Pub Date : 2019-06-28DOI: 10.1177/0974686219836544
Mohammad Rajon Meah, Nasir Uddin Chaudhory
Abstract This article aims to investigate the impact of corporate governance through board size, female directors, family duality and director ownership on firm’s profitability in Bangladesh. It’s a quantitative study on 110 manufacturing firms listed in Dhaka Stock Exchange. Multivariate pooled Ordinary Least Square (OLS) regressions are applied on 512 sample-year observations from the year 2013 to 2017 to test the hypotheses in the study. On one side, the results reveal that larger board size and female directors on board are positively associated with firm’s profitability, which in turns helps to enhance firm’s profitability. On the other side, it is also found in the results that percentage of shares held by the directors and family duality are negatively related to firm’s profitability and thus reduces firm performance. The outcomes of this study advocate the policymakers to formulate a policy by addressing the percentage of shares held by the directors to be kept at a certain level.
{"title":"Corporate Governance and Firm’s Profitability: An Emerging Economy-based Investigation","authors":"Mohammad Rajon Meah, Nasir Uddin Chaudhory","doi":"10.1177/0974686219836544","DOIUrl":"https://doi.org/10.1177/0974686219836544","url":null,"abstract":"Abstract This article aims to investigate the impact of corporate governance through board size, female directors, family duality and director ownership on firm’s profitability in Bangladesh. It’s a quantitative study on 110 manufacturing firms listed in Dhaka Stock Exchange. Multivariate pooled Ordinary Least Square (OLS) regressions are applied on 512 sample-year observations from the year 2013 to 2017 to test the hypotheses in the study. On one side, the results reveal that larger board size and female directors on board are positively associated with firm’s profitability, which in turns helps to enhance firm’s profitability. On the other side, it is also found in the results that percentage of shares held by the directors and family duality are negatively related to firm’s profitability and thus reduces firm performance. The outcomes of this study advocate the policymakers to formulate a policy by addressing the percentage of shares held by the directors to be kept at a certain level.","PeriodicalId":37340,"journal":{"name":"Indian Journal of Corporate Governance","volume":"12 1","pages":"71 - 93"},"PeriodicalIF":0.0,"publicationDate":"2019-06-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1177/0974686219836544","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44505721","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 : 2019-06-28DOI: 10.1177/0974686219836542
Deepa Mangala, Mamta Dhanda
Abstract Disclosure through corporate annual reports is intended to enhance transparency and reduce information asymmetry during public issues. Ritter (1991) revealed that there is something fishy in the financial reports of the companies coming out with public issues. Earnings management has been recognised as a foremost contributor to such misleading financial reports. The short term overperformance of initial public offerings (IPO) of companies increases the expectations of potential investors and leads to a subsequent decline of performance in long run leaving the investors in distraught. The observed phenomenon is omnipresent and thus affects the investors across the globe. The present article empirically investigates the presence of earnings management in IPOs in India. The study is based on Modified Jones Model, the best known model to measure accruals earnings management. Preliminary results exhibit that earnings management in Indian IPOs is much higher than in developed countries. The study further discovers that the earnings performance of IPO companies is abnormally higher in IPO year as compared with post-offer period. Both the results taken together reinforce that post-issue earnings performance is a derivation of issue year earnings management in India.
{"title":"Earnings Management and Performance of IPO Firms: Evidence from India","authors":"Deepa Mangala, Mamta Dhanda","doi":"10.1177/0974686219836542","DOIUrl":"https://doi.org/10.1177/0974686219836542","url":null,"abstract":"Abstract Disclosure through corporate annual reports is intended to enhance transparency and reduce information asymmetry during public issues. Ritter (1991) revealed that there is something fishy in the financial reports of the companies coming out with public issues. Earnings management has been recognised as a foremost contributor to such misleading financial reports. The short term overperformance of initial public offerings (IPO) of companies increases the expectations of potential investors and leads to a subsequent decline of performance in long run leaving the investors in distraught. The observed phenomenon is omnipresent and thus affects the investors across the globe. The present article empirically investigates the presence of earnings management in IPOs in India. The study is based on Modified Jones Model, the best known model to measure accruals earnings management. Preliminary results exhibit that earnings management in Indian IPOs is much higher than in developed countries. The study further discovers that the earnings performance of IPO companies is abnormally higher in IPO year as compared with post-offer period. Both the results taken together reinforce that post-issue earnings performance is a derivation of issue year earnings management in India.","PeriodicalId":37340,"journal":{"name":"Indian Journal of Corporate Governance","volume":"12 1","pages":"39 - 58"},"PeriodicalIF":0.0,"publicationDate":"2019-06-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1177/0974686219836542","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46658481","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 : 2019-06-28DOI: 10.1177/0974686219849760
J. Kiranmai, R. Mishra
Abstract Corporate Governance (CG) refers to a system in which corporations are directed and controlled. The governance structure specifies the distribution of rights and responsibilities among different participants in the corporation and specifies the rules and procedures for making decisions in corporates. Governance provides the structure through which corporations set and pursue their objectives, while reflecting the context of the social, regulatory and market environment. Governance is a mechanism for monitoring the actions, policies and decisions of corporations. Governance involves the alignment of interests among the stakeholders. CG is an umbrella term. In its narrower sense, it describes the formal system of accountability of corporate directors to the owners of companies. In its broader sense, the concept includes the entire network of formal and informal relationships involving the corporate sector and the consequences of these relationships on society in general. The center objective of the paper is to create linkages between firm performance and governance practice in the listed SOEs in India. The present paper makes an attempt to compare the various CG variables of the listed SOEs for a period of five years ie 2012-13 to 2016-17. A detailed analysis of the 42 listed State Owned Enterprises (SOEs) in terms of board size, board meetings, board committees, board composition, independent directors, firm age, gender diversity has been compared. Finally conclusions are drawn from empirical analysis.
{"title":"Corporate Governance Practices in Listed State-owned Enterprises in India: An Empirical Research","authors":"J. Kiranmai, R. Mishra","doi":"10.1177/0974686219849760","DOIUrl":"https://doi.org/10.1177/0974686219849760","url":null,"abstract":"Abstract Corporate Governance (CG) refers to a system in which corporations are directed and controlled. The governance structure specifies the distribution of rights and responsibilities among different participants in the corporation and specifies the rules and procedures for making decisions in corporates. Governance provides the structure through which corporations set and pursue their objectives, while reflecting the context of the social, regulatory and market environment. Governance is a mechanism for monitoring the actions, policies and decisions of corporations. Governance involves the alignment of interests among the stakeholders. CG is an umbrella term. In its narrower sense, it describes the formal system of accountability of corporate directors to the owners of companies. In its broader sense, the concept includes the entire network of formal and informal relationships involving the corporate sector and the consequences of these relationships on society in general. The center objective of the paper is to create linkages between firm performance and governance practice in the listed SOEs in India. The present paper makes an attempt to compare the various CG variables of the listed SOEs for a period of five years ie 2012-13 to 2016-17. A detailed analysis of the 42 listed State Owned Enterprises (SOEs) in terms of board size, board meetings, board committees, board composition, independent directors, firm age, gender diversity has been compared. Finally conclusions are drawn from empirical analysis.","PeriodicalId":37340,"journal":{"name":"Indian Journal of Corporate Governance","volume":"12 1","pages":"121 - 94"},"PeriodicalIF":0.0,"publicationDate":"2019-06-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1177/0974686219849760","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48538544","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 : 2019-06-28DOI: 10.1177/0974686219836539
Ramit Anand, Balwinder Singh
Abstract The present empirical investigation is an addition to the existing extant literature available on the issue of initial public offering (IPO) which sees its inherent anomaly of underpricing by linking it to some of under-researched dimensions of corporate governance in the emerging economy of India. This study incorporates about 443 Indian IPO firms with their board composition and ownership retained by promoter group post IPO being primary variables of focus which are obtained from respective prospectuses of such firms. Like many previous studies, this study also keeps signalling theory as base, and findings show that only interlocking of directors among all the board variables has a significant and negative relation with underpricing. Significant relation of ownership concentration in hands of promoter group with underpricing shows that it is considered as a signal by investors assisting them in gauging safety of their minority interests. Findings show that too high insiders’ ownership alignment of interest between promoters and minority holders turn into risk of entrenchment by initial investors, that is, promoters as perceived by investors.
{"title":"Effect of Composition of Board and Promoter Group Retained Ownership on Underpricing of Indian IPO firms: An Empirical Study","authors":"Ramit Anand, Balwinder Singh","doi":"10.1177/0974686219836539","DOIUrl":"https://doi.org/10.1177/0974686219836539","url":null,"abstract":"Abstract The present empirical investigation is an addition to the existing extant literature available on the issue of initial public offering (IPO) which sees its inherent anomaly of underpricing by linking it to some of under-researched dimensions of corporate governance in the emerging economy of India. This study incorporates about 443 Indian IPO firms with their board composition and ownership retained by promoter group post IPO being primary variables of focus which are obtained from respective prospectuses of such firms. Like many previous studies, this study also keeps signalling theory as base, and findings show that only interlocking of directors among all the board variables has a significant and negative relation with underpricing. Significant relation of ownership concentration in hands of promoter group with underpricing shows that it is considered as a signal by investors assisting them in gauging safety of their minority interests. Findings show that too high insiders’ ownership alignment of interest between promoters and minority holders turn into risk of entrenchment by initial investors, that is, promoters as perceived by investors.","PeriodicalId":37340,"journal":{"name":"Indian Journal of Corporate Governance","volume":"12 1","pages":"21 - 38"},"PeriodicalIF":0.0,"publicationDate":"2019-06-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1177/0974686219836539","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44518478","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 : 2019-06-28DOI: 10.1177/0974686219836543
Rene W. Albertus
Abstract This article seeks to examine challenges affecting the ethical philosophy of senior management at South Africa’s national oil and gas company. South Africa’s economy has been downgraded to junk status due to mismanagement of public funds in public enterprises. Government parastatals have come under major scrutiny in recent years for transgressing the code of good conduct prescribed by the King Report. The article presents a conceptual exploration of corporate governance challenges and is underpinned by diffusion of responsibility and moral hypocrisy which has roots in social psychology. Social psychology can be used as an overlap for strategy and institutional concepts, which encourages new ways of addressing corporate responsibility. The research reveals the impact on state enterprises financial stability when senior management diffuses responsibility and is not prosecuted or held accountable under the constitutional Act 108 of 1996. The article highlights one of the many corporate responsibility transgressions by state-owned enterprises who should be responsible for building the economy rather than destroying public value.
{"title":"Diffusion of the Ethical Philosophy of Good Governance at the National Oil Company of South Africa","authors":"Rene W. Albertus","doi":"10.1177/0974686219836543","DOIUrl":"https://doi.org/10.1177/0974686219836543","url":null,"abstract":"Abstract This article seeks to examine challenges affecting the ethical philosophy of senior management at South Africa’s national oil and gas company. South Africa’s economy has been downgraded to junk status due to mismanagement of public funds in public enterprises. Government parastatals have come under major scrutiny in recent years for transgressing the code of good conduct prescribed by the King Report. The article presents a conceptual exploration of corporate governance challenges and is underpinned by diffusion of responsibility and moral hypocrisy which has roots in social psychology. Social psychology can be used as an overlap for strategy and institutional concepts, which encourages new ways of addressing corporate responsibility. The research reveals the impact on state enterprises financial stability when senior management diffuses responsibility and is not prosecuted or held accountable under the constitutional Act 108 of 1996. The article highlights one of the many corporate responsibility transgressions by state-owned enterprises who should be responsible for building the economy rather than destroying public value.","PeriodicalId":37340,"journal":{"name":"Indian Journal of Corporate Governance","volume":"12 1","pages":"59 - 70"},"PeriodicalIF":0.0,"publicationDate":"2019-06-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1177/0974686219836543","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44278517","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 : 2019-06-28DOI: 10.1177/0974686219836528
Najul Laskar
Abstract This paper examines the relationship between corporate sustainability reporting and firms profitability of Indian and South Korean companies. For calculating the disclosure score of sustainability performance, content analysis technique is employed based on the reporting format of Global Reporting Initiatives. The study sample consists of 28 listed non-financial firms from India and 26 listed non-financial firms from South Korea over a period of 6 years (2010–2015). Using the disclosure scores, regression analysis is used to examine the association between sustainability reporting/performance and firm performance. The regression results indicate that, for South Korean firms, the association is positive and significant. However, in Indian context, the impact of sustainability performance is negative. Further, the relative impact of sustainability reporting is found to be significantly more in South Korea as compared with India.
{"title":"Does Sustainability Reporting Enhance Firms Profitability? A Study on Select Companies from India and South Korea","authors":"Najul Laskar","doi":"10.1177/0974686219836528","DOIUrl":"https://doi.org/10.1177/0974686219836528","url":null,"abstract":"Abstract This paper examines the relationship between corporate sustainability reporting and firms profitability of Indian and South Korean companies. For calculating the disclosure score of sustainability performance, content analysis technique is employed based on the reporting format of Global Reporting Initiatives. The study sample consists of 28 listed non-financial firms from India and 26 listed non-financial firms from South Korea over a period of 6 years (2010–2015). Using the disclosure scores, regression analysis is used to examine the association between sustainability reporting/performance and firm performance. The regression results indicate that, for South Korean firms, the association is positive and significant. However, in Indian context, the impact of sustainability performance is negative. Further, the relative impact of sustainability reporting is found to be significantly more in South Korea as compared with India.","PeriodicalId":37340,"journal":{"name":"Indian Journal of Corporate Governance","volume":"12 1","pages":"2 - 20"},"PeriodicalIF":0.0,"publicationDate":"2019-06-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1177/0974686219836528","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43475370","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 : 2018-12-01DOI: 10.1177/0974686218806725
Shital Jhunjhunwala
This is my last issue as the editor of the journal. Since its inception in 2008, the journal has travelled far, crossed several milestones and scaled new heights. It has been my privilege and honour to have successfully presented 11 volumes of the journal to you. The journey has been one of great learnings and wonderful experiences that I carry with me as my path takes a new direction. I endeavoured to raise the bar with each issue of the journal and the phenomenal increase in both contributions by authors and number of subscribers is testament to my efforts. As I bid adieu, I would like to express my sincere gratitude to the editorial board for their advice and encouragement, the editorial team at Institute of Public Enterprise and SAGE for their tireless work and support, and our authors and readers for always standing by my side and making it all possible. I wish the journal all the best.
{"title":"Valediction","authors":"Shital Jhunjhunwala","doi":"10.1177/0974686218806725","DOIUrl":"https://doi.org/10.1177/0974686218806725","url":null,"abstract":"This is my last issue as the editor of the journal. Since its inception in 2008, the journal has travelled far, crossed several milestones and scaled new heights. It has been my privilege and honour to have successfully presented 11 volumes of the journal to you. The journey has been one of great learnings and wonderful experiences that I carry with me as my path takes a new direction. I endeavoured to raise the bar with each issue of the journal and the phenomenal increase in both contributions by authors and number of subscribers is testament to my efforts. As I bid adieu, I would like to express my sincere gratitude to the editorial board for their advice and encouragement, the editorial team at Institute of Public Enterprise and SAGE for their tireless work and support, and our authors and readers for always standing by my side and making it all possible. I wish the journal all the best.","PeriodicalId":37340,"journal":{"name":"Indian Journal of Corporate Governance","volume":" ","pages":"vii - vii"},"PeriodicalIF":0.0,"publicationDate":"2018-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1177/0974686218806725","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45348695","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 : 2018-11-18DOI: 10.1177/0974686218806724
R. Deb
Abstract The study has been motivated to assay the selective stakeholders’ perceptions on whether the government financial audit has been converted into forensic audit. Adopting a cross-sectional study design with survey strategy through a self-administered interview schedule with a 50-item inventory, data has been collected from randomly chosen 120 sample respondents having equal representations from two groups—current and retired government employees and businessmen of Tripura. The significant statistical results have concluded that corruption and accounting slacks have important impacts on the government audits, and the latter if used in an appropriate manner are likely to detect frauds and catalyse in bringing accounting reforms.
{"title":"Financial Audit or Forensic Audit? Government Sector Panorama","authors":"R. Deb","doi":"10.1177/0974686218806724","DOIUrl":"https://doi.org/10.1177/0974686218806724","url":null,"abstract":"Abstract The study has been motivated to assay the selective stakeholders’ perceptions on whether the government financial audit has been converted into forensic audit. Adopting a cross-sectional study design with survey strategy through a self-administered interview schedule with a 50-item inventory, data has been collected from randomly chosen 120 sample respondents having equal representations from two groups—current and retired government employees and businessmen of Tripura. The significant statistical results have concluded that corruption and accounting slacks have important impacts on the government audits, and the latter if used in an appropriate manner are likely to detect frauds and catalyse in bringing accounting reforms.","PeriodicalId":37340,"journal":{"name":"Indian Journal of Corporate Governance","volume":"11 1","pages":"135 - 158"},"PeriodicalIF":0.0,"publicationDate":"2018-11-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1177/0974686218806724","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45429352","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 : 2018-11-14DOI: 10.1177/0974686218806715
Etienne Ndemezo, Charles Kayitana
Abstract This study aims to determine effects of corporate governance on corporate entrepreneurship of Rwandese manufacturing firms, and to evaluate effects of corporate governance on performance of Rwandese manufacturing firms. We used two complementary methodological approaches: one which links corporate governance to corporate entrepreneurship; another which uses an augmented Cobb–Douglass production function to associate corporate governance with the firm performance. This study resulted in four main outcomes: first, the background—education and experience—and motivation of top managers contribute significantly to both corporate entrepreneurship and corporate performance; second, the sole proprietorship organisational form harms significantly the firms’ entrepreneurial activities and impacts negatively their financial performance; third, electricity and raw materials expenses are positively and significantly related to financial performance of manufacturing firms; and fourth, even if informal competition has no effect on entrepreneurial activity of manufacturing firms, it harms their financial performance.
{"title":"Corporate Governance, Corporate Entrepreneurship and Firm Performance: Evidence from the Rwandese Manufacturing Industry","authors":"Etienne Ndemezo, Charles Kayitana","doi":"10.1177/0974686218806715","DOIUrl":"https://doi.org/10.1177/0974686218806715","url":null,"abstract":"Abstract This study aims to determine effects of corporate governance on corporate entrepreneurship of Rwandese manufacturing firms, and to evaluate effects of corporate governance on performance of Rwandese manufacturing firms. We used two complementary methodological approaches: one which links corporate governance to corporate entrepreneurship; another which uses an augmented Cobb–Douglass production function to associate corporate governance with the firm performance. This study resulted in four main outcomes: first, the background—education and experience—and motivation of top managers contribute significantly to both corporate entrepreneurship and corporate performance; second, the sole proprietorship organisational form harms significantly the firms’ entrepreneurial activities and impacts negatively their financial performance; third, electricity and raw materials expenses are positively and significantly related to financial performance of manufacturing firms; and fourth, even if informal competition has no effect on entrepreneurial activity of manufacturing firms, it harms their financial performance.","PeriodicalId":37340,"journal":{"name":"Indian Journal of Corporate Governance","volume":"11 1","pages":"103 - 121"},"PeriodicalIF":0.0,"publicationDate":"2018-11-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1177/0974686218806715","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43674223","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 : 2018-11-14DOI: 10.1177/0974686218806714
Rupinder Kaur, Balwinder Singh
Abstract The centre of interest of this research article is the association between chief executive officer (CEO) characteristics and firm performance. Employing a sample of Nifty 500 firms, the support found recommends that demographic and job-related characteristics may be related with the firm’s financial performance. We consider CEO gender, duality, nationality, remuneration and education level as CEO characteristics and we employ return on assets (ROA) as a representative for firm performance. This study widens the understanding of the important function played by the CEO and provides better insight into CEO-specific variables. Specifically, the reported findings specify a positive relationship between CEO remuneration and firm performance, thus indicating that compensation acts as a good inducement for executives to yield finer firm performance while CEO nationality appears to inhibit it, steering foreign directors to a minority spot. This implies that remuneration should be more thoughtfully attached to performance, so that proficient CEOs are not lured by more tempted compensation elsewhere and the decision to engage foreign nationals to company boards must be based on norms other than the firm’s future financial performance.
{"title":"CEOs’ Characteristics and Firm Performance: A Study of Indian Firms","authors":"Rupinder Kaur, Balwinder Singh","doi":"10.1177/0974686218806714","DOIUrl":"https://doi.org/10.1177/0974686218806714","url":null,"abstract":"Abstract The centre of interest of this research article is the association between chief executive officer (CEO) characteristics and firm performance. Employing a sample of Nifty 500 firms, the support found recommends that demographic and job-related characteristics may be related with the firm’s financial performance. We consider CEO gender, duality, nationality, remuneration and education level as CEO characteristics and we employ return on assets (ROA) as a representative for firm performance. This study widens the understanding of the important function played by the CEO and provides better insight into CEO-specific variables. Specifically, the reported findings specify a positive relationship between CEO remuneration and firm performance, thus indicating that compensation acts as a good inducement for executives to yield finer firm performance while CEO nationality appears to inhibit it, steering foreign directors to a minority spot. This implies that remuneration should be more thoughtfully attached to performance, so that proficient CEOs are not lured by more tempted compensation elsewhere and the decision to engage foreign nationals to company boards must be based on norms other than the firm’s future financial performance.","PeriodicalId":37340,"journal":{"name":"Indian Journal of Corporate Governance","volume":"11 1","pages":"185 - 200"},"PeriodicalIF":0.0,"publicationDate":"2018-11-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1177/0974686218806714","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46353640","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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