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Corporate boards and ownership structure: Evidence from Sub-Saharan Africa

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  • Munisi, Gibson
  • Hermes, Niels
  • Randøy, Trond

Abstract

This study examines the relationship between board structure and ownership structure for firms listed on the stock exchanges of twelve Sub-Saharan African countries, using data for the period 2006–2009. We find that ownership concentration, foreign ownership and managerial ownership are negatively associated with board size. We also find that government ownership is positively associated with the proportion of outside directors while ownership concentration is negatively associated with the proportion of outside directors. These results emphasize that board and ownership structure are both corporate governance mechanisms that are used as substitutes to one another in reducing agency problems.

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  • Munisi, Gibson & Hermes, Niels & Randøy, Trond, 2014. "Corporate boards and ownership structure: Evidence from Sub-Saharan Africa," International Business Review, Elsevier, vol. 23(4), pages 785-796.
    • Handle: RePEc:eee:iburev:v:23:y:2014:i:4:p:785-796
    DOI: 10.1016/j.ibusrev.2013.12.001
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    Cited by:

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    6. Hearn, Bruce, 2015. "Institutional influences on board composition of international joint venture firms listing on emerging stock exchanges: Evidence from Africa," Journal of World Business, Elsevier, vol. 50(1), pages 205-219.
    7. Ayman Hassan Bazhair & Mohammed Naif Alshareef, 2022. "Dynamic relationship between ownership structure and financial performance: a Saudi experience," Cogent Business & Management, Taylor & Francis Journals, vol. 9(1), pages 2098636-209, December.
    8. Chauhan, Yogesh & Dey, Dipanjan Kumar & Jha, Rajneesh Ranjan, 2016. "Board structure, controlling ownership, and business groups: Evidence from India," Emerging Markets Review, Elsevier, vol. 27(C), pages 63-83.
    9. Hamdan Amer Al-Jaifi & Ahmed Hussein Al-rassas & Adel Ali AL-Qadasi, 2017. "Corporate governance strength and stock market liquidity in Malaysia," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 13(5), pages 592-610, August.
    10. Debmalya Mukherjee & Saumyaranjan Sahoo & Satish Kumar, 2023. "Two Decades of International Business and International Management Scholarship on Africa: A Review and Future Directions," Management International Review, Springer, vol. 63(6), pages 863-909, December.
    11. Nguyen, Tuan & Locke, Stuart & Reddy, Krishna, 2015. "Ownership concentration and corporate performance from a dynamic perspective: Does national governance quality matter?," International Review of Financial Analysis, Elsevier, vol. 41(C), pages 148-161.
    12. Ryan Federo & Yuliya Ponomareva & Ruth V. Aguilera & Angel Saz‐Carranza & Carlos Losada, 2020. "Bringing owners back on board: A review of the role of ownership type in board governance," Corporate Governance: An International Review, Wiley Blackwell, vol. 28(6), pages 348-371, November.
    13. Mohsen Tavakoli Shandiz & Farzaneh Nassir Zadeh & Davood Askarany, 2022. "The Interactive Effect of Ownership Structure on the Relationship between Annual Board Report Readability and Stock Price Crash Risk," JRFM, MDPI, vol. 15(6), pages 1-17, June.
    14. Schmid, Stefan & Roedder, Felix, 2021. "Gaijin invasion? A resource dependence perspective on foreign ownership and foreign directors," International Business Review, Elsevier, vol. 30(6).
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    17. Yahya Uthman Abdullahi & Magajiya Tanko, 2020. "Firm Performance, Corporate Governance Mechanisms and CEO Turnover: Evidence from Nigeria," Applied Finance and Accounting, Redfame publishing, vol. 6(1), pages 66-78, February.

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    More about this item

    Keywords

    Corporate governance; Ownership structure; Board structure; Sub-Saharan Africa;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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