Previous studies on the value relevance of board gender and ethnic diversity have produced mixed results. This paper re-examines this relationship using hand-collected data of 245 South African listed firms over the period [2008][2009][2010][2011][2012][2013]. We document a positive and significant effect of both board gender and ethnic diversity on firm value. We also find that the increase in firm value is greater when boards have three or more women directors. In contrast, ethnic minority directors contribute less to firm value when there are three or more on the board. Furthermore, we document that ethnicity has a concave relationship with firm value, but gender does not. We demonstrate that in better-governed firms, ethnic diversity is more value relevant than gender diversity. Our results also suggest that financial crisis is associated with the propensity to restructure boards along gender and ethnicity. This paper sheds new light on the effect of board diversity in South African firms as the government increasingly pursues policies aimed at eradicating the effects of apartheid. Our results are robust after controlling for self-selection and various forms of endogeneity.

We investigate whether IFRS adoption and the extent of disclosure in a country play any role in reducing perceived corruption, after controlling for the effects of political institutions and economic development. The sample covers 104 countries over the period 2009-2011. We find strong evidence that the length of IFRS experience and the extent of disclosure are negatively related to perceived corruption in a country. We also find that, relative to developed countries, developing countries benefit more from IFRS experience in lowering perceived corruption. Our results are robust to several sensitivity tests, including alternative models, alternative measures of perceived corruption, controlling for endogeneity, and correcting for two-way cluster-robust standard errors. Our findings are important because critics have questioned the merit of IFRS adoption by (developing) countries with weak institutional settings.

We investigate the role of political connections in the performance of family firms. We do so in the setting of Bangladesh, an emerging economy in which family firms are dominant and a weak regulatory environment increases the payoffs from political connections. We find that family firms perform better than nonfamily firms. Moreover, politically connected family firms outperform family firms that are not politically connected. In contrast, nonfamily firms with political connections demonstrate lower firm performance than nonfamily firms without political connections.

To improve accountability of executive compensation, Australia introduced the 'say-onpay' legislation in 2011, which is widely known as the 'two-strikes' rule. We investigate the consequences of this new rule for the pay-performance link in Australian firms. Employing a matched-pair design, we find that pay changes of the chief executive officer and the key management personnel were not significantly positively related to the stock returns of the firms that registered a 'first strike' in 2011 under the 'two-strikes' rule. However, the relations improved significantly in 2012. Our results also suggest that the shareholders of the 'first-strike' firms may have been over-enthusiastic about their voting power in 2011 but exercised this power more judiciously in 2012. Our findings provide important insights for the global debate on governance of executive compensation. Australia's 'two-strikes' rule and the pay-performance link: Are shareholders judicious? Related Party Disclosures (AASB, Melbourne, Vic).

Linck, Netter and Yang (2008) investigate the determinants of board structure in the high litigation-risk and low ownership-concentration environment of the U.S. In contrast, using a hand-collected data set of over 1,000 firms, this paper investigates the determinants of board structure in the low litigation-risk and high ownership-concentration environment of Australia. Multivariate analyses suggest that while board size and board independence are increasing in firm size, CEO duality is decreasing in firm size. Additional tests suggest that high ownership concentration increases board size, decreases board independence and increases CEO duality. These results imply that if high litigation-risk against directors (as in the U.S.) has a monitoring role in corporate governance, ownership concentration appears to offer an alternative governance mechanism in low-litigation-risk countries such as Australia.