Board characteristics and CEO turnover–performance relationship: evidence from India

IF 5.5 Q1 BUSINESS

Corporate Governance-The International Journal of Business in Society Pub Date : 2022-12-06 DOI:10.1108/cg-01-2022-0038

Chhavi Jatana

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引用次数: 3

Abstract

Purpose This paper aims to investigate the impact of board characteristics on CEO turnover performance relationship (TPR) in Indian listed firms. Design/methodology/approach A subset of the Standard and Poor’s Bombay Stock Exchange 500 (S&P BSE 500) Index companies was analyzed over the period 2015–2019 using the logistic (fixed-effects) regression model. Findings It was found that a weak relationship exists between CEO turnover and firm performance. With respect to board characteristics, board size was found to have a significant role in strengthening the TPR. However, other characteristics, such as board independence, multiple directors, board meetings and board gender diversity, played no role in influencing the TPR. Research limitations/implications First, the study period is limited to five years, during which several sample firms did not face any CEO turnover event leading to small sample size. Second, this study considers only the board’s gender diversity, whereas other types of diversity are omitted. Third, this study does not differentiate between insider and professional CEOs. Practical implications The findings suggest that regulators should focus on the effective enforcement of laws to strengthen the TPR and improve the monitoring role of boards, particularly in emerging economies like India, which face type II agency problems in addition to traditional principal–agent conflict. The results also offer implications for corporations, investors and academic researchers, highlighting areas that need considerable attention pertaining to corporate governance. Originality/value This study discerns the impact of several board-related characteristics on the TPR, particularly after the introduction of the new Companies Act 2013 in the emerging economy of India, where it has not been explored extensively.

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董事会特征与CEO离职-绩效关系:来自印度的证据

目的研究董事会特征对印度上市公司CEO离职绩效关系(TPR)的影响。设计/方法/方法使用logistic(固定效应)回归模型分析了2015-2019年期间标准普尔孟买证券交易所500指数(S&P BSE 500)指数公司的一个子集。研究发现，CEO离职与企业绩效之间存在弱相关关系。就董事会特征而言，董事会规模在加强TPR方面具有重要作用。然而，其他特征，如董事会独立性、多董事、董事会会议和董事会性别多样性，对TPR没有影响。研究的局限性/意义首先，研究期被限制在五年，在此期间，几个样本公司没有面临任何CEO离职事件，导致样本规模小。其次，本研究仅考虑董事会的性别多样性，而忽略了其他类型的多样性。第三，本研究没有区分内部人ceo和职业ceo。研究结果表明，监管机构应注重法律的有效执行，以加强TPR，提高董事会的监督作用，特别是在印度等新兴经济体，除了传统的委托代理冲突外，还面临第二类代理问题。研究结果还为企业、投资者和学术研究人员提供了启示，突出了与公司治理有关的需要引起相当重视的领域。原创性/价值本研究发现了几个与董事会相关的特征对TPR的影响，特别是在印度新兴经济体引入2013年新公司法之后，这一点尚未得到广泛探讨。

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-The International Journal of Business in Society BUSINESS-

CiteScore

11.20

自引率

33.90%

发文量

期刊介绍： Providing a consistent source of in-depth information, analysis and advice considering corporate governance on an international scale, Corporate Governance: The International Journal of Business in Society focuses on knowledge development, practice and performance standards for scholars and Boards of Directors/ Governors of companies throughout the world. The journal publishes a diverse range of substantive theoretical and methodological debates as well as practical developments in the field of corporate governance worldwide. The journal particularly encourages attention to the impact of changes of business/corporate governance forms and practices on people, and the sustainability of different governance models. Articles that highlight models and structures that advance the interests, dignity and well being of all stakeholders, in a sustainable manner, are particularly welcome. The journal covers a broad spectrum of governance-related themes including: -Effective boardroom performance -Control and regulation -Executive leadership -The role and contribution of external (non-executive) directors -The growing importance of governance in the wake of ever-greater corporate scandals -Redefinitions and reassessments of corporate governance models -The role of business in society -The changing nature of the relationship and responsibilities of the firm towards various stakeholders -The incentives required to encourage more socially- and environmentally-responsible corporate action -The role and impact of local and international regulatory agencies and regimes on corporate behaviour.