Corporate reputation in India: unveiling the role of board dimensions
Swatilekha Datta, Tarak Nath Sahu, Arindam GuptaPurpose
The primary motive of this research is to quantify corporate reputation by developing a reputation index along with investigating the influence of governance mechanisms, specifically board characteristics, on the reputation of Indian firms.
Design/methodology/approach
Reputation of 249 manufacturing firms listed in the National Stock Exchange (NSE) 500 index has been analysed over the period 2015–2024 using a reputation index, and to further investigate its association with board dynamics, panel data analysis has been employed.
Findings
Results reveal that board dimensions at firms in India have a huge contribution in impacting their reputation. Specifically, larger boards negatively affect corporate reputation, adding credence to agency theory, while board independence enhances it.
Research limitations/implications
This study enriches the corporate governance literature by empirically linking board attributes with corporate reputation in the Indian context.
Practical implications
The findings suggest that firms should prioritise the appointment of independent directors while maintaining optimal board size to improve their reputational standing. Furthermore, the reputation index developed in this study offers investors an additional tool to evaluate potential investments by providing firms' reputation scores.
Social implications
The article contains valuable insights for shareholders who must be aware of how effective governance mechanisms help to build corporate reputation.
Originality/value
The present study is novel in examining the association between board dynamics and corporate reputation in India in the post-Companies Act, 2013 context. It further develops a reputation index using several proxies for measuring firms' reputation quantitatively, offering a distinctive contribution to the literature.