Corporate boards, ownership structure and firm performance in an environment of severe political and economic crisis

MANGENA, M., TAURINGANA, V. and CHAMISA, E., 2012. Corporate boards, ownership structure and firm performance in an environment of severe political and economic crisis. British Journal of Management, 23 (1). ISSN 1467-8551

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Abstract

This study examines the relationship between board and ownership structures and firm performance in an environment of severe political and economic crisis. Using panel data from the Zimbabwe Stock Exchange (ZSE) for the period 2000-2005, we split the period into prepresidential election period (2000-2002) (a relatively stable political and economic period) and post-presidential election period (2003-2005) (a hostile political and economic period) to capture the differences in the political and economic landscape. We find that board size, ownership concentration and executive directors’ share ownership increased whilst the proportion of nonexecutive directors reduced in the post-presidential election period. Employing a system Generalized Method of Moments (GMM) approach, we find that performance is positively related to board size and ownership concentration in the post- (but not in the pre-) presidential election period. The results also show that performance is negatively related to executive directors’ share ownership in the post-presidential election period, but positively related in the pre-presidential election period. The proportion of non-executive directors is negative and significant in both periods. These findings support the notion that the effects of board and ownership structures depend on the nature of the firm’s environment, and therefore have important implications for policy-makers.

Item Type: Journal article
Publication Title: British Journal of Management
Creators: Mangena, M., Tauringana, V. and Chamisa, E.
Publisher: Wiley-Blackwell
Date: 2012
Volume: 23
Number: 1
ISSN: 1467-8551
Identifiers:
NumberType
10.1111/j.1467-8551.2011.00804.xDOI
Rights: © 2011 The Author(s). British Journal of Management © 2011 British Academy of Management. The definitive version is available at www3.interscience.wiley.com
Divisions: Schools > Nottingham Business School
Depositing User: EPrints Services
Date Added: 09 Oct 2015 10:21
Last Modified: 09 Jun 2017 13:27
URI: http://irep.ntu.ac.uk/id/eprint/11729

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