Monitoring corporate boards: evidence from China

China’s listed companies have two-tier boards comprising of a supervisory board and a board of directors. The supervisory board has the responsibility to oversee and monitor the board of directors. Similarly, the role of the independent non-executive directors (INEDs) is to advise and monitor directors. In this paper, we investigate the main board structure hypotheses namely the scope of operations, monitoring and negotiation hypotheses for a sample of Chinese Initial Public Offerings floated on both the Shanghai and Shenzhen stock exchanges. Our results provide evidence to support the three hypotheses. Interestingly, we find that the larger the size of the board of directors, the larger the supervisory board size. Moreover, we find that the higher the proportion of INEDs, the smaller the supervisory board size and this implies that INEDs are perhaps a substituting mechanism for the supervisors’ monitoring role. Finally, we argue that as the Chinese governance structure combines both the German and the Anglo-Saxon models, this creates a conflict between the two boards with respect to the monitoring role. Our results, therefore call for a comprehensive reform in the Chinese governance mechanism

Board Diversity and Financial Fragility: Evidence from European Banks

In the wake of the recent debt crisis in Europe, we investigate the influence of board diversity on financial fragility and performance of European banks. Corporate governance codes in Europe recommend unitary and dual-board systems; therefore, we believe that the influence of board diversity may vary across governance mechanisms and that no other studies have addressed these variations and their influence on financial fragility across European countries. The results show that a critical mass of female representation on both the supervisory board and the board of directors may reduce banks’ vulnerability to financial crisis. However, interestingly, we find evidence that female directors on the management board are not risk averse. We argue that the degree of risk taking for female directors may vary based on their roles (non-executive or executive) and that female and male executive directors may have the same risk taking behaviour. Our empirical results provide guidelines to the regulators in Europe with respect to the recently approved proposal by the European Parliament on female representation

ESG and Aggregate Disagreement

This paper investigates the role of aggregate disagreement in the relationship between environmental, social, and governance (ESG) scores and future stock returns in the United States (US), European Union (EU), and United Kingdom (UK). We find that firms with high ESG scores are likely to have higher exposure to aggregate disagreement than firms with low ESG scores because of the divergence of opinions about long-term earnings growth. Consistent with our conjecture, the results suggest that when aggregate disagreement is high, a profitable trading strategy is to long firms with low ESG scores and to short those with higher ESG scores. Our results have clear implications for the growing debate over ESG investment strategies

ESG and Aggregate Disagreement

This paper investigates the role of aggregate disagreement in the relationship between environmental, social, and governance (ESG) scores and future stock returns in the United States (US), European Union (EU), and United Kingdom (UK). We find that firms with high ESG scores are likely to have higher exposure to aggregate disagreement than firms with low ESG scores because of the divergence of opinions about long-term earnings growth. Consistent with our conjecture, the results suggest that when aggregate disagreement is high, a profitable trading strategy is to long firms with low ESG scores and to short those with higher ESG scores. Our results have clear implications for the growing debate over ESG investment strategies

ESG and Aggregate Disagreement

This paper investigates the role of aggregate disagreement in the relationship between environmental, social, and governance (ESG) scores and future stock returns in the United States (US), European Union (EU), and United Kingdom (UK). We find that firms with high ESG scores are likely to have higher exposure to aggregate disagreement than firms with low ESG scores because of the divergence of opinions about long-term earnings growth. Consistent with our conjecture, the results suggest that when aggregate disagreement is high, a profitable trading strategy is to long firms with low ESG scores and to short those with higher ESG scores. Our results have clear implications for the growing debate over ESG investment strategies

Corporate Governance in Islamic Banks: New Insights for Dual Board Structure and Agency Relationships

We investigate the influence of the dual board structure on the financial performance of Islamic banks. The paper also investigates the unique agency relationships using a sample of 90 Islamic banks across 13 countries over the period 2006-2014. We find that the larger the Shari’ah Supervisory Board (SSB) the better the financial performance and this result reinforces the fundamental role of the SSB to certify permissible financial instruments and products. We also find evidence of the scope of operation hypothesis with respect to both the board of directors and the SSB as Islamic banks are characterised by a higher degree of complex operations. Interestingly, we find that a larger SSB size may result in lower agency costs and that the greater the size of the unrestricted contracts, the higher the agency costs. This implies that unrestricted profit-sharing contracts are one of the main sources of the unique agency relationships in Islamic banks. The paper has a number of policy implications for regulators including the design of governance mechanisms in Islamic banks and the dynamics of unrestricted contracts

Role of ankle-brachial pressure index as a predictor of coronary artery disease severity in diabetic and non-diabetic patients

PurposeThe aim of the study was to estimate the role of ankle-brachial pressure index (ABI) in predicting severity of coronary artery disease (CAD) in patients with or without diabetes mellitus.MethodsThis study included 120 patients with CAD proved by coronary angiography and ABI was measured for all of them. They were divided into 4 groups; Group (A): Non-diabetic patients without peripheral arterial disease (PAD) (ABI < or =0.9) , Group (B):diabetic patients without PAD (ABI < or =0.9), Group (C):Non-diabetic patients with PAD (ABI>0.9) and Group (D):diabetic patients with PAD (ABI>0.9).ResultsHypertension was more prevalent in group (D) (p value>0.05). Group (C) had the highest mean age and the highest percentage of smokers, after normalization of the effects of the risk factors mean Gensini score, mean number of affected coronary vessels, mean number of coronary artery lesions and the percentage of coronary artery chronic total occlusions (CTO) were significantly higher in groups (C & D) (p>0.001) (Table 1).ConclusionABI had a significant relationship with the degree of CAD severity. Therefore ABI seems to be a reliable independent prognostic marker of CAD severity in patients with or without diabetes mellitus