Hamadou Boubacar

The impact of board traits on the social performance of Canadian firms

Purpose – This paper aims to examine if certain board characteristics have an impact on the corporate social responsibility (CSR) score of corporations. Design/methodology/approach – The authors’ paper analyzes the link between the ratings of CSR of the largest publicly traded Canadian firms (i.e. those included in the S&P/TSX 60 index) and the traits of their boards. Findings – The authors’ examination concludes that the CSR score is positively linked with the percentages of women and independent directors. The study did not find a link in the cases of board characteristics, namely, director’s remuneration, director’s tenure and director’s ownership. Research limitations/implications – The study focuses on the 60 largest public Canadian firms, which are strongly scrutinized. An analysis that includes smaller firms as well may show different results. Practical implications – To improve the ability of boards of directors to deal with CSR, the appointment of women and independent directors should be given g...

Is top-management remuneration influenced by board characteristics?

Purpose - – The purpose of this article is to examine if certain board characteristics have an impact on the total remuneration of top management and the ratio of stock-based remuneration to total top-management remuneration. Design/methodology/approach - – The study draws on data from the largest public Canadian companies, the constituents of the TSX/60 index. The study controls for firm size and profitability. Findings - – The authors concludes that total remuneration of top management is directly linked to board-member total remuneration and the board average number of director-tenure years. The study also shows that the ratio of stock-based to total top-management remuneration is positively affected by the percentage of independent directors, total remuneration of board directors, the ratio of stock-based remuneration of directors to their total remuneration and the average number of tenure years of the board of directors. Practical implications - – If regulators are determined to curb the excesses in top-management remuneration by means of promoting boards with certain characteristics, they should implement measures facilitating the control of directors’ remuneration and tenure, to discourage cronyistic behavior. Good corporate governance requires that the board act as a counterbalance to top management, ensuring that a substantial percentage of top-executive total compensation is variable, and not fixed. According to our findings, the boards that are the most likely to hold managerial avoidance of variable pay in check are those favoring director independence, variable director remuneration and longer director tenures. Social implications - – The present article examines specifically the latter aspect, namely, the role of board characteristics (independence, size, compensation, board director ownership and tenure, etc.) in the determination of top-management compensation. This relationship is important because it allows us to further the analysis of corporate governance. If the above-mentioned traits of boards have a meaningful relationship with the compensation of the top management, one might conclude that certain practices in the composition of boards could influence good corporate governance practices. This is relevant for regulatory agencies, for investors and for corporations. Originality/value - – The article adds to the extant literature in a number of ways. Firstly, it considers the role of the traits of the board in the determination of the compensation of the top-management teams, and not only of the chief executive officer, as is the focus of previous literature. Secondly, the article focuses on the power interplay between boards and managers, and, more particularly, on the ability of boards to be an effective mechanism of corporate governance. Finally, the article examines the potential impact of board traits in the determination of top-management compensation in the context of Canadian firms, a subject that has received less attention from academic research, which has mostly concentrated on analyzing the issue in the US context.

Internal governance mechanisms and the performance of decentralized financial systems in Niger

Purpose - The purpose of this paper is to study the effect of internal governance mechanisms on the financial and social performance of Niger’s decentralized financial systems (DFS). Design/methodology/approach - This paper investigated the impact of the board size and the CEO/chairman duality on financial performance and sustainability, respectively, measured by the return on assets (ROA) and operational self-sufficiency on one side and social performance measured by the size of loans granted and the percentage of female borrowers on the other side. Findings - The results show that board size positively and significantly affects the ROA. The author also concludes that the duality of decision and control functions promotes the financial viability of the DFS. Regarding the impact of internal governance on social performance, the author finds that board size positively and significantly affects loan size. Research limitations/implications - This study focuses on Niger’s 13 largest DFSs. However, an analysis that also includes smaller firms may show different results. Practical implications - A board size of between 5 and 15 members is recommended. This would help to incorporate key skills and the active involvement of all members. Originality/value - This research highlights the importance of including internal governance mechanisms, underscores an interesting problem and answers questions raised in the existing literature by invalidating or confirming the results that have been obtained thus far. As the players in the microfinance sector recognize that sound governance is an important factor for a successful outcome in any microfinance institution objective, the paper helps shed some light on the situation of DFS in Niger.

Which type of insider transaction is more perceived as a signal by the market

Using a Canadian dataset, we examine the market reaction to insider transactions to discover if the market reacts with greater certainty to specific types of insider trades. Our results suggest that the market reacts mostly to trades carried out by directors or senior officers of the insider company or the subsidiary of the issuer. These results were steady for both sale and purchase transactions. Another interesting result is that, even though the market does not react to sale and purchase transactions by directors, it reacts to purchases by directors if the director is also an administrator of the issuer. Finally, the transaction size only matters if it is a purchase transaction.