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Research Question/Issue: This study examines the relevance of currently accepted best practice recommendations regarding board structure on the survival likelihood of new economy initial public offering companies. We argue that industry context determines governance outcomes.Research Findings/Insights: We study 125 Australian new economy firms listed between 1994 and 2002. Each firm is tracked until the end of 2007 for monitoring their survival. We find that board independence is associated with an increase in the likelihood of corporate survival. We also find that the benefits of board independence increase at a decreasing rate.Theoretical/Academic Implications: The standard best practice recommendation of board independence stems from the monitoring role of directors and is based on agency theory. The results from our study suggest that the recommendation regarding board independence does not work well for new economy firms. While the agency theory based model implies a monotonic relation between board independence and performance, our research suggests that the relationship is nonlinear. This variation occurs because of increased monitoring costs faced by outsiders due to higher information asymmetry and complexity of new economy firms. Our empirical results suggest that inside directors play a complementary role to outsiders in mitigating firm failure.Practitioner/ Policy Implications: Our research offers insights to policy makers who are interested in setting best practice standards regarding board structure. Our research suggests that firm/industry characteristics play a crucial role in determining the optimal board structure. In firms/industries where outsiders face significantly higher information processing costs, insiders can play a valuable complementary role to outsiders in enhancing the effectiveness of the board. Thus future hard or soft regulations related to board structure should consider industry context.

Manuscript Type: Empirical Research Question/Issue: This study examines the relevance of currently accepted best practice recommendations regarding board structure on the survival likelihood of new economy initial public offering companies. We argue that industry context determines governance outcomes. Research Findings/Insights: We study 125 Australian new economy firms listed between 1994 and 2002. Each firm is tracked until the end of 2007 for monitoring their survival. We find that board independence is associated with an increase in the likelihood of corporate survival. We also find that the benefits of board independence increase at a decreasing rate. Theoretical/Academic Implications: The standard best practice recommendation of board independence stems from the monitoring role of directors and is based on agency theory. The results from our study suggest that the recommendation regarding board independence does not work well for new economy firms. While the agency theory based model implies a monotonic relation between board independence and performance, our research suggests that the relationship is nonlinear. This variation occurs because of increased monitoring costs faced by outsiders due to higher information asymmetry and complexity of new economy firms. Our empirical results suggest that inside directors play a complementary role to outsiders in mitigating firm failure. Practitioner/Policy Implications: Our research offers insights to policy makers who are interested in setting best practice standards regarding board structure. Our research suggests that firm/industry characteristics play a crucial role in determining the optimal board structure. In firms/industries where outsiders face significantly higher information processing costs, insiders can play a valuable complementary role to outsiders in enhancing the effectiveness of the board. Thus future hard or soft regulations related to board structure should consider industry context.

This study investigates whether board gender diversity influences corporate social responsibility (CSR) reporting in Jordan, where there are no gender board balance regulatory requirements. Data was examined from all non-financial Jordanian listed companies for the period of 2006 to 2015. This longitudinal data results in balanced panel data of 800 observations. A content analysis method was used to obtain the reporting index of CSR disclosure in the annual reports. Ordinary least square regression showed that the presence of female directors on a board has a significantly positive effect on the level of CSR reporting. The presence of female directors on the board appears to play a significant role in enhancing compliance with corporate governance best practices. These results provide motivations for companies to consider gender balance on boards. Further, these results reinforce the decision making of regulators in countries where policies have been adopted to increase female representation on corporate boards. In countries where no such regulation exists the inclusion of gender balance practices within boards of directors may increase the level of CSR reporting practices. This study can be considered as one of the few empirical studies that have evaluated the impact of board gender diversity on the level of CSR reporting in a context where there are no gender balance strategies or policies.

This paper investigates trading behaviour among Thai retail investors in 2016. Using detailed survey data from 491 investors, we examine the characteristics and behavioural patterns that lead to investor bias. Empirical results in the behavioural finance literature indicate that retail investors may not behave reasonably. Behavioural biases may influence investor decisions and affect financial markets. These studies, however, are limited to subsamples of the overall investor groups studied and mainly focus on developed markets. We find that biases are common among investors and that men are more overconfident than women. Moreover, we discover that investors with more experience in trading are less likely to hold their stocks for long periods of time. Further, investors aged 45 and younger hold more diversified portfolios. Another finding is that participants with an income of more than 50,000 Baht a month and/or who employ a number of brokers hold more diversified portfolios. This evidence is consistent with the findings that have been reported for Turkey, India, and Vietnam, indicating that demographic factors are useful for distinguishing between investors in terms of the level of overconfidence bias they exhibit. This result confirms that demographic factors play a role in differentiating and classifying retail investors and should motivate future researchers to consider these factors in their research.