Proceedings of The 2nd International Conference on Advanced Research in Management, Economics and Accounting
What determine corporate board diligence: Evidence from Sultanate of Oman
Badar Khalid Hakim Alshabibi
This study aims to examine the determinants of corporate board diligence in the listed firm in Sultanate of Oman, using four corporate board characteristics, board size, board independence, board gender diversity and nationality diversity.
Using a sample comprised of all companies listed in Muscat Securities Exchange over ten-year period (2009–2019), the study applies Pooled OLS regression to examine the determinants of corporate board diligence.
Drawing from the agency theory and institutional theory, the results reveal that the number of independent board members had statistical significance, suggesting that board independence can improve corporate board diligence, though board size and nationality diversity were found to have negative association with corporate board diligence. There is no evidence, however, that board gender diversity improves corporate board diligence.
The study provides insights for both, the investors and regulatory authorities in developing economies. For the investors to be aware about the corporate board characteristics which enhance board monitoring, and for the regulatory authorities to consider revising the corporate governance codes which enhance the quality of governance practices.
The study provides new evidence documenting the determinants of corporate board diligence in a developing country such as Sultanate of Oman, which has high potential for growth and attracting the foreign investment as stated in Oman vision 2040. In addition, this paper is the first to examine the association between corporate board diligence and corporate board diversity aspects.
keywords: board diligence, board monitoring, board composition, board diversity, Oman.