Corporate Governance Measures Research Articles

Corporate Governance and Business Resilience in the Banking Industry

The unstable banking business environment and ethical questions that bedeviled the industry have opened new windows for researchers and policymakers on how best to tackle the menace. But as researchers keep pace on how best banking institutions can remain unperturbed with preparation for future adversities and bearing in mind the shareholders' wealth, the concept of resilience becomes the beacon of hope for managers and directors alike. 139 participants drawn from ten interest-deposit money banks in south-eastern Nigeria were selected for this inquiry. The result of this study demonstrated that corporate governance predicted business resilience positively. It was concluded that corporate governance that is predicated on board independence, board size, board effectiveness, leadership quality, and accountability would strengthen the resilience of interest deposit money banks. This study recommends that managing directors of interest deposit money can leverage corporate governance measures utilized in this study to strengthen the resilience capability of their organisations.

Effect of Corporate Governance on Increasing Foreign Direct Investment in Saudi Arabia

This research paper aimed to investigate the relationship between corporate governance and foreign direct investment (FDI) in the Kingdom of Saudi Arabia. It examined various aspects of corporate governance such as executive compensation, financial reporting, board composition and the shareholder rights. It analyzed the trends, patterns and factors that may affect the decisions of foreign direct investors. The findings revealed that the Kingdom of Saudi Arabia has conducted a great progress in the field of utilizing corporate governance on increasing the foreign direct investments; however, there is a need for improving the quality. The study also provided some recommendations to create more stable environment to support FDI adequately as well as utilizing adequate corporate governance practices such as strengthening the independent board oversight and enhancing the rights of shareholders are among these factors. Improving the executive compensation practices and adopting international financial reporting can increase the number of investments as well as there will be coherence between the economic regulations in the Kingdom and those of other countries. Increasing the corporate social responsibility as well as strengthening the regulatory framework to facilitate applying corporate governance measures as well as enhancing foreign direct investments are recommended as well. Fostering the culture of good governance and providing facilities to attract foreign investments are suggested along with asserting the importance of enhancing the international cooperations.

Corporate Governance On Financial Report Timeliness Among Quoted Non-Financial Firms In Nigeria

The study seeks to examine the effect of corporate governance on financial report timeliness among quoted non-financial firms in Nigeria between the periods of 2013-2022. Specifically, there are twenty one (21) consumer goods firms and thirteen (13) industrial goods firms listed in the Nigerian Exchange Group as at 31st December, 2023 respectively. The study purposively selected ten (10) consumer goods firms and seven (7) industrial goods firms within the reviewed periods. The variables used to measure corporate governance are: board size (BBS), board composition (BOC), board expertise (BOP) and Board Gender Diversity (BGD) while regressed, and financial report timeliness (FRT). The Hausman test evidenced that, the random effect model is the most appropriate model for the study. The study reported that board size has a negative significant effect on financial report timeliness while has a positive insignificant effect on financial report timeliness (FRT). Both board gender diversity and board expertise have positive effect on financial report timeliness (FRT).

Towards better governance: creating a corporate governance index for South African firms

PurposeThe purpose of this study is to construct a robust index and subindices to measure the quality of corporate governance for 266 firms listed in South Africa from 2004 to 2021.Design/methodology/approachPublic information on the compliance of King Code of Good Corporate Governance is used to construct a main index predicated on provisions relating to board characteristics, accounting and auditing and risk management. These categories are transformed into three subindices. All constructs are scored with binary coding and equally weighted.FindingsCronbach’s alpha test reveals that the index and subindices are highly reliable measures of corporate governance. The principal component analysis supports the construct validity of all measures.Research limitations/implicationsThe index is limited to only three corporate governance subcategories and only focuses on South Africa.Practical implicationsThese corporate governance indices provide governing authorities, policymakers, investors and other market participants direct information on the quality of corporate governance in South African firms.Originality/valueAs South Africa lacks a formal corporate governance indicator, the development of an appropriate corporate governance index and subindices contributes towards understanding the quality of corporate governance in South African firms. To the best of the authors’ knowledge, this is the first paper to conduct robustness tests on corporate governance indices designed for South African companies.

Substitutive effects of accounting transparency and corporate governance on firm value

Recently, there has been increasing emphasis on the importance of accounting transparency and corporate governance. While previous studies have individually examined their impact on firm values, this paper investigates their combined effects. Using data from the Compustat and Center for Research in Security Prices databases obtained through Wharton Research Data Services, we measure accounting transparency and company value, and we employ the E-index as a measure of corporate governance. This study conducts firm, year, and industry fixed effects regressions on a large panel dataset comprising 21,476 firm-year observations. According to our research, both accounting transparency and good corporate governance have negative effects on the value of a company. This means that spending money to improve both may end up costing more than it benefits, which could lower the value of the company. These results support the notion that investors may see that maintaining high levels of accounting transparency and corporate governance can be excessively costly, while an overemphasis on these two metrics could potentially limit the flexibility and creativity of management. These findings have implications for managers tasked with achieving a balance between robust corporate governance, enhanced accounting transparency, and corporate value considerations.

Pengaruh Keberlanjutan dan Tata Kelola Perusahaan terhadap Kinerja Perusahaan dengan Reputasi Perusahaan sebagai Pemoderasi

This study aims to analyze the influence of sustainability disclosure and corporate governance on company performance by using thecompany's reputation as a moderator. The sample of this study consisted of primary and secondary sector companies listed on the Indonesia Stock Exchange, from 2014 to 2020. This study analyzes the correlation between sustainability and corporate governanceon corporate performance comprehensively through the development of corporate governance measurement instruments and uses amulti-tiered system of measurement in the disclosure of corporate sustainability This study uses Ordinary Least Square (2SLS) toanalyze data using STATA 16. The results of the study show that sustainability disclosure has a significant negative effect on the Company's performance, governance has a significant positive effect on sustainability disclosure and the Company's reputationmoderates the disclosure of sustainability and the Company's performance.

Financial performance of Nigerian deposit money banks and corporate governance

Corporate governance has become a significant policy issue in Nigeria, especially with many developments such as the volatility of corporations on the Nigerian Exchange and the rise in the population of stockholders, which have increased the relevance of corporate governance measures. This study examined the nexus between corporate governance and Nigerian Deposit Money Banks’ (NDMBs) financial performances using a period from 2012 to 2019. Using a judgmental sampling technique, out of 25 NDMRs, 15 NDMRs were selected as a sample size. Secondary data were extracted from the annual reports of the selected banks. Descriptive research design and regression analysis were used to analyze the data. The findings offer empirical evidence to refute the five null hypotheses and found that the financial performance of NDMBs as measured by Tobin Q and corporate governance proxies (i.e. board meetings, the board size, CEO duality, audit committee independence, and board independence) is statistically related. This study found that the nexus between Nigerian deposit money banks’ financial performance and CEO duality is negative and significant. The nexus between Nigerian deposit money banks’ financial performance and board independence is negative and significant. Nigerian deposit money banks’ financial performance and audit committee independence have a positive and significant nexus. The nexus between Nigerian deposit money banks’ financial performance and board size is positive and significant. The nexus between Nigerian deposit money banks’ performance and board meetings is positive and significant. This study concluded that corporate governance and financial performance of NDMBs are related. AcknowledgmentWhichever contributors to this publication, both non-researchers and scholars, are much acknowledged.

Key Determinants of Corporate Governance in Financial Institutions: Evidence from South Africa

The purpose of this study was to examine the key determinants of corporate governance in selected financial institutions. Using South African financial institutions as a unit of analysis, namely insurance companies and banks, the study employed a panel generalised method of moments (GMM) model using a data set for the period from 2007 to 2020, to assess key determinants of corporate governance proxies identified for the study. The study sampled 21 South African financial institutions composed of Johannesburg Securities Exchange (JSE) listed and unlisted banks and insurance companies. To measure corporate governance, the study developed a composite index employing the principal components analysis (PCA) method. The findings revealed a positive and significant association between the corporate governance index and its lagged variables. Furthermore, a significant and positive link was found between the efficiency ratio and corporate governance index and capital adequacy ratio (CAR); corporate governance index and firm size; corporate governance index and leverage ratio (LEV); and corporate governance index and return on assets (ROA). However, a negative and significant correlation was found between financial stability and the corporate governance index. The link between return on equity (ROE) and corporate governance was insignificant. A small cohort of financial institutions was excluded because it was challenging to obtain complete annual reports to extract the required data. The study was limited to only five corporate governance measures, namely board diversity, board size, board composition (independent non-executive directors and non-executive directors), and board remuneration. The findings are anticipated to persuade developing countries to pay special attention to how corporate governance is measured.

ESG rating results and corporate total factor productivity

As a measure of corporate environmental, social, and governance (ESG) performance, ESG ratings have increasingly gained attention from corporations, the public, and government agencies, gradually becoming a key factor influencing their perceptions and decision-making regarding corporations. This study explores the impact of corporate ESG ratings on Total Factor Productivity (TFP) and its underlying mechanisms. Using listed companies in China as the research sample, it was found that higher ESG ratings significantly enhance corporate TFP, a conclusion that holds even after conducting robustness checks and addressing endogeneity issues. Further analysis indicates that high ESG ratings improve corporate TFP by reducing financing constraints and increasing government subsidies. Heterogeneity analysis shows that the effect of ESG ratings on enhancing TFP is more pronounced for corporations with high levels of attention, good reputations, and high audit quality. Additionally, the study also examines whether ESG ratings can serve as an effective predictor of corporate TFP. By applying machine learning algorithms for validation, the results show that incorporating ESG ratings significantly improves the accuracy of predictions for corporate TFP.

The influence of non-state-owned shareholder governance on the governance level of state-owned enterprises--Based on the perspective of board resolution behavior and party organization governance.

With an increasing number of heterogeneous shareholders participating in corporate governance in reality, the assumption of shareholder homogeneity in agency theory is gradually relaxing in the modern field of corporate governance. The policy of mixed ownership reform in China provides empirical evidence for studying heterogeneous shareholder governance. To fully understand the governance effects of non-state shareholders, we employ the ownership proportion held by non-state shareholders among the top ten shareholders and the appointment of directors as measures for non-state shareholder governance. Using a panel fixed-effect model from the perspective of state-owned enterprises (SOEs) party organizations, we examine the impact of non-state shareholder governance on the governance level of SOEs. The study reveals that non-state shareholder governance positively affects the governance level of SOEs, with board resolutions playing a crucial role in this relationship. When party members serve as directors, the governance effect of non-state shareholders is more significant. Based on the aforementioned research findings, we recommend further refining corporate governance measures for SOEs within the context of SOE reforms. It is advisable to optimize the party organizational governance structure and leverage the synergistic effects of non-state shareholder governance and party organizational governance. Advancing reforms along the Pareto improvement path will contribute to establishing a distinctive corporate governance system for Chinese SOEs.

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.

Review of Asset Management Practice in Indonesian State-Owned Enterprise

This study examines Indonesian State-Owned Enterprises (SOEs) asset management methods, problems, and financial and operational performance effects. The report synthesizes case studies and academic research on how large organizations manage their huge and diverse asset portfolios and how governance, regulatory frameworks, and human resource practices affect their effectiveness. The research begins with case studies of talent management innovations from big Indonesian SOEs. These cases show how proactive human resource approaches can boost company commitment and reduce turnover, improving asset management efficiency. According to the research, governance and legal frameworks influence asset management techniques. Studies show that corporate governance quality affects SOE operational performance. The paper explores how reforms and legislation affect state asset management, highlighting the major changes in SOE governance and legal frameworks, particularly after economic and political reforms. Asset management difficulties for Indonesian SOEs include managing large and diverse asset portfolios, integrating modern management frameworks, and optimizing state asset revenue. According to the study, comprehensive asset management systems, governance transparency, and professional management can address these difficulties. The research examines how asset management strategies affect Indonesian SOE profitability, corporate governance, and performance measures. Strategic asset management boosts financial performance, especially profitability. SOE profitability is greatly affected by current asset and liability management. The study offers advice to Indonesian SOEs and policymakers. Enhancing financial and operational performance requires comprehensive asset management, governance changes, and strategic innovation. These efforts boost Indonesia's economy, demonstrating the importance of asset management in SOE performance.

Перспективы легализации семейного предпринимательства: опыт Португалии

Family and business relationships are closely interconnected and potentially acute succession issues often turn out to be a source of serious conflicts between business representatives. The implementation № 1 2024 год 64 АННОТАЦИИ of specific corporate governance measures is more than just a fundamental prerequisite for the survival of many family businesses. The appointment of a general manager often turns out to be one of the most controversial decisions in the life of a family business. The survival and prosperity of family entrepreneurship in Portugal serves to strengthen competition and choice.

Corporate governance and firm’s risk behavior: the moderating role of corporate social responsibility

PurposeThis study aims to examine the nexus of corporate governance with firms' financial risk-taking behavior under the corporate social responsibility (CSR) disclosures in the context of non-financial listed firms of an emerging economy.Design/methodology/approachThis study investigates the relationship between corporate governance as evaluated by an index and several financial risks, including idiosyncratic, default and systematic risks. The connection of corporate governance with financial risks is also studied while considering the moderation of CSR disclosures. The data are collected from 2014 to 2018 of 73 top 100-index listed non-financial firms of Pakistan Stock Exchange (PSX). Panel regression fixed effect and 2-step generalized method of moments techniques are applied to confirm the hypothesis along with the diagnostic tests to confirm that all outcomes of models must be authentic and reliable.FindingsThe study’s findings confirm that enhancing the overall corporate governance measures resulted in an augment in the firm’s risk due to weak control and regulations prevailing in emerging economies. Moreover, CSR disclosures enhance stakeholder information, lessen information asymmetry about management policies and mitigate the risk associated with operational uncertainties.Practical implicationsThis study has a practical implementation to policymakers that effective monitoring and controlling measures facilitate the corporate management for minimizing the financial risks. Further, the study’s findings shed light that implementing corporate governance measures is not enough to mitigate financial risks until supervisory measures in the form of CSR disclosures are not taken to analyse corporate governance effectiveness.Originality/valueThis paper enhances the key findings in the literature by examining the role of corporate governance measures with respect to firms’ financial risks considering the moderating role of CSR disclosures. Furthermore, this research adds to the body of knowledge regarding the implementation of monitoring measures that assist in the mitigation of firms’ financial risks hence firm value.

Corporate governance report compliance rate and accounting conservatism: New evidence from Korea

This study investigates the relationship between the corporate governance report (CGR) compliance rate and a company’s accounting conservatism, utilizing the CGR compliance rate as a novel method to evaluate the effectiveness of corporate governance practices. Given the challenges of applying global indices to measure corporate governance in the Korean market, this study focuses on the CGR compliance rate as a key indicator. Utilizing the ordinary least squares (OLS) regression model, specifically the Ball and Shivakumar (2005) model widely employed in previous studies to assess accounting conservatism, this paper conducts empirical analyses based on 784 observations from Korean listed firms between 2018 and 2021. The main analysis reveals a positive association between the CGR compliance rates (coef = –2.416, p-value < 0.01) and accounting conservatism. A fixed-effect model and a propensity score matching (PSM) model also show a positive association between the CGR compliance rates, respectively (coef = –2.507, p-value < 0.01; coef = –3.118, p-value < 0.1) and accounting conservatism. This study proves that firms with high CGR compliance rates tend to promptly recognize financial losses in financial reporting, thereby safeguarding investors. This suggests that investors should consider the CGR compliance rates when evaluating potential investments. Overall, these findings contribute to validating the CGR compliance rates as a valuable proxy for assessing corporate governance practices in Korean firms.

Enhancing Financial Stability in Ghana's Universal Banking Sector: A Governance Perspective and Practical Insights

Purpose: This study investigates the impact of corporate governance structures on financial distress within the universal banking sector in Ghana.
 Methodology: The research systematically gathers data from 19 banks spanning 10-year period. Financial distress indicators were extracted from financial statements, while corporate governance measures were obtained from annual reports. The data was analysed through regression analysis and counterfactual analysis through an endogenous switching regression model.
 Findings: Key findings reveal that profitability, liquidity, and effective risk management are critical factors influencing financial distress in both strong and weak governance environments. The results also showed that improving the strength of Corporate Governance has a positive influence on Altman Z Scores, contributing to a potential reduction in financial distress.
 Unique contributor to theory, policy and practice: The study provides valuable insights for policymakers, regulators, and banking institutions in Ghana, emphasizing the need to prioritize and strengthen governance practices for a resilient banking sector. Limitations include data unavailability, reliance on unbalanced panel data, and a narrow focus on board characteristics.

Blockchain Technology and Corporate Governance: An Analysis of Board Structure, Shareholder Rights and Compensation Policies

The blockchain technology (BT)_offers a new means to trade and monitor the ownership of financial assets which is similar to the advent of double-entry bookkeeping centuries ago. This represents a significant development in financial record-keeping. Stock exchanges are investigating BT worldwide to enable businesses to list, to trade and to vote on shares. This adoption has the potential to benefit stockholders through reduced trading costs, faster ownership transfers, improved record accuracy and increased process transparency. This study examines the effect of BT on corporate governance. Using feasible generalised least squares analysis, our study analyses data from 297 European businesses included in the STOXX Europe 600 index between 2016 and 2021. The results show that the adoption of BT improves the quality of board decision-making and streamlines board activities. In addition, the study indicates that BT facilitates greater direct shareholder rights and encourages effective worldwide administration of director and board member compensation. The research contributes to the current body of literature by confirming the positive impact of implementing (BT) on enhancing corporate governance measures. This, in turn, assists managers in formulating appropriate strategies.

An Application of the Scorecard Tool to Measure Corporate Governance Quality: Empirical Study in a transition country

Abstract Nowadays, the corporate governance quality (CGQ) of a company has become increasingly important as it is the benchmark for the investment decision-making process. However, there are not many studies of CGQ in the Vietnamese public sector. In this regard, this study adopted and adapted the Association of Southeast Asian Nations (ASEAN) corporate governance scorecard and the Vietnamese Listed Company Awards scorecard to evaluate the CGQ of state-owned enterprises (SOEs) in Vietnam. Data from 220 equitized SOEs were collected from a self-administered survey and double-checked with information from in-depth interviews with the company’s managers and their documents. Collected data were analyzed to score the CGQ of surveyed companies. Results showed that the CGQ of survey companies met the basic requirements that comply with the legal framework. The analysis also showed the differences between two groups of state-owned enterprises: listed versus unlisted joint-stock companies. Based on the findings, we suggested companies improve and adjust their governance policies following 77 scorecard criteria and apply international best practices in corporate governance to promote their brand value to become more appealing to investors.

The impact of corporate governance on the financial performance of banks

The paper aimed to examine the impact of corporate governance on the financial performance of commercial banks in Jordan. The variables used to measure corporate governance were the board of directors' size, independent members of the board of directors, and the number of audit committee members, while those used to measure financial performance were return on investment, return on equity and earnings per share. The study used a quantitative approach based on the data of 12 commercial banks in Jordan during the period 2005-2022. The panel data were analyzed using the EViews software based on the ordinary least squares time series technique. The paper found the effect of all corporate governance variables on both return on investment and return on equity. However, it indicated that the board of directors' size and the independent members of the board of directors had an impact on earnings per share. This study highlighted corporate governance variables in one of the significant sectors of developing economies. Moreover, it recommended the need to review the principles used in selecting members of the audit committee for commercial banks in Jordan, due to their importance in developing long-term financial performance.

On the socio-political reserves and imperatives of special military operation

Two years have passed since the beginning of Russia's special military operation in Ukraine. Survey data show trends in the social and political understanding of the events by citizens: the growth of consolidation, the activation of volunteer activities, adaptability to Western sanctions. The author of the article draws attention to the key positions of the doctrinal foundation and conceptual content of the special military operation and practical aspects of managerial interactions of citizens, actors and institutions of civil society and the state in the processes of conducting the SWO, considers the serious problem of motivational and psychological aspects and social and power processes around the SWO. The article attempts to analytically comprehend the socio-political trends and prospects of the special military operation, its possible development and completion. According to the author, the transformation and restructuring of the industrial and financial system, approaches to state and corporate governance and other measures in the processes of governance in the zone of the special military operation, in civil society and the state, require the achievement of the necessary degree of information reliability. The discussion of possible scenarios for the completion of a special military operation through the prism of geopolitical and political-economic realities leads to the conclusion that it is necessary to optimize the interaction of military-technical and socio-political mechanisms for the implementation of the available reserves for achieving the goals of a special military operation.