Search Results (15)

For listed companies, board diversity is often associated with improved decision-making, sustainability and financial performance. However, prior studies have neglected the interplay between board diversity and executive remuneration, especially in developing countries, over extended time horizons, and at the level of individual executives. This study addressed this gap by examining the evolution of board diversity and executive remuneration in South African listed companies from 2002 to 2017. Specifically, it investigated trends in board diversity and the determinants of executive remuneration, with particular attention to gender and ethnic pay gaps. Descriptive and regression analyses were conducted on a dataset comprising 8835 executive-level observations. Findings reveal a steady increase in female and non-white executive representation, possibly to align with societal expectations and remain legitimate. However, persistent gender and ethnic pay gaps were also noted, which might indicate that white and/or male executives are more entrenched and able to extract additional remuneration in line with the managerial power theory. The study contributes to the literature by documenting long-term trends in diversity and remuneration, providing empirical evidence on the influence of demographic attributes on remuneration outcomes, and offering insights for regulators, investors and non-executive directors seeking to advance equity and effective governance. Full article

Grounded in stakeholder and social categorisation theories, this study addresses the limited European evidence regarding how board composition and functioning drive corporate equality—a multidimensional construct encompassing diversity, inclusion and people development. We examined the effects of seven board characteristics—gender diversity, the proportion of non-executive directors, tenure, size, cultural diversity, meeting attendance and remuneration structure—corporate equality and its three constituent pillars. Our analysis drew on a panel of 1797 firm–year observations from the Euro Stoxx 300 (2012–2023), extracted from Refinitiv Eikon, using OLS, fixed-effects and random-effects models selected via the Hausman test and AIC/BIC criteria, with firm-level controls and year- and industry-fixed effects. The results demonstrate that gender diversity, non-executive participation and regular meeting attendance are positively associated with corporate equality, particularly its diversity and inclusion dimensions, whilst tenure has no significant effect. Board size affects only people development; cultural diversity enhances the diversity pillar but diminishes the people development pillar; and remuneration schemes are negatively associated with overall equality. The principal contribution involves operationalising ‘corporate equality’ as a multidimensional construct within the European context and identifying differential effects across pillars. These findings offer practical guidance for regulators and organisations seeking to align board composition and governance practices with inclusion objectives, emphasising the importance of gender diversity, independent directors, consistent meeting participation and remuneration policies aligned with social objectives. Full article

The growing presence of women at the top of companies has sparked interest in examining their role in the remuneration gap between senior managers and employees. This article analyses the traditional Chief Executive Officer (CEO)-to-employee pay ratio but includes a new relation, the senior-management-to-employee pay ratio, and extends the research by including six positions for women in company management: on the board of directors, executive directors, CEOs, proprietary directors, independent directors, and senior managers. The study is based on a sample of 77 listed companies in Spain from 2015 to 2022 and the panel data models have been estimated using the Generalised Method of Moments (GMM). The main findings indicate that the proportion of women in different categories of board and senior management positions has a positive effect on the CEO-to-employee pay ratio, especially in companies with higher market capitalisation. In contrast, the proportion of women in senior management positions has a negative effect on the CEO-to-employee pay ratio in all the samples analysed. Government agencies should prioritise the participation of women in non-board senior management positions in order to at least reduce the pay gap between senior managers and employees. Full article

The purpose of this study was to examine the key determinants of corporate governance in selected financial institutions. Using South African financial institutions as a unit of analysis, namely insurance companies and banks, the study employed a panel generalised method of moments (GMM) model using a data set for the period from 2007 to 2020, to assess key determinants of corporate governance proxies identified for the study. The study sampled 21 South African financial institutions composed of Johannesburg Securities Exchange (JSE) listed and unlisted banks and insurance companies. To measure corporate governance, the study developed a composite index employing the principal components analysis (PCA) method. The findings revealed a positive and significant association between the corporate governance index and its lagged variables. Furthermore, a significant and positive link was found between the efficiency ratio and corporate governance index and capital adequacy ratio (CAR); corporate governance index and firm size; corporate governance index and leverage ratio (LEV); and corporate governance index and return on assets (ROA). However, a negative and significant correlation was found between financial stability and the corporate governance index. The link between return on equity (ROE) and corporate governance was insignificant. A small cohort of financial institutions was excluded because it was challenging to obtain complete annual reports to extract the required data. The study was limited to only five corporate governance measures, namely board diversity, board size, board composition (independent non-executive directors and non-executive directors), and board remuneration. The findings are anticipated to persuade developing countries to pay special attention to how corporate governance is measured. Full article

This study investigates the association between the compensation of Remuneration Committee Chairpersons (RCCs) and their characteristics. Utilizing data from firms listed on the UK FTSE350 index between 2010 and 2020, the research unveils that RCC remuneration is influenced by factors such as observable efforts, time commitment, and accumulated experience. Notably, the analysis reveals a substantial gender gap in RCCs’ pay. The results suggest that the contractual pricing of individual director-level attributes plays a role in explaining disparities in compensation for roles with similar responsibilities. Furthermore, the study sheds light on the intricate process of determining compensation within the directorial hierarchy. It delves into how differences in pay among individuals occupying similar positions across various companies can be elucidated by the distinct attributes and qualifications of each individual. Ultimately, the findings advocate for a nuanced examination of directorial roles, highlighting the necessity of distinguishing between different director roles rather than treating them as a homogeneous entity. Full article

This study draws on agency theory and evaluates the effect of the remuneration structures of board members on earnings management, proxied by discretionary accruals. To achieve the objective, this study uses a multiple regression model and a hand-collected dataset of Portuguese-listed firms from 2015 to 2019. This study suggests that fixed board remuneration is associated with lower levels of earnings management, as opposed to variable remuneration of board members, which is strongly associated with a higher level of earnings management. The findings based on this study provide useful information to investors and regulators in evaluating the effect of board compensation structure on earnings management. Additionally, this study expands the corporate governance literature by examining an under-researched mechanism to address the agency problem. Full article

This study analyzes the influence of CEO types on corporate governance, focusing on de facto (substantial) CEOs. We examine how substantial CEOs impact environmental, social, and governance (ESG) activities (Hypothesis 1) and corporate value (Hypothesis 2). Data were collected from KIS-VALUE and DART (Electronic Disclosure System) from the Financial Supervisory Service, defining substantial CEOs as the highest remuneration recipients who exceed the pay of the company’s representative director. The results support Hypothesis 1, showing that companies with substantial CEOs are more likely to engage in ESG activities, potentially to improve public image while concealing self-serving behaviors. Hypothesis 2 is validated, indicating lower corporate value in companies with substantial CEOs, owing to the prioritization of personal interests over long-term profit maximization. Despite the limitations of exploring governance relationships beyond remuneration data, this study offers key contributions. It expands the research on corporate governance and ESG activities by identifying substantial CEOs through objective remuneration data. Additionally, it highlights the importance of an independent board for transparent governance and positive corporate value. Lastly, the empirical evidence shows the negative impact of misdirected ESG activities on corporate value. Using remuneration as an indicator, this study illuminates substantial CEOs’ influences on corporate value and ESG activities, providing insights for future research in this area. Full article

The quantity of teleworkers had already been rising in various work fields even prior to the COVID-19 pandemic. However, it was not until the pandemic that it spread to other sectors such as the industrial sector. There are still few studies looking at telework’s impact on this important sector. This article is intended to discuss: (1) the extent of teleworking in manufacturing, (2) its adjustment to the industrial sector (challenges and benefits), and (3) its prospects for the future. To this end, 31 in-depth interviews have been conducted with four Plant Managers and seven Human Resource Directors of 11 industrial companies in Burgos (Spain) and surroundings, as well as 20 of their workers. Pre-pandemic teleworking was only active in one of the enterprises and now there are workers that work remotely in 9 out of 11. All interviewees agreed that teleworking will gradually expand. The study shows concerns and challenges when it comes to communication, trust, control, and productivity. It highlights the importance of establishing clear policies on teleworking and how to deal with remuneration, expense reimbursements, and equity between teleworkers and on-site workers. Overall, industrial-sector teleworking has brought positive results in terms of productivity and job satisfaction levels, but it has also resulted in new demands on aspects such as ergonomics, negative habits (food and physical inactivity), communication, and work–life balance. Full article

This study aims to understand the impact of the additional remuneration of the Chief Executive Officer (CEO) over the mean remuneration of the board of directors on firms’ financial performance. The objective is to understand if the highest compensation of the CEO is a firm performance driver. In addition to the impact of total remuneration, the different remuneration components were split and analyzed. An unbalanced panel data of listed companies in DAX–Germany over the period from 2006 until 2019 is analyzed. Using dynamic methodology to estimate the models, the results show that higher additional remuneration positively explains higher firm performance measured using both accounting and market measures. The impact is also evident when additional remuneration components are analyzed. These results support the tournament theory, since when CEOs feel rewarded, they are more efficient in increasing the firm’s performance. Moreover, the firms’ financial characteristics, as well as macroeconomic factors, are also relevant to explaining its performance. Full article

Integrated reporting (IR) is the latest topic in corporate reporting that has raised interest in the disclosure literature. Although the board’s role in IR practice has received significant attention in developed countries, this effect is still unexamined in an emerging market like Malaysia. Thus, this study sought to fill this gap in the IR literature by investigating the impact of the board of directors’ characteristics on the quantity and quality of IR disclosure. The study also examined whether the existence of a sustainability committee affects the board-IR relationship. The study used all listed companies in Bursa Malaysia that applied IR strategy from 2017 to 2020 to test the hypotheses. It employed a content analysis technique to measure the quantity and quality of IR using an index with 100 items based on the International Integrated Reporting Council guidelines. Multivariate ordinary least squares (OLS) regression was applied to examine these relationships. The analysis showed that board size, independence, gender diversity, and non-executive remuneration were positively and significantly related to greater IR disclosure, suggesting that the board of directors has a monitoring role in reducing agency problems and protecting stakeholders’ interests. However, multiple directorships did not affect IR disclosure. The analysis also showed that the presence of a sustainability committee positively affected IR disclosure, and had a moderating effect on the board-IR disclosure relationship. Our result was robust to alternative measures of the corporate board and an alternative regression model. This study is among the first to provide empirical evidence of the board and sustainability committee’s significant role in enhancing IR strategy. The findings may benefit regulatory bodies, policymakers, company managers, investors, and researchers in better understanding how directors’ characteristics influence companies’ IR practices. Full article

The main goal of this study is to analyze whether the existence of remuneration committees tend to disclose more corporate social responsibility (CSR) information. In addition, we test the moderating role played by the proportion of independent directors on boards of directors with the relationship between the constitution of remuneration committees and CSR disclosure. Previous research does not appear to have addressed these questions. The research questions proposed are tested using an international sample of 28,610 listed companies, and we took into consideration information on industrial companies from the Middle East, developed Asian and Pacific countries, both emerging and developed European countries, Africa, Latin America and North America. These findings provide evidence that the existence of remuneration committees is more likely to disclose CSR information, and the existence of independent board members positively moderates the association between the existence of remuneration committees and CSR disclosure. We expand on earlier empirical literature concerning corporate governance and CSR issues. Full article

Most of the empirical studies on board remuneration have focused on finding explanatory performance measures. There are studies that analyze if the compensation contracts of directors reward managers in such a way that they strive to maximize firm performance and shareholders’ wealth; however, there are few studies on the social aspect of corporate governance, or agent–employee and principal–employee relationships. Thus, in this study, our aim is to test whether there is a causal relationship between the remuneration of the board of directors of listed companies and the personnel policies of the companies, expressed through the cost of personnel and layoffs. For that, we used a sample of Spanish listed companies, and we found that two performance measures (return on equity and earnings per share on market price) have a greater effect on the growth rate of board remuneration when layoffs occur. Additionally, we found that the sales revenue and cash flow on total assets subsequently influenced personnel management. Full article

This article empirically examines the connection between the board of directors’ characteristics and excesses in remuneration for directors from a sustainability perspective, highlighting the role of information transparency on remuneration control. Using data from 73 listed companies in the period 2007–2012 (the global financial crisis), we find that (1) board size presents a non-linear relationship with excessive total directors’ remuneration during the crisis period; (2) other board characteristics (board independence, duality and directors’ ownership) do not show a significant relationship with excessive directors´ remuneration; and (3) voluntary transparency on directors’ remuneration significantly contributes to controlling excessive total directors’ remuneration, which contributes to the long-term sustainability of the firm. The results of this study provide good reasons to take into account the effect of corporate governance characteristics and transparency on the remuneration excesses committed during the global financial crisis. Full article

To enhance the understanding of psychosocial factors and extend research on work stress interventions, we investigated the key human resource (HR)/occupational health and safety (OHS) stress interventions implemented at five Australian universities over a three-year period. Five senior HR Directors completed an online survey to identify the intervention strategies taken at their university in order to reduce stress and enhance employee well-being and morale. We also explored the types of individual-, organization-, and individual/organization-directed interventions that were implemented, and the strategies that were prioritized at each university. Across universities, the dominant interventions were strategies that aimed to balance the social exchange in the work contract between employee-organization with an emphasis on initiatives to: enhance training, career development and promotional opportunities; improve remuneration and recognition practices; and to enhance the fairness of organizational policies and procedures. Strategies to improve work-life balance were also prominent. The interventions implemented were predominantly proactive (primary) strategies focused at the organizational level and aimed at eliminating or reducing or altering work stressors. The findings contribute to the improved management of people at work by identifying university-specific HR/OHS initiatives, specifically leadership development and management skills programs which were identified as priorities at three universities. Full article

In this study, we examine whether the levels and structures of top executive compensation vary discernibly with different levels of board independence. We also examine how the newly mandated adoption of the remuneration committee (RC) in Taiwan affects the board independence-executive pay relation. The mandatory establishment of RC for Taiwanese public firms, starting in 2011, is intended to strengthen the reasonableness and effectiveness of the executive compensation structure; thus, it is timely and of interest for practitioners and regulators to understand whether the establishment of RCs can effectively discipline top executive compensation policies. We first find that CEOs of firms that do not appoint independent directors have greater levels of annual pay than is the case for firms that have appointed independent directors, after controlling for the effect of CEO pay determinants. Second, we find that CEO pay for early RC adopters is more closely related to firm performance. Third, we find that the establishing of RCs may decrease CEO pay and enhance the pay-performance association, in particular for firms that have not appointed independent directors; however, this effect is not found to be statistically significant. Full article