BOARD GOVERNANCE: DOES OWNERSHIP MATTER?

Muluneh Hideto Dato, Marek Hudon and Roy Mersland
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Marek Hudon: ULB - Solvay Brussels School of Economics and Management [Brussels] - ULB - Université libre de Bruxelles
Roy Mersland: UIA - University of Agder

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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 structure; microfinance institutions; Nonprofit organizations governance ownership form board structure microfinance institutions (search for similar items in EconPapers)
Date: 2019-12-22
Note: View the original document on HAL open archive server: https://hal.science/hal-05321823v1
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Published in Annals of Public and Cooperative Economics, 2019, 91 (1), pp.5-28. ⟨10.1111/apce.12262⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05321823

DOI: 10.1111/apce.12262

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