Dividend Policy and Corporate Governance Perspective

Abstract

This study examines the influence of corporate governance (Board Size, Board Independence and Board Meetings) and dividend policies of the Pakistani firms. The study covers four important sectors i.e. Cement, Textile, Banks and Sugar of the economy for the time span of 2009 to 2015. By employing the regression analysis, we found that Board size and Board independence does matters significantly for the divided policies of the firm. We also observed that CEO ownership has significant negative influence on the dividend payout ratio of the firm due to entrepreneurial effect. Furthermore in the ownership effect, we found that foreign ownership of the firm has positive influence on the dividend payout ratio of the firms.

Kurumsal Yönetimin Firma Temettü Politikası Üzerindeki Etkisi: Gana Örneği

“…This suggests that rather than prioritizing concerns relating to dividend payments, the respective boards of the quoted companies are perhaps spending more of their time discussing other matters during their regular meetings. The result opposes the findings of Riaz et al (2016) and Boonyanet and Promsen (2020).…”

“…Also, frequent board meetings demonstrate board effectiveness, which is likely to reduce agency costs and enhance dividend payments to shareholders (Alshabibi et al, 2021: 218). Riaz et al (2016) and Boonyanet and Promsen (2020) reveal that regular board meetings lead to higher dividend payments. Following these arguments, a positive impact of board meetings on firm dividend payout is assumed.…”

“…Ranti (2013) evidences a positive influence of independent directors on dividend payout of quoted Nigerian firms. Riaz et al (2016) report a positive effect of board independence on the dividend distribution of financial and non-financial firms in Pakistan. Employing the fixed effects method with data of non-financial firms, Tahir et al (2020) document a positive impact of board independence on the payment of dividends in Malaysia.…”

Impact of Corporate Governance on Dividend Pay-out Policy of Malaysian Insurance Companies

“…After conducting Hausman test using eViews, the preferred model for this study is Fixed Effect Model (FEM). Following Alkurdi et al ( 2017) and Riaz et al (2016), the proposed regression model is modified and formulated as presented below: Dividend yield is the dependent variable in this study. Being as a controversial issue in finance most of the times, dividend payout is one of the popular studies due to its crucial role in reducing agency cost.…”