Does Board Diversity Attract Foreign Institutional Ownership? Insights from the Chinese Equity Market

Ali, Shoukat; Rehman, Ramiz Ur; Ahmad, Muhammad Ishfaq; Ueng, Joe

doi:10.3390/jrfm14110507

Cited by 5 publications

(4 citation statements)

References 92 publications

(121 reference statements)

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“…Carson (2002) documented that IO increases the presence of compensation committees in Australia but not of audit and nomination committees (Carson, 2002, Australia). Three studies did not find any link between IO and tenure both from cross-country samples (Ali et al, 2021) and national settings (Feldmann and Schwarzkopf, 2003, USA;Franks and Mayer, 2001; based on bank concentration in Germany). Insignificant results were also stated for busyness and multiple directorships (Ali et al, 2021;Nekhili and Gatfaoui, 2013) and meetings (Feldmann and Schwarzkopf, 2003;USA).…”

Section: Other Board Composition Variablesmentioning

confidence: 98%

“…Three studies did not find any link between IO and tenure both from cross-country samples (Ali et al, 2021) and national settings (Feldmann and Schwarzkopf, 2003, USA;Franks and Mayer, 2001; based on bank concentration in Germany). Insignificant results were also stated for busyness and multiple directorships (Ali et al, 2021;Nekhili and Gatfaoui, 2013) and meetings (Feldmann and Schwarzkopf, 2003;USA). IO and board size are positively (Chauhan et al, 2016, India) and insignificantly (Feldmann and Schwarzkopf, 2003) related.…”

Section: Other Board Composition Variablesmentioning

confidence: 98%

“…Strong IO monitoring should lead to increased board independence. Some studies assumed IO homogeneity and found a positive impact of board independence based on cross-country samples (Ali et al , 2021) or national settings (Chauhan et al , 2016; India; Cheng et al , 2010; Feldmann and Schwarzkopf, 2003; USA; Li et al , 2006; Hong Kong). We also note studies with a negative impact of IO on independent board chairs (Balsam et al , 2016; USA) and insignificant relationships between IO (Sur et al , 2013; Feldmann and Schwarzkopf, 2003; USA), IO concentration (Ho et al , 2020; Taiwan) and board independence.…”

Section: Literature Reviewmentioning

confidence: 99%

“…We also note studies with a negative impact of IO on independent board chairs (Balsam et al , 2016; USA) and insignificant relationships between IO (Sur et al , 2013; Feldmann and Schwarzkopf, 2003; USA), IO concentration (Ho et al , 2020; Taiwan) and board independence. Referring to specific IO nature and types, there are indications that foreign IO strengthens board independence (Ho et al , 2020; Taiwan) and the independence of audit committee and compensation committee members (Ali et al , 2021; cross-country setting). In contrast to this, passive IO decreases board independence (Ho et al , 2020, Taiwan) and independent director appointments (Schmidt and Fahlenbach, 2017, USA).…”

Section: Literature Reviewmentioning

confidence: 99%

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Institutional ownership and board governance. A structured literature review on the heterogeneous monitoring role of institutional investors

Velte

2023

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Purpose This paper aims to review empirical research on the relationship between institutional ownership (IO) and board governance (85 studies). Design/methodology/approach Based on agency and upper echelons theory, the heterogeneous monitoring function of specific types and the nature of institutional investors on board composition, compensation and chief executive officer (CEO) characteristics will be focused. Findings The author found that most studies have referred to archival studies, analyzed the impact of board governance on IO, focused on CEO characteristics, neglected IO heterogeneity and advanced regression models to address endogeneity concerns. In line with the theoretical framework, the relationship between total IO and board governance is heterogeneous. However, specific types such as foreign, dedicated and pressure-resistant institutions represent active monitoring tools and push for increased board governance. Research limitations/implications The author provided useful recommendations for future research from a content and methodological perspective, e.g. the need for analyzing the impact of IO on sustainable board governance and other characteristics of top management team members, e.g. the chief financial officer. Practical implications As many regulatory bodies implemented regulations to promote shareholder rights and board governance, this literature review highlights the connections of both corporate governance mechanisms. Managers should conduct a careful and timely investor analysis and change the composition and compensation of the board of directors in line with institutional investors’ preferences. Originality/value This analysis makes useful contributions to prior research by focusing on IO and board governance, whereas the author structured the heterogeneous variables and results within the structured literature review. The authors guides researchers, regulatory bodies and business practice in this corporate governance topic.

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Section: Other Board Composition Variablesmentioning

confidence: 98%

Section: Other Board Composition Variablesmentioning

confidence: 98%

Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

See 2 more Smart Citations

Institutional ownership and board governance. A structured literature review on the heterogeneous monitoring role of institutional investors

Velte

2023

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CSR and ownership structure: Moderating role of board characteristics in an emerging country context

Kaimal,

Uzma

2024

Corp Soc Responsibility Env

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The existing literature on the impact of ownership structure on corporate social responsibility (CSR) showed inconsistent results and disregarded the possibility of non‐linear patterns in the relationship. The present study examines the non‐linear relationship between ownership structure (family, foreign, institutional, and government) and CSR expenditure of listed non‐financial service sector firms in India. Further, the moderating effect of board variables, including board size, board independence, multiple directorships and gender diversity, is explored in the ownership structure‐CSR nexus. Based on a balanced panel dataset of 243 non‐financial service sector companies listed in India, the study observed an inverse U‐relationship between institutional ownership and CSR. The study also found that family, foreign, and government ownership positively influence the firm's social engagement. However, the study could find partial support for the moderating role of the four board characteristics; board size, board independence, multiple directorships and gender diversity in ownership‐CSR association. The study contributes to existing CSR and corporate governance literature by exploring one of the major factors (ownership structure) impacting CSR and the role of board variables in the association.

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What’s age got to do with it? The effect of board member age diversity: a systematic review

Gardiner

2022

Manag Rev Q

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The current research is a systematic review of 54 empirical papers from 1996 to 2022 which aim to investigate whether board member age diversity influences a firm’s financial and non-financial outcomes. Analysis of the extant research reveals board member age diversity to be an inconsistent predictor of both the financial and non-financial performance of a firm. Apart from CSR performance, which was found to more consistently be positively associated with age diversity, most studies included in the review failed to identify age diversity as a significant predictor of firm outcomes, however several positive, negative and curvilinear relationships were found by some studies. The lack of a consistent trend of significant associations may indicate that age diverse boards perform no better or worse than non-diverse boards or, more likely, given the inconsistent pattern of results, this research highlights that there may be other factors, such as team processes or task characteristics, which differentially impact whether age diversity has a positive, negative, curvilinear or no effect on outcomes. The current work is the first to systematically evaluate the available data on board age diversity and provides a clear account of what is known and what is not known about the relationship between board member age diversity and financial and non-financial outcomes. This study offers important insights and practical recommendations to researchers, HRM practitioners and policy makers interested in understanding how board composition factors influence the performance of corporate boards.

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Does Board Diversity Attract Foreign Institutional Ownership? Insights from the Chinese Equity Market

Cited by 5 publications

References 92 publications

Institutional ownership and board governance. A structured literature review on the heterogeneous monitoring role of institutional investors

Institutional ownership and board governance. A structured literature review on the heterogeneous monitoring role of institutional investors

CSR and ownership structure: Moderating role of board characteristics in an emerging country context

What’s age got to do with it? The effect of board member age diversity: a systematic review

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