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http://hdl.handle.net/1942/31821
Title: | Multiple directorships in emerging countries: Fiduciary duties at stake? | Authors: | LATIF, Bilal VOORDECKERS, Wim LAMBRECHTS, Frank HENDRIKS, Walter |
Issue Date: | 2020 | Publisher: | WILEY | Source: | BUSINESS ETHICS-A EUROPEAN REVIEW, 29 (3) , p. 629 -645 | Abstract: | This study investigates the effect of multiple directorships on firm performance, using a database of non-financial firms listed on the Pakistan stock exchange. Prior literature provides inconsistent evidence on the relationship between multiple directorships and firm performance in an emerging country context, which may be the result of overlooking both the large differences in institutional environments among emerging countries and the dynamic endogenous relationships between board variables and firm performance. We aim to contribute to this academic debate by focusing on directorship appointments to multiple boards in a weak institutional context. Corporate governance practices, such as boards with outside directors exercising their fiduciary duties, are crucial for effective governance in weak institutional environments. However, serving in multiple directorships is expected to compromise the execution of director duties. Using a dynamic system Generalized Method of Moments model, our findings show, indeed, a negative effect of multiple directorships on firm performance in a weak institutional environment. Building on the premise that corporate governance is conditional in nature, we also tested the moderating influence of firm size on this relationship, but we did not find supporting evidence in a dynamic model setting. Our results have important practical implications for policy makers as well as firms. | Notes: | Voordeckers, W (corresponding author), Hasselt Univ, Res Ctr Entrepreneurship & Family Firms RCEF, B-3590 Diepenbeek, Belgium. wim.voordeckers@uhasselt.be |
Other: | Voordeckers, W (corresponding author), Hasselt Univ, Res Ctr Entrepreneurship & Family Firms RCEF, B-3590 Diepenbeek, Belgium. wim.voordeckers@uhasselt.be | Keywords: | Corporate Governance;Firm Performance;Independent Directors;Executive-Compensation;Earnings Management;Market Valuation;Board Processes;Moderating Role;Family Firm;Too Busy | Document URI: | http://hdl.handle.net/1942/31821 | ISSN: | 0962-8770 | e-ISSN: | 1467-8608 | DOI: | 10.1111/beer.12275 | ISI #: | WOS:000538910000015 | Rights: | 2020 John Wiley & Sons Ltd. | Category: | A1 | Type: | Journal Contribution | Validations: | ecoom 2021 |
Appears in Collections: | Research publications |
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