Board independence and firm performance: Evidence from Bangladesh

Rashid, Afzalur

doi:10.1016/j.fbj.2017.11.003

Cited by 204 publications

(265 citation statements)

References 75 publications

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“…A study acknowledged the board's independence as both exogenous and endogenous and found no positive association among outside directors and the economic performance of the firms. However, they found the positive influence of the size of the board on board independence [64]. On the other hand, the scholars also found the negative impact of external directors on performance because they found that the balanced size of the board's independence could lead to an increase in the value of these companies [60].…”

Section: Independent Directorsmentioning

confidence: 99%

Do corporate governance structure and capital structure matter for the performance of the firms? An empirical testing with the contemplation of outliers

Wang

Ramzan

2020

PLoS ONE

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A superlative combination of the Board of Directors (BOD) with diverse members is considered a sign of a good governance structure. Meanwhile, the key decision taken by BOD to make organizations profitable is the capital structure with the optimal mix of debt and equity. Unfortunately, previous literature has reported this relationship with a mixed trend, which may be due to research gaps in the statistical analysis. Moreover, it also shows that the relationship between them has not yet been fully predicted and can still be completely understood. This study contains time-variant and time-invariant variables, and these variables usually have an outlier's problem. As we know that the OLS estimators are more sensitive to react adversely to this problem, yet we have not received enough evidence from similar researches that cares about it. Consistent with these arguments, this study focuses primarily on exploring the influence of corporate governance structure and the capital structure on firms' market-oriented and accounting-based performance, especially with the contemplation of outliers. Hypotheses have been evaluated using M-estimators and S-estimators of robust regression for 45 listed firms for the period from 2013 to 2017. The findings reveal that the governance structure of firms with BOD, independent director, institutional investors, audit committee and female directors accelerates its performance. Further, we find that the leverage ratio improves accounting performance, but it has a downward impact on the share prices of listed firms. Our study contributes to the prevailing literature by proving that the kind of governance structure that based on diverse expert members and a capital structure with a high volume of debt is of utmost importance to the performance of firms as a whole.

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Section: Independent Directorsmentioning

confidence: 99%

Do corporate governance structure and capital structure matter for the performance of the firms? An empirical testing with the contemplation of outliers

Wang

Ramzan

2020

PLoS ONE

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“…The non-executive directors on the board will not be able to exercise their duties effectively unless they are independent of management (Fuzi, Halim & Julizaerma 2016). Rashid (2018) used accounting and market performance measures in analyzing the effect of board independence on performance and finds that board independence and firm economic performance do not positively influence each other. Uribe-Bohorquez, Martínez-Ferrero, and García-Sánchez (2018) use technical evidence to measure corporate performance and provide evidence that board independence increases the firm's technical efficiency.…”

Section: Board Independence and Corporate Performancementioning

confidence: 99%

Board Attributes and Corporate Performance: Evidence from Nonfinancial Firms in Nigeria

Emeka-Nwokeji¹,

Agubata²

2019

jeb

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Corporate board is pressured from all stakeholders for better reporting on corporate health. Meanwhile, effective discharge of the responsibilities of a corporate board is assured by an appropriate balance of skills and diversity without compromising competence, independence, and integrity. This study examines the extent to which corporate board attributes drive the performance of non-financial firms in Nigeria. The study adopted ex post facto research design. Data were extracted through content analysis from the annual report of 93 out of 122 non-financial firms listed on the Nigerian Stock Exchange from 2006 to 2015. Collected data were analysed with pooled ordinary least square regression conducting diagnostic tests to confirm the assumptions of the regression. Analysis revealed that: Board size and board gender diversity have a positive and significant effect on corporate performance. While board independence and board remuneration have a negative and significant effect on corporate performance. Also, directors' shareholding has a negative but insignificant effect on corporate performance. Based on the findings, the study among other things recommends that companies in Nigeria should promote diversity in its membership across a variety of attributes particularly gender diversity considering that it is relevant for enhancing firm performance. Also, Company should remunerate fairly, responsibly and transparently so as to reduce the decreasing effect of board remuneration and promote positive outcomes in the short, medium and long term.

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“…Further, women on Board of Commissioners is measured based on percentage of women on board (Thams et al, 2018). Finally, Board of Commissioners independence is measured by percentage of Board of Commissioners from outside (Rashid, 2018).…”

Section: Methodsmentioning

confidence: 99%

“…defines independent director as outside director who no association with dominant shareholders. According toRashid (2018), the contention of board independence arises from the one tier board system. Some prior finding believe that Board of Commissioners independence is related to superior shareholder's wealth(Baysinger & Butler, 1985;Rashid, 2018) Muhammad et al (2016).…”

mentioning

confidence: 99%

Board of Commissioners Involvement and Shareholder’s Wealth

2019

IJRTE

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Using Continental European data on Indonesia, this research investigates the effect of Board of Commissioners involvement which is measured by responsibility, seniority, women participation and independency on shareholder’s wealth. This paper is the first research that examines the association between Board of Commissioners involvement and shareholder’s wealth based on 249 Indonesia listed companies. Panel data analysis was used to assess whether the Board of Commissioners responsibility and independency have positive effect on shareholder’s wealth. Based on the finding, seniority and women involvement have a negative relationship with shareholder’s wealth. These findings have practical implication, i.e. the shareholders should consider the Board of Commissioners involvement in appointing and dismissing them. Theoretically, these findings contributed to the agency theory in the way that the Board of Commissioners involvement could reduce the agency cost and increase the wealth of shareholders

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Board independence and firm performance: Evidence from Bangladesh

Cited by 204 publications

References 75 publications

Do corporate governance structure and capital structure matter for the performance of the firms? An empirical testing with the contemplation of outliers

Do corporate governance structure and capital structure matter for the performance of the firms? An empirical testing with the contemplation of outliers

Board Attributes and Corporate Performance: Evidence from Nonfinancial Firms in Nigeria

Board of Commissioners Involvement and Shareholder’s Wealth

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