National Culture and Corporate Governance

Duong, Hong Kim; Kang, Helen; Salter, Stephen B.

doi:10.2308/jiar-51346

Cited by 36 publications

(15 citation statements)

References 47 publications

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“…Beekes et al, (2016) in a cross-country study involving 23 countries confirmed: "the belief that bettergoverned firms make more frequent disclosures to the market" also corroborated by Ntim, (2016) and (Rupley, Brown, & Marshall, 2012). That often happens in common law countries (Beekes et al, 2016) while national culture is said to be capable of explaining variations in firm-level and country-level in corporate governance (Duong, Kang, & Salter, 2016) and carbon disclosure (Luo & Tang, 2016). When the institution is weak, it affects the effectiveness of corporate governance (Kumar & Zattoni, 2016).…”

Section: Corporate Governancementioning

confidence: 69%

Corporate Board Characteristics and Environmental Disclosure Quantity: A Comparative Analysis of Traditional and Integrated Reporting Evidence

Odoemelam¹,

Ofoegbu²

2018

Preprint

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The aim of this study was to compare the influence of corporate board characteristics on the extent of environmental disclosure quantity of listed firms in two leading emerging economies in Africa, South Africa (integrated reporting framework) and Nigeria (traditional reporting framework). Methods: The sample was comprised of 303 firms including environmentally sensitive companies purposively selected for content analysis study in South Africa (213) and Nigeria (90). We used both descriptive, multivariate and regression models to comparatively analyze the differences about corporate board characteristics as determinants of the extent of their environmental disclosure quantity. Results: The results reveal a more significant positive association between board characteristics and environmental disclosure in South Africa and less relevant association in Nigeria. Also, the results support that board independence arrangement may serve as bonding mechanisms in weak reporting environments, suggesting a substitutive relationship between board independence and the regulatory framework. Quiet revealing a board with environmental committee show a higher tendency to be ecologic transparent in both countries. However, in a traditional reporting framework, the environmental committee is not enough; its effect was insignificant and highly significant in the integrated reporting framework. Further revealed is the significant positive effect of industry membership influence on environmental disclosure. In all estimated models of South Africa sample show that 45% of environmentally sensitive industries significantly influence environmental disclosure, while 51% is environmentally polluting industries in Nigeria show less concern on environmental disclosure. Interestingly, Audit firm size (Big4) positively and statistically significantly associated with overall environmental reporting in both countries. The results are consistent with stakeholder theory, agency theory, institutional and legitimacy theory suggesting that a strong board size, independent members of the board with auditing experience, the active environmental committee in conjunction with solid audit reputation may reduce information asymmetry. Our findings will be helpful for policymakers and other regulators who are interested in environmental impact reporting.

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Section: Corporate Governancementioning

confidence: 69%

Corporate Board Characteristics and Environmental Disclosure Quantity: A Comparative Analysis of Traditional and Integrated Reporting Evidence

Odoemelam¹,

Ofoegbu²

2018

Preprint

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“…Some studies, including Li and Harrison (2008), Mihet (2013); Karolyi (2016), Duong et al (2016); and Griffin et al (2021), identify that cultural characteristics at the country level affect firms. For example, corporate governance, including board of directors, is influenced by country culture (Li and Harrison, 2008; Duong et al , 2016; Griffin et al , 2021); for firms in countries with high individualism or high power distance, they are likely to have more outside directors (Li and Harrison, 2008). In addition, Mihet (2013) finds that cultural characteristics impact firms’ risk-taking practices (measured by financial distress likelihood, the standard deviation of return on assets, and input of R&D expenditure).…”

Section: Findings and Discussionmentioning

confidence: 99%

Board gender diversity and firm risk: international evidence

Jia

Chapple

2022

MAJ

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Purpose This paper aims to uncover the global trend on the relationship between board gender diversity and firm risk. In addition, this paper investigates how country characteristics affect the relationship between board gender diversity and firm risk. Design/methodology/approach This study uses a large sample of firms in 45 countries for the period from 2002 to 2018. Ordinary least square regression is used as a baseline methodology, along with firm fixed effects. Difference-in-differences regression, two-stage least squares regression (instrumental variables approach) and change-on-change regression are adopted to better mitigate endogeneity. Findings This study finds that board gender diversity is associated with lower firm risk worldwide. In addition, the negative effect of board gender diversity on firm risk is more pronounced for firms that can more easily attract female directors, and for countries with lower power distance and greater preference for individualism. Practical implications The findings offer insights into the intense debate in recent years among academics and practitioners on the effect of board gender diversity on firm outcomes. Shareholders and directors may take the findings into account when they consider appointing female directors. The findings should be of interest to policymakers in countries that have not yet promoted board gender diversity. Originality/value By using an international sample with board gender quotas in different countries, this paper provides novel and persuasive evidence regarding the impact of board gender diversity on firm risk. This paper also adds to the literature by showing that the relationship between board gender diversity on firm risk is influenced by country characteristics.

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“…Many stakeholders, not just financial ones, have an interest in the corporate governance information provided by a firm, and many corporate governance codes (including South Africa’s King codes and the UK’s Combined Code) consider management to have a duty of responsibility to a broad stakeholder base, operating under a social licence which requires them to consider stakeholder needs and prevailing social norms (Suchman 1995 ). The social and cultural norms in different countries can also influence corporate governance, with research showing that countries with a higher preference for rules tend to have better corporate governance (Duong et al 2016 ).…”

Section: Determinants Of Corporate Governance Reportingmentioning

confidence: 99%

Determinants, mechanisms and consequences of corporate governance reporting: a research framework

Villiers

Dimes

2020

J Manag Gov

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Corporate governance disclosures form a key part of a company’s non-financial reporting. Several studies consider the determinants of corporate governance reporting, including external factors such as country-specific legislation and scandals, and internal factors such as financial performance, size and culture. Others consider the consequences of corporate governance reporting, using simple proxies for corporate governance mechanisms such as board composition characteristics to analyse the impact on financial reporting quality and company valuation. Yet the determinants and consequences of corporate governance reporting may be interlinked, and many quantitative studies fail to consider these links and their multiple effects adequately. Poor financial performance, for example, can be both a determinant and a consequence of the underlying governance mechanisms that corporate governance reporting aims to capture. The framework provided in this paper considers both the determinants and consequences of corporate governance and likely links between them, and also considers internal corporate governance mechanisms and the measures that are used as their proxies. In combining these three aspects of corporate governance and showing potential links, the framework offers insights into future research opportunities. The framework can be adapted to any country or organisational setting and also offers the opportunity to consider theories other than agency theory when studying corporate governance disclosures.

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National Culture and Corporate Governance

Cited by 36 publications

References 47 publications

Corporate Board Characteristics and Environmental Disclosure Quantity: A Comparative Analysis of Traditional and Integrated Reporting Evidence

Corporate Board Characteristics and Environmental Disclosure Quantity: A Comparative Analysis of Traditional and Integrated Reporting Evidence

Board gender diversity and firm risk: international evidence

Determinants, mechanisms and consequences of corporate governance reporting: a research framework

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