Corporate Governance: An International Review
- Publication date:
- Nbr. 29-1, January 2021
- Nbr. 28-6, November 2020
- Nbr. 28-5, September 2020
- Nbr. 28-4, July 2020
- Nbr. 28-3, May 2020
- Nbr. 28-2, March 2020
- Nbr. 28-1, January 2020
- Nbr. 27-6, November 2019
- Nbr. 27-5, September 2019
- Nbr. 27-4, July 2019
- Nbr. 27-3, May 2019
- Nbr. 27-2, March 2019
- Nbr. 27-1, January 2019
- Nbr. 26-6, November 2018
- Nbr. 26-5, September 2018
- Nbr. 26-4, July 2018
- Nbr. 26-3, May 2018
- Nbr. 26-2, March 2018
- Nbr. 26-1, January 2018
- Nbr. 25-6, November 2017
- Issue Information
No abstract is available for this article.
- CGIR Special Issues
- CGIR Review Issue 2022
- Corporate Governance Mechanisms in light of the COVID‐19 Crisis: How Financial Information and Regulation, Managerial Decision‐Making, and Policy Intervention Can Shape the Economic Recovery
- Gender diversity and the spillover effects of women on boards
Research Question/Issue This study seeks to understand the circumstances under which board behavior is affected by gender diversity. The “reasoned action approach” is used as a lens through which to assess the extent that the behavior of the board varies with its gender diversity. Research Findings/Insights The study uses archival data from a panel sample of 80,395 directorships observed between 1998 and 2012. Boardroom gender diversity is significantly related to director personal responsibility (board attendance), CEO accountability, and risk taking. Our findings highlight the key importance of the exposure of male directors to women directors on boards beyond the focal board. This suggests a positive externality or a spillover effect. Theoretical/Academic Implications The empirical findings of this study highlight the importance of allowing for the operation of social norms when studying boardroom decision making. Experience gained by male directors of working with women directors on other boards, beyond the focal board, is shown to enable women directors to contribute more effectively. Practitioner/Policy Implications This study offers encouragement to policy makers' intent on increasing the presence of women on corporate boards. These results point to a spillover effect: there is an observed impact of women on boards that acts not only directly on the board on which they sit but also through the network of boards on which their male counterparts sit. Video Abstract https://youtu.be/ZlADhUUdZrA
- CEO education and the ability to raise capital
Research Question/Issue Using a unique hand‐collected dataset, this study examines the role of chief executive officer (CEO) educational attainments in relation to newly public firms. Theoretical/Academic Implications Using human capital, institutional and upper echelon theories, we hypothesize and demonstrate that CEO educational attainments do not unambiguously affect investors' perceptions of a firm's future prospects. Instead, their influence depends on the quality of CEO education as well as on the degree of uncertainty regarding the firm's future performance and the level of information asymmetry between issuers and prospective investors. To our knowledge, this is the first study that provides a comprehensive treatment of the role of CEO education in the IPO context. Research Findings/Insights We find that initial public offering (IPO) firms led by CEOs with superior educational credentials—in terms of level and quality—are associated with lower levels of IPO underpricing. This association is mainly driven by CEOs that hold advanced degrees. Notably, a difference‐in‐differences approach based on two quasi‐natural experiments indicates that the impact of CEO education on IPO underpricing is more pronounced within environments characterized by lower information transparency. The baseline results also hold in the longer term, thereby confirming the value of signaling prestigious academic awards at the time of the IPO. Practitioner/Policy Implications Our evidence on the importance of CEO education, and especially that CEOs with varying levels and quality of educational training might differentially affect newly listed firms, is useful to providers of financial capital and boards of directors interested in assessing the viability of new ventures. The implication of our study for IPO investors is that it is worth paying more to take an equity position in firms run by better educated CEOs.
- Do supervisory enforcement actions affect board composition?
Research Question/Issue Do enforcement actions impact banks' board composition? Based on a unique sample of sanctions imposed on Italian banks by the country's banking supervisory authority from 2009 to 2015, we investigate whether supervisory enforcement actions affect changes at the board level. Moreover, we examine whether changes at the board level after a sanction are effective in reducing the probability of further sanctions in the future. Research Findings/Insights The findings reveal that sanctioned banks change their board composition following a supervisory sanction. We further test whether these changes improve bank governance and find that, under certain conditions, they may reduce the probability that the board is sanctioned again. Robustness tests confirm the results. Theoretical/Academic Implications This study provides empirical evidence that supports the role of supervisory enforcement actions in inducing banks to adopt changes at the board level. Given that the relationship between supervisory sanctions and changes in board characteristics is still neglected, we contend that our results may increase the understanding of the effectiveness of enforcement actions in improving board characteristics. Practitioner/Policy Implications We believe that our results have policy implications by making a clear and concrete contribution to the ongoing debate on the revision of the principles for enhancing corporate governance and banking supervision.
- CEO outside directorships and managerial efficiency: The role of host board capital
Research Question/Issue Do CEO outside board directorships improve or reduce CEO managerial efficiency? What is the role of host board capital in this relationship? Research Findings/Insights We explore the value of CEO outside directorships on managerial efficiency by identifying a unique empirical setting where a CEO's number of outside board seats is exogenously decreased by a merger that eliminates the board of a host firm the CEO is serving on. Using this event as our empirical instrument, we find that outside directorships decrease a CEO's managerial efficiency while host board capital reduces this effect. Theoretical/Academic Implications Proponents view outside board service as a valuable leadership development tool to mentor the CEO while others promulgating an agency view argue that outside board service detracts from the CEO's ability to improve the efficiency of the home firm as it leads to busyness of the CEO. We shed light on this debate by arguing that CEO outside directorships might reduce CEO's managerial efficiency; however, this effect might be contingent on the characteristics of the host board. Practitioner/Policy Implications Our findings offer insights to practitioners about the value of multiple directorships and the importance of the host board capital while informing policy makers about the potential restrictions on outside board assignments.
- Strategic leadership and technological innovation: A comprehensive review and research agenda
Research Question/Issue We review the literature on the relationship between strategic leadership and technological innovation. Research Findings/Insights We identify the theoretical lenses that researchers apply when studying strategic leadership and innovation, most notably agency theory and upper echelons theory. We review the innovation constructs and measures that scholars employ, and we survey the links among strategic leaders' characteristics and technological innovation. Ultimately, we organize the literature into an integrative framework that provides a concise overview of the extant knowledge, and we outline an agenda for future research. Theoretical/Academic Implications First, we offer scholars a discipline‐spanning overview of the extant knowledge on the topic. Second, by integrating important aspects of corporate governance, such as the role of the board of directors, incentives for the chief executive officer or the top management team, and firm ownership, into the context of technological innovation, we highlight the vital role it plays in the realm of technological innovation. Third, we provide a useful guide for scholars and direct their work towards fruitful avenues for future research. Practitioner/Policy Implications We offer insights for practitioners interested in better understanding the bidirectional relationship between strategic leadership and technological innovation. In particular, our framework and our detailed analysis of the impact of strategic leaders on technological innovation can guide shareholders and board members in matters related to board composition as well as top executive selection and compensation.
- The founder chief executive officer: A review of current insights and directions for future research
Research Question/Issue From its inception in the late 1980s and early 1990s, founder‐chief executive officer (CEO) research has garnered significant scholarly attention in the strategy and entrepreneurship disciplines, although other fields—such as economics, finance, and family business—have also generated substantial research insight on this topic. Despite this progress, a limited consensus exists on the influence of the founder CEO owing to the fragmented nature of extant research. In this review, we address this fragmentation by reviewing current literature, synthesizing the discipline‐specific findings into an integrated framework, and highlighting promising directions for future founder‐CEO research. Research Findings/Insights Using a cross‐disciplinary review of founder‐CEO research based on 221 articles from 24 academic journals, we synthesize current research and provide directions for future research. Our framework organizes current research on the founder CEO into three broad themes. First, we review and synthesize scholarly work on factors related to the founder CEO during the nascent years of the firm. In the second theme, we review research that explores the impact of the founder CEO on strategic choices and firm configurations. In the third theme, we review the performance consequences of the founder CEO. Theoretical/Academic Implications This review advances research on the founder CEO by taking stock of insights from various disciplines, highlighting advancements made, and suggesting promising directions for future research on founder CEOs. Additionally, a critical evaluation of current methodological approaches provides opportunities for strengthening the rigor of scholarly inquiry in this area. Practitioner/Policy Implications This review provides corporate governance scholars and policymakers with a current, multidisciplinary summary of research findings on founder CEOs and their impact on the firm across various stages of the organizational life cycle.
- The promise of reward crowdfunding
Research Question/Issue We study reward crowdfunding (RC), the most innovative segment of the crowdfunding market, where, instead of a debt or equity contract, fund providers are promised some good or service in the future in exchange for their contribution to the funding of the investment project...
- The role of the board chair—A literature review and suggestions for future research
Research Question/Issue The role of the board chair has become increasingly complex in recent decades. Research on corporate governance has called for and has initiated the pursuit of more research for the purpose of creating a better understanding of the role of board chairs. We reviewed 234...
- Who Withdraws Shareholder Proposals and Does It Matter? An Analysis of Sponsor Identity and Pay Practices
Manuscript Type Empirical Research Question/Issue We study more than 12,000 shareholder proposals that were filed to S&P1500 companies from 1997 to 2009, and investigate the determinants of proposal withdrawal by the sponsoring shareholder. We also study the effectiveness of withdrawn...
- Large Shareholders, Shareholder Proposals, and Firm Performance: Evidence from Japan
Manuscript Type Empirical Research Question/Issue Previous studies, primarily based on evidence from the United States, fail to link shareholder activism to firm performance, with one explanatory factor being that the legal and regulatory system in the United States limits the anti‐director...
- Cross‐National Governance Research: A Systematic Review and Assessment
Manuscript Type Review Research Question/Issue Using a systematic literature review approach, we survey 192 cross‐national comparative studies published in 23 scholarly journals in the fields of accounting, economics, finance, and management for the period 2003 to 2014. The purpose is to...
- Institutional Determinants of Private Shareholder Engagement in Brazil and South Africa: The Role of Regulation
Manuscript type Empirical Research Question/Issue This study investigates to what extent regulation encourages private shareholder engagement attitudes and behavior (including behind‐the‐scenes consultations, letters, meetings, and ongoing dialogues) of pension funds and asset managers with...
- The Silent Board: How Language Diversity May Influence the Work Processes of Corporate Boards
Manuscript Type Empirical. Research Question/Issue Corporate boards often change their working language when they acquire foreign members. Consequently, boards “talk” in one language but “think” in another. The present study explores and explains how language diversity influences work processes...
- Looking Inside the Black Box: The Effect of Corporate Governance on Corporate Social Responsibility
Manuscript Type Review Research Question/Issue This study provides a systematic multi‐level review of recent literature to evaluate the impact of corporate governance mechanisms (CG) at the institutional, firm, group, and individual levels on firm level corporate social responsibility (CSR)...
- Separation of Cash Flow and Voting Rights and Firm Performance in Large Family Business Groups in Korea
Manuscript Type Empirical Research Question/Issue This study examines how separation of cash flow and voting rights influences performance of firms affiliated with large family business groups. Complementing the dominant view grounded in agency theory, we suggest that the separation of cash flow...
- Does proximity to corporate headquarters enhance directors' monitoring effectiveness? A look at financial reporting quality
Research question/issue In this study, using a unique Canadian setting that relies on a principle‐based corporate oversight environment and that has access to a large pool of U.S. directors, we investigate how directors' proximity to a firm's headquarters influences its financial reporting quality. ...