Do firms adjust corporate governance in response to economic policy uncertainty? Evidence from board size

Ongsakul, Viput; Treepongkaruna, Sirimon; Jiraporn, Pornsit; Uyar, Ali

doi:10.1016/j.frl.2020.101613

Cited by 40 publications

(45 citation statements)

References 33 publications

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“…Jensen (1993) argues that large boards also lead to ineffective monitoring for executives as they become so overweight making them highly averse to follow-up. So executives of firms with higher level of control under large boards make them less effective across different functions (Jensen, 1993;Ongsakul et al, 2020). Large boards may be compromising on their controlling and monitoring functions, which weakens the internal governance and shift of power curve turns towards the executives, reflecting the managerial power and executives leading their own influence on their remunerations, which results in higher salaries.…”

Section: Board Sizementioning

confidence: 99%

Executive remuneration, corporate governance and corporate performance: Evidence from China

Rehman

Ali

Hussain

et al. 2021

Economic Research-Ekonomska Istraživanja

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This study investigates the impact of corporate performance and corporate governance on executive remuneration in a Chinese market setting. Using Generalized Method of Moments (GMM) estimation approach for a sample of 860 non-financial firms listed on Chinese Stock Exchanges over the 15 years period of 2004-2018, the study found a positive and significant association between corporate profitability and executive pay. The study further reports that ownership concentration is positively related to executive pay revealing an entrenchment effect i.e., collusion between large shareholders and top management. Consistent with managerial power and agency theory CEO duality exhibits a positive relationship with executive remuneration, while board size and board independence also reveal a positive association with executive pay, indicating board ineffectiveness in reducing managerial entrenchment. Interestingly, non-state-owned enterprises report a negative relationship of board size with executive remuneration which means non-state-owned enterprises with larger board size tend to reduce executive pay because they may have better control and monitoring. Following the managerial power propositions, CEO duality weakens the performance sensitivity of executive pay, but contrary to agency theory the impact of board independence on this sensitivity is in contrast and weakens the relationship of managerial pay and performance, making the independent director's role ambiguous.

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Section: Board Sizementioning

confidence: 99%

Executive remuneration, corporate governance and corporate performance: Evidence from China

Rehman

Ali

Hussain

et al. 2021

Economic Research-Ekonomska Istraživanja

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“…Third, we focus on the UK case, which is unique when relative to other developed and emerging markets. For instance, UK listed firms have diffused ownership (Kilincarslan 2019), while governance structure has significantly changed in response to shocks, such as the 9/11 attacks (Ongsakul et al 2020). Hence, this study offers new insights compared with the former study of Ozkan and Ozkan (2004).…”

mentioning

confidence: 86%

Firm Size Does Matter: New Evidence on the Determinants of Cash Holdings

Magerakis

Γκίλλας

Τσαγκανός

et al. 2020

JRFM

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We study the financial determinants of cash holdings and discuss the importance of firm size in the post-crisis period. We employ panel data regression analysis on a sample of 6629 non-financial and non-utility listed companies in the United Kingdom from 2010 to 2018. We focus on the comparative analysis of large, medium, and small size firms in terms of cash holdings. Our findings indicate that cash levels are higher for firms with riskier cash flows, more growth opportunities, and higher R&D expenditures. In contrast, the firms’ cash holdings decrease when the substitutes of cash, cash flows, and capital expenditures increase. We show that small-sized firms tend to hold more cash than their larger counterparts due to precautionary motives. Further, we confirm a significant and varying association between managerial ownership and cash holdings. The study is robust to different regression specifications, additional analyses, and endogeneity tests. Overall, we add to the prior literature by identifying the effect of firm-level attributes and governance characteristics on cash policy during the post-crisis period. To the best of the authors’ knowledge, this is the first work that provides insights on the way that firm characteristics impact cash holdings, considering the differences among firm size groupings.

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“…Usually, the capital structure varies depending on the characteristics of the industry and their approaches. The consequence of this indicates that all the aforementioned factors may have an effect on a board of directors [12][13][14][15][16][17][18] (Hypotheses 6-8).…”

Section: Shareholders' Rights Interests and Equitabilitymentioning

confidence: 97%

Sustainable Corporate Governance: The Impact Factors for Top Consulting Engineering Companies in Taiwan

et al. 2021

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The objective of this research was to explore the impact factors of sustainable corporate governance for top consulting engineering companies in Taiwan, to facilitate managers in meeting stakeholders’ needs and adapting to the challenges of the global markets. Nine hypotheses derived from a literature review were proposed and used to develop a survey. Based on the concept of structural equation modeling (SEM) and these hypotheses, a questionnaire containing six aspects and comprising 46 stems was developed using the Likert 5-scale format. The survey took around four months to administer with 324 effective returns, with only five hypotheses confirmed. This was followed by factor analysis to determine the weight sequence for the 28 impact factors and four aspects. The contributions of the findings are as follows: (1) the weighted factors provide practitioners with guidelines for the proper order for the implementation of measures to improve corporate governance, and (2) they answer questions about the degree of influence and the relationship among all aspects and factors for sustainable corporate governance.

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Do firms adjust corporate governance in response to economic policy uncertainty? Evidence from board size

Cited by 40 publications

References 33 publications

Executive remuneration, corporate governance and corporate performance: Evidence from China

Executive remuneration, corporate governance and corporate performance: Evidence from China

Firm Size Does Matter: New Evidence on the Determinants of Cash Holdings

Sustainable Corporate Governance: The Impact Factors for Top Consulting Engineering Companies in Taiwan

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