Board executive committees, board decisions, and firm value

Vafeas, Nikos; Vlittis, Adamos

doi:10.1016/j.jcorpfin.2019.04.010

Cited by 23 publications

(14 citation statements)

References 58 publications

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“…After considering eight widely used board characteristics in corporate governance, we find evidence (1) that the coefficient board size supports the ineffectiveness of large boards, consistent with Eisenberg et al [1] and Yermack [3]; (2) that independent directors have no significant effect on firm value, consistent with Bhagat and Black [11]; (3) that outside CEO directors show a positive impact on firm value, supporting the advising and enhancing role of outside CEO directors [8]; (4) that there is no significant impact of directors with financial expertise on firm value; (5) that presence of a director with a CEO as a family member has a significant negative effect on firm value, consistent with prior studies [7,24]; (6) that on average, the more diversified the board is in terms of director age, nationality, and gender, firm value measured by Tobin's Q is likely to decrease significantly. These results are different from the expectations of effectiveness of directors with financial experience [14,15], foreign directors [17,18], and female directors [19][20][21].…”

Section: Discussioncontrasting

confidence: 89%

“…Another professional background of boards studied in corporate governance is that of directors with financial expertise [14,15]. These directors are considered to perform better in management advising, as they have specific knowledge in key areas.…”

Section: Literature Reviewmentioning

confidence: 99%

“…The most commonly used board characteristics are board size [1][2][3] and board independence [3][4][5][10][11][12][13]. Since late the 2000s, additional board characteristics have been introduced: Directors with different areas of expertise and experiences [10,[14][15][16], foreign directorships [17,18], female director positions [19][20][21], and nominations of certain numbers of outside directors over 69 years [9].…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Sustainable Causal Interpretation with Board Characteristics: Caveat Emptor

2020

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The study of a causal interpretation of board and firm characteristics, that is, a hidden dependence relationship on the causal inference among board and firm characteristics, is an important but unaddressed issue in the corporate governance literature. Using diverse advanced statistical methods and focusing on Tobin's Q, we find that (i) not all board variables previously found to be significant are "robust" to latent variable data analysis, and (ii) those variables that are consistently significant differ markedly in latent structural equation analysis. Our analyses provide researchers interested in board issues with an important caveat: Focusing on the dependence structure of available board variables affected by latent factors may introduce a new horizon in corporate finance.

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Section: Discussioncontrasting

confidence: 89%

Section: Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Sustainable Causal Interpretation with Board Characteristics: Caveat Emptor

2020

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“…This evaluation originates from the stock investor’s perception of firm capability. In essence, market value is the result of stock investors’ evaluation of a listed company (Griliches et al , 1991; Vafeas and Vlittis, 2019). In keeping with previous studies, this paper uses the stock market value to measure market value.…”

Section: Methodsmentioning

confidence: 99%

R&D volatility and market value: the role of executive overconfidence

Hai

Gao

Yin

et al. 2019

CMS

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Purpose Significant increase or decrease in research and development (R&D) expenditure may have an immense impact on market value. Based on the punctuated equilibrium theory, this paper aims to empirically analyze the impact of R&D volatilities on market value and the moderating effect of executive overconfidence. Design/methodology/approach The study uses the panel data set that covers 902 Shanghai and Shenzhen A-share manufacturing listed firms and multiple regression method to test the theoretical hypotheses. Findings The results show that both positive and negative R&D volatilities have a robust and significant positive impact on the market value. Further analysis shows that the executive overconfidence positively moderates the relationship between R&D volatilities and market value. Research limitations/implications In a rapidly changing and highly competitive environment, firms should recognize that the balance of innovation strategies will help to bring higher market value. Furthermore, firms could improve corporate governance to make the best of managerial characteristics, such as overconfidence, on the innovation decision-making process. Originality/value By pushing the static perspective to a dynamic perspective and empirically documenting the role of executive overconfidence, this study contributes to the literature on the relationship between R&D expenditure and market value, generating theoretical and practical insights for firms to improve innovation governance and innovation strategies to achieve better business performance.

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“…A review of studies also suggests that the gender composition of the board has been usually associated with the firm's financial performance (Sami et al 2011). Vafeas and Vlittis (2019) mentioned that independent female directors, compared to their male counterparts, might take organisational practice issues seriously due to their stronger moral orientations and reputational reasons. Rupp et al (2006) argued that an increasing number of women on the boards would have positive impacts on the firm's performance.…”

Section: H3: Frequency Of Board Meetings Positively Influences Pensio...mentioning

confidence: 99%

Corporate Governance and Performance of Pension Funds in Ghana: A Mixed-Method Study

Akomea-Frimpong

Tenakwah

et al. 2022

IJFS

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This paper assesses the relationship between corporate governance practices and the performance of pension funds in Ghana, which is an emerging market. Data for this study came from two sources: surveys of pension fund managers and annual financial reports of pension funds. Data analysis techniques include mean score ranking and panel regression. The results showed that corporate governance practices such as upholding the rights of shareholders to know the capital structure of the pension funds, equitable treatment of all shareholders, effective internal controls, and timely supervisory functions of audit committees influence the performance of pensions funds. In addition, ensuring proper board composition, the ethnic and gender diversity of board members affect the success of pension funds in the country. The study indicates that the current challenges facing pension funds in the country include poor investment decisions and market volatilities in the investment market. This study provides insight into the governance practices of pension funds. It is relevant for policies and corporate practices to be strengthened to enhance the performance of the firms.

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Board executive committees, board decisions, and firm value

Cited by 23 publications

References 58 publications

Sustainable Causal Interpretation with Board Characteristics: Caveat Emptor

Sustainable Causal Interpretation with Board Characteristics: Caveat Emptor

R&D volatility and market value: the role of executive overconfidence

Corporate Governance and Performance of Pension Funds in Ghana: A Mixed-Method Study

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