Abstract-The aim of this study is to examine the impact of board characteristics and firm performance. Specifically we test the effects of board meeting, board independence, board size and directors accounting expertise on firm accounting performance. The paper uses both financial and non-financial data from annual reports of the 700 public listed firms in Malaysia for the year 2009. The result shows that board independence does not affect firm performance, whilst board size and board accounting/financial expertise are positively associated with firm performance. Board diligence in terms of board meetings is found to have an adverse effect on firm performance. These findings provide some implication for future research on the effectiveness of board directors on firm performance.Index Terms-Corporate governance, board characteristics, board meeting, board independence, accounting expertise and firm performance.
Purpose – The purpose of this paper is to test the impact of the internal audit function (IAF), an increasingly common internal governance mechanism, on a firm's financial reporting quality. Specifically, this paper investigates the association between the quality of the IAF and abnormal accruals (as a proxy for financial reporting quality) and whether the board of directors play a role in moderating the relationship. Design/methodology/approach – This paper uses a unique dataset of survey responses and archival data. Regression analysis was used to test their hypotheses. Findings – Although their initial findings show an unexpected positive relationship between internal audit quality and abnormal accruals, this relationship is contingent on whether firms outsource their internal audit activities and/or whether they are politically linked. In estimations excluding outsourcing and political connections observations, this paper shows that the association between internal audit quality and abnormal accruals is negative and in particular internal audit organisational independence, financial focus audit activities and investment are associated with lower income-increasing (opportunistic) abnormal accruals. Next, when this paper interact board quality with internal audit quality, this paper finds although the lower ordered variables board quality and internal audit quality coefficients are negatively related to abnormal accruals, the interaction variable between these two variables is positively associated with abnormal accruals, indicating the possibility of a substitution relationship between board quality and internal audit quality. Research limitations/implications – Their findings show that certain internal audit attributes play an important role in the financial reporting process and thus these findings are expected to inform the Institute of Internal Auditors and other regulatory bodies on the role of internal audit (being an important internal governance mechanism) in financial reporting, which in turn can assist in market/regulatory reforms/changes and inform the revised Malaysian Code of Corporate Governance. Originality/value – This paper extends prior internal auditing literature by examining the relationship between internal audit quality and financial reporting quality in the context of a developing country, namely Malaysia, and whether the board of directors moderate the examined association.
The growing concerns surrounding the precarious state of the biosphere have triggered organizations to develop and implement innovations that curb environmental degradation (eco-innovation). However, eco-innovation is a risky proposition for organizations and their stakeholders, due to uncertainty of outcome. Despite the high investment risk of eco-innovation, the literature that assesses eco-innovation outcomes from an organizational performance perspective is scant. Thus, this paper uses a systematic approach to review eco-innovation and performance literature. The eco-innovation and performance literature reviewed in this paper is sourced from the Scopus and Web of Science (WoS) scientific databases. Results from this systematic review suggest that the capital market stakeholder group—an essential stakeholder group—has received little attention in the eco-innovation and performance literature. This is alarming, as this stakeholder group is expected to act in the best interests of the organization—as well as the other stakeholders—especially during strategy formulation and implementation. This paper also finds that the resource-based view and stakeholder theory are frequently utilized in explaining eco-innovation. However, the natural resource-based view is least utilized, despite growing environmental pressures. A multi-theoretical perspective can help to overcome the limitations of one theory, as well as help to unearth additional organizational factors which could potentially catalyze the eco-innovation and performance relationship.
Reporting is a means of communication for companies to their respective stakeholders. The literature on non‐financial reporting has mostly focused on operational, Carbon Discloser Project (CDP), and environmental disclosure to firm performance. This reporting and disclosure approach adopted by companies in their sustainability practices appears to be a normative approach. However, there has been a growing demand by stakeholders to incorporate proactive approach in business activities. To meet that, green innovation practices (GIPs) has been integrated as a new element in environmental reporting, thereby reflecting the proactiveness of companies in their adoption of green innovation reporting (GIR). The objective of this study is to advocate for greater disclosure on sustainability reporting by incorporating the GIPs of companies and substantial, sustainable development goal contribution, along with the moderation of the newly upgraded ISO 56002‐2019 innovation management system. Adoption of green innovation reporting and ISO 56002‐2019 will enhance the level of transparency of business activities and create greater stakeholder confidence along with enhancing the firm's sustainable development of goal performance. Furthermore, an extensive literature review was undertaken to create a GIR framework (i.e., product, process, service and technology) for firms to integrate GIPs into sustainability reporting. The conceptual model proposed the adoption of green innovation reporting and ISO 56002‐2019 innovation management system to firm sustainable development goal. This needs to be injected into the sustainable reporting of companies to reflect their innovativeness, actual sustainable business practices and sustainable development goal performance for the firm.
This paper examines the demographic diversity at toplevel management and its impact on firm performance. The paper focuses on Upper-echelon theory, which explains board characteristics and firm performance. Theoretical framework is specially designed using concepts, measures and models. Relevant hypotheses are developed to test diversity impact with the use of appropriate variables and measures. A total sample of large 60 top listed companies are considered based on their market capitalization. This empirical work uses BODs attributes and financial data, which are gathered over the period 2009 to 2013. This study incorporates econometrics methodology on panel data analysis, which is used rigorously for hypothesis testing. The results indicate that demographic diversity at board level does have a relationship with market value.
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