Corporate Board role duties and composition

Journal Information
ISSN / EISSN : 1810-8601 / 2312-2722
Published by: Virtus Interpress (10.22495)
Total articles ≅ 316
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Hugh Grove, Maclyn Clouse
Corporate Board role duties and composition, Volume 17, pp 54-69; https://doi.org/10.22495/cbv17i2art5

Abstract:
The major research purpose of this paper is to identify the challenges for boards of directors concerning their responsibilities to assess and track their companies’ commitments to zero net emissions goals and performances. A major challenge for boards is to determine whether their companies are sincerely trying to reach zero net emissions or just doing greenwashing, i.e., just making commitments or pledges without any substantial subsequent performance. This literature-search research broadens previous research on companies’ commitments to renewable energy (Grove & Clouse, 2021) to zero net emissions goal commitments and related boards’ monitoring responsibilities, especially to avoid greenwashing. This study also extends previous research on climate change risks and opportunities (Grove, Clouse, & Xu, 2021) to develop and establish board challenges for zero net emissions goals with the following sections: overview of climate risk, current climate lawsuits and board risks, EU climate law, carbon inserts, carbon offsets, carbon credits for agriculture, climate disclosure metrics, global bank greenwashing, and conclusions. The International Organization of Securities Commissions Organization (IOSCO) includes 90% of the public market security regulators in the world and has established a working group that should establish climate disclosure metrics for public companies. Climate disclosure metrics are relevant and needed to help stakeholders, including boards, assess company climate performances, opportunities, and risks.
Erik Beulen, Ries Bode
Corporate Board: Role, Duties and Composition, Volume 17, pp 38-53; https://doi.org/10.22495/cbv17i2art4

Abstract:
In corporate governance, more dedicated attention to digital transformations is becoming essential. This research applies design science to design an information technology and innovation (IT&I) committee as an integral part of corporate governance for organisations that are engaging in digital transformations. This research builds on the work of Turel and Bart (2014). In our research, we conclude that the seven Dutch studied organisations, which are engaging in digital transformations, have corporate governance challenges for the board of directors related to these transformations. These challenges include the presence of digital capabilities and experience, as well as having sufficient dedication and focus on digital transformation. In most organizations, the audit committee addresses the risks associated with information technology including digital transformations. However, our research shows that the audit committee by default does not focus on business opportunities of digital transformations. Our research proposes a design for an IT&I committee, which enhances corporate governance, as well as the long-term value creation by means of IT, technology, and innovation. The IT&I committee councils and monitors digital transformations and facilitates decision-making by the board of directors. Overall, the results of our research suggest that installing an IT&I committee improves corporate governance for organisations that are engaging in digital transformations.
Corporate Board role duties and composition, Volume 17, pp 27-37; https://doi.org/10.22495/cbv17i2art3

Abstract:
Board decision-making is a complex process. It is represented by reasoning for choosing the most suitable alternative within a series of options for the operation of the corporation. In practice, strategic decision-making is an important function of the board of directors, especially in the information age. Although there are various determinants of the board for carrying out decision-making, there has been little research concerning the impact of information technology (IT) governance wisdom on board decision-making. This study seeks to investigate the origin of IT governance and analyze IT governance wisdom from the perspective of the philosophical thinking of The Art of War. The analysis indicates that the concept of IT governance must have been produced no earlier than the late 1990s, highly likely at the beginning of the 21st century. In addition, this study presents the results of qualitative field research of a Chinese information and communication technology (ICT) company which indicates that it has an important meaning in explaining IT governance wisdom might have a significant influence on board decision-making. In summary, the importance of information governance wisdom in the decision-making process of the board of directors is also a reflection of intelligent management while considering the interests of shareholders in the digital era.
Dean Blomson
Corporate Board: Role, Duties and Composition, Volume 17, pp 18-26; https://doi.org/10.22495/cbv17i2art2

Abstract:
The research aim was to explore whether the dominant style of board model used in Australia was reaching its use-by-date and if so, what more future-ready model/s or features could be considered. This paper represents original thinking and research to generate a new set of “working hypotheses”. We have followed a “grounded research” (an inductive methodology) to produce an emergent theory. We have used semi-structured and qualitative interviewing techniques. The research has generated an initial “theory” and point of view that is directional (not empirical). The focus of the study was on board operating models of the future — taking a much longer-term perspective, more specifically to identify and postulate what “fit-for-purpose” board operating models could look like in 2030 and beyond. By examining possible solutions through an operating model lens, the study has taken a system’s view of boards, going well beyond the constraints of current siloed, domain-specific research. The findings clearly point to a model that for larger and/or more complicated enterprises is under considerable strain. It is fast approaching its use-by-date, especially in the light of 1) a shift toward stakeholder capitalism and 2) the need to operate effectively in faster-moving, less predictable, and significantly more complicated environments than the existing board models were designed for. Having set the context for future governance, the recommendations focus on six elements of board operating models, board structures, key governance processes, management systems, and frameworks, e.g., board charters, technology/systems, participants and skills, and ways of working. The relevance of the paper is that at a time when directors are doubling down on what needs to be done, there is a general absence of consideration of 1) what “fit-for-purpose” governance should be and 2) whether the governance system as we know it in Australia is approaching a breaking point for some major enterprises (not all companies).
Mohamed Ahmed Ali Nemr, Yuhuan Liu
Corporate Board role duties and composition, Volume 17, pp 8-17; https://doi.org/10.22495/cbv17i2art1

Abstract:
Higher education institutions and most contemporary organizations face behavioral issues often related to the leaders’ skills and styles of leadership. Ethical leadership is one of those methods that helps to improve the workers’ behaviors within the workplace (Brown, Treviño, & Harrison, 2005; Kia, Halvorsen, & Bartram, 2019; Qian & Jian, 2020). This study aims to test ethical leadership’s (EL) impact on in-role work behaviors (IWBs) and to test the moderating role of organizational cynicism (OC) between them. The authors conducted this study using a stratified random sample consisting of 400 faculty members working in Egypt’s Sohag University. For this analysis, we used simple regression, hierarchical regression moderated analysis (HRMA) and simple slope analysis. Our paper findings reveal that EL had a positive effect on IWBs and that OC modified the positive correlation between them. This meant that the relationship was stronger for workers, who perceived a low level of cynicism, and was weaker for workers who perceived a high level of cynicism. These findings resulted in our conclusions about the respective relationships between EL, IWBs and OC concerning ethical leadership.
Corporate Board: Role, Duties and Composition, Volume 17, pp 60-68; https://doi.org/10.22495/cbv17i1art6

Abstract:
This paper examines whether and how firm performance is influenced by board practices in Ghana. The analysis shows that chief executive officer (CEO) duality has a negative impact on firm performance, evidence that supports agency theory’s position. Further analysis shows that the smaller Ghanaian board size appears to be optimal because it has a positive impact on firm performance. However, the larger non-executive director representation on the board has no impact on firm performance. Overall, these results suggest that the Ghanaian firms should be encouraged to separate the role of CEO and the board chair positions, have a board size of between eight and nine, and make good use of non-executive directors’ time in the board decision process if they are to achieve better performance.
Sandra Gaitán,
Corporate Board: Role, Duties and Composition, Volume 17, pp 51-59; https://doi.org/10.22495/cbv17i1art5

Abstract:
In this paper, we review the current state of corporate governance in Colombia. First, we discuss the evolution of the legal framework of corporate governance including the main changes in the code of best corporate governance practices that took place since the global financial crisis of 2008. After this, we discuss key corporate governance issues such as the ownership structure of listed corporations and the market for corporate control, we analyze the practices of corporate boards of Colombian listed companies and their remuneration systems and the role of pension funds and hedge funds as shareholder activists. We also review the evidence regarding corporate governance and firm performance. Finally, we discuss the current state of corporate social responsibility (CSR) and an assessment of corporate governance specifics by industry. We conclude that there are opportunities for future research in several of these fields of study, especially regarding boards of director practices, director remuneration, and corporate social responsibility.
Anissa Dakhli
Corporate Board: Role, Duties and Composition, Volume 17, pp 39-50; https://doi.org/10.22495/cbv17i1art4

Abstract:
The current study aims to investigate the relationship between budgetary participation and job satisfaction, moderated by the personality variable, locus of control. The data is gathered via a questionnaire administered to 75 managers from Tunisian hotels. To test the hypothesis of this study, moderated regression analysis was performed. Our results in a developing country setting confirm the contingent aspect of budgetary participation and show that the locus of control moderates the budgetary participation effects on job satisfaction. Budgetary participation was found to have a positive effect on internal managers while having a negative effect on external managers. The results suggest that it is necessary for Tunisian hotels to focus on the broader context in which budgetary participation is used. This latter has two aspects: structural and behavioral. The success of budget participation certainly depends on the organizational setting in which it is used but also on the psychological willingness of actors involved to develop and succeed in such budgetary practice.
Mohamed Ahmed Ali Nemr, Yuhuan Liu
Corporate Board: Role, Duties and Composition, Volume 17, pp 30-38; https://doi.org/10.22495/cbv17i1art3

Abstract:
Ethical leadership (EL) aims to improve the positive behaviors of workers and achieve common goals between leaders and their subordinates by directing and nurturing from leaders to their subordinates, this is accomplished by establishing ethical standards in the workplace that clarify the relationship between them (Ng & Feldman, 2015; Hussain & Attiq, 2017; Qian & Jian, 2020). Therefore, this paper aimed to test the impact of ethical leadership on counterproductive work behaviors (CWBs) and test organizational cynicism’s (OC) moderating role between them. We applied in the study a stratified random sample of faculty members working in Egypt’s Sohag University. The researchers relied on the survey and analyzed the results using simple regression, hierarchical regression moderated analysis and simple slope analysis. The paper’s findings show that EL has a negative effect on CWBs and that OC modifies the negative relationship between EL and CWBs. Consequently, when compared to those workers who realize a low level of cynicism, there is a weaker relationship in respect of workers who realize a higher level of cynicism. Our findings help university officials to improve the faculty members’ perceptions of EL. In detailing this study’s findings, we discuss several conclusions regarding EL, CWBs and OC.
Stergios Tasios, Evangelos Chytis, Panagiota Karametou, Periklis Tagkas
Corporate Board: Role, Duties and Composition, Volume 17, pp 20-29; https://doi.org/10.22495/cbv17i1art2

Abstract:
Corporate disclosures constitute the main means of communication between companies and their related parties, with the Internet being one of the most important. Although several studies have been conducted on the extent of disclosures on the Internet and the factors that affect it (Elsayed, Masry, & Elbeltagi, 2010; Botti, Boubaker, Hamrouni, & Solonandrasana, 2014; etc.), research during the crisis of the pandemic is limited. The purpose of this paper is twofold. On the one hand, it aims to examine the extent and quality of disclosures that companies provided on corporate websites during the COVID-19 pandemic. On the other hand, an effort is made to assess which factors affected the extent of disclosure. These factors focus on firm-specific characteristics (company size, leverage, profitability, auditing firm size) and core corporate governance attributes (board size, ownership concentration and chief executive officer duality). Results indicate that average disclosure was relatively high. Regression analysis shows that the level of disclosure was significantly positively associated with company size, profitability and board size. This indicates that during the pandemic, larger companies, more profitable and with more board members, disclosed more information on their websites. The results of the study may be of interest for clients, financial and credit analysts, investors, supervisory authorities as well as management, in their effort to improve corporate disclosures and the level of social responsibility.
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