Do board and audit governance matters for insurer performance? A meta-analytical review

Barkha Goyal and Rachita Gulati ()
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Barkha Goyal: Indian Institute of Technology Roorkee
Rachita Gulati: Indian Institute of Technology Roorkee

DECISION: Official Journal of the Indian Institute of Management Calcutta, 2023, vol. 50, issue 3, No 3, 285-319

Abstract: Abstract Amassing a dataset of 32 empirical studies published between 2003 and 2021, the article meta-analyzes the effect of board and audit governance on insurer performance. Utilizing the Schmidt and Hunter (2015) approach, it also investigates whether variations in findings are attributable to definitions of governance variables, performance measures, corporate governance systems, endogeneity issues, and publication quality. The study particularly focuses on four board (board size, outside directors, CEO duality, and board meetings) and three audit attributes (presence of an audit committee, its size, and independence). The results show that outside directors and the audit committee presence significantly improve insurer performance. However, board size and duality hold a positive influence only in Anglo-American economies. The study advocates that simply occupying the insurer’s board with outside directors is insufficient. Instead, they should be “operationally independent” for the effective functioning of the insurers’ boards. Our study recommends implementing distinct governance norms for insurers aligned with the country’s internal environments instead of reproducing a common set of practices.

Keywords: Agency theory; Audit governance; Board governance; Insurer performance; Meta-analysis; Stewardship theory (search for similar items in EconPapers)
JEL-codes: G22 G32 G34 L25 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s40622-023-00351-2

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