We examine how corporate governance reporting corresponds to actual conduct regarding severance payment caps for prematurely departing members of executive boards in Germany. Firstly, we evaluate the declarations of conformity for all companies listed in the CDAX between 2010 and 2014, which we use to determine conformity and deviation rates, and analyse the reasons for deviation, contributing to current research on comparative corporate governance, which focuses on when, why and how companies deviate from legitimate corporate governance goals (Aguilera, Judge, & Terjesen, 2018). Secondly, we assess the compensation amounts of all severance payments made and published by DAX companies to compare the respective severance ratio with the cap recommended by the German Corporate Governance Code (GCGC). We find that more than 20% of companies listed in the CDAX declared deviation in the declaration of conformity. Moreover, in 57% of actual severance cases where DAX companies had previously declared their conformity, the cap was exceeded. Yet, none of the companies that had exceeded the cap disclosed this in the following declaration of conformity. In most cases, the corporate reports deviated from reality and therefore could not serve as a suitable basis for decisions by the capital market.
{"title":"Corporate Governance Reporting: Compliance with Upper Limits for Severance Payments to Members of Executive Boards in Germany","authors":"A. Dilger, Ute Schottmüller-Einwag","doi":"10.2139/ssrn.3601033","DOIUrl":"https://doi.org/10.2139/ssrn.3601033","url":null,"abstract":"We examine how corporate governance reporting corresponds to actual conduct regarding severance payment caps for prematurely departing members of executive boards in Germany. Firstly, we evaluate the declarations of conformity for all companies listed in the CDAX between 2010 and 2014, which we use to determine conformity and deviation rates, and analyse the reasons for deviation, contributing to current research on comparative corporate governance, which focuses on when, why and how companies deviate from legitimate corporate governance goals (Aguilera, Judge, & Terjesen, 2018). Secondly, we assess the compensation amounts of all severance payments made and published by DAX companies to compare the respective severance ratio with the cap recommended by the German Corporate Governance Code (GCGC). We find that more than 20% of companies listed in the CDAX declared deviation in the declaration of conformity. Moreover, in 57% of actual severance cases where DAX companies had previously declared their conformity, the cap was exceeded. Yet, none of the companies that had exceeded the cap disclosed this in the following declaration of conformity. In most cases, the corporate reports deviated from reality and therefore could not serve as a suitable basis for decisions by the capital market.","PeriodicalId":256682,"journal":{"name":"CGN: Board Decision-Making (Topic)","volume":"415 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122850265","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
R. McKenzie, Larelle Law Chapple, Elisabeth Sinnewe, S. Osborne
Purpose - The purpose of this study is to investigate the role including the formal and informal activities of company secretaries on contemporary Australian boards, which has expanded with the increased liability of company secretaries. Design/methodology/approach - This study utilizes eleven in-depth semi-structured interviews with company secretaries of organizations in the public, private, and not-for-profit sectors to examine the importance of organizational dynamics, boundary spanning capabilities, and skills necessary in the role construction of company secretaries as senior officers. Findings - The company secretary accommodates the expansion of responsibilities from administrator to strategic advisor by using informal activities and developed social skills. Dual-role company secretaries (those combining the legal counsel or chief finance officer function in non-profit and government organizations) are acutely aware of setting the boundaries of responsibilities. The use of informal working spaces opens up the possibility for the company secretary to provide further influence as the organization’s gatekeeper. Research limitations/implications - The number of interviews possibly limits this study; however, in the eleven interviews totaling over eight hours of data, participants made profound reflections on their particular role with their overall experiences well reflected in the commentary. Practical implications - Participants discussed the expanded skill set required to effectively support individual board members, specifically dealing with the chair and CEO. Company secretaries also require higher order social skills of emotional intelligence and diplomacy attributes for their roles. Given the increased responsibility space of company secretaries, regulatory requirements for a formal corporate governance officer qualification may be needed. Originality/value - This study expands the spatial-behavioural dynamics framework by McNulty & Stewart (2015) by examining role construction differences across sectors and the major internal and external influences that shape the company secretary role construction.
{"title":"Responsibilities within the Governance Space: A Study of the Role of the Company Secretary on Contemporary Boards","authors":"R. McKenzie, Larelle Law Chapple, Elisabeth Sinnewe, S. Osborne","doi":"10.2139/ssrn.3338309","DOIUrl":"https://doi.org/10.2139/ssrn.3338309","url":null,"abstract":"Purpose - The purpose of this study is to investigate the role including the formal and informal activities of company secretaries on contemporary Australian boards, which has expanded with the increased liability of company secretaries. \u0000 \u0000Design/methodology/approach - This study utilizes eleven in-depth semi-structured interviews with company secretaries of organizations in the public, private, and not-for-profit sectors to examine the importance of organizational dynamics, boundary spanning capabilities, and skills necessary in the role construction of company secretaries as senior officers. \u0000 \u0000Findings - The company secretary accommodates the expansion of responsibilities from administrator to strategic advisor by using informal activities and developed social skills. Dual-role company secretaries (those combining the legal counsel or chief finance officer function in non-profit and government organizations) are acutely aware of setting the boundaries of responsibilities. The use of informal working spaces opens up the possibility for the company secretary to provide further influence as the organization’s gatekeeper. \u0000 \u0000Research limitations/implications - The number of interviews possibly limits this study; however, in the eleven interviews totaling over eight hours of data, participants made profound reflections on their particular role with their overall experiences well reflected in the commentary. \u0000 \u0000Practical implications - Participants discussed the expanded skill set required to effectively support individual board members, specifically dealing with the chair and CEO. Company secretaries also require higher order social skills of emotional intelligence and diplomacy attributes for their roles. Given the increased responsibility space of company secretaries, regulatory requirements for a formal corporate governance officer qualification may be needed. \u0000 \u0000Originality/value - This study expands the spatial-behavioural dynamics framework by McNulty & Stewart (2015) by examining role construction differences across sectors and the major internal and external influences that shape the company secretary role construction.","PeriodicalId":256682,"journal":{"name":"CGN: Board Decision-Making (Topic)","volume":"107 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-04-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121283041","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We examine the effect of board independence on spending and payout policy using the 2003 NYSE and NASDAQ board independence requirements as an exogenous shock. Non-compliant firms that are forced to raise board independence reduce the spending on acquisitions and capital expenditures and increase dividends. We conclude that greater board independence mitigates over-investment.
{"title":"Board Independence and Corporate Spending","authors":"E. Lie, Keyang Daniel Yang","doi":"10.2139/ssrn.3167493","DOIUrl":"https://doi.org/10.2139/ssrn.3167493","url":null,"abstract":"We examine the effect of board independence on spending and payout policy using the 2003 NYSE and NASDAQ board independence requirements as an exogenous shock. Non-compliant firms that are forced to raise board independence reduce the spending on acquisitions and capital expenditures and increase dividends. We conclude that greater board independence mitigates over-investment.","PeriodicalId":256682,"journal":{"name":"CGN: Board Decision-Making (Topic)","volume":"31 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-04-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133293090","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study examines the relationship between board gender diversity (BGD) and corporate social performance (CSP) and the moderating role of family ownership in the relationship between BGD and CSP. This study has leveraged on 4 theories (i.e. social role theory, feminist theory, institutional theory, and stewardship theory). The population of this study represents the top 100 public listed companies in Malaysia based on their market capitalization in year 2016 and the final sample is 83 companies. Secondary data was used for this study and all the variables were measured using content analysis method. The result shows a positive relationship between BGD and CSP. In terms of family ownership, the empirical evidence suggests that the presence of family ownership moderates the relationship between BGD and CSP. This study provides useful insights, practically, this study helps managers, NGO’s and fundraisers to understand the dynamism of CSP, BGD and family owned companies better and able to apply them in their daily life. Not only that, this study also provides implications for enforcing female quotas on corporate boards of directors. This is because greater gender diverse board may lead to greater monitoring of the firm.
{"title":"The Moderating Role of Family Ownership in Board Gender Diversity and Corporate Social Performance","authors":"Nanthini Arujunan, Fathyah Hashim, M. Jamaludin","doi":"10.2139/ssrn.3302128","DOIUrl":"https://doi.org/10.2139/ssrn.3302128","url":null,"abstract":"This study examines the relationship between board gender diversity (BGD) and corporate social performance (CSP) and the moderating role of family ownership in the relationship between BGD and CSP. This study has leveraged on 4 theories (i.e. social role theory, feminist theory, institutional theory, and stewardship theory). The population of this study represents the top 100 public listed companies in Malaysia based on their market capitalization in year 2016 and the final sample is 83 companies. Secondary data was used for this study and all the variables were measured using content analysis method. The result shows a positive relationship between BGD and CSP. In terms of family ownership, the empirical evidence suggests that the presence of family ownership moderates the relationship between BGD and CSP. This study provides useful insights, practically, this study helps managers, NGO’s and fundraisers to understand the dynamism of CSP, BGD and family owned companies better and able to apply them in their daily life. Not only that, this study also provides implications for enforcing female quotas on corporate boards of directors. This is because greater gender diverse board may lead to greater monitoring of the firm.","PeriodicalId":256682,"journal":{"name":"CGN: Board Decision-Making (Topic)","volume":"24 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-04-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128288022","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This current study focuses on the diversity of members on the board of directors. There exist many forms of diversity that affect firm financial and accounting performance as well as organizational behavior of board members. Furthermore, director heterogeneity could have both positive and negative effects on corporate boards. Nowadays, gender diversity is becoming increasingly important in a financial and management context. In the interest of promoting gender diversity, many governments around the world have enacted legislation requiring that state-owned and public companies respect pre-established quotas of women on their board of directors. Other countries have opted for an informal system in which state-owned and public companies must justify the absence of women on the board of directors. Even though there is still room for improvement, firms are taking steps toward fostering more diverse corporate boards. I execute an empirical analysis that examines director heterogeneity’s influence on the market value of U.S. firms. My results indicate that diversity’s positive effects are primarily driven by age. In conclusion, it is fair to say that the outlook for diversity on corporate boards seems to be positive.
{"title":"Diversity on the Board of Directors","authors":"Dylan Kaseram","doi":"10.2139/ssrn.3111057","DOIUrl":"https://doi.org/10.2139/ssrn.3111057","url":null,"abstract":"This current study focuses on the diversity of members on the board of directors. There exist many forms of diversity that affect firm financial and accounting performance as well as organizational behavior of board members. Furthermore, director heterogeneity could have both positive and negative effects on corporate boards. Nowadays, gender diversity is becoming increasingly important in a financial and management context. In the interest of promoting gender diversity, many governments around the world have enacted legislation requiring that state-owned and public companies respect pre-established quotas of women on their board of directors. Other countries have opted for an informal system in which state-owned and public companies must justify the absence of women on the board of directors. Even though there is still room for improvement, firms are taking steps toward fostering more diverse corporate boards. I execute an empirical analysis that examines director heterogeneity’s influence on the market value of U.S. firms. My results indicate that diversity’s positive effects are primarily driven by age. In conclusion, it is fair to say that the outlook for diversity on corporate boards seems to be positive.","PeriodicalId":256682,"journal":{"name":"CGN: Board Decision-Making (Topic)","volume":"34 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-08-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123226241","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Board dynamics are a function of many variables. We look into board dynamics through the lens of one of the underlying factors, trust. Trust between board members is one of the foundational elements for effective functioning of the board. To develop a feel for dynamics of the board as a whole, we use a simple conceptual framework based on relationships between each of the members. Further, we focus on emerging growth stage companies ranging from angel and venture funded through post IPO.
{"title":"Trust within Boards Under Crisis","authors":"Tama M. Copeman","doi":"10.2139/ssrn.3019595","DOIUrl":"https://doi.org/10.2139/ssrn.3019595","url":null,"abstract":"Board dynamics are a function of many variables. We look into board dynamics through the lens of one of the underlying factors, trust. Trust between board members is one of the foundational elements for effective functioning of the board. To develop a feel for dynamics of the board as a whole, we use a simple conceptual framework based on relationships between each of the members. Further, we focus on emerging growth stage companies ranging from angel and venture funded through post IPO.","PeriodicalId":256682,"journal":{"name":"CGN: Board Decision-Making (Topic)","volume":"36 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-08-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127072131","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We study the impact of managers’ career concerns from non-competes enforcement on the design of debt covenants in private debt agreements. Using exogenous changes in the enforceability of managers’ non-compete clauses over the period of 1992-2004 across states in the United States, we show that borrowers headquartered in U.S. states with strong enforcement of non-compete clauses have fewer debt covenants compared to those headquartered in states with weak enforcement after controlling for reporting quality, risk taking, and firm performance. Our evidence is consistent with the argument that reduced job mobility and enhanced career concerns incentivize managers to ex ante avoid debt covenants that may trigger default and lead to high risk of terminating their current employment. Moreover, the effect of the enforceability of noncompetes on debt covenants is more pronounced for managers with limited outside options (i.e., low ability, small network) or firms with strong bargaining power with lenders.
{"title":"Non-Competes, Career Concerns, and Debt Covenants","authors":"Yun Lou, Rencheng Wang, Yi Zhou","doi":"10.2139/ssrn.3054876","DOIUrl":"https://doi.org/10.2139/ssrn.3054876","url":null,"abstract":"We study the impact of managers’ career concerns from non-competes enforcement on the design of debt covenants in private debt agreements. Using exogenous changes in the enforceability of managers’ non-compete clauses over the period of 1992-2004 across states in the United States, we show that borrowers headquartered in U.S. states with strong enforcement of non-compete clauses have fewer debt covenants compared to those headquartered in states with weak enforcement after controlling for reporting quality, risk taking, and firm performance. Our evidence is consistent with the argument that reduced job mobility and enhanced career concerns incentivize managers to ex ante avoid debt covenants that may trigger default and lead to high risk of terminating their current employment. Moreover, the effect of the enforceability of noncompetes on debt covenants is more pronounced for managers with limited outside options (i.e., low ability, small network) or firms with strong bargaining power with lenders.","PeriodicalId":256682,"journal":{"name":"CGN: Board Decision-Making (Topic)","volume":"5 7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124647400","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2016-11-15DOI: 10.1108/ARA-07-2015-0067
S. Abdullah, Ku Nor Izah Ku Ismail
Purpose - The purpose of this paper is to determine whether the representation of women on the boards (WOMBDs) and audit committees is associated with a reduction in the practice of earnings management and whether women are associated with income reducing (conservative) rather than income-increasing (aggressive) earnings management. The authors further argue that family ownership moderates the relationship between the presence of WOMBDs and audit committees and earnings management. Design/methodology/approach - The study uses non-finance firms listed on Bursa Malaysia over a period of four years, i.e. from 2008 until 2011. Findings - The evidence reveals that the presence of WOMBD or audit committee is not associated with a propensity for earnings management. In addition, the evidence also reveals that family ownership does not interact either with WOMBD or with women on the audit committee (WOMAC) to influence the propensity for earnings management. Nevertheless, the additional analyses show that, while women on boards are not associated with income-decreasing accruals, the presence of women on audit committees leads to income-reducing earnings management. The evidence further reveals that family ownership does not interact with either WOMBD or WOMAC to influence income-decreasing earnings management. Originality/value - This study extends prior research on the role of women directors and women audit committee members on earnings management focussing on family ownership. Further, the study also examines the direction of earnings management as opposed to the most prior studies, which mainly focus on the propensity of earnings management.
{"title":"Women Directors, Family Ownership and Earnings Management in Malaysia","authors":"S. Abdullah, Ku Nor Izah Ku Ismail","doi":"10.1108/ARA-07-2015-0067","DOIUrl":"https://doi.org/10.1108/ARA-07-2015-0067","url":null,"abstract":"Purpose - The purpose of this paper is to determine whether the representation of women on the boards (WOMBDs) and audit committees is associated with a reduction in the practice of earnings management and whether women are associated with income reducing (conservative) rather than income-increasing (aggressive) earnings management. The authors further argue that family ownership moderates the relationship between the presence of WOMBDs and audit committees and earnings management. Design/methodology/approach - The study uses non-finance firms listed on Bursa Malaysia over a period of four years, i.e. from 2008 until 2011. Findings - The evidence reveals that the presence of WOMBD or audit committee is not associated with a propensity for earnings management. In addition, the evidence also reveals that family ownership does not interact either with WOMBD or with women on the audit committee (WOMAC) to influence the propensity for earnings management. Nevertheless, the additional analyses show that, while women on boards are not associated with income-decreasing accruals, the presence of women on audit committees leads to income-reducing earnings management. The evidence further reveals that family ownership does not interact with either WOMBD or WOMAC to influence income-decreasing earnings management. Originality/value - This study extends prior research on the role of women directors and women audit committee members on earnings management focussing on family ownership. Further, the study also examines the direction of earnings management as opposed to the most prior studies, which mainly focus on the propensity of earnings management.","PeriodicalId":256682,"journal":{"name":"CGN: Board Decision-Making (Topic)","volume":"257 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-11-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121812170","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Prior scholarship has characterized corporate charters as relatively static documents that, if ever amended, tend to serve the interests of managers over those of shareholders. This paper challenges the conventional accounts using newly constructed, original data on corporate charters of the 221 largest, publicly traded U.S. companies. The novel dataset shows that, starting around 2005, there was a substantial increase in charter amendment activity that tends to empower shareholders. This paper argues that a new rule from the U.S. Securities and Exchange Commission (“SEC”) in 2003 and its subsequent interpretation regarding mutual funds’ fiduciary duty in proxy voting have played an important role in this change by empowering proxy advisory firms, such as the Institutional Shareholder Services (“ISS”). The general rise of shareholder influence on charter amendments, however, has not completely shifted control from managers to shareholders. Directors’ exclusive right to dictate the final draft of charter provisions has enabled managers to make compromised implementations which impose limitations on how shareholders can exercise newly granted rights. This paper argues that the current practices of the SEC and proxy advisory firms tend to disregard such compromises and presents suggestions on how to better facilitate a more nuanced debate on charter amendments.
{"title":"Shareholder Voice in Corporate Charter Amendments","authors":"Geeyoung Min","doi":"10.2139/ssrn.2738961","DOIUrl":"https://doi.org/10.2139/ssrn.2738961","url":null,"abstract":"Prior scholarship has characterized corporate charters as relatively static documents that, if ever amended, tend to serve the interests of managers over those of shareholders. This paper challenges the conventional accounts using newly constructed, original data on corporate charters of the 221 largest, publicly traded U.S. companies. The novel dataset shows that, starting around 2005, there was a substantial increase in charter amendment activity that tends to empower shareholders. This paper argues that a new rule from the U.S. Securities and Exchange Commission (“SEC”) in 2003 and its subsequent interpretation regarding mutual funds’ fiduciary duty in proxy voting have played an important role in this change by empowering proxy advisory firms, such as the Institutional Shareholder Services (“ISS”). The general rise of shareholder influence on charter amendments, however, has not completely shifted control from managers to shareholders. Directors’ exclusive right to dictate the final draft of charter provisions has enabled managers to make compromised implementations which impose limitations on how shareholders can exercise newly granted rights. This paper argues that the current practices of the SEC and proxy advisory firms tend to disregard such compromises and presents suggestions on how to better facilitate a more nuanced debate on charter amendments.","PeriodicalId":256682,"journal":{"name":"CGN: Board Decision-Making (Topic)","volume":"7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-08-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130526153","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The impact of boardroom diversity on firm financial performance has attracted growing research interest in recent years. However, due to the lack of readily available datasets for other parts of the world, most of the evidence is based on the US data. The purpose of this study is to examine the relationship between gender diversity in the boardrooms and firm financial performance in a region, where it has never been studied before. Using a sample of 60 firms listed in Abu Dhabi and Dubai Stock Exchanges, first the impact of gender diverse boards on the accounting value of the firms is analyzed. Afterwards, stock price reactions to the announcement of the gender quotas on corporate boards in the UAE are examined. The results do not show a significant impact of female directors on the firm’s both accounting and market value. However, these results should be interpreted carefully since the presence of women in leading positions might affect different aspects of the firm practices.
{"title":"Gender Diversity of Boardrooms and Firm Financial Performance","authors":"Perihan Iren","doi":"10.22495/RCGV6I3C1ART3","DOIUrl":"https://doi.org/10.22495/RCGV6I3C1ART3","url":null,"abstract":"The impact of boardroom diversity on firm financial performance has attracted growing research interest in recent years. However, due to the lack of readily available datasets for other parts of the world, most of the evidence is based on the US data. The purpose of this study is to examine the relationship between gender diversity in the boardrooms and firm financial performance in a region, where it has never been studied before. Using a sample of 60 firms listed in Abu Dhabi and Dubai Stock Exchanges, first the impact of gender diverse boards on the accounting value of the firms is analyzed. Afterwards, stock price reactions to the announcement of the gender quotas on corporate boards in the UAE are examined. The results do not show a significant impact of female directors on the firm’s both accounting and market value. However, these results should be interpreted carefully since the presence of women in leading positions might affect different aspects of the firm practices.","PeriodicalId":256682,"journal":{"name":"CGN: Board Decision-Making (Topic)","volume":"56 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123978057","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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