Market risk disclosures, corporate governance structure and political connections: evidence from GCC firms

Al‐Hadi, Ahmed; Al‐Yahyaee, Khamis Hamed; Hussain, Syed Mujahid; Taylor, Grantley

doi:10.1080/13504851.2017.1420877

Cited by 21 publications

(26 citation statements)

References 19 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…In future research, the impact of politically connected directors on disclosures could be inspected. It could be particularly interesting to determine if political connections on the board of directors reduce the firms' transparency and disclosures in the GCC (Al-Hadi et al, 2017). Furthermore, the joint effect of political connections on the board and important board characteristics, like board independence, foreign directors, and gender diversity, can be examined regarding ESG disclosures to assess the impact of the prevalent political influence on governance in GCC corporations.…”

Section: Discussionmentioning

confidence: 99%

“…Garas and ElMassah (2018) note that internal corporate governance mechanisms (board independence, separation of chief executive officer (CEO) and chairman of the board, the existence of independent audit committee) positively influence CSR disclosure. Furthermore, Al-Hadi et al (2017) find that better corporate governance can be an effective instrument, via the agency theory, in reducing the potentially detrimental influence of politically affiliated board members on firms' transparency. Given that the latter work has strongly established the link between corporate governance and transparency in GCC, we extend the work of Garas and ElMassah (2018) and Al-Malkawi et al (2014) to examine how corporate governance practices through agency theory give support to ESG disclosures, helping Impact of board composition firms' social and environmental exercises to manage the agency conflicts and to reinforce the connection with the key partners within the firm.…”

Section: Literature Reviewmentioning

confidence: 98%

“…The GCC literature mainly asserts that firms listed in the United Arab Emirates markets most often adhere to the corporate governance attributes followed by Oman, Saudi Arabia, Qatar and Kuwait. The focus of our study is on the relationship between board composition and ESG disclosure in developing countries, where the governance system is less mature and less structured compared to developed countries (Al-Hadi et al, 2017;Al-Malkawi et al, 2014). Hence, standard results may not apply in an emerging economy, specifically in the GCC context, which is characterized by weak corporate governance (Arayssi and Jizi, 2018).…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

The impact of board composition on the level of ESG disclosures in GCC countries

Arayssi

Jizi

Tabaja

2020

SAMPJ

240

228

View full text Add to dashboard Cite

Purpose This paper aims to investigate the impact of board composition on environmental, social and governance (ESG) reporting in the Gulf countries. Despite the vast literature on the significance of ESG disclosure on firms’ performance, trust and reputation, there are relatively few studies on the influence of board structure on ESG disclosure in the Gulf Cooperation Council (GCC) countries. Gulf countries are witnessing a fast growing capital markets and having serious efforts to attract foreign investments to divert their economies from the oil and gas reliance. This could be facilitated by illustrating firms’ good citizenship and communicating the fulfillment of their social obligation. Design/methodology/approach The study examines publically listed companies between 2008 and 2017. Thomson Reuter’s database is used to collect the ESG disclosure scores and governance information. The authors apply multiple panel data regressions and sensitivity testing to ensure the robustness of the results. Findings Examining publically listed companies for a 10-year period shows that higher board independence and female board participation facilitate the transmission of a firm’s positive image by improving social responsibility. Independent boards of directors and participation among women serve as catalysts to strike an effective balance between firms’ financial targets and social responsibilities. In contrast, boards chaired by chief executive officers are less supportive in executing a social agenda and consequently reporting their ESG activities. Practical implications The results suggest that firms that appoint a sustainability and/or governance committee tend to engage in more impactful social and environmental activities and communicate their societal engagements more effectively. Social implications The paper recommends that policymakers, executives and shareholders in the GCC countries support board participation among women, independent directors and formation of sustainability committees to facilitate engaging in effectual social activities. Originality/value Empirical evidence regarding the relationship between board composition and ESG disclosure in the Gulf countries is limited. Prior literature mainly provides results on developed countries in which the governance system is mature and well structured. This study provides useful evidence regarding the Gulf countries that lack privatization and where corporate boards tend to be dominated by families and governments.

show abstract

Section: Discussionmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 98%

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

The impact of board composition on the level of ESG disclosures in GCC countries

Arayssi

Jizi

Tabaja

2020

SAMPJ

240

228

View full text Add to dashboard Cite

show abstract

“…However, causal connections of economic growth are studied insufficiently and are not determined by modern economic science, requiring further research. The issues of corporate management are explored in the works of such scholar as Al-Hadi et al (2018) , Bae et al (2018) , Ben-Hassoun et al (2018) , Bobillo et al (2018) , Gaitán et al (2018) , Jacometti et al (2019) , Keay and Zhao (2018) , Marques et al (2018) , Marquis et al (2017) , Oh et al (2018) , Singareddy et al (2018) , and Thomsen (2016) . The existing publications reflect the essence and methodological approaches to corporate management.…”

Section: Theoretical Backgroundmentioning

confidence: 99%

Corporate Social Responsibility Amid Social Distancing During the COVID-19 Crisis: BRICS vs. OECD Countries

Popkova

DeLo

Sergi

2021

Research in International Business and Finance

101

View full text Add to dashboard Cite

This paper compares today’s corporate management in developing markets (BRICS countries) vs. developed markets (the OECD countries). The influence of determining a new social corporate management season considering social distancing amid the COVID-19 pandemic on emerging markets' economic growth is ascertained and set apart from corporate management in developing markets. This paper helps clarifying and better understanding the role of corporate social responsibility in the conditions of an economic crisis against the background of the COVID-19 pandemic. This work provides scientific arguments that allow solving critical discussions regarding the advantages (growth of quality of life, an increase of business's competitiveness) and costs (limitation of economic growth, non-commercial use of profit, and increased price for goods and services) of domestic production and consumption. In the long-term, responsible financial practices return all investments and allow countries to better cope with a crisis. The research supplies a new view of corporate social responsibility as a measure of crisis management. It reflects its advantages at a time of social distancing in the conditions of the COVID-19 pandemic. The institutionalization of corporate social responsibility in emerging countries is not predetermined by internal factors (approach to doing business or organizational culture), if not by external factors (market status, state regulation, and consumer awareness). These circumstances prove the high complexity of strengthening corporate social responsibility in developing countries. In the conditions of social distancing – due to the COVID-19 pandemic – corporate social responsibility goes to a new level. In both developing and developed countries, one of the most widespread manifestations of corporate social responsibility is the entrepreneurship's transition to the remote form of activities. This envisages the provision of remote employment for workers and the online purchase of goods and services for consumers.

show abstract

“…They document that ruling family board members reduce the quality and the extent of risk disclosures. In the same setting, Al-Hadi et al (2017) show that the presence of a royal family director on the board is associated with lower market risk disclosures. When controlling for the joint effect of politically connected directors and good governance practices, they document that this joint variable is positively associated with market risk disclosures implying that quality corporate governance practices reduce the adverse impact of a royal family director on market risk disclosures.…”

Section: Political Connection Effectsmentioning

confidence: 87%

A review of the influence of political connections on management’s decision in non-US settings

Amara

Khlif

2020

JFRA

View full text Add to dashboard Cite

Purpose Given the interest in better understanding the economic effects of political connections, this paper aims to review empirical studies in the accounting and finance domain investigating the effects of firms’ political connections on management’s decision in non-US settings. Design/methodology/approach Key words used to search for relevant studies include “political connections” linked with “tax avoidance,” “earnings quality” “voluntary disclosure.” The authors consult several editorial sources including Elsevier, Electronic Journals Service EBSCO, Emerald, Springer, Palgrave Macmillan, Sage, Taylor & Francis and Wiley-Blackwell. The authors’ search yields 46 published studies since 2006. Findings The review reveals a prevalence of studies conducted in Asia. A narrative synthesis of empirical findings shows mixed effects of political connections on earnings management, as measured by accrual-based or real earnings management practices. Mixed evidence also exists for the association between political connections and reporting policy (e.g. corporate social responsibility reporting). The review also reveals that firms with political ties adopt an aggressive tax policy aimed at reducing effective tax rates and are more likely to choose a Big 4 auditor. Originality/value The review discusses the political connections literature focusing on studies outside of the USA and the effect of such connections on decision-making by management. It identifies some limitations of this literature and offers guidance for future research avenues. The synthesis suggests that political connections can adversely or beneficially impact management’s decisions depending on the legal, institutional and cultural characteristics prevailing in a particular setting.

show abstract

Market risk disclosures, corporate governance structure and political connections: evidence from GCC firms

Cited by 21 publications

References 19 publications

The impact of board composition on the level of ESG disclosures in GCC countries

The impact of board composition on the level of ESG disclosures in GCC countries

Corporate Social Responsibility Amid Social Distancing During the COVID-19 Crisis: BRICS vs. OECD Countries

A review of the influence of political connections on management’s decision in non-US settings

Contact Info

Product

Resources

About