Corporate governance and dividend pay-out policy in UK listed SMEs: The effects of corporate board characteristics

Mohamed H. Elmagrhi, Collins G. Ntim, Richard M. Crossley, John K. Malagila, Samuel Fosu, Tien V. Vu

Research output: Contribution to journalArticlepeer-review

91 Citations (Scopus)


Purpose: The purpose of this paper is to examine the extent to which corporate board characteristics influence the level of dividend pay-out ratio using a sample of UK small- and medium-sized enterprises from 2010 to 2013 listed on the Alternative Investment Market. Design/methodology/approach: The data are analysed by employing multivariate regression techniques, including estimating fixed effects, lagged effects and two-stage least squares regressions. Findings: The results show that board size, the frequency of board meetings, board gender diversity and audit committee size have a significant relationship with the level of dividend pay-out. Audit committee size and board size have a positive association with the level of dividend pay-out, whilst the frequency of board meetings and board gender diversity have a significant negative relationship with the level of dividend payout. By contrast, the findings suggest that board independence and CEO role duality do not have any significant effect on the level of dividend pay-out. Originality/value: This is one of the first attempts at examining the relationship between corporate governance and dividend policy in the UK's Alternative Investment Market, with the analysis distinctively informed by agency theoretical insights drawn from the outcome and substitution hypotheses.

Original languageEnglish
Pages (from-to)459-483
Number of pages25
JournalInternational Journal of Accounting and Information Management
Issue number4
Publication statusPublished - 2017
Externally publishedYes


  • Corporate board characteristics
  • Corporate governance
  • Dividend pay-out policy
  • Outcome versus substitution hypothesis
  • UK-listed SMEs

ASJC Scopus subject areas

  • Accounting
  • General Economics,Econometrics and Finance
  • Management Information Systems


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