Kader Sahin
Department of Business
Administration, Karadeniz
Technical University, Trabzon,
Turkey.
Cigdem Sahin Basfirinc...
• This study attempts to explain relationship between principles
of good governance, marketing practices and financial
per...
• To examines the inter-relationships between
board composition characteristics, CSR
practices and financial performance i...
PARTI
Conceptual
Framework
, Hypothesis
and Research
Model
PARTII
Research
Methodology
PARTIII
Findings and
Implications
Board Composition
•Board Size
•Proportion of independent
board members
•Proportion of inside board
members
•Existence of C...
H1a
• Smaller board size leads to better financial performance
H1b
• A higher proportion of independent board member leads...
H2a
• Large board size leads to better corporate social performance
H2b
• A higher proportion of independent board members...
H3a
• Improved CSR leads to better financial
performance
H3b
• Better financial performance leads to
improved CSR
• This research uses 165 firms that were listed in the
Istanbul Stock Exchange (ISE)
• There are two primary sources of da...
Statistic Observation Mean Median Std. deviation Min. Max.
CSP 165 0.4400 0.5000 0.25490 0.00 1.00
CONCENT1 165 0.5140 0.5...
• Significant impact of board composition on corporate
financial and social responsibility performance.
• Board size, prop...
• Sample size is small.
• Moreover, using content analysis the authors utilized
categorical data derived from published co...
• This research helps to show the importance of
Corporate Social Responsibility performance
(CSP) in the corporate governa...
The impact of board composition on corporate financial and social responsibility performance evidence from public listed c...
The impact of board composition on corporate financial and social responsibility performance evidence from public listed c...
The impact of board composition on corporate financial and social responsibility performance evidence from public listed c...
The impact of board composition on corporate financial and social responsibility performance evidence from public listed c...
The impact of board composition on corporate financial and social responsibility performance evidence from public listed c...
The impact of board composition on corporate financial and social responsibility performance evidence from public listed c...
The impact of board composition on corporate financial and social responsibility performance evidence from public listed c...
The impact of board composition on corporate financial and social responsibility performance evidence from public listed c...
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The impact of board composition on corporate financial and social responsibility performance evidence from public listed companies in turkey

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  • The impact of board composition on corporate financial and social responsibility performance evidence from public listed companies in turkey

    1. 1. Kader Sahin Department of Business Administration, Karadeniz Technical University, Trabzon, Turkey. Cigdem Sahin Basfirinci and Aygun Ozsalih Public Relations and Advertising Department, Karadeniz Technical University, Trabzon, Turkey.
    2. 2. • This study attempts to explain relationship between principles of good governance, marketing practices and financial performances of companies in Turkey. • Globalization, competing interest among internal i.e. management and external stakeholders i.e. customers, suppliers • Caused the need for decision maker not only increase their financial performance but also satisfy increasing expectations of customers, suppliers and society as a whole. • Lack of clarity about aforementioned interrelations due to – Most research based on board composition and financial performance – Few non-US empirical studies
    3. 3. • To examines the inter-relationships between board composition characteristics, CSR practices and financial performance in this study.
    4. 4. PARTI Conceptual Framework , Hypothesis and Research Model PARTII Research Methodology PARTIII Findings and Implications
    5. 5. Board Composition •Board Size •Proportion of independent board members •Proportion of inside board members •Existence of CEO Duality •Existence of audit (H1) or /and corporate governance (H2) Corporate Social Responsibility Performance •Corporate Social Responsibility Index Financial Performances •Net Return of Assets •Net return on Equity •Return on Sales •Debt Ratio •TOBIN’S Q H1 H2 H3 Figure 1. The Research Model CONCEPTUAL FRAMEWORK
    6. 6. H1a • Smaller board size leads to better financial performance H1b • A higher proportion of independent board member leads to better financial performance H1c • A higher proportion of inside board members lead to worse financial performance H1d • Existence of CEO duality leads to worse financial performance H1e • The existence of an audit committee leads to better financial performance
    7. 7. H2a • Large board size leads to better corporate social performance H2b • A higher proportion of independent board members lead to better corporate social responsibility H2c • A higher proportion of independent board members lead to better CSP H2d • Existence of CEO duality leads to worse financial performance H2e • The existence of a corporate governance committee leads to better corporate social performance H2f • The existence of an audit committee leads to better corporate social performance
    8. 8. H3a • Improved CSR leads to better financial performance H3b • Better financial performance leads to improved CSR
    9. 9. • This research uses 165 firms that were listed in the Istanbul Stock Exchange (ISE) • There are two primary sources of data: – companies’ financial statements and – corporate Governance Principles Compliance Reports. • Data of the financial performance of the companies were obtained from two main financial statements: • balance sheet and income statements. • Compliance reports were used to obtain both board structure and corporate social responsibility data. SAMPLE SELECTION AND DATA ANALYSIS
    10. 10. Statistic Observation Mean Median Std. deviation Min. Max. CSP 165 0.4400 0.5000 0.25490 0.00 1.00 CONCENT1 165 0.5140 0.5100 0.22754 0.00 0.98 CONCENT2 129 0.1892 0.1540 0.18014 0.00 1.00 CONCENT3 100 0.2145 0.0605 0.535591 0.00 4.82 FREELOAT 163 0.3237 0.3072 0.18358 0.00 0.91 ROA 162 0.0506 0.0524 0.13910 -0.84 0.49 ROE 160 0.0335 0.1001 0.45093 -3.90 0.54 TOBINQ 163 4.1276 0.8322 39.05392 0.11 499.43 ROS 160 0.2493 0.0457 2.51969 -1.53 31.79 DEBT 162 0.4608 0.4054 0.33990 0.02 3.47 BOARDSIZE 165 6.4970 7.0000 1.91790 3.00 12.00 CEODUAL 165 0.2061 0.0000 0.40571 0.00 1.00 NDEPDIR 165 0.0640 0.0000 0.13691 0.00 0.78 INDIR 165 0.2345 0.1667 0.25097 0.00 1.00 AUDITCOM 165 0.9333 1.0000 0.25020 0.00 1.00 GOVERNCO M 165 0.2303 0.0000 0.42231 0.00 1.00 SECTOR 165 0.7636 1.0000 0.42614 0.00 1.00 Table1.DescriptiveStatistics
    11. 11. • Significant impact of board composition on corporate financial and social responsibility performance. • Board size, proportion of inside board members and existence of duality has partial relationship with the financial performance, whereas, proportion independent director and existence of audit committee do not support the financial performance. • Board size, inside board members, existence of duality and existence of corporate governance does not support the hypothesis with the relationship with CSP. • Improved CSR does not lead to better financial performance whereas better financial performance leads improved CSR.
    12. 12. • Sample size is small. • Moreover, using content analysis the authors utilized categorical data derived from published corporate governance reports, since there is no continuous data or corporate social responsibility and some board composition characteristics in Turkey. • The difficulty of obtaining previous years’ data and the categorical nature of the data has restricted the study in terms of overcoming the endogeneity problem as well as the statistical analysis selection process. • Disclosure in annual reports should not be regarded as a complete measure of corporate involvement in social activities.
    13. 13. • This research helps to show the importance of Corporate Social Responsibility performance (CSP) in the corporate governance. • Helpful for the organization to determine the board size, independent director, CEO duality, the proportion of inside board members, and existence of audit committee to implement the proper CG in an organization.

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