Board Committees

Corporate governance in the marketplace is an extremely important source of comfort and confidence among investors and organizations. A key player in setting a corporate governance framework is the “Board of Directors” and subsequently its corresponding committees. The board may include executive and non-executive directors and can be in the form of a unitary or two-tier board. However, many ethical issues poses a real threat to the board and its sound operations and therefore stems the need for corporate governance acts.

Several roles and activities have been taken by the board of directors in relation to setting a governance framework in the business environment. A small summary of such acts would include communication with executives on shareholders’ interests on a regular basis, setting business strategies in line with shareholders’ interests, ensuring compliance with best practices, risk identification and acts promoted to address such risk factors and finally maintaining integrity in relationships with the supply chain and customers’ base.

In addition to the direct roles of the board of directors, the subsequent board committees also have a role in the framework setting of corporate governance. Such roles would include developing and recommending to the board corporate governance principals, annual evaluation of CEO performance, evaluating and approve programs that are relevant to corporate governance best practices, overseeing processes of disclosure and their compliance with international and local regulations and finally insuring the integrity of the listed company’s financials.

This study sought to examine the relationships among board activities and performance of firms listed at the Nairobi Securities Exchange. This study used a census approach and a target population of the study comprised of all companies listed at the Nairobi Securities Exchange between 2002 and 2016. A total of sixty five (65) companies were listed at the Nairobi Securities Exchange as at 31 st December 2016. The data on board activities and performance of firms were extracted from annual reports of the individuals firms. This study employed longitudinal descriptive research design to determine relationships amongst board activities and performance of firms. A panel data regression analysis was conducted using random effects model which allowed the companies to have a common mean value of the intercept to determine whether corporate governance influence firm performance. An increasing trend was observed in other board activities variables such board ownership, board meetings, board tools, board committees and number of committees meetings. The study findings on the other hand revealed reducing trend in board tenure and board remuneration of listed firms Kenya. This was inferred to indicate that listed firms in Kenya have been strengthening their corporate governance over the study period. Regression analysis indicated that board activities are insignificant predators of Return on Assets, However board tenure, committees meetings and board remuneration were found to have a positive but insignificant effect on Tobin's Q among listed firms in Kenya. Board ownership board tools, board meetings and number board committees were found to have negatively affected the performance measured by Tobin's Q in listed firms in Kenya. However, only board tools significantly affected the performance measured by Tobin's Q. The study concluded that listed firms in Kenya adopted corporate governance practices as part of the requirements of the regulating authority which had not impact on the specific company's

This paper investigates whether Internet Financial Disclosure (IFD) can be
explained by the elements of the company’s characteristics and dominant
personalities in board committ ees. Ten variables have been tested using
data collected from 194 Malaysian listed companies’ websites, namely,
internationality, leverage, foreign shareholders, information technology
(IT) experts, fi rm’s age, number of shareholders, listing status, dominant
personalities in the audit committ ee, chairman of audit and nomination
committ ees, and dominant personalities in the audit and nomination
committ ees. It is found that IT experts, fi rm’s age, number of shareholders
and listing status are signifi cantly aff ected by the level of IFD. However
dominant personalities in the audit and nomination committ ees are
negatively related to the level of IFD in Malaysia. The study provides some
evidence to support the signalling theory and the cost and benefi t hypothesis
in relation to Internet disclosure.

Many directors and boards struggle to understand the multiple and inter-related challenges, opportunities, possibilities, developments, trends and unexpected events of our contemporary world. This raises the questions of: whether we have unrealistic expectations of what can be achieved by a relatively small group of very similar people selected in a previous era and who may periodically meet for a relatively short time to consider agenda items set out in an annual calendar of meetings and topics of which they often have limited knowledge and experience; and whether we may have reached the limits of the ability of our current approaches to corporate governance to meet stakeholder requirements, unless new models and practices are adopted and better support is provided. To encourage discussion and  thinking about options, possibilities and priorities, this Theme Paper poses a series of questions for intending participants to consider ahead of the 2019 London Global Convention on Corporate Governance and Sustainability.

Questions are posed in relation to the current status of corporate governance; the evolution and future of corporate boards and board committees; sustainability and sustainable development; diversity in relationships, approaches, business models, memberships and perspectives, and in various functional, project and other groups, including corporate boards; digital and environmental governance; navigating risks and opportunities in a volatile world and achieving desired next steps. The 19th London Global Convention on Corporate Governance and Sustainability is organised by India’s Institute of Directors (http://www.iodglobal.com/). Further information on the convention can be obtained from: https://iodglobal.com/london-global-convention-2019.html

Published as: Coulson-Thomas, Colin (2019), [19th London Global Convention on
Corporate Governance and Sustainability] Board’s Opportunities and Challenges for Corporate Governance and Sustainability, www.iodglobal.com, https://iodglobal.com/images/lgc2019/theme-paper.pdf,13th May

This paper investigates whether Internet Financial Disclosure (IFD) can be explained by the elements of the company’s characteristics and dominant personalities in board committees. Ten variables have been tested using data collected from 194 Malaysian listed companies’ websites, namely, internationality, leverage, foreign shareholders, information technology (IT) experts, firm’s age, number of shareholders, listing status, dominant personalities in the audit committee, chairman of audit and nomination committees, and dominant personalities in the audit and nomination committees. It is found that IT experts, firm’s age, number of shareholders and listing status are significantly affected by the level of IFD. However dominant personalities in the audit and nomination committees are negatively related to the level of IFD in Malaysia. The study provides some evidence to support the signaling theory and the cost and benefit hypothesis in relation to Internet disclosure.   Keywords: Dete...

Presentations and discussion at the 16th Global Convention on Governance and Sustainability suggests a desire of the corporate leaders present to put a higher priority upon better addressing the requirements of stakeholders other than shareholders. Achieving this might require changes of corporate purpose, governance arrangements and leadership criteria. Recent investigations of adoptions of performance support suggest that it is possible to simultaneously deliver multiple objectives and deliver benefits to a wider range of stakeholders as well as furthering the interests of shareholders. Revised corporate ends could be matched by developments in the means to achieve them. This raises the possibility of businesses, regulators, governments and public bodies working more closely together to pursue shared aims and create economies and build companies that increasingly work for all rather than just the few. Such a shift of emphasis could help to dispel cynicism and reduce mistrust  of business leaders and usher in a new era of collaborative capitalism.

An overview of current issues and questions for directors and boards in relation to governance and sustainability. Explores the consequences, implications and relevance of contemporary approaches and possible future scenarios. Published in a book of papers to coincide with the 16th London Global Convention on Governance and Sustainability as: Coulson-Thomas, Colin (2016), Governance, Sustainability and Contemporary Boards, in Ahluwalia J. S. (Editor), Boards Evolving Role in an uncertain Global Economy, London, IOD Publishing, 15th October, pp 54-65 [ISBN: 978-81-932503-9-6]

Explores the future of governance and the future role and practice of directors and boards in the light of trends and changing requirements and questions the sustainability of current approaches to governance based upon particular responses to issues in certain jurisdictions in what now seems an increasingly remote age in relation to new forms of organisations and changing ways of obtaining  finance. Also raises questions about the contribution of boards to sustainability and innovation. Written to encourage debate ahead of the 16th London Global Convention on Governance and Sustainability and published as: Coulson-Thomas, Colin (2016), Governance for Sustainability and the Sustainability of Governance,  Director Today, Vol. II Issue VIlI, August, pp 41-45  Also published and available as the Theme Paper for this convention.

We use the special case of Finland to analyze the role of nomination committees on board diversity and composition.  We compare board diversity in two types of firms: firms with a nomination committee composed of board members, and firms where the (usually three) largest shareholders choose a group of outside experts to select director candidates. We find that firms with an external nomination board (composed by a group of external experts) have, on average, more female directors on their boards,  but have less international diversity and less diversity in terms of dispersion of age and time on board of their directors.  However, most of these differences become non significant when the voting rights of largest shareholders are included in the regression analysis.  Controlling for ownership, governance and firm characteristics, only differences in international  diversity persist. We do not find significant differences in terms of boad size, board independependence, or average age of board members. Our results suggest that- once ownership structure is taken into account- the procedure to select director candidates has a limited impact on the final board composition or diversity.

This study sought to examine the relationships among board activities and performance of firms listed at the Nairobi Securities Exchange. This study used a census approach and a target population of the study comprised of all companies listed at the Nairobi Securities Exchange between 2002 and 2016. A total of sixty five (65) companies were listed at the Nairobi Securities Exchange as at 31st December 2016. The data on board activities and performance of firms were extracted from annual reports of the individuals firms. This study employed longitudinal descriptive research design to determine relationships amongst board activities and performance of firms. A panel data regression analysis was conducted using random effects model which allowed the companies to have a common mean value of the intercept to determine whether corporate governance influence firm performance. An increasing trend was observed in other board activities variables such board ownership, board meetings, board to...