist firms to enhance their market measure of performance. CEO duality is found detrimental to the accounting measures of performance. Apart from, findings support that holding more ownership by insiders leads to enhance firm performance. Thus, it provides empirical evidence to support a view of agency theory that large board, board independence, and insider ownership are good incentives to the firm to monitor and supervise managerial activities and minimize agency problems. Practical Implication: Overall, findings of the study are posing some implications for academics, practitioners, and policy makers in advancing the existing knowledge domain and formulating governance policies in the context of emerging countries like Bangladesh. Originality: The driving force of this work was to investigate how effective the corporate governance directives/notifications in regard to board independence and insider ownership was in protecting the shareholders’ interest during the post-shock period of stock prices in Bangladesh. Therefore, this study provides a robust result with regard to the impacts of reformed corporate governance notification (CGN 2012) on firm performance in Bangladesh.

PurposeThis study seeks to examine the key factors that affect the timeliness of corporate internet reporting (CIR) by the Egyptian listed corporations on the Cairo and Alexandria Stock Exchange.Design/methodology/approachThe authors use firm characteristics and corporate governance variables to investigate the influence on the timeliness of CIR. They also develop a disclosure index to measure the timeliness of CIR for the listed Egyptian corporations.FindingsThe primary analysis finds a significant relationship between the timeliness of CIR and firm size, type of industry, liquidity, ownership structure, board composition and board size. The results indicate that firms typically in the service sector, that are large and have a high rate of liquidity, a high proportion of independent directors, a large number of board directors and a high free float disclose more timely information on their web sites. Furthermore, a significant association between the entire independent variables and some items of timeliness of CIR is found.Originality/valueThis study is one of the first empirical studies to investigate the relationship between the corporate governance and the timeliness of CIR in an emerging market.

The research investigates the impact of corporate governance mechanisms on financial reporting quality (FRQ) in Egyptian firms.The study sample includes 68 non-financial firms obtained from the top 100 most active firms listed in Egyptian stock exchange (EGX).Secondary data was obtained from both the annual reports of Egyptian firms and sourced from Refinitiv Eikon Datastream for a 9-year period from 2014 to 2022.Using random effects multiple regression, findings reflect that not all corporate governance mechanisms significantly affect FRQ in Egyptian firms.Specifically, blockholder ownership and the frequency of board meetings have a significant negative impact on FRQ, while board size and audit committee meeting frequency partially influence FRQ positively.Other mechanisms, such as managerial ownership, board independence, CEO duality, and audit committee size, do not show a significant impact.Control variables such as Age showed a significant positive impact on FRQ.Leverage and ROA partially affect FRQ positively.However, Size showed an insignificant relationship with FRQ.