“Corporate Governance And Board Of Directors” By Naciti

Evidence-based practice is used in many scientific fields, and quantitative approaches allow for statistical analysis that can be duplicated, verified, or disproved by the research community. The journal article “Corporate governance and board of directors: The effect of a board composition on firm sustainability performance” by Naciti (2019) was selected for a comprehensive evaluation in this study. The author uses excellent English throughout the essay, meaning the piece is short and to the point. It is free of glaring errors or incoherence, and the writing is smooth and easy to follow. It is also possible to verify the author’s credentials by looking at her extensive scholarly output on organizational development and governance, as seen on her ResearchGate page. However, it is not apparent whether the author has any real-world expertise in corporate governance.

In the article’s title, it is apparent what the topic of inquiry is and what specific issue is being studied. Corporate authority and the management board are designated as this research’s focus (Naciti, 2019). An explanation of how and which elements of the board structure affect long-term business success follows, with an indication of the topic, thus improving the orderliness of ideas in the research. While the title of an article may include the research sample, the abstract of this piece goes into further detail on the sample under study. The article’s abstract gives readers a concise yet thorough summary of the research. Based on this, an investigation into how corporate governance traits affect sustainability performance is outlined as a research question. It was also essential to specify in the abstract what was tested and how it was analyzed. The major findings of the study are presented in the end. The abstract, however, lacks any propositions based on the study’s findings.

The study’s introduction makes it obvious what the problem is. The author’s strategy is to focus on a specific aspect of a more significant issue. First, current literature references are used to establish the general link between corporate governance features and business success (Naciti, 2019). This is followed by a narrower focus on sustainable performance, which is less broad than overall performance. As a result, the researcher affirms that the connection between board configuration and sustainable development has not been well studied, and there is no consensus on how executive committee features influence the firm’s long-term success. Accordingly, the reasoning behind deciding to look into this connection is clear. The study’s justification and relevance were not made explicit. The insufficiency of research in the field might be an explanation; however, it would have been beneficial to have more details justifying this study.

The author has unmistakably defined all-important research concepts in the article. The structure of the article is consistent and follows a logical progression. To begin, a problem formulation is based on previously published research on the subject. Second, a survey of empirical and theoretical research is undertaken to determine what other scientists have discovered. Third, these findings are used to develop the analysis’s approach; this process has four stages (Naciti, 2019). In the fourth step, the findings are analyzed and discussed in light of the primary research. The article has a few flaws that can be worked over in future studies. This logical framework follows guidelines for writing credible research papers. It is evident that the study topic is whether board qualities influence the firm’s long-term profitability. The three objectives developed following the three board features were examined to address this question. Accordingly, three hypotheses have been created for the study’s testing. They assume that each trait, such as the separation of the chief executive officer and board chairperson and board diversity, contributes to long-term corporate success.

The review of the literature in the article is comprehensive and thorough. The author includes a literature overview and a hypothesis-building section in a well-structured review. To begin with, the author argued that corporate governance practices should be aligned with a company’s long-term objectives. The researcher detailed two primary theories to help the reader understand how successful companies perform. According to the agency theory, managers might act in a way that is not in the shareholders’ best interest or the company’s long-term goals (Naciti, 2019). Conversely, stakeholder theory points out that in addition to the firm’s internal stakeholders, such as customers, workers, and the local community, numerous external stakeholders exist and should be considered. The facts and hypotheses for three board member qualities are established. Board independence, directors’ diversity, and chief executive officer independence are the three critical elements that make up a great panel.

Relevant theoretical framework concepts are contained in the theories that the author selected. Concerns about environmental and social repercussions may be overlooked in favor of a theory that emphasizes possible conflicts between managers and owners. This is because agency theory focuses primarily on the company’s financial results. On the other hand, stakeholder theory holds that non-financial factors are just as important as monetary ones. Thus, the choice of company behavior model influences the level of attention paid to non-financial components of firm success (Naciti, 2019). These concepts are not detailed in depth, but their explanation is broken down into sections based on the study hypotheses and factors studied. As a result, theories become more challenging for the reader to comprehend. Consequently, the literature study provides empirical data indicating a variety of perspectives on the influence of the board qualities stated. There is a mix of new and older studies in the review’s empirical literature, with the majority drawing on secondary data from various nations.

The author has not discussed the sample under study well enough. The sample encompassed 360 Fortune 500 businesses, or 72% of the total, although no selection criteria were provided (Naciti, 2019). The researcher may have made the decision based on the accessibility of data, but they did not say so. Non-random sampling was clearly used since the sample size was adequate to complete the research and draw generalizable findings. Secondary data from reputable databases, such as Compustat Global Vantage and Sustainalytics, were employed to conduct the analysis (Naciti, 2019). Due to its reliance on publicly accessible secondary data, which may be found in yearly reports or paid databases, the study posed no damage to any participants. Trade secrets and private information were not disclosed in this study. The findings may be checked and study repeated by any interested party because the research was conducted in a positivist manner to make concepts vivid.

Precise definitions of words and theories used in the research were evidently outlined in the article. The study’s lack of a clearly defined research design is a flaw. On the contrary, the process sequence clarifies the study approach. As previously stated, the information has been gathered from credible sources; however, the decisive factors for data processing have not been specified. The statistics and the data collecting method are acceptable since gathering the information manually from multiple databases would take a lot of time and resources.

The researcher employed both inferential and descriptive statistics to compute the results. The researcher did not formulate any empirical model to support the findings of dependent and explanatory factors, which impedes understanding of the research approach. Similarly, the article does not make it apparent if the independent variables are utilized as dummies with the values 0, 1, or 100, or whether they can assume intermediate values between 0-100. This is an additional problem with this data sample. In addition, the properties of independent variables are chosen unconventionally, in contrast to prior research devoted to studying corporate governance procedures. A value of 100 is provided for these variables if at least two-thirds of the board comprises independent executives, female directors, and managers from countries other than the corporation’s headquarters. Furthermore, the results demonstrate that the impact of control variables and directors’ attributes on sustainability practices, social processes, and environmental operations was calculated separately (Naciti, 2019). At the same time, a confidence interval of these three dimensions was used to describe the dependent variable. This uncertainty is just another drawback of the research approach.

The method of analysis that was selected was thoroughly discussed. More specifically, the researcher demonstrated that several underlying factors were decided concurrently with the dependent variable, which might lead to an issue with endogeneity in the independent variables and the development of unexplained set effects. When using a pooled ordinary least squares regression, the results will be skewed by the estimation errors introduced by the biased estimates. As a result, neither a panel data regression with predetermined effects nor a pooled regression model would be suitable. The author used the generalized method of moments, which was discovered to be more appropriate in this scenario, to handle the endogeneity of directors’ attributes and potential heterogeneity, heteroskedasticity, and autocorrelation in the sample (Naciti, 2019). The board elements the researcher initially found endogenously linked to performance have been re-evaluated. As a result, the researcher used lag t-2 and lag t-3 inferential statistics as instrumental variables to justify endogeneity.

Diagnostic tests were performed as part of the investigation to ensure the accuracy of the findings. Using the Hansen-Sargan test, the researcher looked at whether the limitations set were still relevant. The results of this test show that the instruments in use are suitable under the current conditions. The autoregression examination with t-2 lag is the second test, and it was used to check that the error terms were not serially correlated (Naciti, 2019). Non-serial correspondence of error stipulations and validity were respectively demonstrated in testing.

The researcher evidently outlines the implications of the results and how they concern theories, other discoveries, and real practice. Board characteristics and senior executive duality extensively and positively influenced all three areas of business operation. This established that board diversity with regard to race and gender, in addition to the disconnection of the executive and board chairperson duties, had a beneficial impact on performance (Naciti, 2019). In contrast, board independence negatively influences both sustainable and social feat. Findings appeared in line with ideas that had been taken into consideration. As a control variable, firm performance was favorably affected by higher earnings and bigger size. According to agency theory, separating chief executive officer and chairperson duties avoided possible conflicts of interest and improved managerial control. A beneficial effect of board characteristics on operations is consistent with stakeholder theory since directors’ diversity would help account for the welfare of various shareholder groups.

The author recommended future research that might enhance and clarify the findings. Furthermore, the study’s limitations were acknowledged, allowing researchers to address them in further research. Towards the conclusion of the discussion, the researcher noted the study’s limitations, such as the selection of the sample and the large number of statistical tests, which raised the likelihood of errors being made. Internal and external validity were at risk after understanding the study’s limitations. Sample selection, for example, might compromise the validity of a survey of both the internal and external levels. Internal validity is jeopardized since the sample did not seem to be drawn randomly. Since the findings cannot be extrapolated to a broader population because of this weakness in the design, the study’s external validity was jeopardized.

Quantitative research necessitates a great deal of statistical analysis that I find challenging for those without a foundation in statistics. For non-mathematicians, quantitative data analysis is challenging because it necessitates exhaustive statistical calculations and the development of a complex research model, which are difficult for non-statisticians. Additionally, it is costly and time-consuming to do quantitative research since it requires a large sample of participants who are representative of the target demographic, as well as sourcing for, collating, and converting data into a statistical form for extensive analysis. This sort of study is meticulously organized to guarantee proper randomization and accurate identification of control groups.

The type of sampling method and its appropriateness in the provided list has not been declared in the article by Naciti. Instead, the author leaves the readers to guess the sampling strategy employed, which impedes the study’s credibility. Using probability-founded sampling procedures would have been the best way for the researcher to eliminate bias in the study. Some methods the researcher could have utilized and openly stated encompass simple random, cluster, or systematic sampling.


Naciti, V. (2019). Corporate governance and board of directors: The effect of a board composition on firm sustainability performance. Journal of Cleaner Production, 237, 117727.