Boards of directors and bank performance in United Arab Emirates

This study presents an empirical analysis about corporate governance of financial institutions in United Arab Emirates (UAE). The purpose of this research is to analyze the influence of the structure of board of directors on the performance of these institutions. To examine the effect of control exerted by particular families on bank management, we estimated models where the dependent variable is return on assets (ROA) and return on equity (ROE), independent variables are board of directors variables, and control variables are bank management variables. Our results show that the control of corporate governance by a ruler's family within a board of directors has a positive effect on bank profitability. Our results indicate that control by a ruler's family through a bank's board of directors compensates for the inadequacy of UAE's corporate governance system.

"Management of private corporations" ... with notes on organization, meetings and records, giving decisions of the courts touching the acts of corporations, boards of directors and corporation officers.

Mode of access: Internet.

Corporate governance in banking: the role of board of directors

We test hypotheses on the dual role of boards of directors for a sample of large international commercial banks. We find an inverted U shaped relation between bank performance and board size that justifies a large board and imposes an efficient limit to the board’s size; a positive relation between the proportion of non-executive directors and performance; and a proactive role in board meetings. Our results show that bank boards’ composition and functioning are related to directors’ incentives to monitor and advise management. All these relations hold after we control for bank business, institutional differences, size, market power in the banking industry, bank ownership and investors’ legal protection.

Evaluating boards and directors

The challenge for boards is to prevent crises in the organisations they govern. Performance evaluation is a key means by which boards can recognise and correct corporate governance problems and add real value to their organisations. Our paper provides a practical introduction to board and director evaluations. We discuss the reasons for governance failures and how board evaluations can help prevent them from occurring. We then review the performance pressures facing boards and the benefits of board evaluations in meeting these pressures. Finally, we introduce our framework for a successful board and/or individual director evaluation, whatever the company type. In this framework, we suggest there are seven key questions to consider when planning a board evaluation and discuss each of these seven decision areas.

What Does Board Capital Really Bring to the Table? Exploring the Effect of Directors’ Human and Social Capital on Effective Governance During International Expansion

What constitutes effective corporate governance? Which director characteristics render boards effective at positively influencing firm-level performance outcomes? This dissertation examines these questions by taking a multilevel, multidisciplinary approach to corporate governance. I explore the individual-, team-, and firm- level factors that enable directors to serve effectively as strategic resources during international expansion. I argue that directors’ international experience improves their ability to serve as effective strategic consultants and resource providers to firms during the complex internationalization process. However, unlike prior research, which tends to assume that directors with the potential to provide important resources uniformly do so, I acknowledge contextual factors (i.e. board cohesiveness, strategic relevance of directors’ experience) that affect their propensity to actually influence outcomes. I explore these issues in three essays: one review essay and two empirical essays. In the first empirical essay, I integrate resource dependence theory with insights from social-psychological research to explore the influence of board capital on firms’ cross-border M&A performance. Using a sample of cross-border M&As completed by S&P 500 firms from 2004-2009, I find evidence that directors’ depth of international experience is associated with superior pre-deal outcomes. This suggests that boards’ deep, market-specific knowledge is valuable during the target selection phase. I further find that directors’ breadth of international experience is associated with superior post-deal performance, suggesting that these directors’ global mindset helps firms in the post-M&A integration phase. I also find that these relationships are positively moderated by board cohesiveness, measured by boards’ internal social ties. In the second empirical essay, I explore the boundary conditions of international board capital by examining how the characteristics of firms’ internationalization strategy moderate the relationship between board capital and firm performance. Using a panel of 377 S&P 500 firms observed from 2004-2011, I find that boards’ depth of international experience and social capital are more important during early stages of internationalization, when firms tend to lack market knowledge and legitimacy in the host markets. On the other hand, I find that breadth of international experience has a stronger relationship with performance when firms’ have higher scope of internationalization, when information-processing demands are higher.

The board of directors as a part of family business governance – multilevel participation and board development

In this study, I examine the board of directors as a part of family business governance. Both boards and governance have increased their attractiveness as a research topic lately. Research on boards has concentrated mostly on the study of different board attributes, like composition, and the relationship of these attributes to the firm’s performance. Family business governance studies are criticized for ignoring the multifaceted needs of companies. More research observing the context and contingencies affecting the governance and board of directors is needed. The objective of this study is to clarify: 1) how the board participates in family business governance, and 2) how the board develops along with the firm’s and family’s development. The study is implemented as qualitative research, and the longitudinal process approach has been used as it provides the opportunity to examine development in context. Selection criteria for the two cases selected for this study are: active board of directors, at least one implemented succession, and interviewees available from two generations and from different positions in the firm. The data consists of interviews and secondary data, and it is collected from different data sources. The analysis was done selecting first some critical events from both cases to closer examination, and analysing them by using content analysis technique. Several conclusions were drawn basing on the findings. First, the family business board participates in the firm’s activities much more widely than it is customary to think. Second, the family business board is not a static part of the business, but it develops and it has to develop for different reasons. Third, ownership is not only the basis for the board’s activities or existence, but the relationship between the board and ownership is two-way. The board contributes to a large extent to the ownership decisions, and in this way to the management of ownership. Fourth, according to the cases, the board has many unrecognized possibilities to facilitate succession in family firms.

The effectiveness of non-executive directors in Chinese state-owned enterprises

Purpose – The primary aim of this paper is to examine whether boards of directors with independent members function as effective corporate governance mechanisms in Chinese State-Owned Enterprises(SOEs), by analysing four characteristics of non-executive directors (NEDs) that impact on their effectiveness, namely their degree of independence, information, incentive, and competence. Design/methodology/approach – Being exploratory in nature, the research uses qualitative methods for data collection. It is based on an interpretivist perspective of social sciences, analysing and explaining the factors that influence the effectiveness of NEDs. Findings – The findings indicate that the NED system is weak in China as a result of the concentrated ownership structure, unique business culture, intervention of controlling shareholders and the lack of understanding of the benefits brought by NEDs. Research limitations/implications – The paper examines the salient features of and challenges to the system of NEDs of SOEs in present-day China. It provides an understanding of how the various perceptions of the board, gathered from in-depth interviews of corporate directors, leads to new interpretations of board effectiveness. The research, however, is limited owing to a relatively small sample size and the sensitive nature of the information collected. Originality/value – The study aims to fill gaps in the literature and contribute to it by assessing the “real” views and perceptions of NEDs in China in an institutional environment significantly different from that of the USA, the UK and other western economies.