Table 1

Variable definitions and scoring rules

VariablesProvisionsScoring rule
Panel A: Board characteristics subindex (BCS)
BC1Board majority are independent non-executive directors (NEDs)1 if yes; 0 otherwise
BC2Minimum four board members1 if yes; 0 otherwise
BC3Chairman and chief executive officer (CEO) split1 if yes; 0 otherwise
BC4Chairman of an independent NED1 if yes; 0 otherwise
BC5Company secretary present1 if yes; 0 otherwise
BC6Board meets at least four times a year1 if yes; 0 otherwise
BC7Nomination committee exists1 if yes; 0 otherwise
BC8Nomination committee has mostly independent NEDs1 if yes; 0 otherwise
BC9Remuneration committee exists1 if yes; 0 otherwise
BC10Remuneration committee only has independent NEDs1 if yes; 0 otherwise
BC11Chairman of remuneration committee an independent NED1 if yes; 0 otherwise
BC12Record of meeting attendance is disclosed1 if yes; 0 otherwise
Panel B: Accounting and auditing subindex (AAS)
AA1Audit committee exists1 if yes; 0 otherwise
AA2Audit committee has at least two independent NEDs1 if yes; 0 otherwise
AA3Chairman of committee is an independent NED, who is also not the main board chairman1 if yes; 0 otherwise
AA4Record of meeting attendance is disclosed1 if yes; 0 otherwise
Panel C: Risk management subindex (RMS)
RM1Risk management committee exists1 if yes; 0 otherwise
RM2Company discloses actual and potential future non-systematic risks1 if yes; 0 otherwise
RM3Company discloses how current and future assessed risks will be managed1 if yes; 0 otherwise
RM4Company provides a narrative of existing internal control1 if yes; 0 otherwise
Source: Authors’ own creation
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