Corporate Governance Framework Research Articles

Fortifying Transparency: Enhancing Corporate Governance through Robust Internal Control Mechanisms

Purpose: This study explores how robust internal control mechanisms enhance corporate governance by fostering organizational transparency and accountability. The focus is on the interplay between internal controls and corporate governance practices, emphasizing their collective role in promoting organizational success and sustainability. Research Design and Methodology: The study employs a qualitative approach, conducting a comprehensive literature review of peer-reviewed articles, books, and reports. Using relevant keywords, data were collected from academic databases such as PubMed, Scopus, Web of Science, and Google Scholar. Thematic analysis was used to categorize and synthesize recurring themes and patterns, ensuring objectivity and rigor in data interpretation. Findings and Discussion: The findings of this study have significant practical implications. They reveal that effective corporate governance frameworks, underpinned by robust internal control mechanisms, not only enhance transparency, accountability, and ethical conduct but also mitigate risks, safeguard assets, and ensure compliance with regulations. This underscores the real-world relevance of the research and its potential to guide organizational practices. Implications: This study highlights the need for organizations to comprehensively integrate internal control mechanisms into their governance frameworks. It also emphasizes the importance of fostering a culture of integrity, adopting technological innovations, and maintaining compliance with evolving regulations. However, the study also points to the need for future research, particularly longitudinal studies, and interdisciplinary approaches, to further understand the dynamic governance-control relationship. This opens opportunities for further exploration and the development of more effective corporate governance practices.

Which direction for stakeholder capitalism? Approaches and reporting towards POP accounting

AbstractOur study uncovers the evolving landscape of stakeholder capitalism. This paradigm recognises the intrinsic value of capital among diverse stakeholders and underscores the importance of engaging them in the long‐term value‐generation process. Through bibliometric analysis, we explore the multifaceted nature of stakeholder capitalism, its historical evolution, and the current debates surrounding its implementation, particularly in social reporting and integrated performance representation. Our findings illuminate the growing emphasis on POP accounting as a potential bridge between traditional shareholder‐centric models and a more inclusive stakeholder‐oriented approach. POP accounting emerges as a vital tool for demystifying complex financial data, offering a transparent, accessible narrative that resonates with broader stakeholders. By integrating insights from various sectors and geographical regions, this paper sheds light on the practical implications of adopting POP accounting within stakeholder capitalism. It suggests it could catalyse a more democratic, transparent, and sustainable corporate governance framework. Our research contributes to the ongoing corporate responsibility and governance discourse, providing actionable insights for businesses, policymakers, and academics committed to fostering an equitable, stakeholder‐inclusive future.

Greening the Workplace: Exploring the Influence of Corporate Sustainability Governance on Corporate Labour Rights in the Case of Indian Listed Companies for the Period of 2010 to 2021

Amidst today’s globalized economy, embedding sustainable practices into corporate governance frameworks has become important. This era underscores a heightened focus on CSR and sustainability, drawing considerable scholarly and practical interest to the nexus of corporate governance, sustainability initiatives, and corporate labour rights (CLRs). Hence, this study investigates the relationship between corporate sustainability governance initiatives (CSGIs) and CLR practices in India. Despite regulatory efforts, issues such as modern slavery and low wages persist in the country. Drawing on legitimacy, agency, stakeholder, and resource dependency theories, this study examines how CSGIs influence CLR practices. Data from 1212 observations of top Indian listed companies between 2010 and 2021 indicate positive correlations between CSGI dimensions and CLR practices across industries and board CSR orientations. This research underscores the importance of CSGIs in promoting sustainable corporate practices and improving CLRs in emerging economies. It also aligns with the United Nations sustainable development goals (SDGs), particularly SDG 3, SDG 5, SDG 8, and SDG 10. By combining theoretical rigour with practical relevance, this study provides insights for businesses, policymakers, workers, investors, and CSR scholars, contributing to efforts to enhance CLRs in India and beyond. For instance, the study offers actionable guidance for businesses and policymakers aiming to improve CLR practices. It highlights the positive correlation between specific attributes of CSGIs and CLR practices, providing insights for corporate decision-making and emphasizing the importance of aligning operations with the UN’s sustainable development goals. The findings serve as critical decision-making tools for investors concerned with corporate sustainability governance and CLRs to identify ethically responsible companies and mitigate investment risks.

Towards novel blockchain decentralised autonomous organisation (DAO) led corporate governance framework

Decentralised autonomous organisation (DAO) powered by blockchain technologies has the potential to transform the organisational governance model with the foundations of algorithmic trust and democratic systems. DAO envisages a decentralised democratic organisation using software-based smart contracts to execute autonomous transactions with consensus among stakeholders. The study investigates the prospects of adopting DAO led corporate governance to manage agency (theory) problems in the light of institutional (theory) pressures. The paper depicts how algorithmic trust led corporate governance measures help any organisation follow policies, rules and regulations using DAO led corporate governance (DAOCG) framework. The authors mapped the constituents of agency theory, ethical decision-making, and institutional factors to propose the DAOCG framework. The DAOCG framework is assessed using a thematic analysis of 16 expert interviews with relevant experience from corporate governance and audit domains from varied industries across geographies. The research leveraged MAXQDA software to analyse interview transcripts and opinion codes. The framework helps to identify the core elements of DAO-led corporate governance (DAOCG) and provides the potential to study the theoretically sequenced practical constituents of corporate governance. The first-of-its-kind practical DAOCG framework can be used in the pursuits of digital transformation, business model innovation and social change.

Mergers and Acquisitions: An Examination of Auditors\' Role in Corporate Governance

Abstract: This paper explores the complex link that exists between corporate governance and mergers and acquisitions (M&A), concentrating on the role that auditors play in maintaining ethical behaviour and transparency within this framework. The first step of the study is to examine how M&A operations are currently conducted within the corporate governance framework. This includes a thorough analysis of the regulatory environment that oversees these transactions. In addition, the research carefully evaluates the crucial function that auditors play during the M&A process and examines how they affect corporate governance procedures. It clarifies the difficulties in maintaining integrity and openness in the face of the intricate dynamics of mergers and acquisitions. The research distinguishes between the roles and affects that internal and external auditors play in forming corporate governance frameworks during mergers and acquisitions. This paper provides useful insights for stakeholders trying to manage the challenges of M&A activity

Indonesia Insurance Corporate Governance: A Literature Review

The aim of this research is to present and evaluate corporate governance framework for insurance companies in Indonesia based on previous researches related to corporate governance and The Indonesia Financial Services Authority Regulation. We evaluate concerning to governance objectives that include protecting shareholder interests, enhancing shareholder value, ensuring accountability, managing risk, promoting ethical behavior, transparency and disclosure, balancing interests, strategic decision-making, compliance with laws and regulations, efficient operations, long-term sustainability, stakeholder engagement, adapting to change, creating a positive reputation, and facilitating investment. We discuss the corporate governance framework for insurance companies in Indonesia based on the Indonesia Financial Services Authority regulation that states governance structure, corporate governance code, self-assessment & governance report, governance process and corporate governance principles to meet governance objectives. Although every year all insurance companies report corporate governance, but some companies have been stopped by the Authority. This raises research problems for the future relating to why insurance companies that have complied with corporate governance provisions have been stopped by the Authority.

Corporate governance and CSR for sustainability in Oil and Gas: Trends, challenges, and best practices: A review

Corporate governance and Corporate Social Responsibility (CSR) are integral components of sustainability in the oil and gas industry, shaping the sector's environmental and social impact. This review explores current trends, challenges, and best practices in corporate governance and CSR for sustainability within the oil and gas sector. The review examines how corporate governance frameworks influence CSR strategies, highlighting the importance of board oversight and stakeholder engagement in driving sustainable practices. It also delves into the evolving role of oil and gas companies in addressing environmental concerns, such as climate change and resource depletion, through CSR initiatives and transparent reporting. Challenges faced by the industry, such as regulatory complexity, stakeholder expectations, and balancing short-term profitability with long-term sustainability, are analyzed. The review underscores the need for robust governance structures and effective CSR programs to navigate these challenges and maintain social license to operate. Best practices in corporate governance and CSR are explored, emphasizing the importance of integrating sustainability into core business strategies. Case studies illustrate successful approaches to CSR implementation, showcasing how companies can create shared value for stakeholders while driving positive environmental and social outcomes. In conclusion, the review calls for a proactive and holistic approach to corporate governance and CSR in the oil and gas industry. It advocates for increased transparency, stakeholder engagement, and alignment of CSR efforts with the Sustainable Development Goals (SDGs) to enhance sustainability and mitigate risks in the sector.

Corporate governance and risk management: An evaluation of board responsibilities in western and Islamic banks

This research aims to explore the role of the board in cor-porate governance (CG) and risk management within the context of Islamic banking. Given the global reach of fi-nancial institutions, it is important to compare and evalu-ate the unique position of Shari’ah committees or Shari’ah Supervisory Board (SSB) in addressing the unique risks of Islamic banks. Using a comparative analysis, this study evaluated risk management guidelines in the CG codes of the United Kingdom, Germany, Saudi Arabia, and Malaysia. It found that board were ultimately responsible for risk management, regardless of the governance structure, and Shari’ah-related risks fell under the board’s purview. An innovative blend of Western CG frameworks and Islamic principles enhanced governance robustness through the strategic collaboration between board and SSBs.

Exploring the Corporate Governance and Financial Performance: Nexus Through Green Investment in the Automobile Sector of Pakistan

Based on the legitimacy theory, The main aim of this study intends to evaluate the impact of corporate governance (CG) on firm performance (FP) with the mediating role of green investment (GI) by deploying automobile sector listed on PSX from 2011 to 2021. Because automobile sector has a significant impact on Pakistan GDP and also the growing importance of sustainable practices. This study used balanced panel data with diagnostic tests, descriptive, correlation analysis, GLS model and mediation analysis via STATA. Preacher and Hayes (2013) model were used to check the mediating effect. The results found that there has a significant positive impact of managerial Ownership (MO) and audit committees (AC) on firm performance (FP), with board size (BS) showing a negative and statistically insignificant effect. The overall framework implies a significant and positive relationship between CG and FP, while GI did not show the mediating effect. This current study emphasizes that the companies should incorporate green investment strategy into CG frameworks to meet financial success and sustainable environment. This provides a remarkable insight for policymakers to improve governmental rules, stimulate stakeholder input, enforce transparent disclosure standards, and promotion of GI in order to establish a sustainable corporate environment. These actions are recognized as crucial tactics for creating a corporate structure that balances environmental responsibility with economic development.

Equivalent biodiversity area: A novel metric for No Net Loss success in Brazil’s changing biomes

This study presents a new method to incorporate the No Net Loss (NNL) principle within corporate Environmental, Social, and Governance (ESG) frameworks. This principle aims to ensure that biodiversity losses from human activities are fully offset. In this context, we tackle two main challenges: managing epistemic uncertainties in environmental modeling and accurately assessing compensatory areas needed to replace lost habitats. Focusing on Brazil’s diverse biomes, which are undergoing rapid changes, we highlight the role of expert opinion surveys in addressing the uncertainties of the InVEST Habitat Quality, a model that simulates changes in landscape integrity under different land use scenarios. Our analysis across three of Brazil’s regions – Caatinga Semi-arid, Cerrado Savanna, and Atlantic Forest – leverages open-source data to reveal substantial habitat losses due to activities like wind farm development, mining, and intensive agriculture, leading to a widespread decline in habitat quality. We introduce the Equivalent Biodiversity Area (EBA) metric to support NNL and Net Gain of Biodiversity efforts, measured in hectares. Findings show a reduction in EBA across all studied areas, highlighting the need for effective compensation strategies. Such strategies should merge Legal Reserves and ecological restoration into ESG policies, encourage landholder collaboration, and align with larger environmental efforts, such as watershed revitalization and Biodiversity Credits markets.

ESG controversies and corporate performance: The moderating effect of governance mechanisms and ESG practices

AbstractThis paper investigates the relationship between Environmental, Social, and Governance (ESG) controversies and firm performance, examining the moderating influences of corporate governance structures and ESG practices. Utilizing quantitative methods, we analyze data from 5360 firm‐year observations. Our findings reveal a significant negative relation between ESG controversies and firm performance. However, well‐defined corporate governance frameworks and internal ESG strategies mitigate these adverse impacts and can transform these controversies into growth opportunities and reputation enhancement. A comparative analysis involving the United Kingdom and other European Union nations highlights the influence of geographical and regulatory contexts in shaping this dynamic. These results offer valuable insights for policymakers, corporate strategists, and investors, emphasizing the role of governance in navigating ESG controversies and enhancing firm resilience and adaptability. The study contributes to the sustainability field by providing a nuanced understanding of the interaction between ESG controversies, corporate governance, and firm performance.

The Impact of Independent Directorship on Business Performance in China: Empirical Study on SSE Listed Firms

In an effort to enhance the influence of independent directors within the framework of corporate governance, the China Securities Regulatory Commission (CSRC) has recently introduced revised regulations pertaining to independent directorship in August 2023. This regulatory adjustment signifies a pivotal step towards bolstering Chinese-specific corporate governance. This research endeavors to delve into the potential impact of independent directorship on business performance within mainland China's corporate landscape. This study harnesses data from publicly traded companies on the Shanghai Stock Exchange (SSE) in conjunction with panel data analysis and Ordinary Least Squares (OLS) regression to build empirical models. It is noteworthy that the initial results indicate a favorable connection between independent directorship and business performance. It has been demonstrated that having more independent directors is connected with better corporate profitability. Against the backdrop of the newly implemented regulatory reforms concerning independent directors, this study is poised to make a substantive contribution to the ongoing discourse on corporate governance and its ramifications for business performance in China. As these revised regulations usher in a renewed emphasis on independent directorship, this research's insights hold significant relevance for both practitioners and policymakers navigating the evolving corporate governance landscape.

Intersecting bonds: a perspective on polygamy's influence in Arab Middle East family firm succession

PurposeThe aim of this study is to explore and elucidate the influence of polygamy on the succession dynamics of family businesses in the Arab world, offering insights that may be underrepresented or overlooked in traditional, Western-focused literature.Design/methodology/approachThis article adopts a perspective-based approach, focusing on delving into the amalgamation of polygamous family structures and their implications on the operation and continuation of family-run businesses.FindingsPolygamy, while often primarily perceived as a cultural or religious tradition, wields substantial influence over various business facets. Notably, its presence can significantly shape business continuity, the methodologies behind succession planning and the overarching framework of corporate governance within Arab family businesses.Originality/valueThis article offers a unique Middle Eastern lens, highlighting the underexplored intersection of polygamy and business succession. It strives to bridge the knowledge gap by addressing topics potentially sidelined in mainstream Western business research.

Corporate governance for sustainable development in Vietnam: Criteria for SOEs based on MCDM approach.

This research explores the nexus between corporate governance and sustainable development, focusing on State-Owned Enterprises (SOEs) in Vietnam. Recognizing the pivotal role of SOEs in the national economy, this study employs a Multi-Criteria Decision-Making approach (MCDM) to assess and enhance the corporate governance frameworks of these entities. First, the Data Envelopment Analysis (DEA) model is employed to identify the most qualified prospective SOEs firms based on several quantitative criteria. Then, the spherical fuzzy analytic hierarchy process (SF-AHP) model is used to identify priority weights for a given set of qualitative criteria, the Evaluation based on distance from average solution (EDAS) model is implemented to rank enterprises in the SOEs sector. To validate the proposed models, a case study conducted within the Vietnamese electric power industry is utilized. The MCDM methodology integrates diverse factors such as business management, corporate social responsibility, and corporate governance shareholder to construct a comprehensive evaluation framework. By applying this approach, the study aims to identify the key drivers and barriers influencing corporate governance practices within Vietnamese SOEs. The study's findings illustrate the efficacy of the suggested approach in evaluating corporate governance performance, providing valuable insights for policymakers, corporate leaders, and stakeholders involved in shaping the governance landscape of SOEs in Vietnam. By aligning corporate governance with sustainable development principles, the research aims to contribute to the ongoing discourse on responsible business practices, offering practical recommendations to enhance the performance and resilience of SOEs in the pursuit of long-term socio-economic and environmental sustainability.

THE POSITION OF WOMEN IN SUPERVISORY BOARDS AND THE RELATIONS WITH BUSINESS RESULTS OF LARGE COMPANIES IN REPUBLIC OF CROATIA

The corporate governance framework comprises of a supervisory board, which acts as a liaison between numerous investors with varying interests, influences and motives, and the management. The supervisory board has a crucial role to play in the corporate governance system, as they adopt strategies that are vital for the survival and growth of the business. This paper examines the role of the supervisory board in corporate governance, the factors that determine its effectiveness, and the representation of women on these boards. The paper analyzes the characteristics and performance of women on supervisory boards, the barriers they face in securing membership on these boards, the concept of the glass ceiling, and prior research on the relationship between gender diversity and the performance of supervisory boards. Based on the results of regression analysis, it is determined that there exists a weak yet positive correlation between the number of women on the supervisory board and the profits realized by large companies in the Republic of Croatia.

The moderating effect of corporate governance factors on capital structure and performance: evidence from Indian companies

Purpose This paper aims to empirically investigate the moderating role of corporate governance (CG) in the capital structure-performance relationship. Design/methodology/approach The analysis is based on top Business Today-500 companies and covers a time span of 10 years. The fixed effect panel regression model is used to examine the impact of CG mechanisms on the relationship between capital structure and firm performance. Findings The core findings of the study indicate significant positive moderating role of board independence, board size and family ownership on the relationship between leverage and performance. Practical implications The results enable the managers of Indian firms to comprehend the significance of CG framework while taking financing decisions. The findings encourage managers to raise debt funds in those firms that adhere to good governance norms. Originality/value Unlike extant studies that emphasize on the moderating impact of single CG variable in leverage-performance relationship, the current work comprehensively examines the role of many CG factors that moderate the relationship between capital structure and firm performance. To the best of the authors’ knowledge, the present study is the first of its kind with respect to India.

Financial Indicators and Corporate Financial Distress Prediction in Context of Pakistan: A Systemic Review.

It is feasible to predict the financial distress that a Pakistani company may experience under the current conditions. This study draws attention to key factors influencing financial forecasting and mitigation by integrating the results of several research studies conducted over the last two decades. The literature places a great deal of emphasis on financial variables such as profitability, solvency, and liquidity as indicators. Other factors that may affect prediction models is an increase in inflation, interest rates, or the gross domestic product. Corporate governance, industry dynamics, market indicators, and legal and regulatory frameworks are among the many factors that impact financial distress prediction. As far as methodologies adopted in existing research are concerned, the machine learning methods are replacing statistical methods and are providing best prediction results. Moreover, this study provides a road map for the future research diretions to be employed for financial prediction related studies.

دور الرقابة الداخلية في تفعيل حوكمة الشركات

The study dealt with the role of internal control in activating corporate governance. The problem of study is that the weak internal control system within the framework of corporate governance creates an inappropriate environment that hinders officials within the company in the performance of their responsibilities. Which in turn represent an impediment to the implementation of the governance system in the Sudanese banks that can be formulated in the following question: What is the contribution of internal control in the activation of corporate governance? The study aimed to highlight the aspects through which the concept and importance of internal control can be identified, to identify the concept and components of governance, and reflect the extent of the contribution of internal control in activating corporate governance. The study has reached a number of results, the most important of which are: The internal control system applied in the bank contributed to ensure effective governance and provides sufficient, fair, and integrated information, moreover provides an Organizational chart consistent with the functions of the bank. The study came out with a number of recommendations, the most important of which are: Issuing a guide to corporate governance standards and binding Sudanese banks, public shareholding companies, and audit offices to work on them.

Framework of Green Banking and Green Corporate Governance in Indonesian

Inflation is one of the most widely tested economic variables both theoretically and empirically. Stable inflation is a sign that sustainable economic growth provides benefits for improving people's welfare. This study aims to analyze the impact of Covid-19 on volatility inflation in Indonesian. The method used in this study is the ARIMA model. The results of this study are the ARMA (1.1.0) model suitable for testing inflation volatility in Indonesia. Forecasting results show that inflation over the next 5 months or until December 2022 tends to decrease. From the prediction results, the policy that can be applied to business sector actors is to carry out operational (marketing) activities carried out with an online system. The next policy that can be applied to companies is tax relaxation and easy access to credit to banks. Finally, the policies that can be applied due to the decline in commodity prices in the food and beverage and tobacco sectors are capital assistance and production equipment assistance for business actors.

Revisiting corporate governance and financial risk‐taking

AbstractCorporate governance attributes have varying effects on risk taking when variables are examined separately. We study the effects of a large range of corporate governance attributes on risk taking using a comprehensive US sample. Our findings confirm that although there are certain characteristics that drive this positive effect such as compensation structure, there are those which have the opposite effect such as board‐level attributes. Our paper contributes to the broader literature on the relationship between corporate governance and risk in financial institutions, which are often overlooked in traditional studies. We shed light on the importance of studying corporate governance at a granular level rather than using a single index. The findings offer insights to regulators in determining suitable corporate governance frameworks to ensure the protection of investors rights in financial institutions.