Characteristics of Board of Directors and Cost of Debts: A Case of United Arab Emirates Listed Companies

Characteristics of Board of Directors and Cost of Debts: A Case of United Arab Emirates Listed Companies

Cost of debt provides signals not only on how the firms are financed but it also indicates managers’ ability to increase the bottom line-income statement item. Thus, with a good corporate governance practice, firms are expected to experience optimum level of cost of debt. However, there is a general...

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Main Author: Aomrah, Muneer Rajab Awadh
Format: Thesis
Language:eng
eng
Published: 2011
Subjects:
HD2709-2930.7 Corporations
Online Access:https://etd.uum.edu.my/2894/1/Muneer_Rajab_Awadh_Aomrah.pdf
https://etd.uum.edu.my/2894/2/1.Muneer_Rajab_Awadh_Aomrah.pdf
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id my-uum-etd.2894
record_format uketd_dc
institution Universiti Utara Malaysia
collection UUM ETD
language eng
eng
advisor Abdul Wahab, Nor Shaipah
topic HD2709-2930.7 Corporations
spellingShingle HD2709-2930.7 Corporations
Aomrah, Muneer Rajab Awadh
Characteristics of Board of Directors and Cost of Debts: A Case of United Arab Emirates Listed Companies
description Cost of debt provides signals not only on how the firms are financed but it also indicates managers’ ability to increase the bottom line-income statement item. Thus, with a good corporate governance practice, firms are expected to experience optimum level of cost of debt. However, there is a general lack of studies that investigate this issue in the Gulf Council Countries (GCC), particularly the United Arab Emirates (UAE). Therefore, this research is conducted to investigate the relationship between characteristics of board of directors and cost of debts in UAE setting. The characteristics tested include board size, board independence, duality, board meetings, multiple directorships and major director ownership. This paper reports the results from a multivariate analysis on a dataset collected from the 2009 company annual reports of 62 non-financial UAE companies listed on the Dubai Financial Market and Abu–Dhabi Securities Exchange. The empirical results of this study found that the relationship between board size and board independence with cost of debts was in a negative direction but not significant. However, the results found that there was a positive relationship between CEO duality and cost of debts. Board meetings and multiple directorships of the board were the new variables discussed by this study, and the results found that there was a negative relationship between board meetings and multiple directorships with cost of debts. Although, the results of this study found a negative relationship between major director ownership and cost of debts, this relationship was not significant statistically.
format Thesis
qualification_name masters
qualification_level Master's degree
author Aomrah, Muneer Rajab Awadh
author_facet Aomrah, Muneer Rajab Awadh
author_sort Aomrah, Muneer Rajab Awadh
title Characteristics of Board of Directors and Cost of Debts: A Case of United Arab Emirates Listed Companies
title_short Characteristics of Board of Directors and Cost of Debts: A Case of United Arab Emirates Listed Companies
title_full Characteristics of Board of Directors and Cost of Debts: A Case of United Arab Emirates Listed Companies
title_fullStr Characteristics of Board of Directors and Cost of Debts: A Case of United Arab Emirates Listed Companies
title_full_unstemmed Characteristics of Board of Directors and Cost of Debts: A Case of United Arab Emirates Listed Companies
title_sort characteristics of board of directors and cost of debts: a case of united arab emirates listed companies
granting_institution Universiti Utara Malaysia
granting_department Othman Yeop Abdullah Graduate School of Business
publishDate 2011
url https://etd.uum.edu.my/2894/1/Muneer_Rajab_Awadh_Aomrah.pdf
https://etd.uum.edu.my/2894/2/1.Muneer_Rajab_Awadh_Aomrah.pdf
_version_ 1747827455006081024
spelling my-uum-etd.28942022-04-12T00:30:50Z Characteristics of Board of Directors and Cost of Debts: A Case of United Arab Emirates Listed Companies 2011-06 Aomrah, Muneer Rajab Awadh Abdul Wahab, Nor Shaipah Othman Yeop Abdullah Graduate School of Business Othman Yeop Abdullah Graduate School of Business HD2709-2930.7 Corporations Cost of debt provides signals not only on how the firms are financed but it also indicates managers’ ability to increase the bottom line-income statement item. Thus, with a good corporate governance practice, firms are expected to experience optimum level of cost of debt. However, there is a general lack of studies that investigate this issue in the Gulf Council Countries (GCC), particularly the United Arab Emirates (UAE). Therefore, this research is conducted to investigate the relationship between characteristics of board of directors and cost of debts in UAE setting. The characteristics tested include board size, board independence, duality, board meetings, multiple directorships and major director ownership. This paper reports the results from a multivariate analysis on a dataset collected from the 2009 company annual reports of 62 non-financial UAE companies listed on the Dubai Financial Market and Abu–Dhabi Securities Exchange. The empirical results of this study found that the relationship between board size and board independence with cost of debts was in a negative direction but not significant. However, the results found that there was a positive relationship between CEO duality and cost of debts. Board meetings and multiple directorships of the board were the new variables discussed by this study, and the results found that there was a negative relationship between board meetings and multiple directorships with cost of debts. Although, the results of this study found a negative relationship between major director ownership and cost of debts, this relationship was not significant statistically. 2011-06 Thesis https://etd.uum.edu.my/2894/ https://etd.uum.edu.my/2894/1/Muneer_Rajab_Awadh_Aomrah.pdf text eng public https://etd.uum.edu.my/2894/2/1.Muneer_Rajab_Awadh_Aomrah.pdf text eng public masters masters Universiti Utara Malaysia Abbott, L., Parker S., Peters, G., & Raghunandan, K. (2003). The association between audit committee characteristics and audit fees. Auditing: A J. Pract. Theory, 22(2), 17–32. Abdulhafedh, K. (2006). Testing and evaluation of the relationship between the cost of capital and stock market returns: An Empirical Study on the industrial companies listed on the Amman Financial Market. University of the Western Mountain Libya. Abdullah, S. (2004). Board composition, CEO duality and performance among Malaysian listed companies. Corporate Governance, 4(4), 47-61. Abdul-Salam, A. (2009). 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