Board Governance: Does Ownership Matter?

24 Pages Posted: 28 Apr 2020

See all articles by Muluneh HIDETO DATO

Muluneh HIDETO DATO

affiliation not provided to SSRN

Marek Hudon

Université Libre de Bruxelles (ULB) - Solvay Brussels School of Economics and Management

Roy Mersland

University of Agder

Date Written: March 2020

Abstract

Good governance is crucial to achieving an organization's mission. Nevertheless, little is known about how the structure of governance is influenced by the nonprofit (NPO) or for‐profit ownership (FPO) structure of an organization, partly because they tend to be active in different sectors. In this paper we overcome this challenge by using data from a global sample of 392 microfinance institutions. The results show that the average NPO has a larger board, more female directors, and a higher number of board meetings than the average FPO. Moreover, where there are larger boards and more frequent board meetings, this has a positive effect on the financial performance of NPOs. It is thus confirmed that ownership structures influence boards’ characteristics and that some board mechanisms are more efficient in some ownership structures than in others. An effective board design should thus be based on a firm's ownership structure.

Keywords: Nonprofit organizations, governance, ownership form, board structures, microfinance

JEL Classification: G21, G32, L31

Suggested Citation

HIDETO DATO, Muluneh and Hudon, Marek and Mersland, Roy, Board Governance: Does Ownership Matter? (March 2020). Annals of Public and Cooperative Economics, Vol. 91, Issue 1, pp. 5-28, 2020, Available at SSRN: https://ssrn.com/abstract=3586892 or http://dx.doi.org/10.1111/apce.12262

Muluneh HIDETO DATO (Contact Author)

affiliation not provided to SSRN

No Address Available

Marek Hudon

Université Libre de Bruxelles (ULB) - Solvay Brussels School of Economics and Management ( email )

50 Avenue Roosevelt
Brussels 1050
Belgium

Roy Mersland

University of Agder ( email )

Serviceboks 422
N-4604 Kristiansand, VEST AGDER 4604
Norway

HOME PAGE: http://www.uia.no/microfinance

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