Corporate governance mechanisms and firm performance in Saudi Arabia before and during the COVID-19 outbreak

Boshnak, Helmi A.; Alsharif, Mohammad; Alharthi, Majed

doi:10.1080/23311975.2023.2195990

Cited by 27 publications

(9 citation statements)

References 83 publications

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“…Concurrently, increased market performance was observed alongside elevated board experience and education, spotlighting board competency's pivotal role during crises (Boshnak et al, 2023). Given the foregoing, we propose the following hypothesis: Hypothesis 1.…”

Section: Boards' Csr Competence and Corporate Financial Performancementioning

confidence: 91%

“…Relatedly, during the COVID‐19 pandemic, board independence and financial acumen were positively correlated with firm performance (Tarighi et al, 2023), reinforcing agency theory's premises. Concurrently, increased market performance was observed alongside elevated board experience and education, spotlighting board competency's pivotal role during crises (Boshnak et al, 2023). Given the foregoing, we propose the following hypothesis:Hypothesis A significant positive relationship exists between the knowledgeable and skilled board of directors' CSR competence and corporate financial performance.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

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Exploring the mediating role of corporate social responsibility in the connection between board competence and corporate financial performance amidst global uncertainties

Al Frijat,

Albawwat,

Elamer

2023

Corp Soc Responsibility Env

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Despite the growing literature on corporate social responsibility (CSR), little is known about how the board of directors' competence can affect the CSR‐financial performance relationship during severe uncertainties such as the COVID‐19 outbreak. This paper focuses on exploring the mediating role of CSR in the connection between board competence and corporate financial performance amidst global uncertainties. The sample consists of Jordanian companies listed on the Amman Stock Exchange. Data were analyzed using the partial least square structural equation modeling. The findings show that boards' CSR competence has a direct and indirect positive impact on financial performance. Therefore, boards of directors' CSR competence can be seen as enablers for CSR activities. In this regard, companies could invest more in qualifying board directors to be socially responsible and enhance their role in improving corporate financial performance. This study identifies and provides empirical evidence on a critical enabler of CSR activities (i.e., boards of directors' CSR competence) from a developing country perspective. This, in turn, could widen the management and other stakeholders' understanding of CSR‐enhancing factors and therefore increase its efficiency. We provide theoretical and practical implications to guide regulators and businesses to ensure sustainable development.

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Section: Boards' Csr Competence and Corporate Financial Performancementioning

confidence: 91%

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Exploring the mediating role of corporate social responsibility in the connection between board competence and corporate financial performance amidst global uncertainties

Al Frijat,

Albawwat,

Elamer

2023

Corp Soc Responsibility Env

View full text Add to dashboard Cite

show abstract

“…There are limited studies that have examined the impact of board education on earnings management practices. Nevertheless, prior studies document how board education affects various of corporate operations including corporate innovation (Abtahi et al, 2023), firm performance (Alalwani & Al Hadi, 2021;Boshnak et al, 2023;Hatane et al, 2023), and corporate social responsibility (Katmon et al, 2019). In general, board director education significantly influences earnings management practices within companies by enhancing financial literacy, promoting ethical oversight, enabling effective monitoring, fostering professional scepticism, and facilitating strategic decision-making.…”

Section: Hypotheses Developmentmentioning

confidence: 99%

Corporate Governance And Real Earnings Management: Evidence From Indonesian Fraudulent And Non-Fraudulent Listed Companies

2024

APMAJ

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Corporate governance mechanisms provide a framework to mitigate managerial misbehaviour, including the manipulation of earnings. Despite their intended functions, the persistence of earnings management practices remains, ultimately contributing to instances of financial reporting fraud. Thus, this study aimed to examine how corporate governance attributes may affect the occurrence of earnings management, in particular real earnings management among Indonesian fraudulent and non-fraudulent listed companies. Using 192 firm-year observations, in the span of 2012-2021, the findings showed that educational background of the board of commissioners and board of directors significantly affected real earnings management practices. Nevertheless, this study failed to find a significant relationship between real earnings management and other corporate governance attributes, including changes in the board of commissioners (BOC), changes in the board of directors (BOD), the independence of BOC, the size of the audit committee, and the occurrence of auditor change. The findings of this study provide preliminary evidence on the importance of board education to influence real earnings management practices.

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“…In fact, as good corporate governance couples with more effective monitoring, less information asymmetry and better decision-making, it is more likely to attenuate the impact of the pandemic on the stock market (Hsu and Liao, 2022). In this line of thought, the relationship between good corporate governance practices and firm performance and whether it helps reduce the negative effect of such crises on firm valuation is the current focus of COVID-19 studies (Jebran and Chen, 2023; Boshnak et al ., 2023).…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Are small waves fondle and big waves overturn? Market reaction and corporate governance during four COVID-19 waves

Khanchel,

Lassoued

2023

RBF

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PurposeThis study examines the effects of corporate governance on market returns during the first four waves of the COVID-19 crisis.Design/methodology/approachEvent study and linear regression methods were applied on a sample of 293 US firms.FindingsThe results show that differences in abnormal returns are more significant during the second wave of COVID-19 and the two following waves. Moreover, estimations show that good corporate governance alleviated the effect of COVID-19 during the second wave and the two following waves. However, corporate governance did not affect abnormal returns during the first wave. Furthermore, evidence highlights that the effect of corporate governance is more observed in the industries most affected by COVID-19 than in the least affected industries.Originality/valueMany studies have attempted to investigate the effect of corporate governance on stock returns during the first wave of the pandemic. However, to the authors' knowledge, this is the first study that focuses on different waves that occurred during 2020 and 2021.

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Corporate governance mechanisms and firm performance in Saudi Arabia before and during the COVID-19 outbreak

Cited by 27 publications

References 83 publications

Exploring the mediating role of corporate social responsibility in the connection between board competence and corporate financial performance amidst global uncertainties

Exploring the mediating role of corporate social responsibility in the connection between board competence and corporate financial performance amidst global uncertainties

Corporate Governance And Real Earnings Management: Evidence From Indonesian Fraudulent And Non-Fraudulent Listed Companies

Are small waves fondle and big waves overturn? Market reaction and corporate governance during four COVID-19 waves

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