Outside directors, board interlocks and firm performance: Empirical evidence from Colombian business groups

We investigate the relation of board structure through the appointments of outside directors and the role of busy directors on firm return on assets within an environment of no regulation for privately held firms and voluntary adoption of corporate best practices for security issuers with family controlling blockholders. This study relies on a sample of an average of 335 firms per year for the 1996-2006 period, where 244 are private firms and 285 are affiliated to one of the seven largest non-financial business groups in the country. Five of these groups were, in 2006, still family-controlled. We find a positive relation between both the ratio of outside directors, and the degree of board interlocks, with firm return-on-assets. Outside busy directors turned out to be key drivers of improved firm performance. Appointments of outsiders are endogenous to firm ownership structure. Blockholder activism as well as contestability becomes an internal mechanism that improves director monitoring and ex-post firm valuation.     

Doing Good Business by Hiring Directors with Foreign Experience

Using a manually collected dataset on the overseas experiences of directors of Chinese listed firms, we examine the effects of returnee directors on firms’ corporate social responsibility (CSR) engagement. Our results show that returnee directors significantly improve their firms’ CSR engagement. The positive relationship between the percentage of returnee directors and CSR engagement is more significant when a firm is in a competitive industry, when a firm has no government ownership, when a firm’s CEO is not politically connected, and when a firm’s CEO is older. Furthermore, we find that only long-term foreign professional or academic experience matters, whereas short-term visiting experience does not. Finally, our results are robust after controlling for endogeneity. Therefore, this paper offers clear policy implications by suggesting that hiring more returnees as corporate directors is an efficient way to enhance firms’ CSR, which may be of particular interest to regulators in emerging markets.     

Does Increased Equity Ownership Lead to More Strategically Involved Boards?

According to Jay Lorsch, boards will be increasingly expected to exercise more leadership, even strategic leadership, in the running of a firm. In order to align directors to the best interest of the firm, directors are increasingly required to purchase the equity of the companies on whose board they serve, and in the majority of cases, the minimum shareholding is 1000 shares. The rationale for this is that the directors will take the perspective of real owners of the company, partly based on a study by the National Association of Corporate Directors in 1995. Using behavioral economics, this paper makes some counterintuitive predictions about how involved boards are likely to react to an offer for a hostile takeover. By studying their reactions, the paper inductively analyzes the use of equity ownership as an incentive mechanism.     

Evaluating the effects of equity incentives using PSM: Evidence from China

This paper investigates the effects of equity incentives on firm performance in Chinese listed firms. We address the sample selection problem by employing the propensity score matching methodology. Results show that, (1) On the whole, performance is positively related to equity incentives even after controlling for sample selection bias; (2) The final control rights have an important impact on the effects of equity incentives. The execution of equity incentives in privately owned firms can significantly decrease the agency costs between shareholders and managers, but such effects cannot be observed in state-owned firms; (3) Effects of equity incentives depend on the incentive type, that is, comparing to stock-based incentives, option-based incentives can reduce the agency costs significantly, thus are more effective; (4) Ownership structure also has important impacts on the effects of equity incentives. The agency costs decrease in firms with more decentralized ownership after introducing equity incentive, while in concentrated firms the effect is negligible.     

Does Increased Equity Ownership Lead to More Strategically Involved Boards?

According to Jay Lorsch, boards will be increasingly expected to exercise more leadership, even strategic leadership, in the running of a firm. In order to align directors to the best interest of the firm, directors are increasingly required to purchase the equity of the companies on whose board they serve, and in the majority of cases, the minimum shareholding is 1000 shares. The rationale for this is that the directors will take the perspective of real owners of the company, partly based on a study by the National Association of Corporate Directors in 1995. Using behavioral economics, this paper makes some counterintuitive predictions about how involved boards are likely to react to an offer for a hostile takeover. By studying their reactions, the paper inductively analyzes the use of equity ownership as an incentive mechanism.     

Board composition,family ownership,institutional distance and the foreign equity ownership strategies of Turkish MNEs

In much of the developing world, families represent the dominant form of firm ownership. This study investigates how this influences equity ownership strategies when firms venture abroad. Drawing on agency theory and institutional theory, we investigate the direct effect of board composition and family ownership on the equity-based ownership strategies of multinational enterprises (MNEs) in their affiliates, and how institutional distance may moderate this. Examining foreign affiliates of listed Turkish MNEs, we find that a high ratio of independent directors is negatively linked to levels of equity ownership of MNE affiliates. We also find that a high ratio of inside directors on the board is positively associated with the equity stake of MNEs in their affiliates. The significant interaction effect between board composition, family ownership and institutional distance helps explain the unexpectedly weak effects of institutional distance.     

Ethics Programs, Board Involvement, and Potential Conflicts of Interest in Corporate Governance

Board composition, insider participation on compensation committees, and director compensation practices can potentially cause conflicts of interest between directors and shareholders. If these corporate governance structures result in situations where actions beneficial to directors do not also benefit shareholders, then shareholders may suffer.Corporate ethics programs usually address conflicts of interest that may arise in the firm's activities. Some boards of directors take active roles in their firms' ethics programs by actively overseeing the programs. This paper empirically examines the relationship between ethics programs and potential conflicts of interest and the relationship between board involvement in a firm's ethics program and potential conflicts of interest.Evidence in this paper shows that firms with ethics programs have a lower percentage of inside directors on their compensation committees than do firms without ethics programs. Firms in which boards are actively involved in the programs have more independent boards (higher percentage of independent directors and lower percentage of inside directors) and are more likely to compensate outside directors with equity than are firms in which boards are not actively involved in the programs. Supplemental analyses show that the incidence of potential conflicts of interest is not significantly different between firms without ethics programs and firms in which boards are not actively involved in the programs. Taken together, the evidence in this paper indicates that a board actively involved in an ethics program, and not the simple existence of an ethics program, is related to the incidence of potential conflicts of interest.     

Managerial ownership,diversification, and firm performance: Evidence from an emerging market

Numerous existing studies have explored the impact of corporate diversification on firm performance, whereas considerably less research has investigated the inter-relationships among managerial ownership, diversification, and firm performance. This paper develops several hypotheses based on the agency theory self-interest perspective and tests the relationships among managerial ownership, corporate diversification, and firm performance using a sample of 98 emerging market firms listed on the Taiwan Stock Exchange. The results show a U-shaped relationship between managerial ownership and corporate diversification, similar to that found in prior studies. However, the inflection point is 33.17%, which is lower than that found in previous studies. Moreover, in contrast to prior results, corporate diversification is found to be positively associated with short-term firm performance and bears no relationship with mid-term firm performance, while firms engaged in unrelated diversification outperform those engaged in related diversification. This paper concludes with theoretical implications and suggestions for future research.     

社会网络视角下独立董事与企业创新绩效

本文以2007~2015年中国A股上市公司为样本,利用社会网络分析方法,考察不同专业背景独立董事的网络中心度对企业创新绩效影响的差异.研究发现:独立董事网络有助于企业创新绩效的提高,即独立董事网络中心度与企业创新绩效有显著的正相关关系;对独立董事的专业背景进行区分后,发现上市公司拥有技术背景独立董事时,公司独立董事网络中心度与创新绩效的正向关系显著增强.独立董事的网络位置是影响企业创新绩效的重要因素,这种影响随公司是否拥有技术背景独立董事而不同.     

Time Allocation and Performance: The Case of Chinese Entrepreneurs

This paper analyses the effect of time allocation on the financial performance of entrepreneurial firms. We apply the Lewbel estimator to a pooled data set of Chinese private manufacturing firms that are managed by their owners. Time is allocated between management, networking, and study activities. After accounting for endogeneity, we find an inverted U-shaped relationship between management hours and firm performance and between networking and firm performance. However, no relationship between time spent studying and firm performance is observed. We also find that the managing hours–performance relationship is particularly strong for companies managed by entrepreneurs who own more than 75% of share, for companies that are managed by owners with previous experience, for male entrepreneurs, and for smaller-sized firms.     

Institutional Ownership and Private Equity Placements: Evidence from Chinese Listed Firms

This paper examines the impact of institutional ownership on the performance of private equity placements (PEPs) for listed firms in China. We find that the presence of institutional investors can alleviate the information asymmetries between listed firms and the market. The market reaction to PEP announcements is significantly smaller if there is a higher portion of institutional shareholdings. Long‐term firm operational performance after PEPs is positively correlated with institutional shareholdings. Moreover, we find that the relationship between institutional shareholdings and PEP performance is mainly driven by nonlisted corporate investors and mutual funds. Finally, the relationship between PEP performance and institutional shareholdings is stronger in smaller PEP issuers.     

Are Demographic Attributes and Firm Characteristics Drivers of Gender Diversity? Investigating Women’s Positions on French Boards of Directors

In this article, we examine the factors determining the representation of women on boards of directors by considering three main questions. The first question deals with the relationship between characteristics of ownership and governance on one side, and female directorship on the other. The second major question concerns the demographic attributes of women directors, such as nationality, foreign experience, educational level, business expertise, and connections to external sources. The third important question refers to women in senior positions on French boards (e.g., as independent members or board subcommittee members) in relation to firm characteristics and women’s demographic attributes. Our study focuses on French large- and mid-capitalized companies belonging to the SBF120 stock market index during a 5-year period running from 2000 to 2004. First, our results give evidence that the appointment of women directors is strongly related to family ownership and board or firm size. Second, the appointment of women directors is related to their professional services, valuable skills, and network links. Furthermore, we show that women face a double glass-ceiling problem, and note that French firms rely more on the demographic attributes of their women directors when they are appointed to senior board positions. Our study sheds light on issues concerning the law that comes into force in 2016, which imposes quotas of women members on boards of directors in French companies.     

Outsider Board Activity,Ownership Structure and Firm Value: Evidence from Korea

Using a sample of publicly listed firm in Korea from 2002 to 2006, this article examines the impact of board monitoring on firm value and productivity. We use outsider's attendance of board meetings as a proxy for board monitoring. Consistent with the commitment hypothesis, we find that outsider's attendance rate increases firm value, suggesting that attending board meeting itself is a strong signal that reflects outsider's intention to monitor insiders. While ownership of controlling shareholders negatively affects firm value, this relationship is not moderated by increased monitoring by outsiders. Our findings provide further evidence that the outside director system is less effective in chaebol‐affiliated firms. Results also indicate that the effect of outsider's board monitoring activity on investor's valuation of the firm is greater than on productivity improvement of the firm. Our conclusions are robust for possible endogeneity in the relationship between firm value and board attendance by outside directors.     

独立董事治理、 供应链关系与股权资本成本

本文以2009～2016年我国A股制造业上市公司为研究样本,检验了供应链关系对企业股权资本成本的影响.在此基础上,利用社会网络分析方法进一步考察了独立董事通过董事网络发挥的治理作用对供应链关系与股权资本成本之间关系的影响.研究结果表明:供应链集中度越高,企业的股权资本成本越高,二者显著正相关;进一步研究发现这种关系在独立董事网络位置较差时更加显著.说明网络位置较好的独立董事可以帮助企业获得更多的社会资本,缓解外部资源依赖,发挥更有效的治理效应,从而抑制供应链集中度过高对股权资本成本带来的不利影响.研究结论丰富了供应链关系对股权资本成本的作用机理,并为企业缓解过度依赖供应链关系交易所产生的不利影响提供新的解决思路.     

银行关联对企业并购投资的影响研究

从银企关系的视角分析银行关联是否影响企业并购概率及结果,重点考察银行关联对我国并购及并购绩效影响的作用机制。使用2006-2012年我国上市公司数据,实证检验结果发现：银行关联显著增加了企业并购概率,且董事会银行背景关联和银行股权关联都显著增加了企业并购的概率;银行关联公司的并购绩效显著低于非银行关联公司,董事会银行背景关联对企业并购的影响有限,股权关联显著降低了企业并购的绩效。这说明,银行关联促进企业并购的发生,但银行关联特别是股权关联降低了并购绩效。     

Does Geographic Proximity Change the Passiveness of Equity Ownership by Bank Trust?

We provide evidence that while concentrated bank trust ownership is passive with distant firms, it is nonpassive with local firms and reduce their risk‐taking. Concentrated local bank trust ownership is associated with (i) lower future firm equity beta and (ii) less uncertain corporate policies. The results cannot be explained by private information alone, are not driven by local bank trusts as a mixed debt‐equity holder, and are robust to various tests for endogeneity. We also explore channels through which local bank trusts could exert their influence, including their stabilizing function during crisis periods and joining force with local independent directors.     

The influence of family ownership on SME performance: evidence from public firms in Taiwan

The relationship between family ownership and firm performance has gained increased attention in the business strategy and financial economics literature. Most existing studies use large companies as the research sample; studies that explicitly investigate the influence of family ownership on the performance of small- and medium-sized enterprises (SMEs) remain sparse. This study raises this issue explicitly by investigating the influence of founding-family ownership on the return on assets and Tobin’s q of 341 public SMEs in Taiwan, during the period of 2002–2006. It emerges from the data that family ownership is prevalent and substantial in Taiwan, representing half of the public SMEs and accounting for more than 11 percent of their outstanding equity. It was found that the influence of family ownership on SME performance is positive and significant. Overall, the results suggest that family ownership is an effective organizational structure for SMEs in Taiwan.     

求贤若渴：创业型IPO企业如何聘请到具有多重兼任的独立董事？

具有多重兼任的独立董事由于积累了丰富的经验和较高的声誉成为企业争相聘请的对象,但是鲜有研究创业型IPO企业如何才能聘请到这些优秀的独董、他们又为何接受具有较高不确定性的企业提供的职位。文章在整合信号理论和独董任职动机的基础上,利用创业板IPO企业的数据,对创业型IPO企业选聘独董的机制进行了实证研究。结果发现：首先,IPO企业的企业声誉、社会关系和提供给独董的薪酬可以作为传递企业合法性和任职利益的信号,能够激发独董任职的声誉动机、关系动机和经济动机,从而帮助企业吸引到具有多重兼任的独董。其次,IPO企业具有的多个信号或独董的多个动机之间存在相互替代的关系,声誉、关系和薪酬对独董的吸引和激励在一定程度上是相互替代的。最后,随着上市日期的临近,IPO企业想要聘请到具有多重兼任的独董会越发困难;而且随着时间和情境的变化,企业的各种信号对独董的吸引和激励作用也会发生一定的变化。     

The portrayal of women in Canadian corporate annual reports

We assess the inclusion of women in Canadian corporate annual report (CAR) photographs and on boards of directors at TSX100 firms and evaluate whether either is related to financial performance. We find that women are underrepresented in CAR photographs and on boards. In CAR photographs women are frequently portrayed as outsiders or less powerful organizational members than men. Higher return on equity (ROE) was found at companies that more frequently depicted women in their CAR photographs. However, no association was observed between the inclusion of women on the board and the ROE of the firm. The applied and theoretical implications of these results are discussed. Copyright © 2010 ASAC. Published by John Wiley & Sons, Ltd.     

Gaijin invasion? A resource dependence perspective on foreign ownership and foreign directors

While boards around the globe are becoming more international, the reasons behind this internationalization are not fully understood. In this study, we suggest that foreign ownership increases the presence of foreign directors on boards. Based on resource dependence theory, we argue that the dependence on foreign owners makes foreign nationals an important resource for firms. Using data from large Japanese stock market firms and employing logistic regression analysis, we find empirical evidence that greater dependence on foreign, i.e. gaijin, owners is associated with a higher probability to have foreign directors on the board. We also demonstrate that the link between foreign ownership and foreign directors is positively moderated by a firm’s foreign market exposure. We conclude that firms consider foreign directors a viable response to the deviant expectations of foreign owners.