Politicians on boards and CEO pay

Despite pressures to change the role of hospital boards, hospitals have made few changes in board composition or director selection criteria. Hospital boards have often continued to operate in their traditional roles as either "monitors" or "advisors." More attention to the direct involvement of hospital boards in the strategic decision-making process of the organizations they serve, the timing and circumstances under which board involvement occurs, and the board composition that enhances their abilities to participate fully is needed. We investigated the relationship between broader expertise among hospital board members, board involvement in the stages of strategic decision making, and the hospital's strategic focus. We surveyed top management team members of 72 nonacademic hospitals to explore the participation of critical stakeholder groups such as the board of directors in the strategic decision-making process. We used hierarchical regression analysis to explore our hypotheses that there is a relationship between both the nature and involvement of the board and the hospital's strategic orientation. Hospitals with broader expertise on their boards reported an external focus. For some of their externally-oriented goals, hospitals also reported that their boards were involved earlier in the stages of decision making. In light of the complex and dynamic environment of hospitals today, those charged with developing hospital boards should match the variety in the external issues that the hospital faces with more variety in board makeup. By developing a board with greater breadth of expertise, the hospital responds to its complex environment by absorbing that complexity, enabling a greater potential for sensemaking and learning. Rather than acting only as monitors and advisors, boards impact their hospitals' strategic focus through their participation in the strategic decision-making process.

This study examined performance as a moderator of organizational adaptation to environmental change. Change in the composition of boards of directors was examined as a dependent variable reflecting organizational attempts to deal with changing external contingencies. We tested specific hypotheses in an analysis of 290 California hospitals over a seven-year period. Results indicate that hospitals change the composition of their boards to adapt to changing environmental contingencies but that the hospitals' performance moderates the rate of their response, with poorer performers being more willing to initiate changes in board composition than strong performers.

This paper tests the effect of an exogenous shock, the Sarbanes-Oxley Act (SOX) of 2002, on the structure of corporate boards and their efficiency as a monitoring mechanism. The results suggest an increase in the participation of independent directors at the expense of insiders. Consequently, we investigate the implications of board composition changes on CEO turnover and firm value. We document a significant reduction in CEO turnover in the post-SOX period. We also demonstrate that, after SOX, a board dominated by independent directors is less likely to remove a CEO owing to poor performance. Finally, we highlight a negative association between the change in board composition and firm value. Contrary to the legislators' objectives, we suggest that the change in board structure brings about inefficient monitoring and promotes an unfavourable trade-off between independent directors and insiders.

PurposeThe purpose of this research paper is to explore the proposition that diversifying the board in terms of gender, ethnicity or skill base may require consideration of the specific strategic environment of the organisation. The proposition arises from the question as to whether or not greater diversity in board configuration is desirable in certain circumstances and considers the group dynamics, skill mix and capabilities that are required by boards under different conditions of change and strategic complexity.Design/methodology/approachThe study examines the financial performance of New Zealand publicly listed companies over a five‐year period and focuses on changes in board composition, strategic activity and implications for corporate performance.FindingsThe study finds limited support for the idea that board configuration, strategic context and corporate decision quality may be linked.Originality/valueThis paper will be of particular value to those involved in the appointment of directors within the private and public sectors. In particular, it focuses discussion on the strategic environment faced by the organisation and the relevance of a range of potential selection criteria when appointing new directors. It is also of interest to researchers evaluating the value of social capital and gender equity in contemporary organisations as, based on empirical reseach, it challenges conventional thinking. By implication, the paper also questions whether or not boards are actually able to influence key outcomes in the manner expected by legislators.

EUGENE FAMA and Michael Jensen's treatment of the "Separation of Ownership and Control" is both insightful and informative. It deepens our understanding of corporate control, and the analysis of residual claimants usefully extends the economics of internal organization to include partnerships, mutuals, nonprofits, and the like. The basic argument is this: specialized governance structures arise in response to the efficiency needs of each type of organization. This is an important argument and one with which I broadly concur. They couple this, however, with a strong suggestion that these structures have reached a high degree of refinement-on which account there is not now, if indeed there ever has been, an organization control problem with which scholars and others are legitimately concerned. On this point I have grave doubts. My discussion of the paper addresses three issues: What is the relation, if any, of the hierarchical organization of the firm to economic performance? What relation, if any, does residual claimant status have to the composition and character of the board of directors? And is there now or has there ever been a corporate control problem? I deal with each of these issues in order.

Introduction P.Molyneux An Examination of Cross Border Strategies in Banking B.Howcroft, R.ul-Haq & C.Carr Governing British Banks A.Mullineux Changes in Board Composition and Compensation in Banking in the Period 1999-2008 P.de Andres-Alonso & E.Vallelado-Gonzalez The Governance of Executive Remuneration through the Crisis: Evidence from Italy M.Bianchi, A.Ciavarella, V.Novembre & R.Signoretti On the Relationship between Bank CDS Spreads and Balance Sheet Indicators of Bank Risk L.Chiaramonte & B.Casu Are the Ratings Good Indicators of the Credit-worthiness of the Entities that Qualify? C.Salvador Munoz, J.Manuel Pastor & J.Francisco Fernandez de Guevara The Information Content of Sovereign Watchlist and Outlook: S&P versus Moody's R.Alsakka & O.ap Gwilym Errors in Individual Risk Tolerance C.Lucarelli & G.Brighetti Attitudes, Personality Factors and Household Debt Decisions: A Study of Consumer Credit S.Cosma & F.Pattarin An Insight into the Suitability Practice: is a Standard Questionnaire the Answer? N.Marinelli & C.Mazzoli The Business of Clearing Cash Equities in Europe: Market Dynamics and Trends G.Chesini The Nature of China's Exchange Rate Regime and the Potential Impact on its Financial System R.W.H. van der Linden

ABSTRACTWe use panel data on S&P 1500 companies to identify external network connections between directors and CEOs. We find that firms with more powerful CEOs are more likely to appoint directors with ties to the CEO. Using changes in board composition due to director death and retirement for identification, we find that CEO‐director ties reduce firm value, particularly in the absence of other governance mechanisms to substitute for board oversight. Moreover, firms with more CEO‐director ties engage in more value‐destroying acquisitions. Overall, our results suggest that network ties with the CEO weaken the intensity of board monitoring.

[Purpose]This study analyzes whether economic policy uncertainty has a differential impact on corporate employment practices based on gender. Also, this study examines whether companies increase the appointment of female executives during times of economic uncertainty as empirically evaluating corporate responses and policy effects related to gender diversity. [Methodology]This study conducted an analysis using 7,266 firm－year observations of companies listed on the Korea Exchange (KRX) from 2015 to 2024. Economic policy uncertainty was measured using the Economic Policy Uncertainty (EPU) Index developed by Baker et al. (2016). [Findings]The analysis shows that as economic policy uncertainty increases, male regular employment significantly decreases, while both male and female non－regular employment significantly increase. In contrast, female regular employment does not show a significant relationship with economic uncertainty. It suggests that female employment has remained quite stable due to the government’s efforts to implement gender diversity policies. Additionally, this study finds that firms are more likely to appoint female executives under high economic policy uncertainty. It indicates that companies, facing uncertain business environments, are adopting strategies to build more gender－diverse boards in order to better respond to crisis. [Implications]This study suggests that female employment remains relatively unstable, indicating the need for continued policy efforts to address the disparity in employment between genders. The finding that female regular employment was not significantly affected by economic uncertainty demonstrates the effectiveness of government policies aimed at promoting women’s employment and enhancing gender diversity. In particular, the fact that the female executive quota system has contributed to changes in board composition highlights the potential value of institutional intervention.

<span>We present an exploratory study of changes in board composition of Texas savings and loan associations during the tumultuous 1980s. The purpose of the study is to explore the relationship between director turnover and S&L failure. While director turnover constitutes a board attribute that is concrete and conspicuous to the outside world, very few studies have examined its role as a potentially informative indicator of board performance. This is in sharp contract with the extensive research on executive turnover and succession.</span>

Most research on corporate directors has focused on two roles: agency and resource dependence. While these two roles are theoretically and practically distinct, previous research has used the same classification scheme for measuring board composition regardless of role examined. Our paper examines the resource dependence role of directors and posits that the widely used insider/outsider categorizations do not adequately capture this role of directors. A taxonomy of directors is presented specifically for studying the resource dependence role. We then apply the taxonomy to a sample of US airline firms undergoing deregulation, and examine how board composition changes parallel the changing resource dependence needs of the firms. We conclude that the board’s function as a link to the external environment is an important one, and that firms respond to significant changes in their external environment by altering board composition.

The purpose of this general review is to enhance understanding of the importance of a corporation's whole ethics of governance regime and the connection to governance practices. This connection is often missing from corporate governance discussion. There is need for better business community awareness of a well-developed ethics of governance regime guiding appropriate board structure and composition choices subject to firm age and size, understanding of how these choices evolve as the firm matures and grows, plus the benefits from more emphasis in this area for company director training and development. This paper synthesises the theoretical and empirical insight from the ethics and corporate governance literatures to give guidance on best practice for large, medium size and small stock exchange listed companies. This synthesis of the literature evidences that the preferred Australian Institute of Company Directors agency theory prescription for a corporate board is not always optimal. In terms of practical implications advice is given on sound choices on board composition, director selection, plus director training and development that will give the best probability of effective board decisions and strong firm performance - this is not 'one size fits all' corporations advice. Future research should focus on whole ethics of governance regimes and governance practices in place for companies that have succeeded compared with companies that have failed. This will improve understanding in this area. This is a substantial future research agenda item as deeper knowledge of this contrast may add significantly to understanding of corporate success and failure.

Talking in a language that everyone can understand? Transparency of speeches by the ECB Executive Board

The paper examines the Sarbanes-Oxley (2002) Acts immediate impact on board composition and characteristics as well as possible reversals in its impact over time. Effects on directors age and tenure are analyzed over the 2001-06 sample period. Female participation in corporate boards is also studied in the pre-SOX and post-SOX periods. The dual roles of directors in being a member of the board as well as serving as either CEO, CFO, Chairman, Co-Chair, Founder, or Lead Director of their respective companies is also examined. We observe a short-term impact of SOX on board compositions due to changes seen in board characteristics between 2001 (pre-SOX), and 2003-05 short-term period (post-SOX). Also, we observe a reversal of board characteristics in 2006 to pre-SOX levels implying that the effects of SOX on board composition were short-lived, and needs to be monitored over time to ensure adherence to corporate accountability guidelines over the long-term.

: Research is intended to determine whether the composition of the board (board of directors and board of commissioners), which consists of the presence of women councils, boards of foreigners, and the proportion of independent commissioners, have an effect on the disclosure of the activities of Corporate Social Responsibility (CSR) in the annual report. This study uses a quantitative approach using multiple linear regression method. The sample used in this study are all companies listed on the Stock Exchange in the period 2010-2012, a total of 795 firm- years. The control variables used are company size, profitability and debt to equity. These results indicate that the composition of the board and the control variables simultaneosly affect CSR, the presence of women council and the existence of foreign boards, on boards of directors and commissioners, as well as the size of the company's positive significant effect on the disclosure of CSR. However, the proportion of independent commissioners, profitability, and the ratio of debt to equity has no significant effect on the disclosure of CSR. Keywords : Corporate Social Responsibility Disclosure, Board Diversity, Board of Women, Foreign Board, The Proportion of Independent Board

Some giant US conglomerates are now undergoing corporate spin-offs or are considering such spin-offs in the near future. Corporate spin-offs offer a unique opportunity to assess corporate capital structure decisions. The leverage ratio of the spin-off firms represents their initial capital structure. We investigate the capital structure of corporate spin-offs and find evidence that they adhere to the trade-off theory. This study provides evidence that the subsidiary firms tend to aim for a target capital ratio during the sample period. The results indicate that the partial adjustment model with firm fixed effects is a good fit for the data sample. The parent companies in corporate spin-offs exhibit a similar pattern but with a slower adjustment speed. The tendency to target capital ratios is observable in both market value and book value leverage measures for the parent and subsidiary firms. Indicators of the pecking order assumption do not possess statistically significant coefficients. Changes in share price affect market debt ratios in the short term. With alternative definitions of leverage, the estimated adjustment speeds vary. In the case of longer horizons, the results align with a continuous rate of adjustment.