Board Effectiveness: An Evaluation based on Corporate Governance Score

Abstract

Growth, progress, and prosperity of any country depend highly on the corporate governance mechanism of that country. Good governance of a country helps it to sustainable growth and consistency in progress. The good governance should contribute towards the improvement in transparency, ethics, morality, and disclosure. The principles of good governance stand on honesty, trust, integrity, openness, and performance orientation. Our honorable Prime Minister Narendra bhai Modi had given the three E for good governance during his speech on Independence Day i.e. Effective Governance, Electronic Governance, and Ethical Governance. The fundamental concern of corporate governance mechanism is to ensure the protection of minority shareholders/owners of specific firms. Mechanism of a corporate governance specifies the relations among the shareholders, board of directors, and managers. The present paper is an attempt to evaluate the effectiveness of the board by calculating the corporate governance score. The mandatory and non-mandatory guidelines have been considered while assigning points to specific parameters of the corporate governance.

Board Effectiveness, Entrepreneurial Orientation and Corporate Culture: Evidence from an Emerging Economy

“…In this context, board effectiveness is defined as "a combination of committed, collaborative, competent, creative and achievement-oriented individual board of directors who possesses a strong selfcharacter in performing their responsibilities" (Tricker, 2015, p. 314). However, extant literature provides a limited understanding of the use of corporate governance principles to achieve effective board compliance, with best practices of governance (e.g., board index based on board characteristics) (Shukla & Limbasiya, 2015). Hence, this study adopted 19 dimensions encompassing both demographic and behavioral principles (e.g., board independence, board size, board human capital, Chief executive officer (CEO) duality, board shareholding, board diversity, audit committee existence, audit committee size, audit committee independence, remuneration committee existence, nomination committee existence, board expertise, board commitment, board cohesiveness, meeting practices, board power, board control role, board advisory role, board strategic role).…”

“…Firstly, although the mainstream literature supports the relationship between effective board behavior as an internal governance mechanism and entrepreneurial orientation, there are limited studies on the topic (Olori & Sylva, 2017); of the studies which do exist, the evidence is mixed and warrants further investigation. Secondly, research recognizing key board characteristics largely focused on board demographic factors aligned with a single theoretical perspective to the detriment of effective behavioral characteristics of corporate boards (Shukla & Limbasiya, 2015). Thirdly, the influence of corporate culture as a potential contingency variable on the relationship between board effectiveness and entrepreneurial orientation has been largely overlooked (Szczepańska-Woszczyna, 2015;Mervelskemper et al, 2018).…”

Board of Directors Effectiveness Challenge: an Introspective on the Government Link Companies Experience

“…Menurut Shukla & Limbasiya (2015), sebuah lembaga yang efektif merupakan lembaga yang dikategorikan sebagai berprestasi tinggi. Sebuah lembaga yang berprestasi tinggi mampu menyumbang kepada kepada pertumbuhan mapan sesebuah syarikat.…”

“…Sebuah lembaga yang berprestasi tinggi mampu menyumbang kepada kepada pertumbuhan mapan sesebuah syarikat. Pembentukan sebuah lembaga yang efektif memerlukan kepada budaya ketelusan dan akauntabiliti (Shukla & Limbasiya 2015).…”

“…Terdapat beberapa parameter penting yang digunakan dalam memperihalkan ciri lembaga dalam menilai konteks tadbir urus korporat sesebuah entiti. Antara parameter tersebut ialah kepemimpinan lembaga, saiz lembaga, komposisi lembaga, kekerapan mesyuarat lembaga dan kehadiran dan keanggotaan wanita dalam lembaga, struktur dalaman lembaga daripada segi jawatankuasa khusus dan peranannya, serta struktur ganjaran pengarah (Bezemer et al, 2014;John & Senbet 1998;Shukla & Limbasiya 2015;Heaney 2009; De Andres, Azofra dan Lopez 2005). Sharifah Faatihah, Syahrina & Julizaerma (2016) pula telah mengkaji kerelevanan parameter kebebasan pengarah dalam mengurangkan masalah agensi dalam syarikat korporat.…”