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Prior work has shown that the board of directors can alleviate market imperfections that lead to capital investment inefficiency. The authors extend previous work by exploring how board characteristics influence the efficiency of human capital investment, a critical production factor that has remained insufficiently examined. Specifically, this study aims to investigate how board activity, size, the presence of a separate chairman, female directors and board independence affect firm labour investment efficiency in the European context.

The sample contains 4,331 firm-year observations traded on the STOXX® Europe 600 index from 2009 through 2022. This paper applies a lagged ordinary least squares (OLS) regression to test the proposed hypotheses. It also uses a dynamic panel generalised method of moments (GMM) regression to tackle potential endogeneity concerns.

The results show that board gender diversity and the level of independent directors are positively linked to labour investment efficiency, whereas board size and meeting frequency are negatively related to labour investment efficiency. Meanwhile, the presence of a separate chairman on the board does not appear to be significantly associated with labour investment efficiency. In additional subgroup analyses, the authors find that board gender diversity mitigates managers’ inclinations towards both overinvestment and underinvestment in labour. The authors also find that the level of independent directors helps greatly in reducing the underinvestment in labour, while it fails to attenuate the overinvestment in labour. Moreover, the authors find board size to be significantly associated with the tendency to make suboptimal labour decisions, manifesting as both overinvestment and underinvestment in labour. Finally, the results show that board meetings are significantly associated with overinvestment problems, while underinvestment problems seem to be unrelated to meeting frequency.

The empirical results have implications for policymakers and market participants in Europe. Firstly, firms may improve the efficiency of their labour investments by increasing directors’ independence and adding more female voices to corporate boards. Secondly, the evidence shows that some board attributes, such as board activity and size, do not necessarily have a beneficial impact on corporate decisions, particularly labour investment decisions. Finally, market participants are likely to benefit from this paper by understanding the role of board attributes in promoting the efficient allocation of firm resources.

This paper makes two significant contributions. Firstly, it extends the literature on the role of boards of directors in shaping corporate decision-making processes, particularly concerning human capital investment decisions within European firms. By doing so, the authors provide new evidence confirming that certain board attributes, such as board size, director independence and board gender diversity, are important for optimising firms’ resource allocation. Secondly, although numerous studies investigate boards’ role in capital investment decisions, relatively few empirical studies exist on the role of boards in labour investment decisions. This paper, therefore, tries to tackle this void in the literature by investigating firms’ decision-making concerning labour investments.

Political‐legal risk perception is just as important a consideration in dealing effectively with the threats exposed by international enterprises. This research emphasizes how important it is to integrate the perception of risk factor into the analysis. This is an essential factor when catastrophic risks are involved. Relatively, nevertheless, little work has been done to explore the concept of political‐legal risk as it applies to international commercial and business applications. The purpose of this research is to first examine the perception of Kuwaiti executives to political‐legal business environment while conducting outward investment and where a number of recent events like those in Tunisia, Egypt, Libya and Yemen illustrate that the rise of enterprises onto the world stage will not necessarily be entirely without risk and second, to explore the correlations between the executives' perceptions of political‐legal variables and enterprise‐specific characteristics.

A review of the literature relating to risk in international business in both developed and emerging markets is provided. The empirical research was conducted via a questionnaire survey. In line with the research aim, questionnaires were distributed to the entire target population of Kuwaiti international enterprises. Nonparametric statistics were used to analyze the findings.

The Middle East and North Africa (MENA) region has been shaken like never before. The recent events of the uprising in Tunisia, Egypt, Yemen and Libya and the regional reverberations of the upheaval are unfolding, inter alia, concerns about rising exposure to more risks and the instability in the MENA have reached a fever pitch. Findings of this research suggest that the political‐legal related risks associated with enterprises' activities pose a threat to the majority of executives and the vulnerability to these risks are not related to any enterprise's‐specific characteristics.

The research on international enterprises states that some parts of the globe have remained detached. Given its economic and political importance, the most obvious omission is the Middle East. To date and despite that the region has garnered its fair share of coverage in current news, little is known on management practices by enterprise in the region. This research, therefore, provides empirical evidence of executives' perception of political‐legal business environment in an emerging market context: Kuwait. Furthermore, most recent literature omits oil‐producing nations. Focusing on this oil‐rich region is an attempt to fill this void.