Effects of board characteristics on information asymmetry: Evidence from the alternative investment market

Almulhim, Abdulateif A.

doi:10.1016/j.heliyon.2023.e16510

Cited by 8 publications

(5 citation statements)

References 106 publications

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“…The corporate governance factor was captured through the board of directors' structure. Specifically, we take two proxies for board effectiveness, which are board size, measured by the number of directors on the board, and board independence, measured by the percentage of independent members on the board (Almulhim 2023).…”

Section: Measures Of Variablesmentioning

confidence: 99%

Board Structure, CEO Equity-Based Compensation, and Financial Performance: Evidence from MENA Countries

Aljughaiman,

Almulhim,

Al Naim

2024

IJFS

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This paper investigates the association between board of director (BOD) structures and CEO equity-based compensation (long-term incentive) for commercial banks (conventional and Islamic banks) in MENA countries. Specifically, we take board size and board independence to measure the board structure. Furthermore, we investigate the influence of board structure on the association between CEO equity-based compensation and financial performance. Moreover, we compare conventional and Islamic banks in testing these relationships. Using a sample of 65 banks in MENA countries for the period between 2009 and 2020, we show a significant positive association between board size and CEO compensation. However, we find the same association between these variables for IBs, but the effect of board size on CEO compensation is less. We also show that board independence is negatively correlated with CEO compensation. Nevertheless, the relationship between board independence and CEO ownership is positive for IBs. For the moderating test, we find that effective board structure provides more incentives to the CEO, leading them to achieve higher financial performance. The Islamic bank’s business model (based on Shari’ah principles) contributes to the different influences of board structure on CEO compensation. Our results provide the insight that a strong and effective board is important for managing the executive’s compensation system. The findings of this study have implications for financial firms, policymakers, and regulators. Specifically, the study may help in understanding the benefits of different compensation structures relative to different types of financial firms.

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Section: Measures Of Variablesmentioning

confidence: 99%

Board Structure, CEO Equity-Based Compensation, and Financial Performance: Evidence from MENA Countries

Aljughaiman,

Almulhim,

Al Naim

2024

IJFS

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“…Firm age (FAGE) is the number of years since a corporation was established. Financial leverage (FLV) can be described as the percentage of total liabilities to total assets [83]. We also controlled for the exclusive effects of time factors and industrylevel factors by employing dummy variables for the year and industry studied [84].…”

Section: Control Variablesmentioning

confidence: 99%

Corporate Sustainability and Financial Performance: The Moderating Effect of CEO Characteristics

Almulhim,

Aljughaiman

2023

Sustainability

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This study aimed to investigate the effect of corporate sustainability on financial performance as well as examine whether CEO characteristics influence the association between corporate sustainability and the financial performance of listed firms in the Saudi Stock Exchange. In this vein, this study is the first to utilize multiple CEO characteristics as a moderating role influencing the association between corporate sustainability and financial performance. In addition, the study focuses on the developing country of Saudi Arabia, which is one of the top oil producers in the world and is targeting to invest billions of dollars in renewable and sustainable energy projects according to Saudi Vision 2030. We primarily focused on ESG activities (environmental, social, and governance) and their impact on the return on assets and return on equity (employed as a proxy of financial performance). This study used the ordinary least squares (OLS) model to examine these associations as well as the system GMM to test for endogeneity problems. Using a sample of 1143 observations to represent the non-financial firms listed on the Tadawul All Share Index (TASI) for 9 years from 2014 to 2022, we found a negative and significant relationship between the activities of corporate sustainability and financial performance. Furthermore, we demonstrated that CEO characteristics (CEO busyness, CEO ownership, CEO education, CEO gender, and CEO tenure) exerted influence on the association between corporate sustainability and financial performance; that is, CEO busyness, CEO ownership, and CEO gender mitigated the negative influence of corporate sustainability on financial performance, whereas CEO education and CEO tenure made it worse. The results of this study have implications for regulators, firms, and stakeholders.

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“…• Sustainability of development (Blok, 2018;Yuan et al, 2018). Adeleke et al (2022), Almulhim (2023), Mandl (2023) This article strives toward filling this gap based on the literature sources which note the advantages of digitalization (Lawrence, 2023) and sustainable development (Ramsarup et al, 2023), as well as the pandemic as a stimulus for innovations (Saad et al, 2023). We propose the following hypothesis to describe the gap between developed and developing countries (Montes-Sancho et al, 2022).…”

Section: Gap Analysismentioning

confidence: 99%

Economic asymmetries and the new “markets of tomorrow”

2023

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This article investigates the differences between the ongoing digital advancements in the market‐based society and the future market‐technology society in the Fourth Industrial Revolution. This article explores the “markets of tomorrow” that embody the production capacity limits of technological progress to respond to socio and economic transformations amid viral threats, digitalization, and sustainable growth development. Examining the digital economy and technological advancement in developed and developing countries is being conducted. Generally, three key factors play a significant role in determining business strategy and development. These are the threat of viral infections, the process of digitalization, and the need for sustainable development. Our findings show that socio‐institutional innovations are present in the current landscape and play a role in guiding suggestions for managing these markets, considering their unique characteristics. The novelty of this article is analyzing the digital divide as a new form of global asymmetry. This is particularly important when there is a growing emphasis on polarization and power relations, especially under the conditions of digital competition in new markets of tomorrow, which the Fourth Industrial Revolution has predetermined.

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Effects of board characteristics on information asymmetry: Evidence from the alternative investment market

Cited by 8 publications

References 106 publications

Board Structure, CEO Equity-Based Compensation, and Financial Performance: Evidence from MENA Countries

Board Structure, CEO Equity-Based Compensation, and Financial Performance: Evidence from MENA Countries

Corporate Sustainability and Financial Performance: The Moderating Effect of CEO Characteristics

Economic asymmetries and the new “markets of tomorrow”

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