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The effectiveness of independent directors in family businesses in emerging economies: Contingent on social and human capital? (SF19/AFM/SOBHAN)

  • Full or part time
  • Application Deadline
    Applications accepted all year round
  • Self-Funded PhD Students Only
    Self-Funded PhD Students Only

Project Description

Independent directors, one of the most crucial element of corporate governance (CG) codes based on the Anglo-American model, have been transplanted across emerging economies (Aguilera and Haxhi, 2018). In emerging economies, external monitoring agencies (i.e., regulatory agencies, financial intermediaries) are either absent or ineffective, and ownership and control of companies are concentrated to sponsor families (Aguilera and Haxhi, 2018, Sobhan and Bose, 2018). This institutional void creates an opportunity for controlling families to appoint and classify their ‘trusted lieutenants’ (Maclean, Charles and Jon, 2006, p.108) or professional advisors to the businesses as independent directors to remain compliant with the CG code (Ansari, Goergen and Mira, 2018; Sobhan, 2016). Consequently, agency theorists generally perceive that the so-called independent directors are ineffective in family-controlled businesses in emerging economies. However, some of these so-called independent directors possessed significant human and social capital and might have considerable ability to play monitoring, advisory and resource provision roles (Hillman and Dalziel, 2003).

This study has two main objectives: (1) What are the factors that motivate people with significant social and human capital to join as independent directors on the board of family-controlled business in emerging economies? (2) How do the so-called independent directors liberalise their different social and human characteristics (e.g., identity, knowledge base, experience, connections to other organisations) to play their governance roles in and contribute to the performance of the family-controlled business in emerging economies? This study will use primary data collection methods such as semi-structured interviews and questionnaires to investigate the research questions mentioned above.

Understanding the roles of the social and human capital of the board of directors represents one-way to address governance challenges faced by family firms in emerging economies. Indeed, family business is the life-blood of emerging economies. Research on board’s social and human capital in the context of developing economies has not featured in academic journals yet and is of growing policy relevance as both the existing research on board independence and the best practice recommendations on board composition is dominated by agency theory. Studies based on agency theory not only fail to acknowledge the importance of social and human capital but also produce conflicting empirical evidence on the effectiveness of the board of directors. These suggest the importance of an understanding of so-called independent directors’ governance roles and their antecedents beyond agency theory conception (Ansari, Goergen and Mira, 2018).

Applicant should submit research proposal discussing how the themes of antecedents and governance role perceptions of so-called independent directors would be constructed. They should also highlight how access to research participants is expected to be managed.

Eligibility and How to Apply:

Please note eligibility requirement:
• Academic excellence of the proposed student i.e. 2:1 (or equivalent GPA from non-UK universities [preference for 1st class honours]); or a Masters (preference for Merit or above); or APEL evidence of substantial practitioner achievement.
• Appropriate IELTS score, if required.

For further details of how to apply, entry requirements and the application form, see
https://www.northumbria.ac.uk/research/postgraduate-research-degrees/how-to-apply/

Please note: Applications that do not include a research proposal of approximately 1,000 words (not a copy of the advert), or that do not include the advert reference (e.g. SF19/…) will not be considered.

Northumbria University takes pride in, and values, the quality and diversity of our staff. We welcome applications from all members of the community. The University holds an Athena SWAN Bronze award in recognition of our commitment to improving employment practices for the advancement of gender equality and is a member of the Euraxess network, which delivers information and support to professional researchers.

Funding Notes

Please note this is a self-funded project and does not include tuition fees or stipend.

References

Recent publications by supervisors relevant to this project:

Sobhan, A. (2016). Where institutional logics of corporate governance collide:
Overstatement of compliance in a developing country, Bangladesh, Corporate Governance: An International Review, 24(6): 599-618
Sobhan, A., and Bose, S. (Forthcoming). Corporate governance research in an emerging
economy, Bangladesh: Status today and future outlook. In I. Tsalavoutas & P. Weetman
(Eds.), The Routledge Companion to Accounting in Emerging Economies. United
Kingdom: Routledge.
Sobhan, M. A., Bose, S., & Podder, J. (2018). Corporate Social Responsibility (CSR) Committee,
its Composition and CSR Performance: Evidence from a Large Longitudinal Dataset,
Paper presented at International Corporate Governance Society to be held on 2nd – 3rd
October, 2018, Fudan University, Shanghai, China.
Sobhan, M. A. (2018). Externally Facilitated Board Evaluation in UK: An Analysis of Compliance
and Quality of Implementation, British Finance and Accounting Association Conference,
11th and 12th April 2016 London, UK.
Sobhan, A. (2016). Redundant corporate governance prescription? Anglo-American model and
investment and lending decision making in a developing country, Bangladesh – Paper
presented at the International Corporate Governance Society Conference at
Massachusetts, USA 2016.
Sobhan, M. A. and Shrives, P.J. (2016). Responses to pressures for external board evaluation: Is
institutional theory working? Financial Reporting and Business Communication (FRBC)
Conference, 30th June and 1st July 2016, Bristol University, UK.

References:

Aguilera, R. V., & Haxhi, I. (2018). Comparative Corporate Governance in Emerging
Markets. In R. Grosse, & K. E. Meyer (Eds.), Oxford Handbook on Management in Emerging Markets Oxford: Oxford University Press. DOI: 10.1093/oxfordhb/9780190683948.013.9
Ansari, I. F., Goergen, M., & Mira, S. (2018). How Reported Board Independence Overstates
Actual Board Independence in Family Firms: A Methodological Concern. Annals of Corporate Governance, 3(2), 81-183.
Hillman, A. J., & Dalziel, T. (2003). Boards of directors and firm performance: Integrating
agency and resource dependence perspectives. Academy of Management review, 28(3), 383-396.
Maclean, M., H. Charles, and P. Jon. (2006). Business Elites and Corporate
Governance in France and the UK. Hampshire: Palgrave MacMillan.
Sobhan, A. (2016). Where institutional logics of corporate governance collide:
Overstatement of compliance in a developing country, Bangladesh, Corporate Governance: An International Review, 24(6): 599-618
Sobhan, A., and Bose, S. (2018). Corporate governance research in an emerging
economy, Bangladesh: Status today and future outlook. In I. Tsalavoutas & P.
Weetman (Eds.), The Routledge Companion to Accounting in Emerging Economies. United Kingdom: Routledge.

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