Does board composition and ownership structure affect banks’ systemic risk? European evidence

Purpose: Low market value which recently led to delisting of some companies from the Nigerian Exchange Group can be linked to companies’ ownership structure, board structure or financial structure. This study examined the effect of board characteristics on the market value of listed consumer goods firms in Nigeria, focusing on board size, composition, independence, gender diversity. foreign membership, turnover, and staggered board structure. The study also controlled for the effect of firm size in determining the relationship between board characteristics and market value. Methodology: An ex-post facto research design was adopted because the study heavily relied on the secondary data extracted from the annual reports of twenty-one (21) listed consumer goods firms in Nigeria, from which sixteen (16) firms were selected as the sample covering the period of 2014-2023. The data were analyzed using the fixed effects panel regression model, chosen based on the Hausman test. Findings: The findings of the study revealed that the board turnover and staggered board have a positive and statistically insignificant effect on the market value of listed consumer goods firms in Nigeria, while the board composition, board independence, board gender, and foreign board membership have a negative and statistically insignificant effect on the market value of listed consumer goods firms in Nigeria. The board size and firm size were found have a negative and statistically significant effect on the market value of listed consumer goods firms in Nigeria. It was also found that firm size controls the relationship between the board characteristics and the market value of listed consumer goods firms in Nigeria. Based on the findings, the study concluded that board characteristics can be used as a predictor of market value of listed consumer goods firms in Nigeria Unique Contribution to Theory, Practice and Policy: The study recommended that firms in the consumer goods sector should maintain an optimum board size and prioritize board quality over quantity. Companies should consider adopting a staggered board structure in their articles of association since it appears to have a positive effect on market value. Furthermore, independent directors' activities should be closely monitored to ensure they are not compromised. The competence. experience, and contributions of women and foreign directors should be periodically evaluated to identify and bridge any resource or knowledge gaps. Finally, future research should employ larger samples and longer timeframes to further explore the dynamic relationship between board turnover and firm market value.

The purpose of this paper is to examine the effect of ownership structure and board structure on performance in VC-backed firms. Using 106 French VC-backed firms, our methodology in this paper is to estimate four equations. A regression analysis is then used to study the impact of ownership structure and board structure on performance and also to analyze whether ownership structure (ownership concentration, director ownership, venture capital ownership and employee ownership) and board variables (size, outside directors, COE-chairman duality, proportion of VC directors, proportion of employee directors and board meeting frequency) are significant determinants of VC-backed firm performance. Results indicate a strong positive relation between ownership concentration and performance and between director ownership and performance measured by ROE. And strong negative relation between ownership concentration and performance and between director ownership and performance measured by ROA. No strong relation was found between venture-capital ownership, employee ownership and firm performance. Results show also a strong negative relation between board size and performance measured by ROE and positive relation between board size and performance measured by ROA, Tobin’s Q and MVA. The proportion of independent outside directors on the board was positively associated with ROE and negatively associated with ROA. The presence of a dual leadership structure is negatively associated with ROE and positively associated with ROA. No strong relation was found between the proportion of venture-capital in board, the presence of employee in board, or board meeting frequency and firm performance.

Board Characteristics, Ownership Structure and Firm Value of Listed Petroleum Companies in Nigeria

PurposeThe aim of the paper is to examine the association of corporate governance (CG), the firms’ characteristics and the financial performance of firms operating in the Middle East and North Africa (MENA) region after Arab Spring. The study focuses on CG, exemplified by boards’ composition and ownership structure. It also explores the possible moderating effects of environmental social and governance characteristics (ESG), leverage and size on the relationship between CG and the company’s performance.Design/methodology/approachUsing Thomson-Reuters database, a sample of 67 firms was extracted in the MENA region to measure CG and financial performance post Arab Spring from 2012 to 2016. Panel GLS regression random effects is used to quantify the relationship; robustness is checked by using several alternative regressions and specifications to the performance measure.FindingsThe results reveal that board independence (BI) is negatively correlated with firm profitability but ownership concentration and board gender diversification contribute to profits. When firms that voluntarily form a governance committee are examined, ownership is less concentrated. We obtain a stronger impact of good governance on performance in these firms: board composition, in general, and workers’ satisfaction generate more profits; and undertaking ESG activities become a more dispensable activity. The effect of board size (BS) and forming a governance committee are studied and ensuing recommendations are drawn. In addition, relevant internal control of firms’ characteristics that strongly predict firms’ market values are discussed in the context of agency and stewardship theories.Originality/valueDespite the fact that governance-performance nexus has been extensively discussed and examined, the focus of this volume of research is on western developed countries. The growing economies of the MENA countries, and the limited governance-performance literature in the MENA context have created a demand to understand the governance environment in these countries and its influence on firm’s performance. In this region where firms’ owners are mainly family members, governments and/or institutions, governance is typically weak; moreover, ownership concentration is expected to guarantee good performance, as the role of independent directors becomes ineffective. For firms where ownership is more diluted, a sound governance system should be established to replace ownership concentration, and to more efficiently monitor management, and consequently improve firm performance. Therefore, this study not only contributes a summary of the prevailing corporate structure in MENA. Moreover, it explains the settings where both the stewardship and agency theories apply in MENA firms. Some recommendation on the importance of changes to the existing governance rules are highlighted in terms of more rules requiring board independence, board gender diversity, limits on board size and establishing governance committees.

This empirical study examines the interaction between systemic risk and corporate governance in European financial institutions. Specifically, we investigate how two corporate governance issues, ownership concentration, and institutional investors’ presence, affect systemic risk. We use the conditional value-at-risk (CoVaR) approach (Adrian & Brunnermeier, 2016) to measure systemic risk and analyze balanced panel data of 96 listed banks from 19 European countries during the period 2011–2020. We choose the European context of its corporate governance’s heterogeneity, the presence of a high level of institutional ownership, and the financial turmoil it has been through over the period analyzed. Our findings reveal that ownership concentration decreases systemic risk, while the high presence of institutional investors increases it. This study contributes to the existing literature by shedding light on the relationship between corporate governance and systemic risk, and how it varies across different ownership structures and institutional contexts. Furthermore, this study provides valuable insights for regulators and policymakers in designing effective corporate governance frameworks that can mitigate systemic risk in financial institutions.

A firm does not operate in a vacuum but where there is an interaction with shareholders and stakeholders. Thus, other than providing resources, a firm given its board as one of corporate governance aspect is in a better position to enhance management of its resources. To extend existing knowledge in literature, the study therefore examined the effect of board characteristics on working capital management of listed construction and manufacturing firms in Kenya. The specific objective was to test the hypotheses as to whether there was a significant relationship board size, board independence, board committee, board's gender and working capital management. As guided by resource dependency theory and explanatory research design, 14 listed construction and manufacturing firms from 2008 to 2017 were targeted. From the panel regression analysis, WCM positively and significantly related to board's gender, board size as indicated by ji= 18.293 (p-value=.011) and Hr= 3.822 (p-value = .019) respectively. Moreover, board composition had significant (p-value = .028<.05) and negative tji= -35.833) result while relationship between board independence and WCM was negative tjl= -6.581) but insignificant (p-value = .558 >.05). The study thus concluded that board size and gender diversity of the board enhanced WCM. The findings of the study contributed to resource dependency theory by examining the extent to which the features of the board affect management of resources inform of working capital. The management firms listed in construction and manufacturing sectors were suggested to increase female representation in the board as well as ensuring that optimal board size and committee is maintained. Future studies were expected to extend the model by incorporating other board characteristics. Furthermore, working capital strategies and ownership structure could be considered by upcoming researchers as mediating and moderating variables in that order.

For a sample of 26 non-financial listed Portuguese firms-year from 2002 to 2016, this study extends previous research by empirically examining how board structure affects the magnitude of accounting conservatism for companies listed in Portugal. Mainly, we focus on the main characteristics of the board structure that are highlighted by the Portuguese Securities Market Supervisory Authority’s recommendations: board size, board composition, board’s monitoring committees and number of board meeting. This study predicts and finds a non-linear relationship between board size and conservatism. Specifically, we find that as board size increases up to 8 members, the sample firms employ more conservatism, consistent with the idea that smaller boards can be more effective than larger boards in monitoring managerial behaviour. When board size reaches beyond 8 members, a negative relationship between board size and conservatism accounting occurs. We also find that both boards comprised of more non-executive members and high board meetings frequency lead firms to report more conservatively.

Determinants of corporate ownership and board structure: evidence from Singapore

This study focuses on examining the influence of board size, ownership structure and characteristics of the supervisory board on the financial performance of companies listed on the Vietnam stock market. Using the fixed-effects regression model (FEM) and the random-effects model (REM) with panel data from 2017 to 2021, the research results have shown: (i) ownership (share ownership ratio of major shareholders are state, foreign investors, domestic private investors, members of the board of directors) have a positive influence on financial performance, (ii) board size has a negative effect on the financial performance, and (iii) characteristics of the supervisory board has a positive effect on the financial performance of companies listed on the Vietnam stock market. Based on the research results, the authors propose several key policy recommendations to enhance the financial performance of listed companies on the Vietnam stock market.

PurposeThis study aims to investigate the impact of ownership structure and board characteristics on dividend policy in the listed Turkish firms between 2013 and 2019.Design/methodology/approachThis study uses the probability of paying dividends, dividend payout ratio and dividend yield measures. The suitable regression procedures (logit, probit and Tobit models) are used to examine the research hypotheses by focusing on a panel data set drawn from the Borsa Istanbul (BIST) 100 index, excluding financial and utility firms.FindingsThe empirical findings indicate that institutional and concentrated ownerships are significant and positively associated with dividend payouts, whereas family ownership does not influence dividend policy. On the other end, board size is positive, while chief executive officer duality is negatively related to dividend policy. Additionally, the female directors and board independence are insignificant in influencing firms to pay high dividends.Research limitations/implicationsFuture researchers can validate this paper’s findings by considering the stock dividends as well. Additionally, future researchers may investigate the relationship between these constructs by extending the sample size of firms listed on BIST or in other emerging markets.Practical implicationsThis study’s findings may serve policymakers, regulators, investors and academic researchers to get valuable guidance from relevant literature. The Turkish firms may improve dividend policy by implementing the regulatory framework introduced by the Capital Markets Law in 2012 for effective monitoring and protecting the minority shareholders’ rights. The controlling shareholders may alleviate principal-principal conflicts by ensuring the independence of directors and increasing the number of female directors according to the critical mass of at least 30% of board members.Originality/valueThis study contributes to agency theory and signaling theory by considering ownership structure and board attributes among Turkish firms related to dividend payments.

The objective of this paper is to empirically examine the moderating effect of ownership structure on the relationship between systemic risk and corporate governance. It complements prior research by studying the relationship between the proportion of capital held by state institutions and systemic risk. It also examines the internal governance mechanisms that mitigate systemic risk. For this purpose, this research used a dataset consisting of 22 banks from Gulf Cooperation Council (GCC) countries (10 Islamic banks and 12 conventional banks) over the period 2004–2018. We used a three-stage least squares (3SLS) regression to test our research hypotheses. The findings revealed that the structure of the board of directors (BOD) reduced systemic risk in the banking sector. In particular, we provide evidence that board composition and board meetings negatively affect systematic risk. In addition, we provide empirical evidence that the state plays a key role in moderating the relationship between governance mechanisms and systemic risk. As such, our paper provides significant contributions to the governance and corporate finance literature.

Purpose: This paper would like to review the past studies related to the influence of corporate governance internal mechanism on a firm's stock return. Materials and Methods: This study uses systematic literature review to synthesize the relationship between corporate governance internal mechanism and the firm’s stock return. Results: Past researchers found several indices that can measure internal corporate governance mechanisms. The measurement is calculated based on variables such as board size, board compositions, board process, board structure, board characteristics, gender diversity and ownership concentration practice. Those indicators which contribute to a company's sustainable orientation, improved business performance and better stock return. Research Limitations or Implications: The terms of corporate governance and its underlying factors are very popular among researchers, but the comparison between different industries and different regions remains an interesting subject to be explored. Originality/Value: This article compiles various research about corporate governance from different industries and different parts of the world.

The objective of this research paper is to investigate the association between internal Corporate Governance (CG) mechanisms and stock price volatility in Egypt as an emerging market. The paper investigates the impact of ownership structure and board structure as internal CG mechanisms on stock price volatility. Data are analyzed using a two-way fixed effects model, a one-step dynamic panel data model, and a panel weighted least squares model. The study concluded that ownership concentration has a negative influence on volatility. Interestingly, an inverted U-shaped relationship between the percentage of ownership by the greatest shareholder and volatility is evidenced. Managerial ownership also showed a negative influence on volatility. As for board structure mechanisms, the findings show that both board size and frequency of board meetings negatively influence volatility, whereas board independence has a positive impact.

Corporate board structure has been at the center of policy debate concerning their relevance to organisation’s performance in recent times. Since the value creation of corporate governance can be measured through firm performance, this study investigates the relationship between board size, board composition, CEO-duality and performance of listed manufacturing firms in Nigeria. Content analysis was used to collect secondary information from the thirty listed firms that met the requirement for selection as sample between 2006 and 2010 from Nigerian stock exchange Fact Books. Panel data regression techniques were employed as analytical instrument to test the study hypotheses. Findings of the study revealed that board sizes is positively related to ROA but negatively related to ROE performance variables. The study recommends that firms should appoint more of outside directors (NEDs) than inside executive directors to enable it to maximize the benefits of board independence as well maintain a two-tier board structure. Classification-JEL: Keywords: board structure, board size, board composition, ceo-duality, listed manufacturing firms, performance

PurposeThis study aims to understand the antecedents of export performance at the firm level. Building on agency theory but taking into account emerging market settings and institutional differences, the authors investigate how the board composition determines the export competitiveness of the firms operating in an emerging country from the point of view of corporate governance mechanisms.Design/methodology/approachUsing data from 221 exporting firms for four years (2007-2010), the authors find that there is a significantly positive relationship between board size and all measures of export performance, while a higher presence of outside directors on the board is negatively associated with export performance, consistently with expectations. The separation of chairman of board of directors and chief executive officer (CEO) positions has significantly positive impact on export performance. On the other hand, the authors find no support for the position that inside director professional representation neither reduce nor increase all measures of export performance of firms. In other words, the convergence with Western practices and consistently with agency theory’s claims is evident for both board size and CEO duality. However, the effects of inside professional and outside directors are no consistent with agency theorists’ expectations.FindingsUsing data from 221 exporting firms for four years (2007-2010), the authors find that there is a significantly positive relationship between board size and all measures of export performance, while a higher presence of outside directors on the board is a negatively associated with export performance, consistently with expectations. The separation of chairman of board of directors and CEO positions has significantly positive impact on export performance. On the other hand, the authors find no support for the position that inside director professional representation neither reduce nor increase all measures of export performance of firms. In other words, the convergence with Western practices and consistently with agency theory’s claims is evident for both board size and CEO duality. However, the effects of inside professional and outside directors are no consistent with agency theorists’ expectations.Research limitations/implicationsExport performance is one of the most widely researched areas within international marketing research but least reached topic of management. However, exporting continues to be an important mode of internationalization for multinational companies, especially operating an emerging economy. This study is one of the first studies on the impact of governance factors such as board structure on only export performance rather than overall (firm) performance in light of international management. In other words, the study of the determinants of exports in the context of an emerging economy is an important contribution to the literature, given that our understanding of how the board composition determines the export competitiveness from the point of view of firms operating in an emerging country such as Turkey. Moreover, this research investigates this relationship at objective export performance dimensions using primary data set from listed and non-listed export firms.Practical implicationsThe current study offered in-depth information to multinational companies that aim to gain a competitive exporting advantage in Turkey. Further, the results of this study give managers an opportunity to see the reasons behind the success of the exporting firms from the point of view of corporate governance mechanism.Originality/valueIn this paper, the authors contribute to this recent stream of research providing evidence on the effects of governance mechanism on the export performance from the point of view of emerging countries. Building on agency theory but taking into account emerging market settings and institutional differences, and international management, the authors provide a new framework that models the linkages between board composition and export performance. This work helps us to gain a deeper understanding of how board dynamics contribute to the internalization of firms. Research in this area has been sparse, although some studies have linked governance with export intensity. In this effort, the authors differentiate from previous studies in several ways.