Board structure and firm performance : evidence from India's top companies

Manuscript Type: Empirical

Research Question/Issue: This paper investigates the relationship between internal governance structures and financial performance of Indian companies. The effectiveness of boards of directors, including board composition, board size, and aspects of board leadership including duality and board busyness are addressed in the Indian context using two theories of corporate governance: agency theory and resource dependency theory.

Research Findings/Insights: The study used a sample of top Indian companies taking into account the endogeneity of the relationships among corporate governance, corporate performance, and corporate capital structure. The study provides some support for aspects of agency theory as a greater proportion of outside directors on boards were associated with improved firm performance. The notion of separating leadership roles in a manner consistent with agency theory was not supported. For instance, the notion that powerful CEOs (duality role, CEO being the promoter, and CEO being the only board manager) have a detrimental effect on performance was not supported. There was some support for resource dependency theory. The findings suggest that larger board size has a positive impact on performance thus supporting the view that greater exposure to the external environment improves access to various resources and thus positively impacts on performance. The study however failed to support the resource dependency theory in terms of the association between frequency of board meetings and performance. Similarly the results showed that outside directors with multiple appointments appeared to have a negative effect on performance, suggesting that "busyness" did not add value in terms of networks and enhancement of resource accessibility.

Theoretical/Academic Implications: The two theories of corporate governance, namely agency and resource dependence theory, were each only partially supported, by the findings of this study. The findings add further to the view that no single theory explains the nexus between corporate governance and performance.

Practitioner/Policy Implications: This study demonstrates that corporate governance measures utilized in developed economies related to boards of directors have some synergies and relevance to emerging economies, such as India. However, the nature of business structures in India, for example the large number of family businesses, may limit the generalizability of the findings and signals the need for further investigation of these businesses. The evidence related to multiple appointments of directors suggests that there may be support for restricting the number of directorships held by any one individual in emerging economies, given that the "busyness" of directors was negatively associated with firm performance.

Citation patterns within the leading top-tier finance journals implications for journal rankings and other issues

This paper examines all citations and self-citations to a list of 95 finance journals appearing in the Journal of Finance, Journal of Financial Economics and Review of Financial Studies from 1995 through 2005. Additionally, the publication profile of 100 prolific authors in top-tier finance journals is tabulated for these 95 journals. Citations to non-finance journals in economics and accounting are also tabulated for comparison with their finance counterpart along with working papers. Six ranking schemes are constructed with each scheme identifying the top fifty finance journals. Citations to finance journals are highly concentrated within ten journals and similarly for self-citations. Authors of papers appearing in top-tier finance journals pay scant attention to the bulk of research published in other finance journals. Furthermore, these authors cite other economic journals with greater frequency than their counterpart in finance. Of the top fifty finance journals identified in this paper, only 21 are listed in Social Sciences Citation Index (SSCI), and this compares to approximately 500 listed economic journals. Some glaring omissions from SSCI are identified, but most notably the Journal of Applied Corporate Finance, Journal of Financial Research, Journal of Empirical Finance and Journal of Fixed Income. An analysis of 2006 citations patterns is also presented. The top-tier mantra assigned to finance journals has a void with the decision by the Journal of Business to cease publication with the November 2006 issue. This paper identifies five finance journals anyone of which could potentially fill the void.

Effects of invertebrate predators and a pesticide on temporary pond microcosms used for aquatic toxicity testing

The effects of increased trophic complexity, through the addition of predatory notonectids (Anisops deanei), on temporary pond microcosms used for aquatic toxicity testing were studied. Replicate microcosms were established using sediment from a dried temporary pond, and treated with one of four concentrations of the organochlorine pesticide endosulfan (0, 1, 10 or 50 μg/L), in the presence or absence of six A. deanei. The tanks were sampled regularly for nine weeks following the addition of the predators and the entire contents of each tank counted after 12 weeks. Analysis using non-metric multidimensional scaling (MDS) and non-parametric MANOVA showed that both Anisops and endosulfan at concentrations >10 μg/L significantly altered community structure. However, an interaction between the effects of Anisops and the effects of endosulfan was not detected. The addition of Anisops did not increase the variability of response and thus did not reduce the sensitivity of the test method.

Online communication of brand personality : a study of MBA programs of top business schools

Brand personality has often been considered from the perspective of products, corporate brands or countries, but rarely among service offerings. Moreover, there remains the consideration of how these entities are communicated online. This article explores the brand personality dimensions that business schools communicate and whether they differ in putting across clear and distinctive brand personalities in cyberspace. Three clusters from the Financial Times' top 100 full-time global MBA programs in 2005 are used to undertake a combination of computerised content and correspondence analyses. The content analysis was structured using Aaker's five-dimensional framework whilst the positioning maps were produced by examining the data using correspondence analysis. Results indicate that some schools have clear brand personalities while others fail to communicate their brand personalities in a distinct way. This study also illustrates a powerful, but simple and relatively inexpensive way for organisations and brand researchers to study the brand personalities actually being communicated.

Clinical and demographic differences between sexually violent predators and other commitment types in a state forensic hospital

Sexual offenders who are involuntarily civilly committed to a secure state hospital as Sexually Violent Predators (SVPs) appear to differ significantly from other current patient populations. Demographically, SVPs are older and more predominantly Caucasian than other patients. They are less frequently psychotic than patients committed under other state statutes such as those found incompetent to stand trial, not guilty by reason of insanity and mentally ill prison transfers. Another salient dimension which distinguishes SVPs is the degree of psychopathy observed in these patients. As a group, SVPs display only slightly higher levels of psychopathy than other patient groups as measured by the revised Psychopathy Checklist. Yet when considered by offender type, rapists are found to have significantly higher average psychopathy scores than other patients, while child molesters are assessed as having lower average psychopathy scores than most other patient commitment categories.

Underestimated and severe : small mammal decline from the forests of south-eastern Australia since European settlement, as revealed by a top-order predator

In Australia, numerous small mammal species have suffered extinction or severe declines in distribution and abundance following European settlement. The extent of these declines from forested areas of south-eastern Australia, however, remains poorly understood. In this paper we use sub-fossil deposits of the sooty owl (Tyto tenebricosa tenebricosa) as a tool for understanding the diversity of the small mammal palaeocommunity. These results are compared to the contemporary sooty owl diet from the same geographical region to investigate the degree of small mammal decline following European settlement. Of 28 mammal species detected in sub-fossil deposits and considered prey items of the sooty owl at the time of European settlement, only 10 species were detected in the contemporary sooty owl diet. Numerous small mammal species have not only recently suffered severe declines in distribution and abundance but have also recently undergone niche contraction, as they occupied a greater diversity of regions and habitats at the time of European settlement. For some species our understanding of their true ecological niche and ecological potential is therefore limited. The species that underwent the greatest declines occupied open habitat types or were terrestrial. The severity of decline is also likely to have resulted in severe disruption of ecosystem functions, with wide scale ecosystem consequences. There is an urgent need to improve small mammal conservation, to maintain crucial ecosystem functions performed by small mammals. It is recommended that broad-scale exotic predator control programs are conducted which may also provide suitable conditions for the re-introduction of locally extinct species.

Continued population recovery by Australian fur seals

Australian fur seals (Arctocephalus pusillus doriferus) are conspicuous, top-level predators in coastal waters of south-eastern Australia that were over-harvested during the 1800s and have had a delayed recovery. A previous species-wide estimate of live pups in 2002 recorded a near-doubling of annual pup production and a 5% annual growth rate since the 1980s. To determine if pup production increased after 2002, we estimated live pup numbers in 2007. Pups were recorded at 20 locations: 10 previously known colonies, three newly recognised colonies and seven haul-out sites where pups are occasionally born. Two colonies adjacent to the Victorian coast accounted for 51% of live pups estimated: Seal Rocks (5660 pups, 25.9%) and Lady Julia Percy Island (5574 pups, 25.5%). Although some colonies were up and some were down in pup numbers, the 2007 total of 21 882±187 (s.e.) live pups did not differ significantly from a recalculated estimate of 21 545±184 in 2002, suggesting little change to overall population size. However, the colonisation of three new sites between 2002 and 2007 indicates population recovery has continued.