Top management team and board attributes and firm performance in the Netherlands

We survey the evidence on the relationship between board and top management team attributes and firm performance in the Netherlands (sample of 94 listed firms). To this aim we develop hypotheses by using sources from the strategic management and the corporate governance literature. Dutch corporations generally have a two-tier board system. We use the size of the top management team (TMT) and their average age as well as the size of the supervisory board (RVC) and the percentage of outside members as attributes of corporate performance. Our base model consists of two performance indicators: a composite financial accounting measure (of ROA, ROS, and ROE) and a market- based indicator (standardized stock prize increase). Control variables are: log of total assets as an indicator of the size of a firm, leverage and adjusted cash flow/total assets as indicators of financial structure, coefficients of variation of sales and ROA as measures of environmental uncertainty (dynamics), and diversification as a measure of risk-spread. In general, we conclude for the year 1996, that by using the base model, direct linear and non-linear relationships between the TMT/board variables and performance are not existent. Also, the interaction effects with environmental dynamics as a moderating variable are tested. From this analysis it becomes evident that, although environmental uncertainty has a clear direct relationship with performance, it has no significance as a moderating variable. Only in one case the interaction with size of the board leads to a significant result. Indicating (instead of the hypothesized inverted U-shaped relationship) a U-shaped relationship between RVC and performance.

Top management team and board attributes and firm performance in the Netherlands

We survey the evidence on the relationship between board and top management team attributes and firm performance in the Netherlands (sample of 94 listed firms). To this aim we develop hypotheses by using sources from the strategic management and the corporate governance literature. Dutch corporations generally have a two-tier board system. We use the size of the top management team (TMT) and their average age as well as the size of the supervisory board (RVC) and the percentage of outside members as attributes of corporate performance. Our base model consists of two performance indicators: a composite financial accounting measure (of ROA, ROS, and ROE) and a market- based indicator (standardized stock prize increase). Control variables are: log of total assets as an indicator of the size of a firm, leverage and adjusted cash flow/total assets as indicators of financial structure, coefficients of variation of sales and ROA as measures of environmental uncertainty (dynamics), and diversification as a measure of risk-spread. In general, we conclude for the year 1996, that by using the base model, direct linear and non-linear relationships between the TMT/board variables and performance are not existent. Also, the interaction effects with environmental dynamics as a moderating variable are tested. From this analysis it becomes evident that, although environmental uncertainty has a clear direct relationship with performance, it has no significance as a moderating variable. Only in one case the interaction with size of the board leads to a significant result. Indicating (instead of the hypothesized inverted U-shaped relationship) a U-shaped relationship between RVC and performance.

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

Firm Performance, Financial Institutions and Corporate Governance in the Netherlands

This paper analyses the impact of share ownership, creditorship and networking by financial institutions on the performance of 94 Dutch non-financial firms in the period 1992-1996. We find a nonlinear relationship between firm performance and ownership by banks. Because of various defense mechanisms the role of the shareholder is very limited in the Netherlands. Financial institutions are, however, in a position to discipline firm management through other channels. It turns out that there is a direct positive link between share o wnership by banks and the firms` short-term bank loans, which indicates the existence of a financing channel. Financial institutions are also represented on the supervisory boards of firms and vice versa, which is an example of networking. This suggests that besides creditorship networking may be an additional disciplinary device for financial institutions. Here we find that there is a significant positive relationship between share ownership by insurance companies and pension funds and the probability of networking.

On the Contribution of New Keynesian Economics

In this paper we consider whether New Keynesian economics provides a meaningful framework for the analysis of the coordination problem in economic society. At this stage the New Keynesian coordination failure framework raises more questions than it provides answers. However, it has the potential to develop to an important area of macroeconomic research if subsequent research is directed toward the implications for economic performance of institutional characteristics of modern economies. In this respect the general equilibrium framework of New Keynesian economics is not appropriate. The analysis of coordination failures may benefit from insights that have been developed in the non-mainstream literature.Macroeconomics; New Keynesian

Investor Protections and Concentrated Ownership: Assessing Corporate Control Mechanisms in the Netherlands

The Berle-Means problem - information and incentive asymmetries disrupting relations between knowledgeable managers and remote investors - has remained a durable issue engaging researchers since the 1930's. However, the Berle-Means paradigm - widely-dispersed, helpless investors facing strong, entrenched managers - is under stress in the wake of the cross-country evidence presented by La Porta, Lopez-de-Silanes, Shleifer, and Vishny and their legal approach to corporate control. This paper continues to investigate the roles of investor protections and concentrated ownership by examining firm behaviour in the Netherlands. Our within country analysis generates two key results. First, the role of investor protections emphasized in the legal approach is not sustained. Rather, we find that performance is enhanced when the firm is freed of equity market constraints, a result that we attribute to the relaxation of the myopia constraints imposed by relatively uninformed investors. Second, ownership concentration does not have a discernible impact on firm performance, which may reflect large shareholders' dual role in lowering the costs of managerial agency problems but raising the agency costs of expropriation.

Investor Protections and Concentrated Ownership: Assessing Corporate Control Mechanisms in the Netherlands

The Berle-Means problem - information and incentive asymmetries disrupting relations between knowledgeable managers and remote investors - has remained a durable issue engaging researchers since the 1930's. However, the Berle-Means paradigm - widely-dispersed, helpless investors facing strong, entrenched managers - is under stress in the wake of the cross-country evidence presented by La Porta, Lopez-de-Silanes, Shleifer, and Vishny and their legal approach to corporate control. This paper continues to investigate the roles of investor protections and concentrated ownership by examining firm behaviour in the Netherlands. Our within country analysis generates two key results. First, the role of investor protections emphasized in the legal approach is not sustained. Rather, we find that performance is enhanced when the firm is freed of equity market constraints, a result that we attribute to the relaxation of the myopia constraints imposed by relatively uninformed investors. Second, ownership concentration does not have a discernible impact on firm performance, which may reflect large shareholders' dual role in lowering the costs of managerial agency problems but raising the agency costs of expropriation

Firm Performance, Financial Institutions and Corporate Governance in the Netherlands

This paper analyses the impact of share ownership, creditorship and networking by financial institutions on the performance of 94 Dutch non-financial firms in the period 1992-1996. We find a nonlinear relationship between firm performance and ownership by banks. Because of various defense mechanisms the role of the shareholder is very limited in the Netherlands. Financial institutions are, however, in a position to discipline firm management through other channels. It turns out that there is a direct positive link between share o wnership by banks and the firms` short-term bank loans, which indicates the existence of a financing channel. Financial institutions are also represented on the supervisory boards of firms and vice versa, which is an example of networking. This suggests that besides creditorship networking may be an additional disciplinary device for financial institutions. Here we find that there is a significant positive relationship between share ownership by insurance companies and pension funds and the probability of networking

Internal representation and factional faultlines as antecedents for board performance in social enterprises

There is an increasing scholarly interest in how social enterprises manage their hybrid nature. As hybrid organizational forms, social enterprises combine mission-driven social goals and revenue generating activities in a variety of organizational constellations and in diverse institutional contexts. Acknowledging the potentially conflicting demands that institutional environments impose on social enterprises there is an increasing research interest in the existence and proliferation of these conflicting demands at the organizational level. Some researchers have pointed to the importance of particular management practices and governance characteristics – such as authority relations and internal representation – as mechanisms to deal with the conflicting demands at the organizational level. This paper adds to this stream of literature by taking into account the organizational level dynamics of internal representation and the proliferation of factional groups in the boards of directors of hybrid organizational forms and their impact on board performance, ultimately influencing the organizational performance

Systematic analysis of chromatin interactions at disease associated loci links novel candidate genes to inflammatory bowel disease

BACKGROUND: Genome-wide association studies (GWAS) have revealed many susceptibility loci for complex genetic diseases. For most loci, the causal genes have not been identified. Currently, the identification of candidate genes is predominantly based on genes that localize close to or within identified loci. We have recently shown that 92 of the 163 inflammatory bowel disease (IBD)-loci co-localize with non-coding DNA regulatory elements (DREs). Mutations in DREs can contribute to IBD pathogenesis through dysregulation of gene expression. Consequently, genes that are regulated by these 92 DREs are to be considered as candidate genes. This study uses circular chromosome conformation capture-sequencing (4C-seq) to systematically analyze chromatin-interactions at IBD susceptibility loci that localize to regulatory DNA. RESULTS: Using 4C-seq, we identify genomic regions that physically interact with the 92 DRE that were found at IBD susceptibility loci. Since the activity of regulatory elements is cell-type specific, 4C-seq was performed in monocytes, lymphocytes, and intestinal epithelial cells. Altogether, we identified 902 novel IBD candidate genes. These include genes specific for IBD-subtypes and many noteworthy genes including ATG9A and IL10RA. We show that expression of many novel candidate genes is genotype-dependent and that these genes are upregulated during intestinal inflammation in IBD. Furthermore, we identify HNF4α as a potential key upstream regulator of IBD candidate genes. CONCLUSIONS: We reveal many novel and relevant IBD candidate genes, pathways, and regulators. Our approach complements classical candidate gene identification, links novel genes to IBD and can be applied to any existing GWAS data