Corporate Board role duties and composition

Journal Information
ISSN / EISSN : 1810-8601 / 2312-2722
Published by: Virtus Interpress (10.22495)
Total articles ≅ 331
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Hugh Grove, Maclyn Clouse, Tracy Xu
Published: 12 September 2022
Corporate Board: Role, Duties and Composition, Volume 18, pp 8-18; https://doi.org/10.22495/cbv18i2art1

Abstract:
The major research question of this paper is: “What are boards’ responsibilities for the climate plans of their companies?” There is no current consensus on how to do so. This paper explores the challenges of boards to assess annual meeting proposals concerning “Say on Climate” by both their own corporations and activist investors (Eccles, 2021; McDonnell, 2022). The guidance for board self-assessment for climate governance is provided. Next guidelines for boards to assess company climate plans are offered, and finally, conclusions are given. The major recommendation in this paper is that boards use six of the ten areas of the Climate Action 100+ Net Zero Company Benchmark Initiative to assess company climate plans. These key areas are climate governance, decarbonization strategy, net zero greenhouse gas (GHG) emissions by 2050 (or sooner) ambition, long-term, medium-term, and short-term GHG reduction targets. It is critical for boards to develop an effective climate governance structure and ensure that a company takes appropriate strategic decisions to manage climate-related risks and opportunities. And the most important role for investors is to ensure board of directors’ accountability.
Dina Tomšić
Corporate Board: Role, Duties and Composition, Volume 18, pp 4-6; https://doi.org/10.22495/cbv18i1editorial

Abstract:
The papers in this issue will be welcomed by experts in the field, academic researchers, and practitioners alike, since they provide insightful findings that may also trigger future research here revealing and discussing new trajectories to solve challenges that corporate governance discipline and boards are facing
Corporate Board: Role, Duties and Composition, Volume 18, pp 62-65; https://doi.org/10.22495/cbv18i1art5

Abstract:
This review covers the book titled “Board of directors: A review of practices and empirical research”, edited by Stefano Dell’Atti, Montserrat Manzaneque, and Shab Hundal (Virtus Interpress, 2020; ISBN: 978-617-7309-16-0). Boards of directors are considered crucial corporate governance mechanisms, with a strategic role in advising and monitoring corporate decisions. The review addresses the impact of board of directors’ practices in several different settings. It highlights the contribution of this book to the ongoing discussion on key points relating to boards of directors issues
Nigel Garrow,
Corporate Board: Role, Duties and Composition, Volume 18, pp 47-61; https://doi.org/10.22495/cbv18i1art4

Abstract:
Tenure is an important component of mergers and acquisitions (M&A) outcomes, as highlighted in this study and recent studies by Zhao (2022) and Bilgili, Calderon, Allen, and Kedia (2017). Research on top management teams (TMTs) has found that a good work relationship between senior managers enhances team cohesiveness, communication, and firm performance. This study explores the impact of the joint tenure of the chairperson and the CEO on M&A outcomes. We utilised the resource-based view (RBV), upper echelon theory, and season of tenure theory as theoretical lenses to explore joint tenure’s potential impact on M&A outcomes. Through a long-event window research methodology, which examines the cumulative abnormal returns to the acquirer’s shareholders for a period of three years following the completion date, this study found that the length of the period of joint tenure of the chairperson and CEO in acquiring firms was significantly positively correlated with the cumulative abnormal return (CAR) to acquiring firm shareholders during the three years following completion of an acquisition (CARB). Although this study has utilised 47 acquisitions in Australia from the period from 1990 up to the global financial crisis, our findings are quite revealing. They have contributed to the limited study on joint tenure
Corporate Board: Role, Duties and Composition, Volume 18, pp 36-46; https://doi.org/10.22495/cbv18i1art3

Abstract:
Prior takeover prediction research has advanced eight hypotheses to explain why specific firms are targeted through takeovers (Palepu, 1986; Powell, 2001; Tunyi, 2021a). However, takeover targets remain difficult to empirically predict ex-ante, perhaps because these established sets of hypotheses do not substantially explain takeover likelihood (Danbolt, Siganos, & Tunyi, 2016). This paper reviews the literature on takeover prediction, particularly focusing on theory, propositions and testable hypotheses on the factors that drive firms’ takeover likelihood. Drawing from prior research outside this literature, the paper then develops conceptual arguments underlying six new predictors of firms’ takeover likelihood including; information asymmetry, mergers and acquisitions (M&A) rumours, financial distress, payroll synergies, share repurchases and industry competition. Specifically, we predict that a firm’s likelihood of receiving future takeover bids increases with merger rumours and industry competition and declines with information asymmetry and share repurchases. Additionally, takeover likelihood plausibly has an inverse U-shaped relationship with payroll excesses and the level of financial distress.
Shirley Mo Ching Yeung
Corporate Board: Role, Duties and Composition, Volume 18, pp 26-35; https://doi.org/10.22495/cbv18i1art2

Abstract:
The aim of this paper is to explore the elements of service quality (SERVQUAL) for improving the quality of life of staff via an art-based curriculum with business elements. Based on the research of Latchem (2006) and Bond, Zawacki-Richter, and Nichols, 2019) on the trend of educational technology by using content analysis. This paper has also conducted 2 stages of qualitative secondary data search: 1) quality of life (QoL) was the major part of data analysis to support the findings: a definition of QoL, a mechanism to measure QoL, and challenges for maintaining QoL; and 2) new normal of productivity via art-based curriculum with business elements for resilience and productivity under COVID-19 was conducted to apply findings onto the SERVQUAL model. The learning outcomes on SERVQUAL and pieces of literature on QoL demonstrate that the principles of SERVQUAL are embedded in measuring QoL. Besides, twenty articles published from 2019 to 2021 were studied. Several related factors were found, including technological tools for art content, education of art for life, curriculum on ethical issues in art content, policy in content protection, perception of the art community, and research thinking skills. The QoL may be tackled via the application of an art based curriculum with business elements for resilience and productivity. With these findings, organizations shall have an idea of designing activities to enhance the QoL in the workplace. The paper details the learning outcomes generated from pieces of literature in the past; and the use of SERVQUAL which has potential in QoL training and individual development.
Hugh Grove, Maclyn Clouse, Tracy Xu
Corporate Board: Role, Duties and Composition, Volume 18, pp 8-25; https://doi.org/10.22495/cbv18i1art1

Abstract:
The major research question of this paper is what are the challenges for boards of directors to help their companies manage, assess, and track performance with environmental, social, and governance (ESG) measures? There are currently no global required ESG measures, just a variety of choices that make comparisons and analyses very challenging for various stakeholders (Waygood, 2021; Buffett, 2021). This paper studies the evolution of ESG measures and provides a comprehensive review of different types of ESG measures, including voluntary measures, those required in the EU and the UK, and those with the potential to be required in the U.S. and globally. Our findings suggest that management and boards of directors may employ a measurement theory perspective to assess and apply various ESG measures for specific benchmarks, targets, and reports. Future research could investigate these board challenges with case studies or empirical studies, especially to study how various ESG measures are used.
Igbekele Sunday Osinubi
Published: 23 December 2021
Corporate Board: Role, Duties and Composition, Volume 17, pp 4-6; https://doi.org/10.22495/cbv17i3editorial

Abstract:
Corporate managers make choices that seek to improve the performance of their organisation. These decisions involve interpreting and framing the environment, developing and implementing programmes and services, and creating processes and structures to monitor and control resources for optimal impact (Brown & Iverson, 2004). Board performs a critical function to monitor environmental trends that might affect organisational performance. The strategy adopted by the corporate board will have a considerable impact on their performance. The literature also suggests that the composition of the board will be contingent upon the characteristics of the firm’s external environment, the demands of its strategy and the salient contextual factors and the past financial performance of the company (Pfeffer & Salancik, 1978). These issues are addressed in the collection of high-quality papers in this issue of Corporate Board: Role, Duties and Composition.
Hugh Grove, Maclyn Clouse
Corporate Board: Role, Duties and Composition, Volume 17, pp 61-71; https://doi.org/10.22495/cbv17i3art5

Abstract:
The key research aim of this paper is to analyze whether an activist investor’s recommendations for financial, corporate governance, and strategic management performances were successful or not. This paper updates the initial case study of the activist investor, Barington Capital Group, in analyzing the performance of a public company, L Brands, which had lost $20 billion in market capitalization in the last three years prior to the public letter from Barington to the L Brands CEO in March 2019. This updated case study analyzes whether Barington’s initial recommendations worked as operational guidelines for improving L Brands’ financial, corporate governance, and strategic management performances. From its financial analysis, Barington recommended either an initial public offering of the superior performing Bath & Body Works brand or a spinoff of the weak performing Victoria’s Secret brand. From its corporate governance and strategic management analysis, Barington recommended that L Brands improve the composition of its board of directors whose deficiencies in director independence, industry experience, and diversity hindered its ability to effectively oversee and advise strategic management. It is important to note that this paper was prepared exclusively with public information.
Fabio Franzoi
Published: 22 November 2021
Corporate Board: Role, Duties and Composition, Volume 17, pp 42-60; https://doi.org/10.22495/cbv17i3art4

Abstract:
While research on long-term capital structures of family and non-family firms is well established, differences in current assets- and liabilities-management are largely under-researched. The aim of the study is to examine whether the type and degree of family involvement in the firm affect the efficiency of working capital management. Employing a partially hand-collected panel of 278 listed firms from 2000–2013 this paper analyzes the impact of family shareholders as owners, managers, and supervisors on working capital handling in Germany. The results show that primarily the share of family members in the executive board increases the length of the cash conversion cycle (CCC), particularly in smaller and non-service firms. Most notably, family management increases the inventory period (DIO). The higher average equity ratio of family firms suggests that family firms may face reduced financing pressure to address such inefficiencies in current assets and current liabilities management. Furthermore, family-managed firms may be less professional in their working capital management. The findings contribute to the literature by showing that in a country with a less investor-friendly corporate governance system, family influences on working capital management are primarily due to management presence, not plain shareholder influence. The results stress the need for researchers to consider the degree of family management involvement when analyzing the financial aspects of family firms.
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