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This study aims to examine the impact of corporate governance (CG) on firm risk-taking in India.

The present study is based on a panel data set of 100 non-financial Indian firms randomly selected from the top 500 firms listed on the Bombay Stock Exchange. The study uses two market-based measures to capture firm risk-taking – total risk and idiosyncratic risk. Generalised method of moments model is applied to examine the relationship between CG and firm risk-taking. Additionally, the fixed-effects model is applied to check the robustness of the results.

The study reveals a significant negative impact of CG index, CEO duality, multiple directorships, promoter ownership and institutional ownership on firm risk-taking. Whereas board size, board independence, board gender diversity and the number of board meetings do not significantly impact firm risk-taking.

This study contributes to the existing literature by providing a comprehensive view of how various CG attributes shape firm risk-taking in India. It examines eight CG variables: board size, board independence, board gender diversity, CEO duality, multiple directorships, number of board meetings, promoter ownership and institutional ownership. Furthermore, the study incorporates idiosyncratic risk as an additional measure of firm risk-taking, largely overlooked in the Indian context. Moreover, to the best of the authors’ knowledge, this is the first study to examine the impact of CG index on firm risk-taking in India.

This paper aims to explore the relationship between board composition and a firm’s commitment to combatting climate change. Specifically, this study investigates how various characteristics of the board, namely its size and presence of independent directors, and of the directors themselves, including gender diversity, age, educational background and national homogeneity, affect the corporate-level climate change orientation. From a theoretical standpoint, the authors take a cross-fertilizing perspective, bridging upper echelons theory with agency, resource dependence and critical mass theories.

The study uses ordered probit regression models on a hand-collected multi-country and multi-industry sample of 35 listed firms included in the Global Climate Change Liquid Equity Index (GALPLACC) provided by ECPI. This index is particularly relevant as it focuses on firms that have demonstrated a commitment to climate change, providing a robust dataset for the analysis.

The findings underscore the importance of disentangling various characteristics of corporate boards and directors. Specifically, the orientation toward climate change is negatively influenced by both board size and having a higher number of independent directors, while it is positively affected by reaching a critical mass of women on the board. Conversely, factors such as average age, educational background and the level of national homogeneity do not show significant effects.

This paper has an exploratory nature and contributes to the ongoing debate on the crucial, yet controversial role played by board-level and directors’ sociodemographic characteristics in shaping a firm’s environmental stance. Moreover, this study offers potential recommendations for policymakers regarding board composition to enhance firms’ climate change orientation.

The authors empirically investigate the association between acquisition, ownership structure and accrual earnings management (AEM) on real earnings management (REM) using Gulf Cooperation Council (GCC)-listed firms' context.

The authors' sample consists of 1,892 firm-year observations for the period from 2007–2017, and the authors adopt a panel data approach in investigating the interrelationships in this study. The authors employ different econometrics approach to test the authors' hypotheses.

The findings reveal that acquiring companies engage more in AEM if compared to REM. In terms of ownership structure, institutional ownership and state ownership mitigate the engagement in REM, whereas foreign ownership is found to be an ineffective mechanism in reducing engagement in REM. The authors report similar findings on ownership structure for AEM. The authors also find that the GCC firms engage more in REM when the firms engage in AEM, suggesting a complementary relation between these two earnings management techniques. These findings are robust after controlling for different aspects including any endogeneity issue in the authors' models.

The authors' research highlights the importance of understanding REM and AEM dynamics in GCC context. Also, the authors' findings on ownership structure suggest that GCC-listed firms can gain from institutional and state ownership which restricts earnings management, improving firm transparency and subsequently impacting firm performance.

This study aims to investigate how the presence of female executives on the board affects a company’s capital structure decisions. The critical mass of female executives on the board was also considered to observe their impact on capital structure.

Samples were taken from nonfinancial sector companies listed on the Indonesia Stock Exchange between 2012 and 2021 (3,707 firm-year observations). Capital structure was measured using four approaches, namely, debt-to-total asset ratio (DAR), debt-to-equity ratio (DER), short-term debt-to-total assets (STD) and long-term debt-to-total assets (LTD). The data were analyzed using panel data regression analysis, including a fixed effects model with clustered standard errors.

The presence of female executives on the board is significantly negatively related to capital structure as measured by DER and STD. The critical mass of women provided no evidence of a relationship with a firm’s capital structure. Robustness checks were performed, and the results were consistent with those in the main analysis.

Female executives can be appointed to management boards when determining a strategy to achieve the capital structure desired by a company.

This study increases the diversity of research in corporate governance by synthesizing various indicators from female executives into a single study to determine their relationships with companies’ capital structures. In addition, this study stands out by incorporating four distinct indicators for assessing capital structure and diverging from the norm observed in many other studies, many of which rely on just two indicators: DAR and DER. Moreover, it strongly emphasizes the unique economic, legal, social and cultural landscapes of developing countries like Indonesia in comparison to their developed counterparts, particularly Western nations.

While there is an increased demand from various corporate stakeholders on the need for public companies to have risk management frameworks as well as a stand-alone risk management committee to mitigate risks and simultaneously improve performance, this study investigates the effects of the risk management committee attributes on firm performance, and the role of board size is highlighted on this relationship in Malaysian listed companies.

Both accounting- and market-based performance measures have been used for measuring performance. A dynamic model using the generalized method of moments (GMM) has been employed to control for potential endogeneity, simultaneity and unobserved heterogeneity.

The findings reveal that risk management committee attributes such as size, independence and meetings negatively affect book-based performance measures and positively affect market-based performance measures. Moreover, board size positively moderates the risk management committee attributes and performance relationship. The study embraces the predictions of agency theory and resource dependence theory.

The findings are practically significant for Bursa Malaysia, Securities Commission Malaysia to assess the compliance of the Corporate Governance Code (MCCG, 2017) and for academia to further explore significant relationships in other emerging economies.

The paper contributes to multiple aspects: first, it studies the impact of risk management committee attributes on firm performance; second, it investigates the moderating effect of board size on RMC–performance relationship; in the end, the study employs dynamic modeling for estimation process to avoid dynamic endogeneity considered a main econometric problem for CG–performance relationships.

This paper aims to examine the association between perceived firm risk and two reporting mechanisms: risk disclosure and earnings smoothing in the UK context.

This study juxtaposes three competing views, the “null”, the “divergence” and the “convergence” hypotheses, and empirically investigates whether risk disclosure and earnings smoothing affect firm perceived risk for a sample of large UK firms with rich and poor information environments. This study also uses the global financial crisis as an external shock on overall risk in the economy to investigate when and how managers use these two reporting mechanisms to shape the firm perceived risk.

This paper documents that risk disclosures have no significant effect on investors’ risk perceptions, consistent with risk disclosures containing boilerplate and generic statements about firm risk. This paper also finds that earnings smoothing reduces investors’ risk perceptions, reflecting investors’ interpretations about future firm performance. Additional tests reveal that earnings smoothing is not associated with perceived firm risk for firms with rich information environments and expanded risk disclosures. Furthermore, reporting smooth earnings decreases perceived firm risk following the global financial crisis. These findings are robust to alternative specifications and measures of earnings smoothing as well as post-filing perceived firm risk.

This study does not distinguish between the garbling role and the informational role of earnings smoothing. The risk disclosure measurement used in this study, developed based on UK annual reports, may limit the generalizability of findings to other countries.

The findings suggest that managers should revise their risk disclosure strategies to provide in-depth details on firm risk. Investors might require information and thorough assessment to evaluate investment risks when firms provide generic risk disclosures and smoothed earnings by consulting sources like financial intermediaries. Regulators should keep an eye on firms reporting boilerplate risk disclosures and on how smoothing earnings impacts the firm perceived risk following economic turmoil, to guide interventions that promote market stability.

The findings provide new insights into when and how managers use their financial reporting discretion to make firms appear less risky and, therefore, influence investors’ risk perceptions.

This study examines the linear and non-linear effects of enterprise risk management (ERM) and corporate governance (CG) on insurers’ risk-taking behaviour.

The study employed panel data of 63 insurers from South Africa over the period 2015 and 2019. The study used the generalised method of moments (GMM) to determine the direct relationship, while the dynamic panel threshold technique was utilised to discover whether there is non-linearity in the relationship and the threshold level at which ERM and CG stimulate insurance risk-taking.

The result from the GMM elicits a positive relationship between ERM and risk-taking, implying that insurers with a robust ERM system are more likely to pursue higher risks. The empirical evidence also suggests that board size and board independence improve insurers’ risk-taking. Contrarily, gender diversity shows an inverse relationship with risk-taking. The dynamic panel threshold regression confirms non-linearities between ERM, CG and risk-taking. The empirical evidence indicates a U-shaped relationship between ERM and risk-taking, implying that a robust ERM system increases insurers’ risk-taking and vice-versa. Further, board size and independence reveal an inverted U-shaped relationship, suggesting that larger boards and a higher proportion of independent directors exhibit lower risk-taking. However, gender diversity presents a negative relationship, demonstrating a strong impact at higher threshold levels. This tells that the presence of females on the board reduces insurers’ risk-taking preferences.

Due to the risk-bearing nature of the insurance business, it is required that they ensure a robust ERM system for prudent risk-taking decisions. This demands strict adherence to ERM principles and allocating sufficient resources for effective implementation. Also, there is a need for strong CG structures that pay more attention to diversity when selecting board members due to their influence in ensuring improved risk-taking choices.

This study contributes to the existing literature by providing insights into the under-researched role of ERM and CG in insurers’ risk-taking behaviour. The study further extends the literature by providing evidence on the non-linearity and threshold levels at which ERM and CG influence insurers’ risk-taking choices. The findings are unique and contribute to the growing body of literature documenting the need for strong ERM and CG systems in insurance companies.

The purpose of this study is to determine the moderating effect of group affiliation (GA) while examining the relationship of corporate governance (CG) with firm performance (FP) and firm risk-taking (FRT).

The study employed a sample of 100 non-financial firms, selected randomly from the top 500 companies listed on the Bombay Stock Exchange (BSE) based on their market capitalisation for 2013–2022. The random effects and fixed effect models are employed for the analysis. Furthermore, the generalised estimating equations (GEE) population-averaged model is used for added robustness.

The results reveal that while strong CG improves FP, GA modifies the effect of CG on FP. Both GA and CG have beneficial effects, but their synergy is insignificant. However, in the context of CG and FRT, the study unveils that a strong CG is associated with a reduction in FRT, and this relationship is more pronounced for standalone firms.

To the best of the authors' knowledge, the present study is a maiden attempt to investigate the moderating effect of GA while examining the relationship of CG with FP and FRT.

This study aims to examine the impact of board characteristics on debt choice.

The sample comprises of unique nonfinancial firms listed in the FTSE 350 over the period 2011–2018. This study uses Tobit and OLS regressions to check the impact of board characteristics on debt choice. The results are robust to the battery of robust checks.

This study finds that board size and board independence are positively associated with public debt. However, CEO duality and board meetings frequency are inversely associated with public debt. Overall, the findings are consistent with the “financial intermediation theory” that the firms with weak governance rely on bank financing, and firms with better corporate governance go for public debt.

This study offers significant insights for investors and policymakers.

This study offers new insights regarding the role of board characteristics in firms’ debt choice by showing the significant impact of board characteristics on debt choice. The findings indicate that the board’s efficient internal monitoring may substitute external monitoring by the bank.

This study aimed at exploring the differential effects of different corporate governance (CG) indicators on risk management practices in Islamic financial institutions (IFIs) and conventional financial institutions (CFIs) of Pakistan. It also investigated the moderating role of institutional quality (IQ) in shaping the effects of CG practices on financial institutions of Pakistan.

A sample of 57 financial institutions including commercial banks, insurance companies and Modarba companies over the period 2006–2017 is used to carry out the empirical analysis. The authors applied the robust two-step system-generalized method of moments estimator, which is also called the dynamic panel data estimator. They also built the PCA-based composite index of CG and IQ by using different indicators to investigate the moderating role of IQ. They used three proxies for risk taking, five for CG and one for Shari’ah governance. To test the validity of the instruments, they applied the Arellano and Bond’s (1991) AR (1) and AR (2) tests and the J-statistic of Hansen (1982).

The results provided strong evidence that several individual characteristics of CG and the composite index are significantly related to the operational risk, the liquidity risk and the Z-score (a proxy for solvency risk). The results also revealed that IQ significantly and substantially contributes in reducing the level of risks. Finally, the estimation results indicated that the effects of CG on risk management are significantly different at IFIs and CFIs. This differential impact is mainly attributed to the fundamental differences in business models, operational strategies and contractual obligations of both types of institutions.

The findings of this study are important for enhancing our understanding of how CG relates to risk taking in Islamic and conventional financial services industries and how good quality institutions are important for formulating the governance effects on the risk-taking behavior of financial institutions. The findings suggest that a suitable size of board should be chosen to manage the risk effectively. As the findings show that the risk-taking behavior of IFIs differs from that of CFIs, the regulators and international standard setting bodies should tailor the regulatory frameworks accordingly.

This paper is different from the existing studies in four aspects. First, to the best of the authors’ knowledge, this is the first empirical investigation in Pakistan, which does the comparison of IFIs and CFIs while examining the impacts of CG on risk management. Second, the paper constructs the composite index of CG by considering several different indicators of governance and examines the combined effect of governance indicators on risk management process. Third, this paper adds to the growing literature on the role of IQ by investigating whether it acts as a moderator between CG structures and risk management and if yes, then whether this moderating role is different for IFIs and CFIs. Finally, the paper builds upon the existing research work on the CG effects for different types of financial institutions by proposing a single regression based analytical framework for comparing the effects across two different types of institutions, harvesting the benefits of higher degrees of freedom and avoiding/minimizing the measurement error.