Corporate Board Characteristics, Managerial Entrenchment and Diversification Strategy: Evidence from Tunisian Context

Marouan, Kouki

doi:10.5539/ijbm.v10n7p184

Cited by 4 publications

(9 citation statements)

References 73 publications

(66 reference statements)

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“…On the other hand, previous studies claim that the advantages of larger boards are related to their greater heterogeneity (Dharmadasa et al, 2014;Guest, 2009), which can provide firms with more comprehensive advice, better-informed monitoring and better external linkages; thus, improving growth strategy options evaluation and implementation (Zheng and Tsai, 2019). Consistently, most previous studies suggest that the greater the number of directors, the greater the opportunities to implement diversification moves (Garcı ´a Soto and A ´lamo Vera, 2007;Marouan, 2015), consistent with findings reporting that more diversified companies tend to have a higher number of outside directors (Anderson et al, 2000) that can provide firms with a better access to external resources.…”

Section: The Role Of Board Sizesupporting

confidence: 87%

The corporate governance-diversification link: exploring the heterogeneity of family firms

Galavotti

D’Este²

2022

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Purpose Building on behavioral agency theory, the authors explore the role played by corporate governance characteristics as drivers of the diversification strategies of family firms. Specifically, this study aims to investigate the effects of board size and board gender diversity on the likelihood that family firms will execute a diversifying acquisition vis-à-vis a related acquisition. Furthermore, the authors investigate the contingency effects played by foreign directorship and the firm’s listing status. Design/methodology/approach The hypotheses are tested on an original sample of 213 cross-border acquisitions executed by Italian family firms between 2008 and 2021. Findings The findings suggest that both large board sizes and greater gender diversity positively affect the diversification of family firms. While the presence of foreign directors magnifies the positive effect of board size, gender diversity discourages diversification in the case of listed firms. Originality/value The originality of this study is twofold. First, while prior literature has mostly focused on the family vs nonfamily dichotomy, this paper contributes to an emergent line of research investigating the heterogeneity among family firms’ corporate strategy decisions. Second, by exploring the corporate governance-diversification link in the context of family business, the authors answer to recent calls that diversification by family firms deserves further investigation in light of its highly controversial nature in terms of socioemotional wealth implications and potential mismatch among multiple objectives.

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Section: The Role Of Board Sizesupporting

confidence: 87%

The corporate governance-diversification link: exploring the heterogeneity of family firms

Galavotti

D’Este²

2022

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“…Firm size (SIZE) was measured by taking the natural log of total assets; one of the most frequently used measures for firm size (Dah et al. , 2020; Marouan, 2015; Bilel, 2020; Dakhli, 2021a, b, c).…”

Section: Methodsmentioning

confidence: 99%

“…The selection of controls is in line with previous studies studying the ME. We included the following firm indicators:Firm size (SIZE) was measured by taking the natural log of total assets; one of the most frequently used measures for firm size (Dah et al. , 2020; Marouan, 2015; Bilel, 2020; Dakhli, 2021a, b, c).…”

Section: Methodsmentioning

confidence: 99%

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Corporate characteristics, audit quality and managerial entrenchment during the COVID-19 crisis: evidence from an emerging country

Dakhli

Mtiraoui

2021

IJPPM

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PurposeThe purpose of this paper is to investigate the relationship between some corporate characteristics, audit quality and managerial entrenchment in Tunisian companies.Design/methodology/approachThe multivariate regression model is used for hypothesis testing using a sample of 224 listed observations on Tunisian Stock Exchange during 2014–2020. An exploratory factor analysis of four variables (chief executive officer (CEO) duality, CEO tenure, CEO seniority and CEO age) is used for calculating a unique index assessing the managerial entrenchment.FindingsThe results show a negative and significant relationship between audit quality and managerial entrenchment. The authors also find that firm characteristics affect management entrenchment. Precisely, corporate financial performance and firm leverage show positive connections with managerial entrenchment (ME). Additional analysis confirms the negative impact of the coronavirus disease 2019 (COVID-19) pandemic on managerial entrenchment level.Practical implicationsThe study’s findings have practical implications that may be useful to different stakeholders, policymakers and regulatory bodies interested in reducing management entrenchment. This study offers signals to shareholders about specific governance attributes, namely audit quality, that control the extent of manager's entrenchment.Originality/valueThe originality of this paper consists in focusing on developing countries, namely the Tunisian context; while the managerial entrenchment phenomena has been widely examined in developed markets. Moreover, contrary to the overwhelming majority of previous studies that has used individual indexes for evaluating the entrenchment, the authors calculate a mixed index of managerial entrenchment using the principal component analysis based on four governance mechanisms (CEO duality, CEO age, CEO seniority and CEO tenure).

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“…2.1.3 Management entrenchment. Marouan (2015) analyzed entrenchment from two points of view. Manager entrenchment associates with all behaviors exerted to maintain the job, increase the freedom of decision-making and protect personal interests.…”

Section: Managerial Myopiamentioning

confidence: 99%

Impacts of psychological behaviors of managers on money laundering: evidence from Iran stock exchange

Saeidi

2021

JMLC

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Purpose This study aims to investigate the impacts of the psychological behaviors of managers, including entrenchment, myopia, narcissism and overconfidence, on money laundering at Iranian companies listed on the Tehran Stock Exchange. Design/methodology/approach The present study is descriptive-correlational in terms of methodology and applied research in terms of objectives. The statistical population consisted of all companies listed on the Tehran Stock Exchange during 2013–2019. A total of 150 companies were selected as samples via screening. Logistic regression was used to analyze the data and test the hypotheses in EViews v10. Findings The findings revealed that management entrenchment, managerial myopia, managerial narcissism and managerial overconfidence have significant impacts on money laundering. Originality/value This study pioneer investigating the impacts of psychological behaviors among managers on money laundering in Iran. As an economic crime, money laundering poses an adverse impact on economic growth in countries. The continuous monitoring of manager performance and the deployment of performance measurement systems could prevent the negative impacts of manager behavior on money laundering.

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Corporate Board Characteristics, Managerial Entrenchment and Diversification Strategy: Evidence from Tunisian Context

Cited by 4 publications

References 73 publications

The corporate governance-diversification link: exploring the heterogeneity of family firms

The corporate governance-diversification link: exploring the heterogeneity of family firms

Corporate characteristics, audit quality and managerial entrenchment during the COVID-19 crisis: evidence from an emerging country

Impacts of psychological behaviors of managers on money laundering: evidence from Iran stock exchange

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