Is the effect of board diversity on CSR diverse? New insights from one-tier vs two-tier corporate board models

Jouber, Habib

doi:10.1108/cg-07-2020-0277

Cited by 52 publications

(38 citation statements)

References 116 publications

(177 reference statements)

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“…Almutairi and Quttainah (2020) argue that foreign directors can potentially decrease managers' interests. Moreover, the recruitment of foreign directors improves the banks' performance by attracting new investors and contributing to high-quality decisions (Daly and Frikha, 2015;Ramly et al, 2018;Almutairi and Quttainah, 2020;Jouber, 2020). Foreign directors are more likely to enrich discussions due to their various experiences and cultural backgrounds (AlHares, 2020;Almutairi and Quttainah, 2020;Temprano and Gaite, 2020).…”

Section: Foreign Directorsmentioning

confidence: 99%

Financial soundness of Islamic banks: does the structure of the board of directors matter?

Khalil

Slimene

2021

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Purpose The purpose of this paper is to examine the Board of Directors’ characteristics and their impact on the financial soundness of Islamic banks. Design/methodology/approach Regression analysis is applied to test the impact of the Board of Directors’ characteristics on the financial soundness of Islamic banks, using a panel data set of 67 Islamic banks covering 20 countries from 2005 to 2018. The Z-score indicator is used to evaluate the Islamic banks’ soundness. To check the robustness of the results, this paper uses other dependent variables (CAMEL) than the Z-score. Findings The main results show that the presence of an independent non-executive director negatively impacts the financial soundness of Islamic banks, while the chief executive officer duality practice has a positive effect on it. Other characteristics of the Board of Directors do not significantly impact the financial soundness of Islamic banks (foreign director, institutional director, chairman with a Shari’ah degree, interlocked chairman and the Board of Directors’ size). Practical implications This study aims to fill the gaps in the literature that discuss the Board of Directors’ role in corporate governance and its impact on the financial soundness of Islamic banks. In other words, it shows the role played by the Board of Directors and improves the knowledge of the corporate governance-financial soundness relationship. Plus, managers, investors and regulators may gain evocative insights, particularly those looking to improve their Islamic banks’ soundness by restructuring their boards’ composition. Originality/value This study sheds new light on the literature on Islamic banking by clarifying the relationship between the Board of Directors and the financial soundness of Islamic banks. Contrary to previous research, this paper uses an additional hypothesis stating that a chairman with a Shari’ah degree (Fiqh Muamalt) has a positive impact on the financial soundness of Islamic banks.

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Section: Foreign Directorsmentioning

confidence: 99%

Financial soundness of Islamic banks: does the structure of the board of directors matter?

Khalil

Slimene

2021

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“…Female executives are likely to show risk-averse behavior and are less confident in making decisions for the firm and are inclined to avoid risky project circumstances, so that’s why they prefer to invest in CSR that reduces the risk of the firm (Zou et al , 2018). Females have greater empathy and apprehension for others, and in addition to that, as per gender socialization theory suggests that females are more social and ethical (Alazzani et al , 2017; Jouber, 2020; Pucheta-Martínez et al , 2018), so they prefer to invest more in socially-related activities like CSR.…”

Section: Introductionmentioning

confidence: 99%

Board’s financial expertise and corporate social responsibility disclosure in China

Naheed

AlHares

Shahab

et al. 2021

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Purpose This study aims to investigate the impact of the board’s financial expertise (BFE) on corporate social responsibility (CSR) disclosure in China. Design/methodology/approach Using a sample of Chinese listed firms from 2009-2016 (making 3272 firm-year observations), this study uses the generalized method of moments (GMM) and panel data estimation techniques. Findings Using the resource dependence theory, the findings of this study are twofold. First, the is positively associated with the disclosure level of CSR. Second, this positive impact is more pronounced in firms with female CEO and state ownership. The findings are robust to the potential issues of endogeneity and sensitivity analyses. Practical implications Practically, the findings hold value for the senior management of Chinese firms to ensure the presence of financial experts in boards to yield both financial and non-financial outcomes. Social implications This study points out how financial experts on boards influence the societal outcomes via disclosure of CSR. Financial experts encourage participation in social and sustainable practices which creates a positive image of the firm not only in the eyes of society but also for investors. Originality/value This study is unique and contributes to the extant literature by examining the impact of a new attribute, i.e. the BFE on the level of CSR disclosure in China.

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“…Second, our findings speak to the ongoing debate about the comparative strengths and weaknesses of the two-tier board model versus the one-tier board model (for instance, see the recent studies by Jouber, 2020;Pham and Tran, 2019). Whereas scholars and practitioners have noted that the separation of decision management (management board) and decision control (supervisory board) should enhance a two-tier board's ability to independently monitor managers (Bezemer et al, 2014;Jungmann, 2006;Millet-Reyes and Zhao, 2010), others have noted that the existence of information asymmetries and the generally slower speed of decision-making might make two-tier boards less effective (Hooghiemstra and Van Manen, 2004;Jungmann, 2006;Maassen, 1999).…”

Section: Discussionmentioning

confidence: 58%

Exploring the key challenges facing company secretaries in a two-tier board context

Peij¹,

Bezemer

2021

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Purpose This study aims to examine the core challenges facing company secretaries in a two-tier board context. This study focuses on the key factors contributing to these challenges and how company secretaries can effectively address them. Design/methodology/approach An analysis of the narratives provided by 291 Dutch company secretaries in response to a series of open-ended questionnaire questions led to insights into the key challenges company secretaries face in their day-to-day work. Findings Company secretaries perceive a myriad of factors contributing to pressures on their time, the need to work for multiple organizational bodies and the processing of information. They believe process interventions and social interventions are needed to alleviate these issues. Research limitations/implications The research highlights the need to deeply study boards from a holistic and systems point of view that recognizes the various actors, such as the company secretary, and their relationships in a boardroom context. Furthermore, the research shows how the two-tier board model may complicate these relational dynamics owing to the formal separation of decision management from decision control. Practical implications This study identifies various pragmatic ways to address the core challenges facing company secretaries so as to improve their contributions to decision-making at the apex of organizations. Originality/value This study sheds light on an important organizational actor (i.e. the company secretary) that hitherto has received scant attention in the governance literature.

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Is the effect of board diversity on CSR diverse? New insights from one-tier vs two-tier corporate board models

Cited by 52 publications

References 116 publications

Financial soundness of Islamic banks: does the structure of the board of directors matter?

Financial soundness of Islamic banks: does the structure of the board of directors matter?

Board’s financial expertise and corporate social responsibility disclosure in China

Exploring the key challenges facing company secretaries in a two-tier board context

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