Board Busyness and Firm Performance: An Emerging Market Perspective

IF 5.5 3区管理学 Q1 BUSINESS

Corporate Governance-An International Review Pub Date : 2024-06-07 DOI:10.1111/corg.12600

G. Venkatesh, Saranya Kshatriya, Shashank Bansal

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引用次数: 0

Abstract

Research Question/Issue

This paper primarily explores the relationship between busy boards and firm performance. Additionally, we have performed a quasi-natural experiment to evaluate the impact of SEBI regulatory restrictions on multiple directorships on the firm performance.

Research Findings/Insights

The study sample includes all firms listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). Our primary findings indicate a nonlinear relationship between busy boards and firm performance. These results are more pronounced for the non-business group firms and firms with high promoter ownership. Our quasi-natural experiment results indicates that the treatment firms had a significant improvement in firm performance. The results of event study analysis and difference-in-difference analysis are robust for both short- and long-term measures of firm performance. Furthermore, we observe an increase in the board meeting attendance of independent directors in the post-mandate period.

Theoretical/Academic Implications

Two competing views prevalent in busy board literature are reputational effect hypothesis and distraction effect hypothesis. Our findings support the limit on number of outside directorships; if this number exceeds a certain threshold, the directors become less effective monitors and exacerbate the firm performance.

Practitioner/Policy Implications

The results are in favor of restriction on multiple directorship positions of independent directors by the regulators in emerging markets. Further, the study demonstrates that firms that adhere to good governance practices protect the investors' interests and improve the firm's performance.

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董事会忙碌与公司绩效：新兴市场视角

研究问题/议题本文主要探讨繁忙的董事会与公司绩效之间的关系。此外，我们还进行了一项准自然实验来评估SEBI对多董事职位的监管限制对公司绩效的影响。研究结果/见解研究样本包括在国家证券交易所（NSE）和孟买证券交易所（BSE）上市的所有公司。我们的主要研究结果表明，忙碌的董事会与公司绩效之间存在非线性关系。这些结果对于非商业集团公司和具有高促销员所有权的公司更为明显。我们的准自然实验结果表明，治疗企业在企业绩效方面有显著的改善。事件研究分析和差异中差异分析的结果对于企业绩效的短期和长期衡量都是稳健的。此外，我们观察到独立董事在任期结束后出席董事会会议的人数有所增加。在忙碌的董事会文献中流行的两种相互竞争的观点是声誉效应假说和分心效应假说。我们的研究结果支持外部董事数量的限制；如果这个数字超过了一定的阈值，那么董事的监督效果就会降低，并使公司绩效恶化。研究结果支持新兴市场监管机构对独立董事的多重董事职位进行限制。此外，研究表明，坚持良好治理实践的公司保护了投资者的利益，提高了公司的绩效。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Corporate Governance-An International Review Multiple-

CiteScore

7.00

自引率

11.30%

发文量

期刊介绍： The mission of Corporate Governance: An International Review is to publish cutting-edge international business research on the phenomena of comparative corporate governance throughout the global economy. Our ultimate goal is a rigorous and relevant global theory of corporate governance. We define corporate governance broadly as the exercise of power over corporate entities so as to increase the value provided to the organization"s various stakeholders, as well as making those stakeholders accountable for acting responsibly with regard to the protection, generation, and distribution of wealth invested in the firm. Because of this broad conceptualization, a wide variety of academic disciplines can contribute to our understanding.