THEORETICAL BACKGROUND OF INTERNAL AND EXTERNAL ENVIRONMENT OF NEGOTIATION

Since 1992 there has been an increase in the development of corporate governance principles after the wide spread corporate failures in the UK and US in the late 1980s. In response to these failures, various good corporate governance principles and regulations have been developed by different institutions to address the factors that lead to the failures. The basis of the study is to find out whether the developments in corporate governance have led to a decrease in the incidence of corporate failures. In doing so, I used data from UK newspapers, journals, magazines and other publications relating to the period under review. The years were divided into groups made up of four years each and ranked according to corporate governance developments and failures. After which, the Spearman's Rank Correlation Coefficient formula was used to determine the level of correlation. My findings indicated that, there is a fairly strong positive correlation between developments in corporate governance and corporate failures meaning that as the number of codes and principles increased the number of corporate failures also increased. The study also identified some of the reasons for the continuous corporate governance failures as board incompetence, poor risk management by companies, ineffective internal controls, and the failure of external auditors to remain neutral. The researcher is, however, convinced that if the principles and codes that have been developed are effectively assimilated by boards of directors, there could be a significant reduction in corporate failures in the near future.

This study investigates the connection between creative accounting practices and corporate failure among selected deposit money banks in Nigeria. The research aimed to establish the effects of discretionary accruals management and non-discretionary accruals on the occurrence of financial distress. This inquiry was motivated by the growing incidence of bank failures and financial scandals in Nigeria, often attributed to the manipulation of accounting information and weaknesses in corporate governance structures. The study adopted an ex post facto research design. The researchers collected secondary data from the published annual reports of five selected banks, spanning the 10 years from 2015 to 2024. Data were analysed using descriptive statistics, correlation analysis, and multiple regression in EViews.The results revealed a significant negative relationship between both discretionary and non-discretionary accruals and the proxy for corporate failure. The negative coefficient for discretionary accruals suggests that managers may employ earnings manipulation to mask financial distress in the short term. On the contrary, the negative correlation between non-discretionary accruals indicates that accruals from real operations are related to financial stability. This paper concludes that whereas abusive creative accounting falsely represents a bank's actual financial well-being, strategic exploitation of discretionary accruals can temporarily conceal financial distress. It is also advisable that regulators tighten compliance controls and impose more stringent audit controls. The management of a bank must adhere to ethical accounting practices, and the external auditors must be professionally sceptical to clearly identify earnings management as early as possible.

Nowadays, industrial goods firms have experienced draught in debt financing due to the lending preference of financial institutions to firms in the oil and gas sector, corporate failures and financial scandals as well as the overstatements of accounts of some firms in and outside Nigeria blamed to be as a result of account improprieties and ineffective board of directors also Issues of the mixed outcome of previous researches; thus, necessitating and justifying the need for undergoing more investigations into the subject area. The objective of this study is to determine the overall effect of capital structure and corporate governance on profitability with the influence of firm size of the sampled industrial goods firms. The study used multiple regressions as a tool for analysis. The population of the study includes the thirteen (13) industrial goods firms listed by the Nigerian Stock Exchange as of 31st December 2022 out of which ten (10) are considered as sample size. The study employed panel data analysis by using random-effect estimation model as alternatively considered more appropriate. Secondary data explored from the annual reports and accounts of the sampled firms for the period of ten (10) years from 2013 to 2022 were analyzed. The results revealed that Leverage, board size and firm size are negatively significant at 1% level of significance. While board composition is positively significant at 5% level of significance to the profitability of the sampled firms. In view of the findings, it is recommended that the financial managers/ management of the industrial goods firms should have more independent directors of its board size to enhance proper control over the activities of the managers through which profit level would be increased. It is therefore recommended to conduct careful evaluation and take into consideration on leverage, board size and firm size that influence the profitability of their firms before making major business decisions as this will go a long way in improving their profitability.

<p>Corporate governance over the years has become an issue of global concern due to the 2008 economic crisis and several financial scandals and corporate failures. This has drawn the attention of policy makers, researchers, investors and regulatory institutions. Moreover, the most significant mechanism of corporate governance is board of directors. Therefore, the purpose of this paper is to review previous studies that examine the relationship between board attributes and firm performance, and to identify possible literature gaps. For the purpose of this review, related materials were being gathered from Emerald management e-Journals and Research Gate database. The paper synthesizes empirical findings on the relationship between selected dimensions of board attributes and firm performance. The paper identifies shortcoming of past studies and concluded by offering some avenues for future researches in this promising area of empirical research. </p>

The issue of Good Corporate Governance (GCG) has developed over the centuries as a reaction to systemic crises or corporate failures. The well-documented failures of the Indonesian government are the 1997-1998 Asian financial crisis and the 2008 global financial crisis. Many experts regard Indonesia’s recession as driven by poor government oversight of the financial sector. This study aims to analyze the historical impact of GCG in Indonesia in the 1998-2020 period on government performance. This study employs Foucauldian archaeology and uses official government documents (laws and policies and their derivatives), books, journals, mass media articles (offline and online), and websites as data sources. The data analysis consists of several activities, including collecting, presenting, and inferring data. This study concludes that the development of GCG in Indonesia has increased from a regulatory perspective. However, the development of GCG in Indonesia impacts the government’s performance because there are still many problems in the practice of GCG in Indonesia. One of the problems is the Jiwasraya financial scandal. The Financial Scandal occurred due to the poor performance of the government, in this case, the Financial Services Authority (OJK), in supervising the insurance industry

Purpose The paper aims to explore a multiplicity of corporate governance issues in the narrow purview of different corporate governance systems and procedures across jurisdictional contexts. It shows a correlation between proper implementation of rules and procedures in a corporation for determining the success or failure of corporations. The paper also posits that however robust internal corporate rules and procedures are, the recent experiences have demonstrated that the fate of corporation could also be dictated beyond the remit of individual corporations by extraneous factors such as globalisation. This was vividly underscored by the recent global financial crisis (2008-2010) and its devastating consequences on well-managed corporation worldwide. The author has structured the paper into two parts – part one and part two. Part one is designed to explore the dynamics of corporate governance in fostering the success or failure of corporations. In part two, the paper examines the interplay between rules and practices in the context of two corporate governance examples –MTN in Uganda and the defunct BCCI (1991) in the UK in corporate success or failure. The former underscores a correlation between effective corporate governance mechanisms in fostering corporate success, whereas the latter underscores how the practice of overlooking corporate rules and procedures could trigger catastrophic consequences for corporations. The paper also tries to tease out how poor corporate governance could be exploited for criminal purposes. This was underscored in the case of the BCCI. The last part underscores how two distinctive corporate governance approaches in MTN (Uganda) and defunct BCCI could proffer a lesson for change of modern corporate governance systems and procedures. Design/methodology/approach The paper was written by way of a comparative analysis of different corporate governance approaches in different jurisdictions and their different implications for the success or failure of corporations. It has examined recent corporate scandals with a view to delineate how lax governance procedures and lack robust oversight of corporation could have played in precipitating conditions for criminal exploitation. Findings The findings of the paper clearly demonstrate a close correlation between good corporate governance and corporate success. It also correlates how lack of robust corporate governance procedures could provide an environment for exploitation of corporation by executives who may have criminal inclination. The lax corporate environment can also be exploited by criminals to perpetuate other forms of criminal activities such as money laundering and fraud. Research limitations/implications The paper was largely undertaken by the analysis of secondary data sources. Because there were no interviews carried to corroborate the foregoing data, it is possible that some of it could have been biased. Undertaking interviews would have mitigated the potential for bias and infused the paper with first-hand experiences from different stakeholders Practical implications The paper underscores how two distinctive corporate governance approaches gleaned in the context of MTN (Uganda) and defunct BCCI (1991) could proffer different approaches for a change in modern corporate governance systems and procedures. Social implications The paper has demonstrated that lack of proper corporate governance procedures and oversight could provide a recipe for criminal exploitation to perpetuate crimes such as money laundering in a corporation. This could have far-reaching implications not only for individuals corporations but also local communities in form of job losses), governments and markets. Originality/value The originality of this paper is manifested that there are no comparable studies undertaken in its purview. It is, therefore, a must-read for both academic and policy purposes.

This study examines the interaction between corporate governance (CG), enterprise risk management (ERM), financial performance, firm value, and regulatory oversight in influencing corporate stability and failure among financial service institutions listed on the Lusaka Securities Exchange (LuSE). Data were drawn from audited financial statements, corporate governance disclosures, regulatory reports, and interviews conducted across six financial institutions: Zanaco Bank Plc, Absa Bank Plc, Standard Chartered Bank Plc, Investrust Bank Plc, Madison Financial Services Plc, and Zambia Reinsurance Plc. The findings indicate that robust governance structures, integrated ERM frameworks, and strong financial performance are positively associated with firm value and institutional resilience. Conversely, weak governance practices, ineffective risk management, and regulatory non-compliance significantly increase the likelihood of corporate failure, as evidenced by the collapse of Investrust Bank Plc. The study highlights the critical role of regulatory oversight, effective board composition, and proactive risk management in enhancing financial stability in emerging markets.

Purpose– This study aims to examine the role the structure of corporate boards plays in the failure of the firm. Specifically, it examines whether the remuneration committee is related to corporate failure in the UK.Design/methodology/approach– The study uses 1,835 firm-year observations for 98 failed and 269 non-failed UK-listed non-financial firms between the periods of 1994 and 2011. This study used pooled cross-sectional, fixed and random effects LOGIT models to estimate whether corporate failure is related to remuneration committee in the UK.Findings– The findings indicate that corporate failure is negatively related to the independence of the remuneration committee chairman and remuneration committee’s effectiveness but not remuneration committee’s presence, size and meetings. However, a positive and significant relationship was observed between corporate failure and remuneration committee independence.Practical implications– The findings of the study provide support for the appropriateness of agency theory as analytical lens through which to study the efficacy of remuneration committee, especially the independence of the remuneration committee chairperson, as a board monitoring device, in the context of corporate failure.Originality/value– The paper adds to existing literature on corporate governance by establishing the likely causes of corporate failure in the UK.

Corporate failure in the UK: An examination of corporate governance reforms

The turning to the XXI century has been marked by reforms in corporate governance practices around the world. Whether due to shocks caused by the economic crisis in East Asia, Russia and Latin America, or by financial scandals in the United States and Europe, the fact is that the way of doing business has changed in terms of demands for greater corporate transparency and accountability, shifts in control of ownership, empowerment of new types of owners and so on. Consequently, countries and firms have adapted their corporate governance policies and practices to this new governance environment. In this chapter, we discuss the foundation of corporate governance, that is, corporate ownership. In particular, we explore the current patterns of the ownership structure of publicly listed firms in six emerging countries. To do so, we have collected firm ownership data for listed firms in Brazil, Chile, South Korea, Czech Republic, Hungary, and Poland during the first decade of the XXI century, and we compare our data with existing ownership research of these countries in the late 1990s. We conclude that although concentration of corporate shareholdings continues to be a common denominator among these emerging countries, the processes and structures controlling firms across countries is remarkably different. For instance, the privatization process in the 1990s, in spite of having different motivations and goals in Latin American and Eastern Europe shaped much of the corporate ownership transformations. Our chapter offers a comparative analysis of the corporate ownership changes in emerging markets.

The study explored the causes of corporate failure among financial institutions using the Altman Z-scores. Traditionally, most finance professionals and firms depend on ratio analysis to determine performance, but the application of models like the Altman Z-Scores has hardly been utilized to analyze firm performance and predict potential failure. The major objective of this study was to assess the level to which Altman Z-scores can be used in determining corporate failures a year or two years before insolvency. The research used a mixed methods approach in gathering data. Financial data from annual reports and statements were quantitatively analyzed to compute key financial ratios essential for deriving the Altman Z-Score. Qualitative methods were also employed to explore best financial practices that can mitigate corporate failure risks in Zimbabwean financial institutions. A total of 20 industry experts, including financial analysts, regulators, and financial institution executives, were purposively selected based on their qualifications and experience, for interviews to gather qualitative data. The findings of the study highlight the Altman Z-Score model’s effectiveness in predicting financial distress well in advance while also highlighting governance, risk management, regulatory compliance, and operational efficiency as critical areas for mitigating corporate failure. The effectiveness of the Altman Z-Score model and its reliability in identifying at-risk companies both two years and one year before failure was confirmed and the findings give pointers to consider in developing policies that promote financial stability and resilience in the corporate sector.

PurposeThe purpose of this research is to examine the impact of governance mechanisms on corporate failure.Design/methodology/approachThis study used a hypothesis-testing research design to collect data from the annual reports of 35 companies listed on Palestine Exchange from 2010 to 2019. Descriptive and inferential statistics were employed, along with correlation analysis to evaluate linear relationships between variables. The variance inflation factor was used to test multicollinearity, and binary logistic regression was utilized to develop the research model.FindingsThere is a significant positive relationship between board of directors' independency, institutional ownership and the quality of external audit, and corporate failure reduction. No significant relationship has been found among corporate governance variables such as board size, board meetings' frequency, board members' remuneration and audit committee existence, and corporate failure reduction.Research limitations/implicationsSeveral empirical research studies have developed models to predict corporate failure using accounting and financial data. However, limited research has empirically investigated the impact of the different mechanisms of governance on corporate failure prediction.Practical implicationsThe research highlighted the significance of companies' commitment to governance principles and their impact on predicting failure. The study suggests that decision-makers and managers can adopt different governance mechanisms to support corporate success and avoid those that may lead to negative consequences and failure.Originality/valueThis research is the first in Palestine to use a comprehensive list of corporate governance mechanisms to predict the failure of companies listed on the Palestine Stock Exchange between 2010 and 2019.

Corporate Governance and Corporate Failure

Corporate failure among companies in Kenya has often been associated with their financial management decisions. The objective of all financial management decisions is wealth maximization and the immediate way of measuring quality of such decisions is to examine its effect on the firm's financial performance. Accounts receivable collection period being one of such decisions is considered as fundamental in any business and has significant impact on the financial performance and overall value of a company. This study aimed to provide empirical evidence about the impact of Accounts receivable collection period on corporate financial Performance of tea firms in Kenya for the period 2014 to 2019. The study utilized panel data econometrics of 40 tea firms which are in Kericho, Bomet and Nandi Counties in Kenya. The results indicate that accounts receivables in days are significantly affecting the financial performance of the firms. The tea firms are in general facing problems with their collection policies. Similarly, the financial leverage, sales growth and firm size also have significant effect on the firm’s profitability. The study also concludes that tea firms in Kenya are following conservative accounts receivables management policy and the firms are needed to concentrate and improve their collection and payment policy. The effective policies must be formulated for the individual components of accounts recivables. In addition, efficient Management and financing of accounts recivables can increase the operating profitability of tea firms. For efficient accounts receivable collection period, specialized persons in the fields of finance should be hired by the firms for expert advice on receivables management in the tea firms. This study will assist decisions makers to implement new set of policies regarding accounts receivable management in Kenya to ensure continuous economic growth. It will help to meet the need of management accountants, academia, and students who will be interested in this study. Other researchers on corporate governance will find useful information from this study, it will also add to the existing literature on the topic. Keywords: Net Trade Cycle, Average Collection Period, Average Payment Period, Tea sector, Fixed Effect Model, Random Effect Model. DOI: 10.7176/RJFA/13-8-01 Publication date: April 30 th 2022

Large-scale business failures marked the beginning of the twenty-first century, which culminated into the global financial crisis. The most well-known disaster, Enron, exposed evidence of corporate greed, fraud, and financial manipulation. The year 2023 also brought with it historic business collapses, with big banks collapsing one after another. This study looked into the primary reasons why companies fail and offered solutions to improve the situation. For this study, a desk research approach was employed whereby materials from previously conducted surveys, articles, journals, documents from public libraries, the internet, and other sources were reviewed. From the findings of the study, it is concluded that the major endogenous factor that leads to corporate failure revolves around bad/poor corporate governance as well as poor risk management practices. Frequent changes in government policies (i.e. exogenous) is a major cause of corporate failures. It is recommended that organizations should eschew multi-disciplinary approach to corporate governance, including economics, psychology, sociology, and law. There should be strong collaboration and co-operation between the Chief Executive Officer (CEO) and Chief Finance Officer (CFO) in order to strengthen corporate governance through maximised stakeholder value, transparency and accountability and efficient capital allocation.