Corporate Governance Committee Research Articles

A Screening of Tools to Measure the Quality of Financial Reporting

Abstract The main objective of this research is to identify and systematize tools for measuring the quality of financial reports, in order to support researchers considering this comprehensive area. By using the PRISMA system in as transparent a manner as possible, we also aimed to find potential gaps in all 89 articles and scholarly papers examined in the smallest detail. As the quality of financial reporting is ultimately aimed at mediating the relationship between the entity and the user, it is not a topic addressed individually, the secondary object of this paper is to expose the most common themes and discussions associated with this object of study, such as: characteristics of entities, adoption of International Financial Reporting Standards, shareholding structure, corporate governance and audit committee.

Empirical Analysis of Good Corporate Governance and Firm Value on Sharia Banking in Indonesia

The position of Islamic banking in Indonesia still needs improvement because currently the market share of Islamic banking is only 6.52% of the entire proportion of national banking. So that the government seeks to improve by launching the Roadmap for the Development of Indonesian Sharia Banking (RP2SI) 2020-2025. However, there are things that hinder the accelerated growth of the sharia banking business, including the absence of significant business model differentiation, sub-optimal quality and quantity of human resources. So that GCG analysis is needed to increase the value of Islamic banks. The purpose of this study is to see how much influence the GCG has on firm value using PBV theory. The research method used in this study is multiple linear regression analysis with secondary data of 13 Islamic Commercial Banks in Indonesia in 2017-2021. The results show that the Audit Committee, Corporate Governance Committee, and Risk Management Committee have a significant effect on firm value. Meanwhile, the Board of Commissioners, Remuneration and Nomination Committee, Risk Monitoring Committee and Institutional Ownership have no effect on company value.

Corporate Governance Committees and Sustainability Reporting of Listed Consumer Goods Firms in Nigeria

This study investigated the impact of corporate governance committees (finance, risk, remuneration and audit) on corporate sustainability reporting of 20 sampled consumer goods firms in Nigeria. In order to achieve the above stated objectives, this study employed a correlational research design to analyze data from 20 listed consumer goods firms in Nigerian Exchange Group (NGX) for the period of twelve (12) years (2011-2022) both years all-encompassing. Also, stakeholder’s theory was used to underpin this study. The logistic regression result revealed that finance, risk, and audit committees have a statistically positive significant association with sustainability reporting of listed consumer goods firms in Nigeria. While on the other hand, remuneration committee documented a positive but insignificant correlation with sustainability reporting of listed consumer goods firms in Nigeria. This study calls for more studies on corporate governance committees and sustainability reporting in another domain other than the consumer goods firms.

Literatur Review Pengaruh Reputasi Auditor, Good Corporate Governance dan Komite Manajemen Risiko Terhadap Pengungkapan Enterprise Risk Management

This literature review article entitled the influence of auditor reputation, good corporate governance and risk management committee on enterprise risk management disclosure is a scientific article that aims to build a research hypothesis on the influence between variables that will be used in further research. The method of writing this literature review article is the library research method, which is sourced from Google Scholar online media and other academic online media. The results of this literature review article are that the auditor's reputation has an effect on the disclosure of enterprise risk management, good corporate governance has an effect on the disclosure of enterprise risk management and the risk management committee has an effect on the disclosure of enterprise risk management

PENGARUH KEPEMILIKAN TERKONSENTRASI, KOMITE PENUNJANG DEWAN KOMISARIS DAN CORPORATE GOVERNANCE TERHADAP AGRESIVITAS PAJAK

This study aims to examine and analyze the effect of concentrated ownership, the supporting committees of the board of commissioners as proxy for the audit committee and the risk management and corporate governance committee as proxy for the board of directors and independent commissioners on tax aggressiveness. The type of research used is quantitative associative. The population in this study are companies that are members of the energy sector listed on the Indonesia Stock Exchange in 2016-2020 as many as 53 companies. Determination of the sample of this study was carried out through purposive sampling technique and obtained 20 companies for five years so that the number of observation data obtained was 100 data. The data analysis technique uses panel data regression analysis with the help of Eviews version 10 as a measuring tool. The results showed that partially concentrated ownership and the audit committee had no effect on tax aggressiveness, the risk management committee had a significant positive effect on tax aggressiveness, and the board of directors and independent commissioners had no effect on tax aggressiveness. Simultaneously, ownership is concentrated, the supporting committees of the board of commissioners as proxy for the audit committee and the risk management committee and corporate governance as proxy for the board of directors and independent commissioners jointly affect tax aggressiveness. 
 Keywords : Committees supporting committees of the board of commissioners; Concentrated Ownership; Corporate Governance; Tax Aggressiveness

Kurumsal Yönetim Komitesi Yapısının Kurumsal Yönetim İlkelerine Uyum Derecelendirmesi Notu Üzerine Etkileri

In this study, effect of corporate governance committee structure on corporate governance compliance rating (CGCR) was investigated, based on the assumption that the corporate governance committee may affect CGCR in terms of its roles and responsibilities. Firms included in XKURY are selected as a sample in the study. Statistical analyses are carried out for the existence of the specified relationship by using the data of the companies in question for the period of 2014-2020. Independent variables of the study are % of female members, % of members of the board, % of independent board members and % of non-executive board members in the corporate governance committee. The effects of these variables on the companies' compliance with corporate governance principles are analyzed by performing Mann-Whitney U test. The obtained results show that presence of non-executive board members at different rates in corporate governance committees makes a difference on the CGCR of the enterprises. To the best knowledge, there is no study in the national and international literature that investigates the effect of corporate governance committee structure on CGCR. It is thought that this study differs from other studies in this respect and contributes to the literature.
 Key Words: Corporate Governance, Corporate Governance Committee, Corporate Governance Committee Structure, Corporate Governance Compliance Rating, XKURY
 JEL Classification: M40, G34

Do board subcommittees boost European firm value? The moderating role of gender diversity on boards

AbstractThe main objective of this study is to analyse the moderating effect of corporate board gender diversity on firm value for 1490 European listed companies between 2016 and 2018. The aim is to investigate whether companies that have different subcommittees (Audit, Corporate Governance, Nomination and Compensation), or that have financial expertise on the audit committee, see increases or decreases in firm value due to the moderating effect of gender diversity. The most striking evidence reveals that the effect of gender diversity on corporate boards, considering all countries in the European sample, could positively impact firm value by moderating the corporate governance and compensation committees. In contrast, when grouped by governance structure, only in the case of one‐tier boards is the moderating effect on the governance committee determinant. Likewise, this moderating effect on the compensation committee may increase firm value, but only in countries with two‐tier corporate boards. On the other hand, our results suggest that the moderating role of women directors on the audit committee with financial expertise and on the nomination committee, while not increasing firm value, could prevent its further decline by acting as a shield for the Nordic and two‐tier groups, respectively. Our findings have important implications for company managers, as these subcommittees could exert a positive influence on the decision‐making process, such as reducing information asymmetries and agency costs.

Determinants of corporate governance disclosure: evidence from an emerging market

PurposeThis study aims to examine the influence of corporate governance (CG) mechanisms and ownership structures on corporate governance disclosure (CGD) in listed Mauritian companies.Design/methodology/approachMultivariate regression techniques, both static and dynamic panel data models, were employed to analyse the effect of the determinants on the CGD level of 42 Mauritian listed companies (38 non-financial and four financial firms) from 2009 to 2019.FindingsIn the static model comprising 42 firms, CG attributes such as board size, board meeting frequency, CG committee meeting frequency and audit committee meeting frequency are major determinants of CGD, whereas ownership structure variables such as managerial ownership and institutional ownership do not influence CGD. In the dynamic model, only the CG meeting frequency is a major determinant. The determinants of CGD vary between non-financial and financial firms.Research limitations/implicationsThis study is limited to CGD in listed firms, excluding mandatory disclosures and unlisted firms. Future research can use qualitative approaches to better understand CGD behaviour with an extension to mandatory disclosures and non-listed firms.Practical implicationsPolicymakers can rely on determinants to draw policy measures to raise CG standards further. Domestic and foreign investors may also depend on the determinants of their expectations of CGD while making investment and credit decisions.Originality/valueThis study contributes to the extant literature by examining a new determinant of CGD: CG committee meeting frequency. It also investigates any differences in the determinants between financial and non-financial firms with different listing status.

Corporate Governance and Bank Liquidity Creation in Nigeria: Panel Vector Error Correction

The study surveyed the influence of sound corporate governance on banks’ liquidity creation in Nigeria using secondary data gleaned from annual reports and accounts of Five (5) quoted Deposit Money Banks (DMBs) in Nigeria between 2013 and 2019. The obtained data were subjected to several preliminary and inferential statistical analyses, the result of the descriptive statistics and PVEC Model revealed that all the specified indicators of Corporate Governance, for example, Board Size, Board Independence, and Audit Committee exact a positive influence on Banks Liquidity creation, while only Board Independence and Audit Committee have a significant influence on Liquidity creation of the selected banks. Thus, the study suggested that bank managers and policymakers must ensure that DMBs continuously design and implement effective corporate governance mechanisms to enhance their liquidity.

Corporate social responsibility and firm risk: Egypt’s case

Studies amongst developed countries have extensively investigated the link between corporate social responsibility (CSR) and financial performance. However, due to lack of research in the Middle East, especially in Egypt, the association between CSR and firm risk remains much less understood (Nguyen & Nguyen, 2015). Therefore, this paper is one of the very few studies that investigate the impact of CSR on firm risk amongst developing countries. A sample of 31 Egyptian listed companies was examined over four years, from 2011 to 2015. We test the impact of CSR on firm risk using fixed and random effects estimation models. We use operating leverage, financial leverage and the beta coefficient of the sample companies’ stocks as a proxy for the companies’ risk. Identified control variables are firm size, market-to-book value, return on equity, return on assets, and firm age. Other variables are used to control for corporate governance, board characteristics and audit committee characteristics. The results show that CSR affects operating risk, yet it does not have a significant impact on financial or market risks in Egypt, which in turn emphasizes that CSR in developing countries differs in characteristics from that in developed countries (Vo & Arato, 2020).

Internal Governance Instruments: Codes and Policies

Corporate governance involves a set of relationships between a company’s management, its board, its shareholders and other stakeholders and effective governance requires a structure through which the objectives of the company are set, the means of attaining those objectives and monitoring performance are determined, and the company and its people are held accountable. Since the elements of corporate governance include ethics, risk management, compliance and administration, companies must establish and maintain the appropriate “control environment” in order for their corporate governance procedures to be effective. One of the first steps in establishing the appropriate control environment is the adoption and dissemination of corporate governance instruments and this chapter covers of the content of key governance-related codes, policies and procedures including principles of corporate governance, codes of conduct and ethics for the entire enterprise, board of directors’ code of conduct, CEO/CFO code of ethics, “independent director” requirements and guidelines that the nominating or corporate governance committee can follow in evaluating prospective candidates for the board of directors and sustainability-related instruments.

Analysis of the Effect of Good Corporate Governance and Audit Committee Size on Thin Capitalization of Companies Owning Foreign Capital

This study aims to analyze the thin capitalization implemented in companies that have foreign capital. Thin capitalization is a financing structure from internal and external companies. This study uses the independent variable Good Corporate Governance and Committee Size. The population of this study consists of all non-financial companies listed on the Indonesia Stock Exchange from 2017-2019. This study took samples from companies that own foreign capital which are non-financial institutions. This study uses multiple linear regression analysis as a statistical method. The results of this study indicate that the size of the Audit Committee has a significant effect on thin capitalization

Is the Concept of Corporate Governance a Strategic Plan for Firms’ Optimum Capital Structure? Evidence from Manufacturing Companies

The aim of the article is to examine the relationship as well as measure the impact of corporate governance as a strategic plan on capital structure decision of top Bombay Stock Exchange-listed manufacturing firms in India. Panel regression analysis is employed to estimate the relationship and measure the impact of corporate governance, namely, size, meetings, independent director, women director and audit committee meetings, on the capital structure mix (debt–equity ratio) of the sample corporate, during a 10-year period of 2008–2017. The results of study reveal that the components of corporate governance, namely, size, board meetings, independent director, and audit committee meetings have a positive association with the capital structure variable (debt–equity ratio) of the sample manufacturing companies. However, there is a negative relationship between the control variables (ROCE and NWTA) and the dependent variable of the sample corporate. Overall, as per the study results, a statistically significant impact prevails on the capital structure, of corporate governance variables, taken as a whole. This article adds on to the existing study by highlighting a new prospect of relation and influence of corporate governance on capital structure decisions. The statistical findings of the study provide evidence to the corporate sector in deciding the optimum capital structure, affecting its costs and performance, and to the regulatory authorities in framing and implementing corporate governance mechanisms more effectively and efficiently for improving the economy of the country.

Chronological Development of the Corporate Governance Guidelines in Bangladesh: A Comparative Analysis between CGG-2012 and CGC-2018

In this study, the chronological development of the Corporate Governance Guidelines (CGG) and Corporate Governance Code (CGC) is examined to identify how much the Code has evolved over time. A comparative analysis between the CGG-2012 and CGC-2018 has also been conducted in the study to outline the latest changes and areas of further improvements. The study is exploratory and literature review-based in nature. Hence, contemporary literatures were analyzed along with comparison of the CGG-2012 and CGC-2018 issued by the Bangladesh Securities and Exchange Commission (BSEC). Data was collected from various secondary sources including – corporate governance codes of different countries, research papers, journals, newspaper articles and websites. The study points out that the BSEC has followed a six-year interval pattern in the further development and modification of the corporate governance codes in Bangladesh. Also, it has been found out that in terms of the number of conditions in the code, the CGC-2018 is about 75 percent enhanced than CGG-2012. Previously, CGG-2012 was enhanced by more than 150 percent over the first guideline in 2006. CGC-2018 has introduced some crucial governance issues that were not present in the code before but there still remain some areas that are yet to be addressed in the best-practices recommendations. Keywords: Corporate Governance, Nomination and Remuneration Committee, Board of Directors’ Committee, Company Website. DOI: 10.7176/EJBM/12-27-13 Publication date: September 30 th 2020

EXPLORING THE INTERRELATION BETWEEN CORPORATE GOVERNANCE AND FINANCIAL PERFORMANCE: EVIDENCE FROM GREEK SYSTEMIC BANKS

In recent years significant changes have been made in the business context, both at national and international level, in many cases, without the existence of an appropriate regulatory framework. These changes had had a significant impact not only on the business itself, but also on the markets and on various stakeholders, both within and outside the business, and have led to the need to establish or strengthen relevant regulatory frameworks with a view to regulating changes in the business environment. This paper reviews the literature on corporate governance in the banking sector. Our research focuses on the impact of Corporate Governance Regulations on the financial performance of systemic banks of Greece, as measured by ROA and ROE ratios based on accounting data, basic principles of sound corporate governance such as the duality of positions of the Chairman of the Board of Directors and the CEO, the existence of Independent members to the Board of Directors, and the establishment of corporate governance committees, for a period of 10 years. The results of our research showed a positive relationship between the financial performance of banks as measured by the ROA and ROE indices and the existence of independent members on the Board of Directors and the establishment of corporate governance committees, and a negative relationship between the financial performance of banks as measured by the ROA and ROE indices and the duality of positions of the Chairman of the Board of Directors and the CEO.

Вплив комітетів при Раді уповноважених, прибутковості та інтенсивності запасів на податкову оптимізацію (Емпіричне дослідження виробничих компаній, що мали лістинг акцій на Індонезійській фондовій біржі у 2014-2018 рр.)

The purpose of this study is to provide empirical evidence about the influence of committees under the board of commissioners, profitability, and inventory intensity on tax aggressiveness. The committees under the board of commissioners in this study consist of the audit committee, the nomination and/or remuneration committee, the risk committee, and the Corporate Governance Committee. All of them are proxied as a committee. Profitability is proxied by Return on Assets (ROA). ROA gives a manager, investor, or analyst an idea as to how efficient a company's management is at using its assets to generate earnings. Then, tax aggressiveness in this study is proxied by the Effective Tax Rate (ETR). Tax aggressiveness is an attempt by the company to reduce the income taxpayments to the state. The firms' effective tax rate (ETR), defined as some measure of tax liability divided by income, has long been used in the literature as a measure of active tax planning. This study uses firm size as a control variable, which is proxied by the Natural Logarithm of total assets (Ln SIZE). Whereas, the data used are secondary data obtained from the annual reports of 29 manufacturing companies listed on the Indonesia Stock Exchange in 2014-2018. The sampling method used in this study is purposive sampling. Testing the hypothesis in this study uses panel data regression. The results showed that the Audit Committee, Profitability proxied by Return on Assets (ROA), and inventory intensity affect tax aggressiveness. At the same time, the Nomination and Remuneration Committee, Risk Committee, and Corporate Governance Committee do not affect tax aggressiveness.

What drives board committee structure? Evidence from an emerging market

PurposeBoard committees enable boards to function effectively, as committees improve the quality of corporate governance by fulfilling specific, assigned tasks. This study aims to explore how board structure, CEO duality and audit quality are associated with board committee structure in the context of an emerging market, namely, Turkey.Design/methodology/approachThe sample consisted of 122 firms listed on the Industrial Index of Borsa Istanbul for the years between 2012 and 2014, inclusive, and this yielded 366 firm-year observations. To test the hypotheses, the panel data analysis method was used, which enabled the elimination of certain problems, such as multicollinearity and estimation bias, as well as specification of the time-variant association between the predictor variables and the output variable.FindingsBoard size, board independence and firm size had a positive association with the number and size of board committees, whereas CEO duality had a negative association with the number and size of board committees. Moreover, the appointment of female members on audit and corporate governance committees was more frequent in firms that had a high proportion of women on their boards. Finally, audit quality was positively associated with the existence of risk committee, the overall diversity of board committees and the diversity of corporate governance committees.Research limitations/implicationsThe study is not free from limitations. It covers the time span between 2012 and 2014; thus, readers should be cautious about generalizing these results longitudinally, as a different time periods could possibly yield different results. The second limitation concerns the fact that only industrial firms were sampled; thus, these findings may not be valid in other sectors.Practical implicationsThe paper shifts the attention of researchers from overall board structure to board committee structure. The results of the study provide insights for policymakers, boards and shareholders. Policymakers can formulate boards and committees by considering these findings. Boards can benefit from the conclusions of this study in shaping their own structure and sub-committee structures. Current and potential shareholders may find the results of the study instructive in making investment decisions.Originality/valueThis study investigates the factors associated with the structure of overall and specific board committees. Additionally, while most prior research on board committees has sampled firms that are domiciled in developed countries, this study examines the subject in an emerging country context, namely Turkey. Moreover, this study adds to the literature by examining the association between audit quality and board committee structure, which has been largely neglected in prior literature.

Stakeholder Perspective of Corporate Governance and CSR Committees

CSR is becoming more and more important, and many companies have taken meaningful steps to improve their corporate governance according with a stakeholder perspective. An emerging board-level figure is the CSR or sustainability committee. The increase in complexity induced by the responsible business conduct and the growing importance of the effective management of reputational risk, highlight the usefulness of committees with proposing and consultative functions on CSR issues. These committees are relatively new governance structures, whose affirmation is slow, and can provide a useful contribution to the integration of social responsibility into strategy setting and the business model.

Varieties of capitalism, corporate governance mechanisms, and stakeholder engagement: An overview of coordinated and liberal market economies

AbstractThis paper examines those aspects of national institutions that affect corporate governance mechanisms at international level. The study uses the “varieties of capitalism” approach, which is concerned with the way companies interact strategically to solve the coordination problems arising from their activities. This research is based on a sample of countries operating in coordinated market economies and liberal market economies. The data were collected from the Thomson Reuters database. The findings suggest that the institutional context is associated with several corporate governance mechanisms. Specifically, our results find that the proportion of female directors on boards and the presence of corporate governance committees are higher in firms operating in liberal market economies than in those domiciled in coordinated market economies. Regarding the disclosure of corporate social responsibility information, the evidence shows that it is not affected by the varieties of capitalism measured, whereas board‐specific skills are higher in the latter than in the former. This paper offers empirical evidence at international level for the varieties of capitalism that contribute to better corporate governance structures. With regard to managerial implications, our findings show that belonging (or not) to a specific variety of capitalism impacts various mechanisms of corporate governance.

Effect of corporate governance on financial performance of listed deposit money banks in Nigeria

This study examined corporate governance and financial performance of listed deposit money banks (DMBs) in Nigeria. The study covered listed DMBs listed in the Nigerian Stock Exchange (NSE) for a ten year period from 2007–2016 and data were obtained from their annual financial reports. Data were presented using tables and analyzed using panel data regression. The corporate governance mechanisms of board size (BSIZE), board composition (BCOM) and audit committee (ACOM) were used as independent variables. Performance of the listed DMBs was measured by return on asset (ROA) which is the dependent variable while the bank size (FSIZE) was used as a control variable.The findings of this study revealed that board size had a positive but insignificant relationship with performance. It was also observed that audit committee, board composition and bank size all had positive and significant relationships with return on asset. The study therefore concludes that board composition and audit committee are good predictors of performance as measured by return on assets (ROA). The study recommended that DMBs listed in the Nigerian Stock Exchange should strive to have an average of fourteen members in their boards to avoid decision-making problems which are characterized by larger board of directors and should therefore comprise a mix of executive and nonexecutive directors with the relevant credentials, competence, and experience to serve on the board of banks. Additionally, the audit committee of banks should meet often to enable them review the financial reports of the banks and make appropriate recommendations that will help to improve the performance of the banks. Keywords: corporate governance, financial performance, board size, board composition and audit committee