Yes / This study examines the relationship between corporate governance compliance and firm performance in the UK. We develop a Governance Index and investigate its impact on corporate performance after controlling for potential endogeneity through the use of a more robust methodology, Generalized Method of Moments (GMM) Estimation. Our evidence is based on a sample of 435 non-financial publicly listed firms over the period 1999–2009. In contrast to earlier findings in the UK literature, our results suggest that compliance with corporate governance regulations is not a determinant of corporate performance in the UK. We argue that results from prior studies showing a positive impact of corporate governance on firms’ performance may be biased as they fail to control for potential endogeneity. There may be a possibility of reverse causality in the results of prior studies due to which changes in the internal characteristics of firms may be responsible for the corporate governance compliance and performance relationship. Our findings are based on GMM, which controls for the effects of unobservable heterogeneity, simultaneity and dynamic endogeneity and thus present more robust conclusions as compared to the findings of previously published studies in this area.

This thesis investigates the phenomena that underlie corporate governance practices in the Nigerian banking sector (NBS); the purpose is to understand the nature of corporate governance and the factors influencing it. It offers a response to a number of concerns raised about the effectiveness of banks’ corporate governance practices, especially before the consolidation reform and during the 2007-2009 global financial crisis. Culture and leadership are identified as providing the most suitable theoretical framework for this study, and through grounded theory (GT), an empirical study is undertaken to identify the nature of corporate governance practices in banks, the factors that influence such practices and the outcomes of this influence. The GT methodology is used in the following ways: First, a comparative analysis is performed in the open coding stage, based on first and second series of semi-structured interviews and focus group discussions conducted with the executive managers of the 24 quoted banks in Nigeria, officials from the Central Bank of Nigeria (CBN), representatives of the Nigerian Deposit and Insurance Corporation (NDIC), and other stakeholders. The open coding leads to the development of eight open categories, their properties and dimensions based on the responses garnered from the interviews and focus groups. Second, through axial coding, the identified open categories are subsumed into higher categories, and the relationships among these categories are established by means of the paradigm model. The paradigm model provides the basis for the development of a substantive GT. Third, through the selective coding process, based on a third series of semi-structured interviews that identify human action and a lack of leadership as core categories, relationships with other sub-categories are verified, which eventually leads to the presentation of the substantive theory of corporate governance for banks. This theory perceives corporate governance practice in banks to be affected by human actions and a lack of leadership. This substantive theory is then explored in relation to the formal theories of culture and leadership; this offers an understanding of the corporate governance of banks in Nigeria and explains the relevance of the formal theories more clearly. Furthermore, the idea of the social contract in relation to cooperation and trust is presented as a tool with which to address free-rider issues. The use of GT is extended to explore the phenomena underlying corporate governance in the given context, providing a better understanding of the influence of culture and leadership in corporate governance theorising. Finally, this thesis is the first attempt to combine the GT methodology, corporate governance and the theories of culture and leadership, and to offer insight into how to address the identified issues using the social contract strategy through trust and cooperation, making it a useful guide on corporate governance for banks.

published_or_final_version / Business Administration / Master / Master of Business Administration

To empirically test the impact of CEOs' outside wealth on their compensation, I use spousal divorce as a proxy for an exogenous, negative shock to a CEO's outside wealth. I hypothesize that this shock decreases a CEO's risk tolerance. I also expect that the board of directors responds to this decrease by raising the CEO's cash compensation and by increasing the sensitivity of the CEO's compensation to changes in firm value. I find that cash bonuses, restricted stock grants, and option grants increase following a CEO's divorce, consistent with boards reacting to changes in CEOs' outside wealth and risk incentives. I also find that firms' total risk and idiosyncratic risk significantly drop during the year of a CEO's divorce, consistent with a drop in the CEO's risk tolerance. Overconfident CEOs, who are more risk tolerant, do not receive the same increases in compensation following divorce. I find little support for the relation between divorce and compensation being endogenously determined by performance or by poor corporate governance. Overall, the results support predictions that the board of directors takes the CEO's wealth into account when setting compensation and that outside wealth impacts the CEO's risk preferences.

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This thesis documents a study of the factors associated with Boards of Directors’ strategic decisions. The premise upon which such a research initiative is founded concerns the increased interest of academics and business practitioners in Board of Directors in the U.K and in U.S in part arising from recent financial scandals made in major public companies. Despite this increased attention to Board of Directors, it is acknowledged that Boards of Directors is one of the most under-researched management topics and its research is limited in scope and scale. An extensive review of the literature revealed that a useful contribution to knowledge could be derived from the investigation of the factors that influence Boards’ strategic decisions in quoted organisations. The research objectives is then to investigate the strategic decisions Boards of Directors and the organisation make by examining the environmental factors associated with the Board, the characteristics of the Board such as age, education, experience, composition, the Boards’ strategic choices in areas such as innovation, strategic decisions and to examine the influence the Boards have on performance. Despite the significant research interest in this topic, knowledge is still incomplete. This thesis makes a significant contribution to the strategic management literature by developing an integrative framework which examines strategic decisions from both content and process perspectives. The model developed, identifies the influence on strategic decisions, the environment, the characteristics of the Boards of Directors and its involvement has as influence on strategic decisions. The empirical study is carried out in a new cultural context; Greece and more specifically to listed firms on the Athens Stock Exchange. A theoretical model has been created and following a deductive approach, primary data through questionnaires was collected from 105 Greek listed organisations. Data was analysed according to their descriptive properties and underlying correlation structure. Several principal components were derived from these analyses which were used in hypothesis testing. Subsequently, a multiple regression and GLM analyses were conducted in order to examine the interrelationships between the factors associated with Boards’ strategic decisions. The research findings are discussed and considered in light of current knowledge in the area. A number of conclusions are made from the findings. Furthermore, implications for academics and business practitioners are drawn that indicate the relevance and applicability of this research to corporate governance practices. Limitations of the research and possible future research are set out. The thesis is organised into seven chapters which are entitled in the following order: literature review of Boards of Directors and development of theoretical framework; empirical approach and conceptualisation of the factors associated with boards’ strategic decisions; descriptive research findings; principal component analysis and construction of scale indices; multiple regression and GLM analyses; and, conclusions and implications of the study.

This thesis adds to the ongoing accounting and financial literature by investigating the determinants and economic effects of corporate disclosure in a low disclosure environment – the two Chinese stock markets.  It examines two research questions: whether the imposition of exogenously-imported corporate governance legislation and international accounting standards (IAS) lead to a fundamental improvement of corporate disclosure practices; and the estimation risk perspective of whether increased corporate disclosure results in a lower cost of equity capital through reducing the risk premiums on information uncertainty on firm-special characteristics. Results for the first question demonstrate that, while corporate disclosure is increased over time, neither advanced corporate governance mechanisms nor the IAS facilitate material improvement in voluntary disclosure.  Instead, the ownership structure, especially foreign-ownership, seems to play a more essential role in determining companies’ disclosure practices. In regards to the second research question, this thesis shows stock prices of listed Chinese companies are largely informational inefficient, and that, under this circumstance, the level of corporate disclosure is strongly negatively associated with stock return volatilities.  This negative association appears to result from the high-margin decrease in information asymmetry on firm-special characteristics when listed companies increase mandatory disclosure.  This finding therefore provides further country-level evidence in support of the view that the extent of negative association between corporate disclosure and the cost of equity capital is primarily dependent upon the features of stock markets and the disclosure environment in different nations. This thesis concludes with recommendations for the Chinese government and the market regulator, the China Securities Regulation Committee (CSRC), to fundamentally improve current political and legal systems and to effectively enforce the mandatory disclosure legislation.

Purpose: The thesis aims to explore the roles that board directors undertake and understand whether there is an impact of the external organisational environment as well as several board characteristics on these roles. Design/ Methodology Approach: Building on existing literature a model is developed to test hypothesized relationships—i.e. directors’ roles with external environment and board characteristics. Measurements are designed—withdrawing them from the literature—to collect quantitative data from directors of UK organisations. The responses were collected from 115 directors working in UK organisations. Principal component analysis is conducted to reduce the data and propose a set of directors’ roles and correlation as well as regression analyses are utilised in order to test the hypothesised relationships. Findings: The results of the principal component analysis propose a set of six distinct roles for board directors, providing a new framework for future researchers. In addition, it is found that both the external environment and the board characteristics have some impact on what directors do, extending the limited empirical evidence found in the literature. However, the theoretical framework needs further examination and research. Limitations/Future Recommendations: The current thesis is evidenced by various limitations. Firstly, additional constructs can be added as determinants of the directors’ roles. Secondly, the response rate in the survey is low, which is regarded as a limitation, although there are limited studies offering quantitative results from board members.