Variables description
| Variable | Description |
|---|---|
| Monitoring tasks | It is a Datastream category score that measures the board commitment towards the monitoring of management through the application of legal rules and best practices of corporate governance principles. It includes a set of the following indicator scores: (1) whether a board has a policy that ensures effective monitoring; (2) whether the policy is implemented; (3) whether the board has internal information tools to develop monitoring of top management and the CEO; (4) whether the board exercises monitoring tasks through the establishment of board committees; (5) whether the board has financial experts on the auditing committee ensuring auditing from the field of the internal control system (in the recommendation of Sarbanes-Oxley Act); (6) the percentage of independent directors on board committees; (7) the number of board meetings; and (8) the average board attendance |
| Skewed board | It is a dummy variable that assumes the value 1 if a board has less than 20% of female directors; 0 otherwise |
| Tilted board 20% | It is a dummy variable that assumes the value 1 if a board has at least 20% of female directors but less than 33% of female directors; 0 otherwise |
| Tilted board 33% | It is a dummy variable that assumes the value 1 if a board has at least 33% of female directors; 0 otherwise |
| Balanced board | It is a dummy variable that assumes the value 1 if a board has at least 40% of female directors; 0 otherwise |
| Independent directors % | Percentage of independent board members as reported by the company |
| CEO duality | It is a dummy equal to 1 if the CEO is also Chairman; 0 otherwise |
| Board size | The total number of board members at the end of the fiscal year |
| Busy directors | Average number of other corporate affiliations for the board member |
| Firm size | The logarithmic transformation of total assets as reported by the annual financial report by the company |
| Variable | Description |
|---|---|
| Monitoring tasks | It is a Datastream category score that measures the board commitment towards the monitoring of management through the application of legal rules and best practices of corporate governance principles. It includes a set of the following indicator scores: (1) whether a board has a policy that ensures effective monitoring; (2) whether the policy is implemented; (3) whether the board has internal information tools to develop monitoring of top management and the CEO; (4) whether the board exercises monitoring tasks through the establishment of board committees; (5) whether the board has financial experts on the auditing committee ensuring auditing from the field of the internal control system (in the recommendation of Sarbanes-Oxley Act); (6) the percentage of independent directors on board committees; (7) the number of board meetings; and (8) the average board attendance |
| Skewed board | It is a dummy variable that assumes the value 1 if a board has less than 20% of female directors; 0 otherwise |
| Tilted board 20% | It is a dummy variable that assumes the value 1 if a board has at least 20% of female directors but less than 33% of female directors; 0 otherwise |
| Tilted board 33% | It is a dummy variable that assumes the value 1 if a board has at least 33% of female directors; 0 otherwise |
| Balanced board | It is a dummy variable that assumes the value 1 if a board has at least 40% of female directors; 0 otherwise |
| Independent directors % | Percentage of independent board members as reported by the company |
| CEO duality | It is a dummy equal to 1 if the CEO is also Chairman; 0 otherwise |
| Board size | The total number of board members at the end of the fiscal year |
| Busy directors | Average number of other corporate affiliations for the board member |
| Firm size | The logarithmic transformation of total assets as reported by the annual financial report by the company |
Note(s): The scores are calculated by equally weighting and z-scoring all underlying data points and comparing them against all companies in Datastream. The resulting percentage is therefore a relative measure of performance, z-scored and normalised to better distinguish values and position the score between 0 and 100%. A Z Score, or “standard score” expresses the value in units of standard deviation of that value from the mean value of all companies
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