Board Committees <I>Vis a Vis</I> Financial Performance: An Insight into Select Indian Companies
DOI:
https://doi.org/10.33516/rb.v43i4.19-33pKeywords:
Board Committees, Financial Performance, Panel Regression.Abstract
The present study examines the relationship of characteristics of board of directors and other board committees (i.e., audit committee, shareholder’s grievance committee and remuneration committee) with firm performance using panel regression models. The sample consists of 155 CNX200 firms listed in NSE during the period 2006 to 2013. This study finds a positive association between number of board meetings and attendance in these meetings with firm’s financial performance. The size of the audit committee and number of meetings of the audit committee do not show any association with any of the measures of financial performance. In the case of other board subcommittees, the results suggest that higher frequency of shareholder grievance committee meetings leads to better financial performance in companies while it is not so for remuneration committee.Downloads
Downloads
Published
How to Cite
Issue
Section
References
Abdulsamad, A. O., Yusoff, W.F.W., &Lasyoud, A.A. (2018). The influence of the board of directors’ characteristics on firm performance: Evidence from Malaysian public listed companies. Corporate Governance and Sustainability Review, 2(1), 6-13. http://doi.org/10.22495/cgsrv2i1p1
Adams, R. A. (2012). Bank board structure and performance:Evidence from large bank holding companies. Journal of Financial intermediation, 21, 243-267.
Bansal, N.&Sharma,A.K. (2016). Audit committee,corporate governance and firm performance:Empirical evidence from India. International Journal of Economics and Finance, 8, 103-116.
Ben Barka, H. & Legendre, F. (2017).Effect of the board of directors and the audit committee on firm performance: a panel data analysis.Journal of Management and Governance (2017), 21(3), 737-755. https://doi.org/10.1007/s10997016-9356-2
Bhagat, S. & Black, B.S. (2002).The NonCorrelation between Board Independence and Long-Term Firm Performance. Journal of Corporation Law, Vol. 27, 231-273
Black, B. & Kim, W., (2012). The effect of board structure on firm value: A multiple identification strategies approach using Korean data. Journal of Financial Economics, 104(1), 203-226.
Coles, J. L., Daniel, N. D. & Naveen, L., (2008) Boards: Does one size fit all? Journal of Financial Economics, 87, 329-356.
Daily, C. & Dalton, D. (1993) Board of Directors Leadership and Structure: Control and Performance Implications. Journal of Financial Economics, 1, 55-64.
Garg, A. K. (2007) “Influence of Board Size and Independence on Firm Performance: A Study of Indian Companies,†Vikalpa, 32(3), 39-60.
Gendron, Y. & Bedard,J.(2006), On the Constitution of Audit Committee Effectiveness, Accounting, Organizations and Society, 31 (3), 211-239
Haniffa, R. &Hudaib, M. (2006). Corporate governance structure and performance of Malaysian listed companies. Journal of Business Finance & Accounting, 33(7- 8), 1034-1062
Hermalin, B.,&Weisbach, M. (2003). Boards of directors as an endogenously determined institution: a survey of the economic literature. Economic Policy Review, 9, 7 – 26.
Jackling, B. &Johl, S. (2009). Board structure and firm performance:Evidence from India's top companies. Corporate Governance: An International Review, 17(4), 492-509.
Jiraporn, P., Singh, M. and Lee, C.I., 2009. Ineffective corporateGovernance: Director busynessand board committee memberships. Journal of Banking &Finance, 33(5), 819-828
Johl,S.K., Kaur, S & Cooper B.J., (2015). Board characteristics and firm performance:Evidence rom Malaysian Public Listed Firms. Journal of Economics, Business and Management, 3(2)
Jensen, M. (1993). The modern industrial revolution:exit and failure of internal control systems. Journal of finance, 48(3), 831-880
Johnson, J., Daily, C., &Ellstrand, A. 1996. Boards of directors: A review and research agenda. Journal of Management: 22: 409-438.
Karamanou, I. &Vafeas, N., (2005). The association between corporate boards,audit committees and management earnings forecast:an empirical analysis. Journal of Accounting Research, 43, 453-486
Kiel, G.C. & Nicholson, G.J., 2003. Board composition and corporate performance: How the Australian experience informs contrasting theories of corporate governance. Corporate Governance: An International Review,11(3), 189-205
Klein, A. (1998). Firm performance and board committee structure. Journal of Law and Economics, 41(1), 275-303.
Klein, A 2002, ‘Audit committee, board of director characteristics, and earnings management’, Journal of accounting and economics, 33(3), pp. 375–400.
Lam, T.Y. & Lee, S.K., (2012). Family ownership,board committees and firm performance:Evidence from Hong kong. Corporate Governance, 12(3), 299-316
Lipton, M. &Lorsch, J.W., 1992. A modest proposal for improved corporate governance. Business Lawyer, 48, 59-77
Main, B.G. & Johnston, J., (1993), Remuneration committee and firm performance. Accounting and Business Research, 23(91A), 351-362.
Main,B.G. ,Jackson,C.,Pym,J. & Wright,V.(2008),The remuneration committee and strategic human resource management.Corporate Governance:An International Review,16(3), 225-238
Mateus,C.,Hall,T. & Mateus, I.B.(2015). Are better listed firms better governed?Empirical evidence on board structure and financial performance . Corporate Ownership and Control , 13(1), 736-755
Mintah, P.A. (2016).Remuneration committee governance and firm performance in UK financial firms.Investment Management and Financial innovation,13(1),176-190
Mishra,S. & Mohanty,P.(2014).Corporate governance as a driver for firm performance :Evidence from India.Corporate Governance, 14(2),265-280
Pearce, J.A. & Zahra, S.A., 1992. Board composition from a strategic contingency perspective. Journal of Management Studies, 29(4), pp. 411-438
Rosenstein, S. &Wyatt,J.W.. (1990), Outside directors,board independence and shareholder wealth. Journal of Financial Economics, 26(2), 175-191.
Sarkar, J. & Sarkar S. (2000).Large Shareholder Activism in Corporate Governance in Developing Countries: Evidence from India. International Review of Finance 1(3), 161-94.
Sarkar, J. & Sarkar S., (2010). Auditor and audit committee independence in India. Working Paper series. Financial sector regulatory reforms project at IGIDR.
Sarkar, J, Sarkar, S. & Sen, K. (2012), A Corporate Governance Index for Large Listed Companies in India. Available at SSRN: http://ssrn.com/abstract=2055091 or http://dx.doi.org/10.2139/ssrn.205-5091
Tricker, R. I. (2009). Corporate Governance: Principles, Policies, and Practices. Oxford University Press.
Vefeas, N. (1999). Board meeting frequency and firm performance. Journal of Financial Economics, 53(1), 113-142.
Weir, C., Laing, D. And Mcknight, P.J., (2002). Internal and external governance mechanisms: their impact on the performance of large UK public companies. Journal of Business, Finance & Accounting, 29(5- 6), pp. 579-611
Wild, J. (1994). Managerial accountability to shareholders:Audit committees and explanatory power of earnings for returns. The British Accounting Review, 26(4), 353-374.
Wintoki, M.B., Linck, J.S. & Netter, J.M., 2012. Endogeneity and the dynamics of internal corporate governance. Journal of Financial Economics, 105, pp. 581-606
Woidtke, T. & Yeh,Y.H. (2013). The role of audit committee and the informativeness of accounting earnings in East Asia. Pacific Basin Finance Journal, 23, 1-24.
Xie, B., Davidson, III & Da Dalt, P.J. (2003). Earnings Management and corporate governance:the role of the board and the audit committee. Journal of Corporate Finance, 9, 295-316.
Yermack, D. (1996). Higher market valuation of companies with a small board of directors. Journal of Financial Economics, 40(2), 185-211.
Free Sample
Editorial Policy
Editorial Board
