**3.3 The developed hypothesis**

Based on the reviewed literature and the objectives of the study, important null hypotheses were developed as follows:

*H01: There is no impact of the Hofstede cultural dimensions (HCL) on Board size (BZ) in Jordanian companies***.**

*H02: There is no impact of the Hofstede cultural dimensions (HCL) on Board Independence (BI) in Jordanian companies***.**


(PDI): Power distance index; (IDV): Individualism vs. collectivism); (UAI): Uncertainty avoidance Index; (MAS): Masculinity versus Femininity; (LTO) Long-term orientation

*Source: (Author's own, 2021).*

#### **Table 1.**

*Empirical studies of the culture and corporate governance.*

*The Impact of the Culture on Corporate Governance (Board Structure) in Jordan Context DOI: http://dx.doi.org/10.5772/intechopen.99136*


#### **Table 2.**

*The description and the measurement of the variables.*

*H03: There is no the impact of Hofstede cultural dimensions (HCL) on Non- CEO duality (NCEO) in Jordanian companies***.**

#### **3.4 Variables measurements**

Variables used in this study include: (1) Independent variable IDV (culture), to measure the culture the study used the Hofstede cultural dimensions CL as in terms of (Power distance index (PDI), Individualism vs. collectivism (IDV), Uncertainty avoidance (UAI), Masculinity vs. femininity (MAS), Long-term orientation vs. short-term orientation (LTO), Indulgence vs. restraint (IND). (2) dependent variable DV (corporate governance) this study used different proxies to measure CG by using board structure in terms of board size (BZ); Board independence (BI); Non- CEO duality (NCEO). The following **Table 2** show the description and the measurement of the variables.

#### **4. Empirical results and discussion**

The current study employs statistical tests: Descriptive statistics, Pearson correlation, and the regression analysis.

#### **4.1 Descriptive statistics**

This section presents the Descriptive Statistics of DV the Board structure in terms of board size (BZ), Board independence (BI), and Non- CEO duality (NCEO), and INV Hofstede cultural dimensions (Power distance index (PDI), Individualism vs. collectivism (IDV), Uncertainty avoidance (UAI), Masculinity vs. femininity (MAS), Long-term orientation vs. short-term orientation (LTO), Indulgence vs. restraint (IND). Such as (Maximum, Minimum, Mean and standard deviations). The following **Table 3** shows the Descriptive Statistics of DV (BI) and, IND (PDI, UAI) Variables.


LPDI: Low Power Distance Index; LTO: Long- Versus Short-Term Orientation, COLL: Collectivism; MAS: Masculinity; HUAI: High Uncertainty Avoidance Index; REST: Restraint; BZ: Board size; BI: Board independence; NCEO: Non- CEO duality

*Source: (Author's Survey, 2021).*

#### **Table 3.**

*Descriptive statistics of DV (BI) and, IND (PDI, UAI) variables.*

The descriptive statistics show the normality of the data, Mean, Standard Deviation, Minimum, and Maximum. The mean value of LPDI, LTO, COLL, MAS, REST, HUAI are (3.9193, 3.9661, 4.0000, 3.8023, 3.8094, 3.9988) respectively with Standard Deviation of .88501, .91561, .67585, 1.08183, The descriptive statistics show the normality of the data, Mean, Standard Deviation, Minimum, and Maximum. The mean value of LPDI, LTO, COLL, MAS, REST, HUAI are (3.9193, 3.9661, 4.0000, 3.8023, 3.8094, 3.9988) respectively with Standard Deviation of .88501, .91561, .67585, 1.08183, 1.09905, .56680. The COLL has the highest mean value of 4.0000 among all other cultural dimensions.

Regarding the Board size (BZ) the mean value is (6.8253) that ranges between a minimum of (4.67) and a maximum of (13) which means there is some companies the board member less than (11). Independence board (BI) the mean value is (.910) that ranges between a minimum of (.00) and a maximum of (1) which means most of the companies in Jordan characterized by the independence that reveals these companies binder with this mechanism. Non- CEO duality (NCEO) registers average with (.903) and standard deviation of (.26564) Which means that that there are separate between the chairman and the CEO in most Jordanian companies. The COLL has the highest mean value of 4.0000 among all other cultural dimensions.

#### **4.2 Multicollinearity test**

Multicollinearity test has been conducted within the regression model. This test is reveals if there is high correlation between the independent variables that should be excluded from the model to achieve more true results. The results of the test show that the (VIF) is less than (10), which means there is no high correlation between the independent variables.

#### **4.3 Regression and testing hypotheses (empirical result and discussion)**

Multiple regression has been used to investigate the impact of the culture on corporate governance (Board Structure) in Jordan companies. The researcher adopted

*The Impact of the Culture on Corporate Governance (Board Structure) in Jordan Context DOI: http://dx.doi.org/10.5772/intechopen.99136*

the significant level (.1) as this level of significance could be adopted in the social sciences. In the following the proposed models of the study:

Model (1): This model measures the impact of Hofstede cultural dimensions on**.** Board size (BZ)**.**

Model (2): This model measures the impact of Hofstede cultural dimensions on Board independence (BI)**.**

Model (3): This model measures the impact of Hofstede cultural dimensions on Non- CEO duality (NCEO)**.**

*4.3.1 The impact of Hofstede cultural dimensions on board size (BZ)*

Model (1): This model measures the impact of Hofstede cultural dimensions on**.**

Board size (BZ)**.**

H01: There is no impact of the Hofstede cultural dimensions (HCL) on Board size (BZ) in Jordanian companies.

The following **Table 4** shows The Regression analysis result of Model (1) the impact of the Hofstede cultural dimensions on Board size (BZ).

**Table 4** shows the results of the regressions analysis of the model (1) consists of the dependent variables Board size (BZ) and the independent variable the Hofstede cultural dimensions. This is model is fitted with the Hofstede cultural dimensions (LPDI, COLL, REST, HUAI). While the other HLC (MAS, LTO) are not fit for this model. The R square is (.08) the explanatory power of the model. This means that the model explains just (8%) of the change that occurs in the dependent variable Board size (BZ). The F-statistics is (2.162) at a significant level (.079). This means that the explanatory power of the model is statistically significant at the level of significance (0.1), which means that the Hofstede cultural dimensions affect Board size (BZ). The values of (β, t, Sig) for each dimension of the Hofstede cultural dimensions show that the (LPDI, HUAI) are effect on Board size (BZ) at a statistically significant level with the value of (0.025, 0.085) respectively.

This means Board size (BZ) is significantly determined by (LPDI, HUAI). Where (LPDI, HUAI) are affected negatively on Board size (BZ) with a coefficient value of (−.565, −.577). This means (BZ) is significantly determined and affected by (LPDI, HUAI) in a negative manner. While there is no effect of (COLL, REST) on (BZ). This means (BZ) is not significantly determined by (COLL, REST).


#### **Table 4.**

*The regression analysis result of model (1) the impact of the Hofstede cultural dimensions on board size (BZ).*

Based on the above results, the tested hypothesis H01: There is no impact of the Hofstede cultural dimensions (HCL) on Board size (BZ) in Jordanian companies is rejected and accepted the alternative Hypotheses regarding the (LPDI, HUAI) while the tested hypothesis H01 is accepted regarding (COLL, REST). This means that (LPDI, HUAI) are the most dimensions that affect significantly on Board size (BZ).

#### *4.3.2 The impact of Hofstede cultural dimensions on board independence (BI)*

Model (2): This model measures the impact of Hofstede cultural dimensions on Board independence (BI).

H02: There is no impact of the Hofstede cultural dimensions (HCL) on Board Independence (BI) in Jordanian companies.

The following **Table 5** shows the Regression analysis result of Model (2) impact of the Hofstede cultural dimensions on Board Independence (BI).

**Table 5** shows the results of the regressions analysis of model (2) consists of the dependent variable Board Independence (BI) and the independent variable the Hofstede cultural dimensions. This is model is fits just with the Hofstede cultural dimension (COLL). While the other HLC (LPDI, REST, HUAI, MAS, LTO) are not fit for this model. The R square is (.036) the explanatory power of the model. This means that the model explains just (3.6%) of the change that occurs in the dependent variable Board Independence (BI). The F-statistics is (3.789) at a significant level (.054). This means that the explanatory power of the model is statistically significant at the level of significance (0.1), which means that the Hofstede cultural dimension (COLL) affects Board Independence (BI). The values of (β, t, Sig) for (COLL) show that the (COLL) is an effect on Board Independence (BI) at a statistically significant level with the value of (0.054).

This means Board Independence (BI) is significantly determined by (COLL). Where (COLL) is affect negatively on Board Independence (BI) with a coefficient value of (− 0.037). This means (BI) is significantly determined and affected by (COLL) in a negative manner. This result is inconsistent with "in [17]" who found there is a positive relationship between the outsider member and individualism, uncertainty avoidance, femininity, and power distance. On the other hand, (BI) is not significantly determined by (LPDI, REST, HUAI, MAS, LTO).

Based on the above results, the tested hypothesis H02: There is no impact of the Hofstede cultural dimensions on Board Independence (BI) in Jordanian companies is rejected and accepted the alternative Hypotheses regarding the (COLL) while the tested hypothesis H02 is accepted regarding the other HLC (LPDI, REST, HUAI, MAS, LTO). This means that (COLL) is the most dimensions affect significantly on Independence (BI).


#### **Table 5.**

*The regression analysis result of model (2) impact of the Hofstede cultural dimensions on board Independence (BI).*

*The Impact of the Culture on Corporate Governance (Board Structure) in Jordan Context DOI: http://dx.doi.org/10.5772/intechopen.99136*

#### *4.3.3 The impact of Hofstede cultural dimensions on non-CEO duality (NCEO)*

Model (3): This model measures the impact of Hofstede cultural dimensions on Non- CEO duality (NCEO).

H03: There is no the impact of Hofstede cultural dimensions (HCL) on Non-CEO duality (NCEO) in Jordanian companies.

The following **Table 6** show The Regression analysis result of Model (3) the impact of the Hofstede cultural dimensions on Non- CEO duality (NCEO.

**Table 6** shows the results of the regressions analysis of the model (3) consists of the dependent variable Non- CEO duality (NCEO) and the independent variable the Hofstede cultural dimensions. This is model is fitted with all of the Hofstede cultural dimensions (LPDI, LTO, COLL, MAS, REST, HUAI). The R square is (.105) the explanatory power of the model. This means that the model explains just (10.5%) of the change that occurs in the dependent variable Non- CEO duality (NCEO). The F-statistics is (1.899) at a significant level (.089). This means that the explanatory power of the model is statistically significant at the level of significance (0.1), which means that all of the Hofstede cultural dimensions affect Non- CEO duality (NCEO). The values of (β, t, Sig) show that the (REST) is effect on Non-CEO duality (NCEO) at a statistically significant level with the value of (0.014).

This means Non- CEO duality (NCEO) is significantly just determined by (REST). Where (REST) is affect negatively on Non- CEO duality (NCEO) with a coefficient value of (− 0.064). This means Non- CEO duality (NCEO) is significantly determined and affected by (REST) in a negative manner. This result is inconsistent with "in [17]" who found there is a positive relationship between the combine of the chairman and the CEO and individualism, uncertainty avoidance, and power distance. On the other hand, (Non- CEO duality (NCEO) is not significantly determined by (LPDI, LTO, COLL, MAS, HUAI).

Based on the above results, the tested hypothesis H03: There is no impact of Hofstede cultural dimensions (HCL) on Non- CEO duality (NCEO) in Jordanian companies is rejected and accepted the alternative Hypotheses regarding the (REST) while the tested hypothesis H02 is accepted regarding the other HLC (LPDI, LTO, COLL, MAS, REST, HUAI). This means that (REST) is the most dimensions that affect significantly on Non- CEO duality (NCEO).


#### **Table 6.**

*The regression analysis result of model (3) the impact of the Hofstede cultural dimensions on non- CEO duality (NCEO.*

#### *Corporate Governance - Recent Advances and Perspectives*


#### **Table 7.**

*The regression analysis result of the impact of the Hofstede cultural dimensions on board structure.*

### *4.3.4 The impact of Hofstede cultural dimensions on board structure (BZ, BI, NCEO)*

This section presents model (M4), this model were conducted for additional results, this model combines the Hofstede cultural dimensions and the proxies of Board Structure (BZ, BI, NCEO).

The following **Table 7** shows The Regression analysis result of the impact of the Hofstede cultural dimensions on Board structure.

**Table 7** shows the results of the regressions analysis of the model (4) consist of the dependent variable board structure BS and the independent variable the Hofstede cultural dimensions HCL. This is model is fitted with the Hofstede cultural dimensions (LPDI, LTO, COLL, HUAI). The R square is (.076) the explanatory power of the model. This means that the model explains just (7.6%) of the change that occurs in the dependent variable board structure. The F-statistics is (2.043) at a significant level (.094). This means that the explanatory power of the model is statistically significant at the level of significance (0.1), which means that all of the Hofstede cultural dimensions affect board structure. The values of (β, t, Sig) show that the (LPDI) is an effect on board structure at a statistically significant level with the value of (.020).

This means board structure is significantly just determined by (LPDI). Where (LPDI) is affected negatively on board structure with a coefficient value of (− 0.232). This means board structure is significantly determined and affected by (LPDI) in a negative manner. On the other hand, board structure is not significantly determined by (LTO, COLL, HUAI).

#### **5. Conclusions**

Many studies have been conducted on culture and corporate governance and their relationship with performance. While, lack studies addressed the relationship between culture and corporate governance particularly, in the Jordan context. Some studies conducted on culture and corporate governance that confirmed that there is a relationship between culture and corporate governance "in [17, 18]".

The current study has added a contribution to the debate regarding this issue. This paper provides new contributions by presenting significant results and critical managerial implications to the literature as a new study conducted to investigate

*The Impact of the Culture on Corporate Governance (Board Structure) in Jordan Context DOI: http://dx.doi.org/10.5772/intechopen.99136*

the impact of culture on corporate governance in terms of board structure in the Jordan context. The current study aims to investigate the impact of the culture on corporate governance (Board Structure) in Jordan companies for the duration (2013–2018). The study used different proxies to measure corporate governance in terms of Board Structure. For this purpose developed hypotheses were tested. The findings indicated that there is an impact of culture on corporate governance (Board Structure), this impact is negative and significant. The results show regarding the Board size (BZ) that the Jordanian companies are somewhat committed to the rules of the board member. Furthermore, most of the companies in Jordan characterized by the independence of the board (BI). As well as there are separate between the chairman and the CEO in most Jordanian companies. Regarding the Hofstede cultural dimensions, the results show that the COLL has the highest mean value of 4.0 among all other cultural dimensions.

Regarding the regressions analysis, the results of model (1) show that the Hofstede cultural dimensions (LPDI, HUAI) are effect negatively on Board size (BZ). Model (2) shows that the Hofstede cultural dimension (COLL) affects negatively Board Independence (BI). Model (3) shows that (REST) is effect negatively on Non- CEO duality (NCEO). From the previous results, it is notable that despite the commitment of Jordanian companies to rules of the board size, but there is no impact of Hofstede cultural dimensions on board size, except for the dimensions (LPDI, HUAI). As well as although most of the companies in Jordan characterized by the independence of the board, there is no impact of Hofstede's cultural dimensions on Board Independence, except for (COLL). Furthermore, most of the companies in Jordan characterized by the Non- CEO duality, but there is no impact of Hofstede cultural dimensions on Non- CEO duality except for (REST).

#### **6. The importance of research for the future and recommendations**

The current study provides new contributions by presenting significant results to the literature regarding the culture and corporate governance in the Jordan context as a modern study that conducted to investigate the impact of the culture on corporate governance. The current study used different proxies to measure the corporate governance by using board structure in terms of board size (BZ); Board independence (BI); Non- CEO duality (NCEO) to investigate the impact of culture on corporate governance.

The results of the current study show there are impacts of the culture on the board structure. These results are consistent with the previous studies that indicated that there is a relationship between culture and corporate governance. However, this impact is somewhat weak as the empirical results show that not all of the cultural dimensions are affected the board structure. Where (LPDI, HUAI) impacts negatively on Board size (BZ). (COLL) impacts negatively on Board Independence (BI), and (REST) impacts negatively on Non- CEO duality (NCEO). This weak impact and in a negative direction could be explained due that the developing countries are characteristics with weak corporate governance practices are weak. In addition, the culture in these countries is different from that of developed countries. Therefore, the current study recommends applying managerial implications and regulations that could help the related parties such as investors, managers, and policymakers in making decisions in the Jordan context. Such as companies should concern with the culture and the local norms when constructing the board or the structure of the company as well as focus on the values of the organization that plays a critical role in the values of the individual and shaping the behavior of the individual that affects the culture that could impact the organizational structure, particularly, on the board of directors. As the human factor is the essence of culture.

In addition, increasing the interest and awareness about the environment when improving company regulations. As a result, that could play an important role in changing the culture as building a strong culture encourages all employees to perform their roles. In addition, adopting and practicing good CG tools leads to attracting foreign investors. Finally, the current study showed that the results of literature related to culture and its impact on the board of directors are controversial. And there is a lack of studies regarding this issue. Therefore, the Current study recommends further future studies in this field, which contributes to enriching the literature.
