Board Composition, Board Diversity and Stock Performance

Jurnal Siasat Bisnis, 2010

This paper discusses the empirical studies investigating the association between board composition and organizational outcome. The board composition is the most important attribute of the board institution as such a composition determines board's characteristics, structure and process. The paper explores the motivation and contribution of previous studies that serves as a basis for defining the significance of a replication work. The paper also presents the outcome approach adopted by previous works. An avenue for further research is presented in the last sections.

Journal of emerging technologies and innovative research, 2018

Board of Directors are the pillar for systems that guarantees that the interests of stakeholders and firm are aligned together by monitoring the working of firm as well. Gender, age, Nationality or independence of board etc are now a day’s trending topic which should be studied deeply and mostly empirical research has been done on board diversity attributes and its relation with corporate governance. In this paper empirical study have been done by taking reviews of various authors on board diversity attributes and how corporate performance have been effected positively by solely following rules and regulations of corporate governance. The study have be extended across nation which can help to understand the different economic working, capital market, cultural differences, effectiveness of corporate governance body. This research provides conceptual framework of board diversity and its impact of governance body.

2013

Directors need to guide and govern companies on behalf of and for the benefit of shareholders and stakeholders (Adams, Hermalin, & Weisbach, 2010; "Duties of directors," 2011), but questions remain in academic literature (Carter, D'Souza,

Brazilian Business Review, 2012

This article investigates the diversity of the boards of directors of Brazilian companies listed on the BM&FBovespa with respect to gender, age, educational attainment and independence, to ascertain whether there is a relationship between any of these diversity measures and firm performance. The study covers all companies without majority control, a type of corporate structure that first appeared in Brazil in 2005. The results indicate that greater diversity in the educational disciplines and the presence or absence of independent board members negatively affect performance, while diversity in years of schooling has a positive effect. The presence of women board members is small, but firms that have at least one female director outperform those that do not.

SSRN Electronic Journal, 2000

We survey the evidence on the relationship between board composition and firm performance. Boards of directors of American public companies that have a majority of independent directors behave differently, in a number of ways, than boards without such a majority. Some of these differences appear to increase firm value; others may decrease firm value. Overall, within the range of board compositions present today in large public companies, there is no convincing evidence that greater board independence correlates with greater firm profitability or faster growth. In particular, there is no empirical support for current proposals that firms should have "supermajority-independent boards" with only one or two inside directors. To the contrary, there is some evidence that firms with supermajority-independent boards are less profitable than other firms. This suggests that it may be useful for firms to have a moderate number of inside directors (say three to five on an average-sized eleven member board). We offer some possible explanations for these results, based on board dynamics, the informational advantages possessed by inside (and, often, affiliated) directors, and the value of interaction between different types of directors who bring different strengths to the board. published in 54 4

Journal of Nusantara Studies (JONUS), 2019

Industry specificity is important to affect board diversity-performance relationship. Prior studies are flawed by assuming that Malaysian industries are homogenous, and industry peculiarities might not be captured by the aggregate results of all firms in the country. The ability of board diversity to boost firms’ performance could be affected by a specific nature of the industries. The purpose of this study is to examine the combined effect of board diversity on firm performance. We also examined the moderating role of industry specificity on the board diversity-performance relationship. Data were collected from 180 listed firms in Malaysia for the period of 2012 to 2016 to avoid the implication of the Companies Act 1965 revamp in late 2016 and the latest MCCG reform in 2017. Data were analysed using the random effect panel data regression to test the research hypotheses. The findings suggest that firm performance is influenced by the combined effects of board diversity dimensions. ...

Corporate Ownership and Control

This study aims at filling existing research by examining the effect of board composition specially board diversity on firm performance using cross-sectional data from London Stock Exchange (FTSE 350) of non-financial companies with a total observations 3961 companies for the years 2000–2016. To the best of our knowledge, the contribution of this paper is to examine the effect of board diversity (age, gender, education, and nationality) of FTSE 100 and FTSE 250 on firm performance. Our results indicate that age diversity has a negative effect on firm performance, which means that young board members enhance and increase firm performance. Furthermore, education diversity has a negative effect on firm performance. On the other hand, gender diversity has positive effect on firm performance, so if companies increase the number of females in the board of directors, firm performance will increase. Ultimately, our result reveals that nationality diversity has a positive effect on firm perf...

Economic Research-Ekonomska Istraživanja

This paper analyses the structure of boards of directors and its impact on business performance, which is approximated by economic profitability and the Tobin's Q ratio. We focus on three basic aspects of boards that have been reviewed in the recent reform of the Good Governance Code: the size of boards, their independence and their diversity. For the study of diversity, we use an index that integrates not only the gender of board members, but also their age and nationality, since these are factors that can influence the knowledge, experience and skills of the directors. The results confirm a high degree of compliance with the recommendations of the Good Governance Code, and suggest that the performance of the advisory and monitoring functions are factors that determine the composition of boards. With respect to the performance of the company, we note that there is a negative and significant relationship with the independence of boards. However, the results are sensitive to the performance measure employed.

Corporate Governance-an International Review, 1995

This article examines the structure of boards and its effects on the performance of significant board functions. Composition of boards is measured by size, outside director representation and cognitive, as well as demographic diversity. A firm's environment, strategy, structure and culture, and factors attributed to personal characteristics of board members were viewed as important determinants affecting effectiveness of boards. Most important, decisions on board size and composition involve a trade-off between benefits of diversity and enhanced costs of group development and group decision processes.

Annals of Dunarea de Jos University. Fascicle I : Economics and Applied Informatics, 2016

This study examines how board composition affects firm performance. Female directors, independent directors and foreign directors and board size were taken as the indicators of board composition. The empirical analysis, based on a sample of 100 firms drawn from the BIST 100 Index over a 3-year period, the years between 2012 and 2014. In the study, for financial performance indicators, Return on Assets, and Return on Equity were used and for market performance indicator Market Value to Book Value was used. After the analysis, it is found that, board composition has an impact on firm performance in BIST 100 companies. This study is unique in terms of analyzing the effects of 2012 regulation of mandating at least 1/3 of all board members to be independent directors and suggesting at least one female director to BIST 100 company boards by Capital Boards of Turkey.