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Corporate Governance and Dividend Policy in UK Listed SMEs: The Effect of Board Characteristics

Elmagrhi, Mohamed H., Ntim, Collins G., Crossley, Richard M., Malagila, John, Fosu, Samuel and Vu, Tien V. (2017) Corporate Governance and Dividend Policy in UK Listed SMEs: The Effect of Board Characteristics. International Journal of Accounting and Information Management, 25 (4). pp. 459-483. ISSN 1834-7649

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Abstract

Purpose: This paper examines the extent to which corporate board characteristics influence the level of dividend pay-out ratio using a sample of UK small and medium-sized enterprises (SMEs) from 2010 to 2013 listed on the Alternative Investment Market.

Design/methodology/approach: The data is analysed by employing multivariate regression techniques, including estimating fixed effects, lagged effects and two-stage least squares regressions.

Findings: The results show that board size, the frequency of board meetings, board gender diversity and audit committee size have a significant relationship with the level of dividend pay-out. Audit committee size and board size have a positive association with the level of dividend pay-out, whilst the frequency of board meetings and board gender diversity has a significant negative relationship with the level of dividend pay-out. By contrast, the findings suggest that board independence and CEO role duality do not have any significant effect on the level of dividend pay-out.

Originality/value: This is one of the first attempts at examining the relationship between corporate governance and dividend policy in the UK’s Alternative Investment Market, with the analysis distinctively informed by agency theoretical insights drawn from the outcome and substitution hypotheses.

Item Type: Article
Subjects: H Social Sciences > HF Commerce > HF5601 Accounting
H Social Sciences > HG Finance
Schools: Huddersfield Business School
Huddersfield Business School > Financial Ethics and Governance Research Group
Related URLs:
Depositing User: Richard Crossley
Date Deposited: 28 Mar 2017 14:37
Last Modified: 10 Oct 2017 18:36
URI: http://eprints.hud.ac.uk/id/eprint/31622

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