Remuneration committee governance and firm performance in UK financial firms
Peter Agyemang-Mintah
https://urn.fi/URN:NBN:fi-fe2021042715643
Tiivistelmä
This paper investigates the association between the
Remuneration Committee (RC) on firm performance. The research uses a data span
of 63 financial institutions for a period of 12 years. Ordinary Least Square
(OLS) and Random Effects (RE) regression estimations are used.
The ascertained empirical results indicate that the
establishment of remuneration committee by the board is positively correlated
to its performance, as measured by its Return on Assets (ROA), and is also
statistically significant on the Market Value (MV) of the firm. Subsequent
tests conducted show that presence of an RC had a positive and statistically significant correlation
during the pre/post global financial crisis on the ROA of the firm. The MV
measure during the pre-crisis indicates a positive and statistically
significant impact, but only positive during the post-crisis. The findings are
robust across econometric models that control for different types of
endogeneity.
The outcome
indicates that the establishment of an RC by the Board assisted in achieving a
positive impact on the profitability of UK financial institutions.
Kokoelmat
- Rinnakkaistallenteet [19207]