Abstract:
The purpose of the present study is to investigate and empirically determine the
effect of ownership structure on corporate board and audit committee meeting frequency
in Pakistani listed companies. The study also examines the relationship between
corporate board characteristics with board meeting and audit committee frequency. The
explanatory variable of the present study is incorporated as the corporate board
characteristics and dimensions of ownership structure. Dimension of corporate board are
incorporated as, proportion of independent director, CEO duality and board size. While
the ownership structure is incorporated as, concentrated ownership, insider ownership
and outsider block holding. The dependent variable of the particular study are taken as
corporate board and audit meeting frequency i.e. the number of board an audit meetings
in a financial year. The study also incorporates control variables as, the firm size,
leverage and age listing. Hypotheses were developed based on agency theory. The
empirical evidence is provided by a sample of nonfinancial companies listed at Karachi
stock exchange. Convenient sampling by employing secondary source data ranging from
2007 to 2012 was collected for empirical data analysis. Estimated generalized least
square regression is used in panel data model to test the relationship. Robustness checks
through Hausman specification test provide further empirical support. Based on 500 year
firm observations, the study found that CEO duality and block holding ownership
negatively impact- either on the corporate board or on the audit committee meeting
frequency. Whilst the board size and proportion of independent directors in the board has
a positive impact. The findings of the study are consistent with the hypothesis that insider
and concentrated ownership are substitute control mechanisms. The findings also suggest
that board and audit meeting are more frequent in large firms as compared to small and
medium size firms. This is the first most empirical investigation providing the empirical
evidence on the determinants of corporate board and audit committee meeting frequency
in a contextual setting featured by nonfinancial sector of Pakistan. The study provides an
agency theory-based examination of the board and audit committee meeting frequency, in
a setting featured by concentrated and insider ownership.
