Mohamed Dia

Board structure and firm technical efficiency: Evidence from Canadian state-owned enterprises

Abstract The objective of the study is to analyze the board–performance relationship for a group of 14 Canadian SOEs. This context is unique because SOEs do not have major control devices other than the board. As the interaction effect, if any, between the board and other corporate governance structures is expected to be low, we do not have to fully control for the potential impact of different control devices, or to disentangle them completely from influencing board composition. The performance is also measured using data envelopment analysis (DEA), a linear programming method used for the first time in this research area. As such, this study contributes to the operational research literature while applying DEA method to untraditional fields of research. The results from the multivariate analysis suggest that board size and board independence are positively related to firm technical efficiency only when SOEs are exposed to market discipline. In other words, product market competition is a precondition for boards to be effective.

Governance–Performance Relationship: A Re‐examination Using Technical Efficiency Measures

The objective of this study is to analyse further the governance–performance relationship while improving on two methodological issues: control for endogeneity and firm performance measurement. To mitigate the endogeneity problem, we first focus on subsamples of firms for which we ex ante expect better corporate governance to cause better performance. Second, we use generalized least squares regressions for panel data. To control for potential measurement bias, we measure firm performance using data envelopment analysis (DEA). The research is conducted in Canada over a five-year period from 2001 to 2005. Corporate governance is measured based on the Report on Business corporate governance index published by the Globe and Mail. Overall, the results show that better governed firms are more efficient. This study is in line with a growing number of recent studies that propose alternative measures of firm performance. By using DEA, this study brings together the corporate finance and productivity literature.

Convergence of corporate governance practices in the post‐Enron period: behavioral transformation or box‐checking exercise?

Purpose – The objective of the study is to analyze corporate governance practices of Canadian companies in the post‐Enron period. The attempt is to investigate whether the convergence phenomenon evidenced in prior studies is limited to the minimum mandatory requirements imposed by regulators or reflects a real behavioral transformation.Design/methodology/approach – Changing governance structure might be slow except in times of financial crisis, increased public scrutiny and reforms. These conditions are met in the post‐Enron period (2002 to 2005) where major reforms have been launched including the Sarbanes‐Oxley Act (SOX) in the USA and Bill 198 in Canada. The authors expect changes in corporate governance to be more important during this period, therefore, enhancing the robustness and reliability of their results. They measure corporate governance on a global scale, relying on the ROB index published by the Globe and Mail. The index distinguishes between four blocks of corporate governance, namely, boar...

Corporate ownership and governance practices in Canada: a longitudinal study

The objective of this study is to analyse convergence of corporate governance in Canada in a period characterised by high financial uncertainty (1999-2008). The methodological strength of this study resides in the combination of a longitudinal approach with a multilevel analysis, focusing on both governance practices and ownership structure. Our results show that ownership structure and control did not change over time. Canadian firms remained controlled by an ultimate shareholder who often is in a position to enjoy all of the private benefits of control while internalising only a small fraction of the costs. However, corporate governance practices converged toward a US model over the period under investigation, overall lending support to functional convergence, not formal convergence.

Monitoring function of the board and audit fees: contingent upon ownership concentration

Purpose The aim of this paper is to revisit the board independence–audit fees (BI–AF) relationship while taking into account the ownership structure of the firm. Two effects are unfolding along the ownership concentration spectrum: separation of ownership and control (principal–agent problems) and separation of voting and cash flow rights (principal–principal problems). Design/methodology/approach The study is conducted over a seven-year period (2002-2008) using panel regressions on a sample of Canadian publicly traded companies. The authors use a moderated regression analysis incorporating two-way interactive terms (ownership × BI) and a sub-group analysis. Findings The results show a positive and significant relationship between BI and AF when ownership is concentrated in the hands of a dominant/controlling shareholder. The higher the gap between voting and cash flow rights of the ultimate owner, the stronger the relationship between BI and AF. Overall, evidence supports both the demand-based perspective on AF and the expropriation effect argument. Practical implications Results support a one-size-fits-all approach to governance despite growing concerns from academics and interest groups about the appropriateness of pursuing such strategy when ownership is concentrated in the hands of a dominant/controlling shareholder. Originality/value By taking the excess voting rights into account (difference between voting rights and cash-flow rights of the ultimate owner), the authors propose a refined classification of the sample firms along the ownership concentration spectrum.

A hierarchical and fuzzy competitiveness evaluation methodology based on DEA

In this paper, we present a fuzzy multi-criteria methodology for measuring the competitiveness of heterogeneous firms in an economy where several competitiveness indicators are considered ambiguous or fuzzy. We homogenise the companies into groups to better address their specificities enabling a better identification and definition of the comparison criteria in each specific grouping. In this context, the competitiveness of a company in an economy was seen as the composite of its competitiveness in its sector with that of its sector in this economy. The methodology, in two phases, consists in determining, first, the fuzzy performances and indices of competitiveness of companies and sectors in their groups using the DEA approach; then, examining the fuzzy indices of competitiveness of these companies in the economy. We illustrate the methodology in the competitiveness measurement of several companies from different sectors in an economy and discuss its advantages and disadvantages.

Benchmarking chains of hardware retail stores in Canada

We analyzed the performance of the three main public chains of hardware retail stores in Canada. The study was based on the use of Data Envelopment Analysis. We performed internal and external benchmarking of the firms for the 2000-2010 periods. It occurs that the companies have been impacted by the 2005-2006 collapse of the United States housing bubble which in itself has led to the Canadian forest industry crisis in 2007 and the subprime mortgage crisis of 2008. Further, our analysis shed a light on the numerous attempts that have been made in the recent years to acquire the Canadian public chain of hardware retail stores.