Does board independence moderate the effect of politician directors on CSR disclosure? Evidence from the publicly listed banks in Bangladesh

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Md. Harun Ur Rashid ◽  
Syed Zabid Hossain
Keyword(s):  
Negative Impact ◽  
Generalized Method Of Moments ◽  
Least Square ◽  
Annual Reports ◽  
Independent Directors ◽  
Board Independence ◽  
Content Type ◽  
Political Csr ◽  
Csr Disclosure

Purpose This study aims to investigate the moderating effect of independent directors on the relationship between politicians on the board and corporate social responsibility disclosure (CSRD). Design/methodology/approach The ordinary least square has been used to analyze the CSRD data collected from the annual reports of all 30 listed banks of Bangladesh covering six years period ranging from 2013–2018. Further, the study has applied the generalized method of moments to prove the robustness of the model across the endogeneity issue. Findings The study found a positive relationship between board independence and CSRD that indicates board independence enhances the CSRD to a great extent. On the contrary, the inclusion of politicians on the board has shown a negative impact on CSRD that implies the higher the presence of political members on the board of a bank, the lower the involvement of the bank in CSR activities. However, board independence positively and significantly moderates the politician directors on the CSRD. The findings imply that if the independent directors are empowered, they play the role of whistleblowers that, in turn, mitigates the negative role of politician directors to CSRD. Research limitations/implications The study suggests the banks’ management, and regulatory bodies formulate sound policies so that the banks are forced to include more independent directors with enough power and at the same time, reduce the politician directors on the board. Originality/value The study extends debate on the political CSR and CSRD through validating the role of board independence.

Board independence and firm performance: evidence from Kuwait

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mejbel Al-Saidi
Keyword(s):  
Firm Performance ◽  
Least Square ◽  
Independent Directors ◽  
Board Independence ◽  
Content Type ◽  
Listed Firms ◽  
Ordinary Least Square ◽  
Large Shareholders ◽  
The Relationship

Purpose This paper aims to reduce the knowledge gap by using a large sample and different regressions while controlling the endogeneity and causality issues. Design/methodology/approach This study used the ordinary least square (OLS) and two stage least squares (2SLS) regressions to control the endogeneity and causality problems; this estimation strategy allows for comparison of both estimates to identify any inconsistency and biases in the parameters. Findings General speaking, this study found that board independence negatively affected firm performance based on Tobin’s Q only and the relationship between the two variables ran from board independence to firm performance but not vice versa. Originality/value The current independent directors are not adding value to Kuwait’s listed firms. Some directors who represent large shareholders and the conflict between large shareholders and small shareholders could affect the role of independent directors in Kuwait. To best of the researchers’ knowledge, this study is the first to consider board independent after controlling the issues of endogeneity and causality in Kuwait; thus, the results could be useful for Kuwaiti firms, regulators and policymakers.

Impact of the busyness and board independence on the discretionary disclosures of Indian firms

2019 ◽  
Vol 61 (1) ◽  
pp. 250-265
Author(s):  
Kavitha D. ◽  
Nandagopal R. ◽  
Uma Maheswari B.
Keyword(s):  
Design Methodology ◽  
Negative Impact ◽  
Annual Reports ◽  
Independent Directors ◽  
Board Independence ◽  
Content Type ◽  
Future Studies ◽  
Listed Firms ◽  
Board Characteristics ◽  
The Impact

PurposeThe purpose of this paper is to empirically investigate the impact of board characteristics such as size, independence, busyness and duality on the extent of discretionary disclosures of listed Indian firms.Design/methodology/approachA disclosure index with 110 items was constructed to assess the discretionary disclosures in the annual reports of listed firms. The study measured disclosure using 1,024 firm-year observations over 8 years from 2009 to 2016. Board characteristics such as size, independence, busyness and duality have been used in the study as indicators of corporate governance.FindingsThe results indicate that while the proportion of independent directors positively impacts the extent of discretionary disclosures, boards with duality and the busyness of the director have a negative impact. The size of the board does not significantly impact the extent of disclosures.Research limitations/implicationsThis study examines the discretionary disclosures made only in the annual reports. Future studies could examine information disclosed in other media. Moreover, this study uses an un-weighted self-constructed disclosure index, which is subject to its inherent limitations.Originality/valueThis study has examined the impact of the “busyness” of the director on the extent of disclosures. This variable has not been explored in prior studies. The significance of the variable indicates that the number of directorships held impacts the efficiency with which a director performs his/her role in the board. The study reiterates the need for firms and policymakers to focus on improving board independence and to move away from leadership structures with duality.

Female directors and CSR disclosure in Bangladesh: the role of family affiliation

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Pallab Kumar Biswas ◽  
Helen Roberts ◽  
Rosalind Heather Whiting
Keyword(s):  
Family Firms ◽  
Emerging Market ◽  
Annual Reports ◽  
Content Type ◽  
Female Directors ◽  
Csr Disclosure ◽  
Female Director ◽  
Corporate Social ◽  
The Impact

Purpose This paper aims to investigate the impact of female director affiliations to governing families on corporate social responsibility (CSR) disclosures in the context of Bangladeshi firms. Design/methodology/approach This study uses a quantitative empirical research method grounded in Socioemotional Wealth (SEW) theory. Data was sourced from Bangladeshi publicly listed non-financial sector companies’ annual reports and stock exchange trading and publication reports and consists of 2,637 firm-year observations from 1996 to 2011. Pooled multivariate regression models are used to test the association between corporate social and environmental disclosure and female directors, and the family affiliation (or not) of those directors. Findings The findings provide strong evidence that female directors who are affiliated to the governing family, founders and other board members reduce CSR disclosure in family firms; unaffiliated female board directors enhance CSR disclosure, and this effect is significant in both family and non-family firms. Research limitations/implications Definitions of family firms and affiliated directors may lead to over-generalization in the results. Originality/value The study highlights variation in the nature of female board appointments in emerging market family-controlled firms. The findings bring attention to the role of affiliated female director appointments in family ownership structures and speak directly to family business owners, advisors and policy makers about the importance of unaffiliated female directors as catalysts of improved CSR disclosure in family and non-family firms.

Slack in family firms: evidence from Italy (2006-2010)

2014 ◽  
Vol 4 (2) ◽  
pp. 171-193 ◽  
Author(s):  
Giacomo Laffranchini ◽  
Mike Braun
Keyword(s):  
Family Firms ◽  
Least Square ◽  
Curvilinear Relationship ◽  
Board Independence ◽  
Reverse Causality ◽  
Publicly Traded ◽  
Content Type ◽  
Family Enterprises ◽  
The Relationship

Purpose – The purpose of this paper is to examine the relationship between available slack and firm performance in Italian family-controlled public firms (FCPFs) from 2006 to 2010. In addition the authors analyze the moderating effects of specific board structure variables on the relationship between slack resources and firms’ performance. Design/methodology/approach – A pooled cross-section of family and non-family publicly traded firms was drawn from COMPUSTAT global and matched with corporate governance and family firm variables hand-collected from companies’ standard profiles from Italy's primary stock exchange, Borsa Italiana. The hypotheses were tested using the feasible generalized least square method in order to analyze the data from 583 firms-observations, controlling for self-selection bias and reverse causality. Findings – The study shows that FCPFs with available slack experience less than proportionate increases in performance, suggesting a concave curvilinear slack-performance relationship. However, the slack-performance relationship is contingent on board independence and board size: greater board independence and larger boards in FCPFs relate to higher performance when the firm lacks or has too much slack available. The findings suggest that a balanced approach of oversight and stewardship helps families to make better resources allocation, to the benefit of outside shareholders as well. Research limitations/implications – The slack measure was restricted to available slack. Future studies can expand this research inquiry with other forms of slack, including potential and recoverable slack. The sample included only publicly traded family and non-family firms, thereby limiting the generalizability of the findings to other types of family enterprises. Lastly, the results only attend to the slack-performance relationship by controlling whether the firm's performance is below or above the industry average. Practical implications – Policy makers and non-family stakeholders may rely on the findings better understand the factors that can alter the family's propensity for risks and its related strategic decisions in the Italian context. Procedures to fully monitor family management's decision making or, at the other extreme, to give the family free reign are likely to disadvantage families, their business, and their outside stakeholders. Originality/value – The study reconciles the debate on the role of slack on firms’ performance by proposing a curvilinear relationship. The study is one of only a handful of research inquiries centrally addressing the role of slack in family-owned businesses, and the only analysis focussed on Italian FCPFs.

Testing a structural equation model of polychronicity

2019 ◽  
Vol 31 (7) ◽  
pp. 2788-2807
Author(s):  
Mustafa Daskin
Keyword(s):  
Structural Equation ◽  
Ethical Climate ◽  
Negative Impact ◽  
Positive Impact ◽  
Positive Influence ◽  
Partial Least Square ◽  
Least Square ◽  
Frontline Employees ◽  
Content Type

Purpose This paper aims to explore the role of ethical climate as an antecedent of polychronicity, then in turn the effect of polychronicity on frontline employees’ service innovative behaviours (SIBE) and error strain and the moderating role of organization mission fulfilment in these relationships in a hotel job context in Penang, Malaysia. Design/methodology/approach In the current study, the data were collected from 312 frontline employees in the survey premises. A partial least square approach of the structural equation modelling technique (PLS-SEM) was used to test the associations among study variables. Findings The study findings reveal that ethical climate had positive impact on polychronicity. Significantly, polychronicity made positive influence on SIBEs and negative influence on error strain. Organization mission fulfilment was found to boost the influence of ethical climate on polychronicity. Finally, while organization mission fulfilment was found to boost the positive influence of polychronicity on SIBEs, on the other hand, buffers the negative impact of polychronicity on error strain. Practical implications The present study procures implications for practitioners in terms of establishing ethical climate in work environment and maximizing the frontline employees’ SIBEs while minimizing error strain. In addition, this research procures valuable implications to apply efficient managerial tools and improve job results in the lodging industry context of Peninsular Malaysia. Originality/value This study by investigating the untested associations such as the influence of polychronicity on frontline employees’ SIBEs and error strain contributes to the related literature.

The linkage between CSR and cost of equity: an Indian perspective

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Monika Dahiya ◽  
Shveta Singh
Keyword(s):  
Social Responsibility ◽  
Stock Exchange ◽  
Public Awareness ◽  
Generalized Method Of Moments ◽  
Manufacturing Firms ◽  
Least Square ◽  
Cost Of Equity ◽  
Socially Responsible ◽  
Content Type ◽  
Csr Disclosure

Purpose This study aims to explore the relationship between corporate social responsibility (CSR) and the cost of equity (CoE) capital of Indian manufacturing firms. Design/methodology/approach The study is conducted on a sample of 68 manufacturing firms listed on National Stock Exchange of India Limited (NSE) 200, investigated for the period 2013 to 2018. To deal with the issue of endogeneity, the techniques of system generalized method of moments and two-stage least square have been applied. Findings The results suggest that CSR disclosure is positively linked with the CoE in the case of manufacturing firms, signalling that socially responsible firms in India bear a higher CoE. The findings indicate that investors do not treat CSR as a value-augmenting factor. Practical implications Firms should effectuate effective managerial and organizational changes to fulfil their social responsibility instead of window dressing their activities. Regulators in India must work towards more stringent enforcement of the act and make efforts to promote public awareness of CSR. Social implications The integration of CSR activities with the economic operations of the business is imperative. Originality/value To the best of researchers’ knowledge, there is a lack of studies focussing on India, which serves as an ideal setting for the study owing to the latest legislation mandating CSR expenditure. The study focusses on manufacturing firms as these firms are more susceptible to contribute to environmental pollution, exploitation of natural resources and labour concerns.

scholarly journals Does Gender Heterogeneity Matters: The Moderating Role of Women Directors' Independence in the Indian Corporate Sector

2021 ◽  
Vol 14 (28) ◽  
pp. 87-105
Author(s):  
Pradeep KAUR ◽  
◽  
Poonam MAHAJAN
Keyword(s):  
Firm Value ◽  
Fixed Effects ◽  
Negative Impact ◽  
Generalized Method Of Moments ◽  
Independent Directors ◽  
Women Directors ◽  
Role Of Women ◽  
The Relationship ◽  
Moderating Role

This study aims to examine the moderating role of the independent status of women directors on the relationship between gender heterogeneity and firm value. The empirical analysis is performed on the panel data of BSE 100 companies for the period of 10 years from the year 2009 to 2018. Generalized Method of Moments is employed along with Fixed Effects Model while controlling for firm and board-specific variables to examine the relationship between gender heterogeneity and firm value. Moderation impact on this relationship is also analyzed empirically as well as graphically. Results show a negative impact of board gender heterogeneity on the value of a firm. Also, there is a negative moderation effect of women independent directors on the relationship between gender heterogeneity and firm value. Empirical findings of the present study contribute to the current discourse of gender heterogeneity and depict the Indian scenario of corporate boards in this context. This is the first study examining the moderating role of women independent directors on the relationship between board gender heterogeneity and the value of a firm in the Indian climate.

scholarly journals Female directors on boards. The impact of faultlines on CSR reporting

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
M. Camino Ramon-Llorens ◽  
Emma Garcia-Meca ◽  
María Consuelo Pucheta-Martínez
Keyword(s):  
Social Capital ◽  
Generalized Method Of Moments ◽  
Gender Diversity ◽  
Alternative View ◽  
Board Members ◽  
Content Type ◽  
Female Directors ◽  
Csr Disclosure ◽  
Human And Social Capital

Purpose This paper aims to analyze the role of female directors on CSR disclosure. It assumes the existence of faultlines when studying gender diversity and classifies female directors into three categories: industry experts, advisors and community leaders. It also examines the influence of the power of female directors as a moderator on the association between female director categories and CSR disclosure. Design/methodology/approach The paper bases on a dynamic generalized method of moments panel estimator which allows controlling for the unobservable heterogeneity and endogeneity and reduces the estimation bias. Findings Results confirm the double-sided nature of gender diversity, noting different behavior among female directors according to their experience and backgrounds. Moreover, the dominating owner position of female directors can balance and moderate the effect of female directors appointed for their technical knowledge or political and social ties. The results also confirm the necessity to not consider all women directors as a homogeneous group and explore the influence and interrelations of female faultlines on CSR disclosure. Practical implications The paper highlights the need to consider the specific skills, expertise, and connections of female board members when analyzing the effect of board composition, and supports the view that firms should emphasize the unique human and social capital of directors to understand how boards impact on firm strategies. Specifically, the authors support the recommendations of the European Commission (2011) regarding the need to increase skills and expertise when selecting new non-executive female board members. Social implications At a time when most governments are introducing active policies that require firms to nominate women to boards, the understanding of the consequences of women’s presence on boards and the interrelations between female power and the diverse categories of female directors is timely and important. Originality/value To the best of the authors’ knowledge, this is the first paper that provides empirical evidence to the scarcely studied area of the human and social capital of female directors’ roles in CSR disclosure, providing an alternative view of the role of women in corporate board effectiveness.

Board characteristics, audit committee attributes and firm performance: empirical evidence from emerging economy

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Rifat Fariha ◽  
Md. Mukarrom Hossain ◽  
Ratan Ghosh
Keyword(s):  
Significant Relationship ◽  
Commercial Banks ◽  
Audit Committee ◽  
Banking Sector ◽  
Independent Directors ◽  
Board Independence ◽  
Content Type ◽  
Board Characteristics ◽  
Management Quality

PurposeThis study is designed and directed to analyze the effect of board characteristics and audit committee attributes on the firm performance of publicly listed commercial banks of Bangladesh.Design/methodology/approachThirty publicly listed commercial banks of Dhaka Stock Exchange (DSE) have been taken as sample for this study. Data have been collected from annual reports between 2011 and 2017 of the assessed banks. Pooled OLS model has been used for running regression model of this study.FindingsBoard independence has a negative and significant relationship with ROA and Tobin's Q. However, Board Independence has a positive and significant relationship with Stock Return. On the other hand, Board Diversity has a negative and significant relationship with ROA and ROE, which implies inefficiency of diversified board members in the context of Bangladesh. Family duality has a positive and significant relationship with ROA and a negative and significant relationship with Stock return. Board Meeting has a positive and significant relationship with ROA. Audit Committee Size has a negative and significant relationship with Tobins' Q. Independence of audit committee chairman has a negative and significant relationship with Tobin's Q and Stock Returns. Presence of non-executive directors and number of audit meetings have no significant relationship with any of the predicted variables.Research limitations/implicationsAmong all variables of the board characteristics, role of independent directors and participation of female directors have conflicting results in this study. This has raised a question about the fair appointment independent directors and their objective view on the board. Female directors' role is not convincing in the context of Bangladesh as most of the commercial banks are family-owned. Policymakers can tighten and supervise the appointment of independent directors to ensure good governance in the banking sector. Moreover, role of audit committee and independence of audit committee chairman have generated conflicting results in terms of market-based performance measure.Originality/valueBanking sector of Bangladesh experiences huge corruption in the form of excessive NPLs and poor management quality which results in low profit for the firm. This study has explored the problems of management quality and flaws of audit committee which is hampering overall growth of banking industry. Improvement of independent directors' appointment and audit committee formation and reporting will certainly help banking industry of Bangladesh to improve overall performance.

scholarly journals Ownership structure and environmental, social and governance performance disclosure: the moderating role of the board independence

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hamzeh Al Amosh ◽  
Saleh F.A. Khatib
Keyword(s):  
Ownership Structure ◽  
Critical Role ◽  
State Ownership ◽  
Annual Reports ◽  
Board Independence ◽  
Content Type ◽  
Industrial Companies ◽  
Analysis Technique ◽  
Moderating Role

PurposeThe current study dealt with the ownership structure effect as a potential determinant of the environmental, social and governance (ESG) performance disclosure in the Jordanian context.Design/methodology/approachUsing the content analysis technique, data were collected and analyzed from a final sample of 51 annual reports of Jordanian industrial companies listed for 2012–2019.FindingsThe results show that foreign ownership and state ownership play a critical role in disclosing the ESG performance. Also, the board's independence plays an influential role in improving disclosure quality, enhancing family ownership in disclosure. It also limits the negative role of block holder ownership and managerial ownership on the ESG disclosure.Originality/valueTo the best of the authors' knowledge, this is the first study that deals with the role of ownership structure on the ESG disclosure level separately and collectively through the moderating role of board independence.

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