Investigating the Relationship between Board Characteristics and the Sustainable Development of Companies Listed at Tehran Stock Exchange

Abstract

The main objective of this paper is to investigate the relationship between board characteristics and the sustainable growth of companies listed at Tehran Stock Exchange. Board characteristics in this study include the size of the board, number of board meetings, the share of non-bound managers of the board, duality of managing director duties and maintaining shares of the Board of Directors. According to previous similar studies, firm size and financial leverage are considered as control variables. In this study, statistical population includes all companies listed at Tehran Stock Exchange. Some restrictions applied on the Statistical population and a sample consisted of 54 companies was selected. Data analysis was conducted on data collected from 2006 to 2012. Multiple linear regression analysis and correlation coefficient methods were used for data analysis and obtaining hypothesis test results. The results indicate that there is no significant relationship between the size of the board, share of non-bound managers of the board, number of board meetings, maintaining shares of the Board of Directors and sustainable growth while there is a significant negative relationship between Managing Director duality of duties and sustainable growth rate. International Journal of Academic Research in Business and Social SciencesJune , Vol. 4, No. 6 ISSN: 2222 385 www.hrmars.com Keywords: Board of Directors size, number of meetings, non-duty managers, maintaining board share, sustainable growth. 1-IntroductionAgency issue is main topic of Board of Directors discussion. This is because conflict of interest between managers and shareholders leads to the creation of agency costs. Distributed ownership (decentralized) causes agency problems because ability and incentives of shareholders to control management will be reduced due to their small shares. In addition, shareholders can often invest in several companies to reduce risk through diversification. They are investing in their stock portfolio for the hope of future profits not for the hope of a better future in a particular company. In addition, dispersed shareholders have no the ability to control management effectively because they do not have sufficient information and expertise necessary to make correct decisions. On the other hand, centralized ownership significantly motivates the major shareholders. Accordingly, they also will have more motivation to improve the company operations and management control as their share in the company increases. There are obvious benefits of centralized ownership but some arguments against this issue are also true. First, shareholders are generally risk averse. Second, when excessive control by centralized ownership occurs, internal stakeholders (managers and employees) will be discouraged of costly investments. Third, centralized ownership may cause agency problems in another way, i.e. conflict arise between major shareholders and other stakeholders. Major shareholders will have necessary incentives to use their control situat...

فعالیة لجنة المراجعة ونمو الشرکات المستدام: حالة مصر (باللغة الإنجلیزیة)

“…Prior studies investigated the impact of corporate governance mechanisms on factors that may have considerable effect on the corporate sustainable growth and reached mixed results. On one side, and based on a sample of 54 companies listed on Tehran Stock Exchange during the period 2006-2012, Zare et al (2014) didn't find any significant relationship between board size, meetings, shareholdings, share of independent directors on board and sustainable growth. But they found that managing director duality of duties is negatively and significantly related to growth rate.…”

“…This paper contributes to the literature of corporate governance and its impact on corporate sustainable growth. Although several research papers have been conducted to examine the impact of corporate governance characteristics in general, and board of directors' characteristics in particular, on corporate sustainable growth (Maher, & Andersson, 2000;Zare, Moeinadin, & Heyrani, 2014;Li, Liu, & Ren, 2015;Mukherjee & Sen, 2019), however up to my knowledge, no prior research examined the association between AC characteristics and corporate sustainable growth. Also, this paper will help policymakers and regulators to understand how AC effectiveness is associated with the sustainable growth of non-financial firms listed on EGX.…”

Penerapan Metode Silver Meal Heuristic untuk Minimasi Biaya Persediaan Bahan Baku Tahu

“…Tujuan manajemen persediaan adalah untuk mencapai keseimbangan yang tepat antara kebutuhan produksi dan biaya persediaan yang efisien [9]. Akan tetapi jika persediaan bahan baku terlalu besar dapat mengakibatkan tingginya biaya untuk menyimpan dan memelihara bahan baku tersebut, disamping itu jika ditinjau dari segi finansial yaitu hal yang tidak efektif karena terlalu besarnya barang modal yang menganggur dan tidak berputar [10].…”