Board composition and firm performance: empirical evidence from Indian companies

Goel, Archana; Dhiman, Rahul; Rana, Sudhir; Srivastava, Vimal

doi:10.1108/apjba-09-2021-0483

Cited by 21 publications

(9 citation statements)

References 87 publications

(256 reference statements)

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“…One of the objectives is to eliminate management influence in the fund reporting procedure to improve the visibility, disclosure, and applicability of financial statements to user demands. This is critical to the study's purpose of identifying the most essential positive features of directors that contribute to a company's performance and attainment of its objectives (Goel et al, 2022;Kanakriyah, 2021).…”

Section: Literature Review Theoretical Background and Propositionsmentioning

confidence: 99%

Board Characteristics and Firm Performance: A Conﬁgurational Analysis

et al. 2023

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Investors and governments have drawn attention to company governance due to the 2007 ﬁnancial crash. This study aims to determine the impact of board characteristics, i.e. women on the board, busy directors, blockholder ownership, and director qualiﬁcation on ﬁrm ﬁnancial performance based on evidence from Pakistan. Former research on the impact of board features on company ﬁnancial performance is built on contradictory theoretical viewpoints and factual results, which are primarily built on regression and are equivocal. Based on the con- ﬁgurational analysis, this study clariﬁes previously ambiguous ﬁndings concerning the link between keyboard attributes and business ﬁnancial success. This research draws upon theories, including resource dependence and agency theory. The study utilized fuzzy-set qualitative comparative analysis to examine a sample of 60 non-ﬁnancial companies listed on the Pakistan Stock Exchange (PSX). Data referred to the pre-crisis period. Findings have shown that diﬀerent combinations of board attributes can signiﬁcantly impact a ﬁrm proﬁtability, i.e. return on assets (ROA) and return on equity (ROE). Practical implications spotlight the policymakers need to evaluate corporations current level of regulatory and competitive development to plan strategy accordingly. It emphasises unique governance solutions for the non-ﬁnancial sector.

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Section: Literature Review Theoretical Background and Propositionsmentioning

confidence: 99%

Board Characteristics and Firm Performance: A Conﬁgurational Analysis

et al. 2023

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“…The Insurance Regulatory and Development Authority of India (IRDA) also introduced a stewardship code for Indian insurance businesses in addition to SEBI's Stewardship Code for AMCs and the planned Stewardship Code for Institutional Investors. The code, which was published in March 2021, aims to encourage insurance companies to own their investments responsibly and to interact responsibly with them (Goel et al , 2022). In concurrence, a stewardship code for pension funds in India was also developed by the Pension Fund Regulatory and Development Authority (PFRDA).…”

Section: Literature Reviewmentioning

confidence: 99%

“…The code, which was published in July 2021, aims to encourage prudent stewardship and investing on the part of pension funds. All things taken into account, SEBI, IRDA and PFRDA's enactment of stewardship guidelines is an advancement that will contribute to the establishment of India's corporate governance and responsible ownership practices (Goel et al , 2022). The regulations encourage institutional investors to be more engaged in monitoring the businesses they participate in and promoting the creation of long-lasting value (Jatana, 2022).…”

Section: Literature Reviewmentioning

confidence: 99%

The unfolding of shareholder activism in India: an exploratory study

Islam

2023

IJLMA

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Purpose The purpose of this study is to provide a holistic view of the emergence of shareholder activism (SA) in India. However, specifically, this study aims at fulfilling the research gap by discussing the policy and legal advancement in the area of SA and investigating the chronological evolution of SA, manifestations of SA, motives of SA, outcome of SAs and impact of SA on the financial performance of the firm. Design/methodology/approach This study used a mixed methodology (both qualitative and quantitative) to draw inferences, including content analysis, descriptive statistics, independent sample t-test and paired sample t-test. The data has been collected from the annual reports of the sample companies and the Prowess database. Return on assets and return on equity have been used as measures of financial performance while investigating the difference in financial performance between firms subjected to SA and firms not subjected to SA. Findings The findings of this study suggest that there has been significant growth in the occurrence of SA incidents in India in the past decade, with shareholders prominently manifesting by opposing the proposals at annual general meetings/extraordinary general meetings, mostly involving governance-related demands. The findings from the independent sample t-tests revealed that there has been a significant difference in the financial performance of the sample subjected to SA and firms not subjected to SA. Furthermore, the results of the paired sample t-test provide strong evidence of significant improvement in the financial performance of firms’ post-SA. Practical implications The findings of this study have implications for various stakeholders. The findings of this study suggest that SA has been relatively more successful in the Indian context and may encourage minority shareholders to follow active participation through shareholder proposals and votes rather than a passive strategy to trade and exit. For firms, it can provide valuable inferences about the emergence of SA and how it has a positive impact on the financial performance of the firm, which can lead to a change in the perception of investors and promoters who perceive SA as a threat (Gillan and Starks 2000; Hartzell and Starks, 2003). For policymakers, it can act as a tool to investigate whether the regulatory changes have been able to bring the intended transparency, accountability and enhanced shareholder participation. This will encourage policymakers to be more agile, as their efforts are bearing fruit. This will also act as a guide to formulating future policies and regulations. Originality/value This study is an effort to provide a holistic view of SA scenarios in a developing economy setting like India, where SA is a very recent phenomenon. Although there are studies in the area of SA, there is a dearth of studies that have investigated the various dimensions of SA in the Indian context in a very systematic and extensive manner, investigating all the different dimensions of SA. Furthermore, this study also intends to investigate the impact of SA, which is normally perceived as a threat to financial performance and provide valuable contrasting evidence.

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“…Sebaliknya, teori stewardship mengartikulasikan bahwa sebagai pelayan perusahaan, manajer lebih memilih untuk melihat kepentingan pemegang saham daripada keuntungan mereka sendiri. Dengan demikian, tidak perlu menambah ukuran dewan dan menunjuk direktur independen Dengan demikian, kedua teori ini memberikan argumen teoretis yang saling bertentangan (Goel et al, 2022).…”

Section: Pendahuluanunclassified

“…Hasil penelitian ini sejalan dengan Goel et al (2022). Hardiyawan et al (2015) mengemukakan bahwa agency theory, sebagai agen dewan direksi berperan dalam menentukan strategi sumber daya yang dimiliki dan arah kebijakan perusahaan, baik untuk jangka pendek maupun jangka panjang.…”

Section: Interpretasi Hasil Pengaruh Board Size Dengan Profitabilitasunclassified

Corporate Governance Dan Profitabilitas Perusahaan Publik Di Indonesia

Samhudi,

Hersugondo

2022

Manajemen

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This study examines the relationship between internal corporate governance mechanisms consisting of the size of the board of directors, the board of commissioners, the proportion of independent commissioners, institutional ownership and managerial ownership on profitability as measured using the return on asset (ROA) ratio and using control variables, namely sales growth and risk. business. A total of 807 companies listed on the Indonesia Stock Exchange during 2015 to 2020 were included in the population in this study. After using purposive sampling technique, 300 companies from various sectors were used as research samples. The data processing technique used is multiple regression analysis using SPSS version 23 software. Several tests were carried out such as Pearson Correlation, F Test, Coefficient of Determination and T Test to see the relationship and influence between variables. This study found a positive and significant relationship between the size of the board of directors, the size of the board of commissioners and managerial ownership on return on assets (ROA), meaning that the increase in the return on company assets is influenced by these three variables. The proportion of independent commissioners and institutional ownership does not have a significant effect on return on assets because it is based on the results of the t test with a significance value > 0.05. The sales growth control variable has a positive and significant effect on ROA while business risk has a negative and significant relationship with ROA. This research has important implications for policy makers within the company as well as for researchers in the same field.

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Board composition and firm performance: empirical evidence from Indian companies

Cited by 21 publications

References 87 publications

Board Characteristics and Firm Performance: A Conﬁgurational Analysis

Board Characteristics and Firm Performance: A Conﬁgurational Analysis

The unfolding of shareholder activism in India: an exploratory study

Corporate Governance Dan Profitabilitas Perusahaan Publik Di Indonesia

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