Boards and Governance

Company boards play a big role in the governance of SMEs and different models were traced from family boards to foundations, as well as the impact of dual board structures frequently adopted. Covering governing arrangements, the chapter reports how SMEs dealt with board roles at public, family-owned, and foundation-owned companies. Discussion of the emergence of dual board structures and the structure of boards at investor-driven companies. The chapter ends with comments on the evolution of boards at SMEs.

Board role performance and compliance with IFRS disclosure requirements among microfinance institutions in Uganda

Purpose The purpose of this paper was twofold. First, to explore the currently performed board roles. Second, to investigate the relationship between board role performance and compliance with international financial reporting standard (IFRS) disclosure requirements among microfinance institutions (MFIs) in Uganda. Design/methodology/approach This study used a mixed methods research design. The relationship between board role performance and compliance with IFRSs requirements was tested using Partial Least Squares. Confirmatory Factory Analysis and interviews were conducted to establish the performed board roles. Findings The findings suggest that among the known board roles of strategic, service and control, the control role is mostly performed. Results further suggest that board role performance is a significant predictor of compliance with IFRS disclosure requirements. In terms of control variables, MFI size and membership to the Association of Microfinance Institutions of Uganda were significant. Other control variables (liquidity, leverage and profitability) are not significantly associated with compliance with IFRS disclosure requirements. Research limitations/implications Compliance with IFRS disclosure requirements was based on one financial year owing to a lack of data for many years. Practical implications The results are important for governing boards regarding improving compliance with IFRS disclosure requirements. The results specifically suggest that MFIs’ boards must focus on performing the control role if compliance with IFRS disclosures requirements is to improve. Originality/value This paper is original because it uses perceptions to measure board role performance, unlike previous studies that used proxies such as board size and proportion of non-executive directors to infer board role performance. The study also reveals that it is only the control role that is important in enhancing compliance with IFRS disclosure requirements. Such evidence does not currently exist.

Examining the impact of corporate governance reforms on firm performance in emerging markets: The mediating effect of board roles

The notion of corporate governance has been given credence on the policy agenda in many countries across the globe, especially after the frequent non-stop worldwide cases of corporate fraud and scandals. This has brought about the massive campaign on corporate governance reforms on finding dynamic corporate practices, structures, and systems that ensure that firms remain profitable, attractive, and sustainable. This study examines the effect of board structural characteristics (BSC) to achieve firm performance (FP) via the mediating effects of board roles (BRs) (frequency of board meetings (FOBM) and board size (BZ)) and the intervening role of corporate governance (CG) code which is an innovative model. By collecting data for 392 listed companies in South Africa for the period 2006-2018 and by employing the generalized method of moments (GMM) model, the findings of the study reveal that FOBM and BZ mediate the relationship between BSC and FP. Furthermore, the study finds a novelty in the interactive effect of corporate governance reforms with BSC on BRs. The study uncovers significant incremental effects of corporate governance reforms interacting with the BSC. These interactions significantly increase the relation after the implementation of the CG code.

Roles and behaviours of diligent and dynamic healthcare boards

Variation persists in the quality of board-level leadership of hospitals. The consequences of poor leadership can be catastrophic for patients. The year 2019 marks 50 years of public inquiries into healthcare failures in the UK. The aim of this article is to enhance our understanding of context-specific effectiveness of healthcare board practices, drawing on an empirical study of changes in hospital board leadership in England. The study suggests leadership behaviours that lay the conditions for better organisation performance. We locate our findings within the wider theoretical debates about corporate governance, responding to calls for theoretical pluralism and insights into the effects of discretionary effort on the part of board members. We conclude by proposing a framework for the ‘restless’ board from a multi-theoretic standpoint, and suggest a repertoire specifically for healthcare boards. This comprises a suite of board roles as conscience of the organisation, sensor, shock absorber, diplomat and coach, with accompanying dyadic behaviours to match particular organisation aims and priorities. The repertoire indicates the importance of a cluster of leadership practices to fulfil the purposes of healthcare boards in differing, complex and challenging contexts.

Inside the Black Box of the Board: Towards a Global Comparative Model of Board Effectiveness for Listed Companies

This conceptual research seeks to develop a global comparable model of board effectiveness for listed companies based on a multi-theoretic and multi-disciplinary approach and mostly quantifiable macro-level (national culture and legal-institutional indicators) and micro-level variables (board characteristics and board processes), by synthesizing recent corporate governance theories on boards of directors and board effectiveness into a new theoretical model. In contrast to most existing models of board effectiveness, it accounts for the moderating effect of national contexts, the mediating influence of board roles on board processes, the relevance of those board processes as predictors of board effectiveness and it offers a validated board effectiveness measure that is directly linked to firm performance. Additionally, it offers a research strategy for cross-national board effectiveness research.

7. Classifications of director

This chapter assesses what a director is and the different types of director that exist. Section 250 of the Companies Act 2006 (CA 2006) provides that a director ‘includes any person occupying the position of director, by whatever name called’. A person validly appointed as a director is known as a de jure director, whereas a person who has not been validly appointed, but who acts as a director, is known as a de facto director. A shadow director is ‘a person in accordance with whose directions or instructions the directors of a company are accustomed to act’. Other types of director include executive director, non-executive director, and alternate director. Meanwhile, certain persons such as major shareholders or creditors may have the power to nominate a person to the board, and this nominated person is known as a nominee director. Many companies will appoint some of its directors to specific board roles.