Ownership structure, board characteristics, and tax aggressiveness

Tax aggressiveness, as commonly proxied by the effective tax rate (ETR), measures a firm’s effort spent on minimizing its tax payments. It is suggested that more tax aggressive firms have greater incentives to allocate resources to minimize taxes and thus have lower ETRs. Corporate governance has been continuously receiving attention in literature across different fields and can affect a firm’s tax strategy through its control mechanism. This thesis investigates how corporate governance influences a firm’s tax aggressiveness. The main hypothesis of this thesis is whether firms with good corporate governance will have less incentives and opportunities to manage tax aggressively. Specifically, I take advantages of the distinct institutional settings in China to study whether the Chinese firm’s tax aggressiveness is affected by ownership structure and the characteristics of board of directors. Using all non-financial listed companies in the Chinese A-share market during 2003 and 2009 period, I find that firms with state-controlled nature and lower proportion of controlling shares pursue less aggressive tax strategies and maintain higher ETRs. In addition, my finding is consistent with prior literature that a higher percentage of the boards’ shareholdings and dual service duties performed by the board chairman result in lower ETRs. However, I do not find a significant relationship between the percentage of independent directors and tax aggressiveness which may suggest the ineffective role of independent directors in China

Boards of directors as an endogenously determined institution: a survey of the economic literature

The authors identify the primary findings of the empirical literature on boards of directors. Typically, these studies have sought to answer one of the following questions: How are the characteristics of the board related to profitability? How do these characteristics affect boards' observable actions? What factors affect board makeup and evolution? Across these studies, a number of regularities have emerged - notably, the fact that board composition does not seem to predict corporate performance, while board size has a negative relationship to performance. The authors note, however, that because there has been little theory to accompany these studies, it is difficult to interpret the empirical results, particularly with respect to possible policy prescriptions.Corporate governance ; Corporate profits

Director Characteristics and Firm Performance

The traditional methodology examining optimal boards relates a simple board variable� (e.g., independence or board demography) to firm performance, however, ig- noring other board characteristics.� This paper investigates how the education and business� experience of directors affect firm� performance. The sample consists of 1,574 directorships from 224 listed firms� in Switzerland.� Using� OLS� and including control variables, the results show that graduates of minor Swiss universities are negatively related to Tobin’s Q, and industrial knowledge and Tobin’s Q are nega- tively� correlated if the firm� has more divisions.�� In� addition, director fixed effects (or unobserved characteristics) are significant, but improve the explanatory power of the models only by 5 percent.Corporate governance: Board of directors; Director characteristics, Education and business experience

The Effect of Board Structure on Bidder-Shareholders' Wealth: Further Evidence from the UK Bidding Firms

In this study we provide evidence of cross-sectional dependence of bidder-shareholder wealth and target’s board characteristics. More specifically we provide evidence that the percentage of non-executives, the board size, the stock holdings of executives, and the other directorships held by non-executives serving the target board are important in assessing the announcement of the bid, whereas in the bidder’s board only the percentage of non-executive directors is important for bidder-shareholders. In addition to that we provide evidence that some of these relationships are not monotonic in nature. Finally, in this study it is documented that bidder-shareholder wealth is favoured in acquisitions where bidders have marginally more executive than non-executive directors in their boards and therefore the question arises as to whether “dependent” boards are more efficient than “independent” ones.Takeovers, Board Characteristics, Corporate Governance, Shareholder-wealth

Board structure, Ownership structure, and Firm performance : Evidence from Banking

This paper examines the interrelations among five ownership and board characteristics in a sample of 260 bank and savings-and-loan holding companies. These governance characteristics, designed to reduce agency problems between shareholders and managers, are insider ownership, blockholder ownership, the proportion of outside directors, board leadership structure, and board size. Using two-stage least squares regressions, we present evidence of interdependencies between board and ownership structures. The results suggest that banks substitute between governance mechanisms that align the interests of managers and shareholders. These findings suggest that cross-sectional OLS regressions of bank performance on single governance mechanisms may be misleading. Indeed, we find statistically significant relationships between performance and insider ownership and blockholder ownership when using OLS regressions. However, these statistically significant relationships disappear when the simultaneous equations framework is used. Together, these findings are consistent with optimal use of each governance mechanism by banks.Corporate governance ; board structure ; ownership structure ; performance ; banking ; simultaneous equations

Dundee Discussion Papers in Economics 228:A soft edge target zone model: theory and application to Hong Kong

Hong Kong’s currency is pegged to the US dollar in a currency board arrangement. In autumn 2003,the Hong Kong dollar appreciated from close to 7.80 per US dollar to 7.70, as investors feared that the currency board would be abandoned. In the wake of this appreciation, the monetary authorities revamped the one-sided currency board mechanism into a symmetric two-sided system with a narrow exchange rate band. This paper reviews the characteristics of the new currency board arrangement and embeds a theoretical soft edge target zone model typifying many intermediate regimes, to explain the notable achievement of speculative peace and credibility since May 2005

Bank liquidity and the board of directors

This short paper presents the first attempt to examine empirically the relationship between the level of bank liquidity and the structure of the board of directors, in terms of board size and independence. A novel database on these board characteristics is built that includes banks operating in 10 OECD countries during the period 2000-2006. We find a negative relationship between board size and liquidity, while the impact of board independence is U-shaped. Therefore, we contend that considerations linked to these effects can have interesting implications for the design of bank conduct and for the quality of bank portfolios.Banks; Board size and independence; Liquidity risk

A survey of the marine environment near the city of Monterey ocean outfall

The California Department of Fish and Game and the State Water Resources Control Board (through Regional Board #3, Central Coast) entered into an agreement whereby Department biologist-divers conducted a subtidal ecological investigation of the marine environment in the vicinity of the City of Monterey ocean outfall. The objective of the study was to provide the Regional Water Quality Control Board with data to assist them in evaluating the effects of the discharge on the marine environment. The determinations made by biologist-divers included: (i) the number and diversity of the plant and animal life; (ii) substrate characteristics; and (iii) physical parameters, including water temperature, dissolved oxygen levels and clarity. Additionally, benthic samples were obtained by the divers and/or by a Ponar grab at each station. The State Water Resources Control Board reimbursed the Department for part of the expenses incurred during this study. (27pp.

Board Characteristics and Corporate Performance in the Netherlands

We analyze the performance-board characteristic nexus of Dutch listed firms. The Netherlands has a continental-European two-tier board structure. This makes it interesting to analyze the impact of management and supervisory board characteristics (size, composition and remuneration) on corporate performance. In Dutch corporate governance, the supervisory board plays a role in (anti-) investor protection. Subsequently, both board size and composition are variables that reflect corporate decision-making. In order to deal with this endogeneity problem, we use governance indicators such as (anti-) investor protection to endogenize board variables. Our results reveal that the size of the management board is not affecting corporate performance. We find support for a negative relationship between the supervisory board size and firm performance. Moreover, we observe a negative relationship between the proportion of supervisory board members with network ties to other organizations and performance.Corporate Governance; Firm; Firms; Governance; Management