Board effectiveness: Evidence from firm risk

Baulkaran, Vishaal; Bhattarai, Sagar

doi:10.1016/j.jeconbus.2020.105907

Cited by 12 publications

(14 citation statements)

References 42 publications

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“…They use a sample of firms in 41 economies from 1990 to 2012 to demonstrate that board reforms such as increasing the number of nonexecutive directors, mitigate agency problems and improve board oversight function. Baulkaran and Bhattarai (2020) find a negative relationship between board effectivenessmeasured as a number of executive directors to total board size, independent directors to total board size, board decision-making process and board systemand firm risk. They attribute their results to the important role of board effectiveness in reducing agency cost through the separation of ownership from control and an overall reduction in the firms' cost of capital.…”

Section: Review Of Related Literaturementioning

confidence: 84%

Independent board, gender diversity and bank performance in Nigeria: a system-GMM approach

Okoyeuzu

Ujunwa²,

Ujunwa

et al. 2021

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Purpose This study aims to examine the effects of board independence and gender diversity on bank performance in Nigeria. Design/methodology/approach The two-step system-generalized method moment was used to estimate the effect of board independence and gender diversity on bank performance in Nigeria using annual data of 15 deposit money banks from 2006 to 2018. Findings The results revealed that gender diversity is a significant positive predictor of bank performance, whereas board independence is a negative predictor of bank performance in Nigeria. Practical implications Despite the significant positive relationship between gender diversity and bank performance, this paper does not recommend mandatory quota-based initiates of female representation on corporate boards because of the increasing number of female representations on corporate boards of banks in Nigeria. Originality/value The study contributes to corporate governance literature from developing country perspective and policy, particularly, on the relevance or otherwise of market-based measures in assessing bank performance in developing counties. This paper finds that market-based variables are not good measures of firm performance in economies with underdeveloped markets.

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Section: Review Of Related Literaturementioning

confidence: 84%

Independent board, gender diversity and bank performance in Nigeria: a system-GMM approach

Okoyeuzu

Ujunwa²,

Ujunwa

et al. 2021

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“…However, the situation is different from the sector perspective. The findings of Baulkaran and Bhattarai [68] imply that the optimal board size depends on the industry affiliation. Following this line of reasoning, we expect that companies from the very specific sector (i.e., energy), which are exposed to similar market forces, legal requirements, and macroeconomic risks, will be characterized by a similar optimal board size.…”

Section: Board Sizementioning

confidence: 99%

“…Firms with complex business activities, which have great advising requirements, may benefit from large boards. Baulkaran and Bhattarai [68] report for Canadian firms that in the 2003-2010 period, the average bard size is about ten directors, but energy sector and mining companies are characterized by smaller boards, while firms from the financial sector have typically larger boards.…”

Section: Board Sizementioning

confidence: 99%

The Impact of Corporate Governance on the Capital Structure of Companies from the Energy Industry. The Case of Poland

Grabińska

Kędzior

et al. 2021

Energies

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The energy sector is expected to face fundamental challenges in the near future. On the one hand, it is experiencing a rapidly increasing demand for energy. At the same time, it is subject to the pressure of the climate policy due to environmental issues. For the same reason, the energy sector is forced to undertake costly investments to transform production from black to green energy. The issue of financing has become one of the key problems of the energy sector, especially in those countries in which energy production traditionally is based on fossil fuels, i.e., coal. The paper aims to investigate the impact of corporate governance on the capital structure of companies from the energy industry. We use three proxies of corporate governance quality: institutional investors, the board size, and state ownership and investigate their impact on capital structure. Our findings suggest that the latter two negatively impact debt levels. In our model, we control for financial factors and CEO personal characteristics. We use a Polish setting since transformational problems of the energy sector in Poland are especially visible. At the same time, energy companies in Poland are subject to the strict EU climate policy.

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“…This is in accordance with the best international practices of governing an entity. Unfortunately, a problem occurs when risk seeking managers choose to pursue selfish, greedy and personal objectives at the expense of the interests of the risk-neutral shareholders (Baulkaran & Bhattarai, 2020). Chances of moral hazards occurring increase due to the rise of opportunistic behavior of self-interest start to be the guide for managers (Ballwieser et al, 2012).…”

Section: Theoretical Frameworkmentioning

confidence: 99%

Underwriting risk, firm size and financial performance of insurance firms in Kenya

Kamau

2023

EJEF

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The purpose of this study was to investigate moderating effect of firm size on the relationship between underwriting risk and the financial performance of insurance firms in Kenya anchored on agency theory. Panel data was collected from 54 insurers that operated in Kenya for the ten years (2010-2018). The unbalanced panel data was analyzed using Random and Fixed effect model where Hausman test select model for testing the hypotheses. The study found that underwriting risk had a significant negative effect on financial performance. firm size negatively moderated the relationship between; underwriting risk and financial performance. High underwriting risk reduce financial performance, the situation is worse in larger firms than small firms. The study recommends that insurance firms should divert their focus towards increasing premium to reduce underwriting risk and enhance their financial performance. Finally, it is crucial for the insurance firms to utilize Equity Capital optimally such that it does not become a liability as a consequence of the interest paid.

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Board effectiveness: Evidence from firm risk

Cited by 12 publications

References 42 publications

Independent board, gender diversity and bank performance in Nigeria: a system-GMM approach

Independent board, gender diversity and bank performance in Nigeria: a system-GMM approach

The Impact of Corporate Governance on the Capital Structure of Companies from the Energy Industry. The Case of Poland

Underwriting risk, firm size and financial performance of insurance firms in Kenya

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