Does board structure drive dividends payout? Evidence from the Sultanate of Oman

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Abstract

The study investigates whether corporate board characteristics influence dividends policy in Omani listed firms. It also examines whether this relationship is determined by the recent global oil crisis. Using a sample of 109 listed firms in Muscat Securities Exchange between 2009 and 2019, we find that dividends payout is positively associated with board independence, board activity, and board nationality diversity. Though, no evidence is found that board size and gender diversity have an impact on dividends payout. Interestingly, when controlling for the global oil crisis, none of the corporate board attributes influence dividends payout. This study presents new evidence on the influence of board structure on dividends policy. The findings suggest that the impact of corporate board characteristics on dividends policy is contingent on the surrounding institutional environment (i.e., the recent global oil crisis).

Keywords: Board Structure, Dividends Payout, Global Oil Crisis, Agency Conflict, Sultanate of Oman

Authors’ individual contribution: Conceptualization — B.A. and S.P.; Methodology — B.A. and S.P.; Formal Analysis — B.A. and S.P.; Investigation — B.A. and S.P.; Resources — K.H.; Data Curation — B.A. and S.P.; Writing — Original Draft — B.A. and S.P.; Writing — Review & Editing — K.H.; Supervision — B.A. and K.H.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

Acknowledgements: The authors would like to acknowledge that the research leading to these results has received funding from Ministry of Higher Education, Research and Innovation–Sultanate of Oman under the Block Funding Program. Block Funding Agreement No. TRC/BFP/SHCT/01/2019. They would also like to extend their gratitude to the management of the University of Technology and Applied Sciences (UTAS)–Shinas for motivating and supporting them to complete this research endeavor. In addition, they are grateful to their graduates, Shahad Alrushdi and Omaima Alshkhari for assisting the research team to hand collect the required data for the study.

JEL Classification: G3, G35

Received: 22.06.2021
Accepted: 16.08.2021
Published online: 18.08.2021

How to cite this paper: Alshabibi, B., Pria, S., & Hussainey, K. (2021). Does board structure drive dividends payout? Evidence from the Sultanate of Oman. Corporate Ownership & Control, 18(4), 218–230. https://doi.org/10.22495/cocv18i4art15