Do Chief Executives’ Traits Affect the Financial Performance of Risk‐trading Firms? Evidence from the UK Insurance Industry

Adams, Mike; Jiang, Wei

doi:10.1111/1467-8551.12222

Cited by 32 publications

(39 citation statements)

References 66 publications

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“…In contrast, members of smaller boards are more likely to work as a team, which leads to better decision‐making (Lipton and Lorsch, ). While employing the agency theory framework, most of the published studies in this area show a negative relationship between board size and various measures of firm performance (Adams and Jiang, ; Yermack, ). Other studies that follow the same theoretical framework have examined board size and its association with other organizational outcomes, such as the probability of restatement of companies’ financial statements (Agrawal and Chadha, ) and the incidence of corporate fraud (Chen et al ., ).…”

Section: Hypotheses Developmentmentioning

confidence: 99%

International Evidence on the Determinants of Organizational Ethical Vulnerability

Ullah

Ahmad

Akbar

et al. 2018

British J of Management

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This paper proposes a model to explain what makes organizations ethically vulnerable.Drawing upon legitimacy, institutional, agency and individual moral reasoning theories we consider three sets of explanatory factors and examine their association with organizational ethical vulnerability. The three sets comprise external institutional context, internal corporate governance mechanisms and organizational ethical infrastructure. We combine these three sets of factors and develop an analytical framework for classifying ethical issues and propose a new model of organizational ethical vulnerability. We test our model on a sample of 253 firms that were involved in ethical misconduct and compare them with a matched sample of the same number of firms from 28 different countries. The results suggest that weak regulatory environment and internal corporate governance, combined with profitability warnings or losses in the preceding year, increase organizational ethical vulnerability. We find counterintuitive evidence suggesting that firms' involvement in bribery and corruption prevention training programmes is positively associated with the likelihood of ethical vulnerability. By synthesizing insights about individual and corporate behaviour from multiple theories, this study extends existing analytical literature on business ethics. Our findings have implications for firms' external regulatory settings, corporate governance mechanisms and organizational ethical infrastructure.

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Section: Hypotheses Developmentmentioning

confidence: 99%

International Evidence on the Determinants of Organizational Ethical Vulnerability

Ullah

Ahmad

Akbar

et al. 2018

British J of Management

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“…Qualitative aspects are in part similar to those considered for the board members (specifically, for the outside directors) in the insurance industry, i.e. past experience in insurance activities, technical skills, previous experience, and age (Adams & Jiang, 2017a;Boubakri et al, 2006, Miller & Yang, 2015O'Sullivan & Diacon, 1999).…”

Section: Ceo: Quality Aspectsmentioning

confidence: 88%

“…In the following streams of research, often also defined on the basis of a specific insurance sector (non-life, life or both), scholars sought to understand which governance mechanisms are most effective for achieving the objectives: these studies focus on the figure and power of the CEO (Adams & Jiang, 2017a;, the composition and characteristics of the board (Hardwick et al, 2011), the role of independent directors, the role of the internal board committees, the types of incentives.…”

Section: Theoretical Assumptions and Empirical Evidencementioning

confidence: 99%

“…The empirical findings are somewhat controversial, perhaps due to increased interactions with other instruments, such as the presence of the Audit Committee and the degree of board independence (Hardwick et al, 2011). Some point to a positive relationship with operational efficiency (Diacon & O'Sullivan, 1995), others find a negative relationship (Adams & Jiang, 2017a); additional evidence shows no relationship if the company is a subsidiary within an insurance group (Mayers & Smith, 2010), others exhibit a positive relationship with performance, but only in the case of large companies; otherwise they show that it is not harmful to the company's results (Miller & Yang, 2015). Part of the literature, on the other hand, show a positive correlation between the cumulation of offices and the assumption of higher levels of leverage risk (Ho et al, 2013).…”

Section: The Ceomentioning

confidence: 99%

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Governance and Performance in Insurance Companies: A Bibliometric Analysis and A Meta-Analysis

Anderloni¹,

Moro²,

Tanda³

2020

IJEF

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This paper provides a review of theoretical contributions and empirical studies on the external and internal mechanisms of corporate governance of insurance companies and their effects on performance and/or risk. Thanks to the analysis of the studies published between 1985 and 2019 through bibliometric tools, we are able to illustrate the networks of scientific collaborations (co-authorship) and relationships between the most used terms, also highlighting the most significant groups of scholars and research strands. Additionally, the paper carries out a meta-analysis of around thirty quantitative articles that show a relationship between the quantitative-qualitative characteristics of the Board of Directors and the performance of the insurance company. The empirical studies show a consensus on the positive contribution of board size and the presence of independent directors on performance. Moreover, insurance research networks do not appear to be very interconnected, especially as regards to emerging markets. The paper also provides a useful starting point for future research aimed at defining the specificities of the governance-performance relationship of insurance companies within an evolving regulatory and market framework.

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“…Additional studies that explore spillover effects within the insurance industry consider the direct comovement of stock returns across life insurers, PC insurers, and accident and health insurers-three distinct but related markets (Carson, Elyasiani, & Mansur, 2008). Adams & Jiang, 2017;Ames, Hines, & Sankara, 2018;He, Sommer, & Xie, 2011) and firm diversification (e.g., Ai, Bajtelsmit, & Wang, 2018;Elango, Ma, & Pope, 2008;Lee, 2017;Liebenberg & Sommer, 2008;Morris, Fier, & Liebenberg, 2017). Other studies examine performance within a specific line of business, such as automobile insurance (e.g., Bajtelsmit & Bouzouita, 1998;Weiss & Choi, 2008) or medical malpractice insurance (e.g., Born & Boyer, 2011;Lei & Schmit, 2010;Viscusi & Born, 2005).…”

Section: Literature Reviewmentioning

confidence: 99%

Spillover effects of increased health insurance enrollment on workers’ compensation insurance

Baggett

Cole

Crowley

et al. 2020

Risk Manage Insurance Review

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The Patient Protection and Affordable Care Act (ACA) was designed to increase the accessibility and affordability of health insurance. While the ACA did not contain direct provisions related to workers’ compensation (WC), because health‐related coverage is a significant portion of WC costs, the ACA could have unintentionally impacted the WC market. Specifically, expanded health insurance enrollment could reduce WC losses and result in higher performance among insurers participating in the WC market. Using insurer‐state level data, we consider the impact of increased health insurance enrollment on the performance of property‐casualty (PC) insurers. Utilizing multiple measures of performance, we find that the post‐ACA period is generally associated with greater profitability for PC insurers operating in the WC market, a positive unintended consequence of this federal regulation.

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Do Chief Executives’ Traits Affect the Financial Performance of Risk‐trading Firms? Evidence from the UK Insurance Industry

Cited by 32 publications

References 66 publications

International Evidence on the Determinants of Organizational Ethical Vulnerability

International Evidence on the Determinants of Organizational Ethical Vulnerability

Governance and Performance in Insurance Companies: A Bibliometric Analysis and A Meta-Analysis

Spillover effects of increased health insurance enrollment on workers’ compensation insurance

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