Search:
Computing and Library Services - delivering an inspiring information environment

Trustee Board Diversity, Governance Mechanisms, Capital Structure and Performance in UK Charities

Elmagrhi, Mohamed H., Ntim, Collins G., Malagila, John, Fosu, Samuel and Tunyi, Abongeh A. (2018) Trustee Board Diversity, Governance Mechanisms, Capital Structure and Performance in UK Charities. Corporate Governance. ISSN 1472-0701

[img] Microsoft Word - Accepted Version
Restricted to Repository staff only

Download (156kB)
[img]
Preview
PDF - Accepted Version
Download (724kB) | Preview

Abstract

Purpose:
This paper aims to investigate the association among trustee board diversity (TBD), corporate governance (CG), capital structure (CS) and financial performance (FP) by using a sample of UK charities. Specifically, the authors investigate the effect of TBD on CS and ascertain whether CG quality moderates the TBD–CS nexus. Additionally, the authors examine the impact of CS on FP and ascertain whether the CS–FP nexus is moderated by TBD and CG quality.

Design/methodology/approach:
The authors use a number of multivariate regression techniques, including ordinary least squares, fixed-effects, lagged-effects and two-stage least squares, to rigorously analyse the data and test the hypotheses.

Findings:
First, the authors find that trustee board gender diversity has a negative effect on CS, but this relationship holds only up to the point of having three women trustees. The authors find similar, but relatively weak, results for the presence of black, Asian and minority ethnic (BAME) trustees. Second, the authors find that the TBD–CS nexus depends on the quality of CG, with the relationship being stronger in charities with higher frequency of meetings, independent CG committee and larger trustee and audit firm size. Third, the authors find that CS structure has a positive effect on FP, but this is moderated by TBD and CG quality. The evidence is robust to different econometric models that adjust for alternative measures and endogeneities. The authors interpret the findings within explanations of a theoretical perspective that captures insights from different CG and CS theories.

Originality/value:
Existing studies that explore TBD, CG, CS and FP in charities are rare. This study distinctively attempts to address this empirical lacuna within the extant literature by providing four new insights with specific focus on UK charities. First, the authors provide new evidence on the relationship between TBD and CS. Second, the authors offer new evidence on the moderating effect of CG on the TBD-CS nexus. Third, the authors provide new evidence on the effect of CS on FP. Finally, the authors offer new evidence on the moderating effect of TBD and CG on the CS–FP nexus.

Item Type: Article
Uncontrolled Keywords: Trustee board diversity; Women and ethnic minority trustees; Governance mechanisms; Capital structure and performance; Charities; UK
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HF Commerce
Schools: Huddersfield Business School
Related URLs:
Depositing User: Jonathan Cook
Date Deposited: 06 Feb 2018 09:05
Last Modified: 08 Feb 2018 19:28
URI: http://eprints.hud.ac.uk/id/eprint/34390

Downloads

Downloads per month over past year

Repository Staff Only: item control page

View Item View Item

University of Huddersfield, Queensgate, Huddersfield, HD1 3DH Copyright and Disclaimer All rights reserved ©