The Board Mix of Maltese Listed Entities and its Corporate Governance Implications
Purpose: The objectives of this study were (i) to ascertain the Board mix of selected Maltese Listed Entities (MLEs) and how this has changed, if in any way, in the years 2018-2022, (ii) to extract the impact of the main factors affecting the Board mix, and (iii) to assess the extent to which the Board mix is perceived as contributing to good Corporate Governance (CG). Methodology: A mixed methodology was adopted. Thirty-one semi-structured interviews were conducted with eleven directors, nine company secretaries, four CFOs and two CEOs of MLEs, together with three corporate advisors, one corporate lawyer and one MLE expert. Findings: Independent Non-executive Directors (INEDs) are appreciated in the Boards of MLE, but the Board mix varies significantly among MLEs. The main factors affecting the Board mix of MLEs are the scope and complexity of the entity’s operations, CEO entrenchment, the directors’ knowledge on the entity’s key functions and the directors’ nationality. NEDs (Non-executive Directors) and INEDs contribute towards strategy formulation, the prevention and detection of corporate irregularities, and enhanced transparency in financial reporting. Meanwhile, EDs (Executive Directors) contribute towards strategy execution and may even aid in preventing and detecting corporate irregularities. Originality/Value: Although much ink has been spilled on Board of Director issues, too few studies have as yet delved into the different types of directors. This paper sheds light on the optimal Board mix within a small-state context that ensures good CG and also on the factors that may necessitate a change to such Board mix.