Corporate Governance Measures Research Articles

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.

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.

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.

Corporate Governance Practices and Performance of Deposit Taking Sacco's in Nairobi City County Kenya

Good performance of SACCOs is a key ingredient for its continuous existence and sustainability. The financial intermediation function carried out by SACCOs is dependent on how well they perform. Over the years, there have been various concerns by policy makers and academician over the SACCOs' dismal performance in Kenya. Despite the various corporate governance initiatives and measures implemented by important organizations such as the Centre for Company Governance, the issue of firm corporate governance remains unresolved, despite the involvement of the Capital Markets Authority and SASRA. The aim of this research is to determine how the performance of deposit taking SACCOs in Nairobi is influenced by corporate governance. The research focused on how stakeholder involvement, board composition, organizational structure, and control environment affect Nairobi-based deposit-taking SACCOs’ performance. The study's base was stakeholder, agency, stewardship, and resource dependence theory. The study employed a descriptive design. A census approach was used whereby all the deposit taking SACCOs in Nairobi were included in the study. The target population was 47 CEOs, 47 Sacco officers, 47 heads of finance and 47 heads of credit department. Data was gathered using structured questionnaire. In this research, to evaluate the construct and content validity, the researcher did a pilot test. Both descriptive and multiple regression analysis were used to examine the data. The findings showed that corporate governance factors (board composition, organization structure, control environment and stakeholder involvement) had a correlation coefficient (R) of 0.691 with an R squared of 0.477. From the ANOVA table corporate governance had a significant effect on performance of DT Saccos (F=28.513; p= 0.000). From the regression, corporate governance (board composition, organization structure, control environment and stakeholder involvement) had a positive effect on performance of DT Saccos. This study concludes that corporate governance (board composition, organization structure, control environment and stakeholder involvement) has a positive effect on performance of DT Saccos in Nairobi, Kenya. The study recommends that management of DT Saccos improve their corporate governance for increased performance levels. There is need for similar research based on other factors influencing performance, other measures of the variables, other Saccos & institutions as well as adopting secondary data.

Corporate Governance And Company Value: An Investigation Into The Role Of ACSG Score

This study investigates the complex relationships between Good Corporate Governance (GCG) scoring, specifically the ASEAN Corporate Governance Scorecard (ACGS) score and company value. The ACGS score, a standardized measure of corporate governance, is used to assess the performance of publicly traded companies in Indonesia from 2017 to 2020. The study reveals a significant negative impact of the ACGS score on firm value, suggesting that while the ACGS score provides a standardized measure of corporate governance, it may not fully capture the nuances of individual company practices. The checkbox-based nature of the ACGS score might be seen as a mere compliance requirement rather than a true reflection of the company's corporate governance performance. However, when control variables are introduced, the effect of the ACGS score on firm value weakens and becomes insignificant. This suggests that the firm value is influenced more by financial performance compared to corporate governance performance. The study concludes that while the ACGS score can provide some insights into a company's corporate governance performance, its impact on firm value can be overshadowed by other factors. Therefore, a comprehensive approach that considers various control variables is necessary to accurately assess firm value.

IMPACT OF INTERNAL CORPORATE GOVERNANCE MECHANISMS ON THE FINANCIAL AND ENVIRONMENTAL PERFORMANCE OF BANKS IN UAE DURING THE COVID-19 PANDEMIC

The COVID-19 pandemic has presented new challenges, leading to increased scrutiny of the financial resilience and sustainability of the banking industry. This conceptual investigation delves into the intricate relationships between internal corporate governance measures, such as ownership concentration and capital intensity, and the financial and environmental performance of banks in the United Arab Emirates (UAE) during the pandemic. By examining the unique dynamics of the UAE's banking sector in response to the crisis, this research aims to advance our theoretical understanding of how internal corporate governance systems influence financial and environmental performance during periods of turmoil. This study addresses a critical gap in the literature by exploring the underexplored link between internal corporate governance practices and financial as well as environmental performance in the context of an international financial crisis. It illuminates how specific governance structures impact the decision-making processes of UAE banks, ultimately affecting their financial and environmental outcomes. Drawing on theoretical frameworks rooted in agency theory, stakeholder theory, and corporate social responsibility, this research leverages the uncertainties brought about by the pandemic to test and validate these theories in a rapidly evolving economic landscape. Employing a mixed-methods approach that combines quantitative financial data analysis with qualitative insights from key stakeholders in the UAE's banking sector, this research provides a comprehensive evaluation, encompassing both qualitative and quantitative findings, which may reshape our understanding of how internal corporate governance systems impact financial and environmental performance.

Financial Distress Risk Levels of Listed Small and Medium Enterprises in the Philippines

Small and Medium Enterprises (SME) play a significant role in the Philippine economy in terms of promoting entrepreneurship and technological innovation, encouraging local development and alleviate poverty levels. However, SMEs are more susceptible to financial constraints and difficulties attributable to limited access to capital and weak financial management practices, among others, which lead to financial distress and insolvency in the long run. Anchored on the Early Bankruptcy Theory, a company’s financial distress can be at-tributed to its inability to meet its obligations which stem from poor management, low profitability, inadequate cash flow, or excessive leverage, among others. Hence, the Study aimed at describing and determining the financial dis-tress risk levels of sample SMEs in order to provide valuable insights into the financial health and stability of these companies. Specifically, the Study ascertained the nature, determinants and levels of financial distress risks using the Altman Z-Score Model (1968). Based on the result, sample companies at SAFE levels were deemed to have strong financial positions with good profitability, liquidity, leverage, and solvency while sample companies at DISTRESS levels could experience financial difficulties with lack of liquidity, declining revenues, and reliance on debt financing from third parties. Future research can (1) expand the determination of financial distress risk levels into non-listed SMEs and other listed companies from key sectors using a longer time frame to assess changes in the financial distress risk levels resulting from changes in economic conditions and (2) investigate the impact of financial ratios on financial distress risk while also considering corporate governance measures affecting it.

Corporate governance and shareholder-employee risk-shifting: Evidence from corporate pension plan sponsors

This study examines how corporate governance affects pension plan sponsors’ conflicting motives—risk-shifting vs. risk management—and their future pension funding status, R&D investments, and shareholder values. We focus on managers’ discretionary choices of expected rates of return on plan assets and discount rates for pension liabilities to capture risk-shifting motives and measure corporate governance quality through foreign equity ownership (strong monitoring) and stable equity ownership (weak monitoring). The evidence shows that well-governed firms use managerial risk-shifting to finance R&D and increase shareholder values. Risk-shifting by poorly-governed firms results in larger pension underfunding without increasing shareholder values.

Do sustainability ethics explain the impact of country-level corporate governance on financial stability in developing economies?

ABSTRACT The study presents an empirical evidence on how sustainability ethics affect the relationship between country-level corporate governance and financial stability in developing countries. Employing the dynamic system Generalized Method of Moments on a panel dataset of 137 developing countries over the period, 2006–2019, the study found that the positive effect of country-level corporate governance framework on financial stability is not instantaneous. We find that internal and external corporate governance frameworks have a strong positive synergistic effect on financial stability. We confirm that corporate governance measures substitute sustainability ethics to yield a desirable outcome of financial stability. Finally, the study finds evidence to support that sustainability ethics reduce the negative impact of country-level corporate governance on financial stability. The study recommends that the build-up of quality sustainability ethics can help tame the reductive effect of the country-level corporate governance framework on financial stability in developing countries.

A Study on the Human Rights Management and Improvement Measures of Corporate Governance. - comparing the laws of human rights management in the world -

A Study on the Human Rights Management and Improvement Measures of Corporate Governance. - comparing the laws of human rights management in the world -

Corporate Governance and Service Delivery in National Government Administration: A Case of Kirinyaga County, Kenya

Corporate governance is vital in ensuring ethical operations and stakeholder interests in companies, preventing fraud, misconduct, and conflicts of interest, leading to a more sustainable and profitable business. Concerns around corporate governance practices in government agencies can hinder their effectiveness and ultimately impact the quality of services delivered to citizens. This study aimed to examine the influence of corporate governance practices on service quality in the national government administration, case of Kirinyaga County. The specific objectives of this study were to examine the influence of organizational structure, stakeholder participation, ethical issues, and legal framework/policies on the service delivery of Kirinyaga County's national government administration. Concerning the theoretical aspect, the study was anchored by agency theory, resource dependency theory, stakeholder theory, and the SERVQUAL model. This study utilized a descriptive research design. The target population was from all the administrative units of Kirinyaga County, namely: Kerugoya Central, Kerugoya East, Kerugoya West, Mwea East and Mwea West, which formed the unit of analysis. The unit of observation was 143 officials from each of those units. The study adopted a stratified random sampling technique to select the study participants. Primary data was obtained by using a semi-structured questionnaire. To validate the questionnaire, content, construct and face validity were used. The study instrument's reliability was measured using the Test-Retest method, and Cronbach's Alpha was utilized as the reliability measure. A Cronbach's alpha equal to or greater than 0.7 was set as the threshold for reliability. As a result, the study instrument was found to be reliable. Data collected were coded and entered into the software Statistical Package for Social Sciences, which was used to generate descriptive and inferential statistics. Descriptive statistics were utilized to summarize the observed data, which included frequencies, percentages, mean, and standard deviation. Additionally, inferential statistics were carried out using correlation and multiple regression analysis. The results of the correlation analysis indicated that all variables had a positive linear correlation. Regarding the impact of corporate governance measures on performance, the regression analysis indicated that the organizational structure and ethical issues variables had a strong positive relationship with national government service delivery. However, the stakeholder participation and legal and policy framework variables had a negative effect on the quality of service delivery. Based on the findings of the study, it can be concluded that maintaining an appropriate organizational structure and applying the appropriate ethical standards are key factors in determining positive service delivery. National government administration units that employ these two initiatives are likely to provide better quality service. In light of this, National government administration units should prioritize maintaining an appropriate organizational structure and implementing ethical standards to improve the quality of service delivery. Additionally, further research should be conducted on the negative impact of stakeholders' participation and legal and policies framework on service delivery to better understand how to mitigate these effects. By considering these recommendations, national government administration units can improve their service delivery and better serve their constituents.

Corporate Governance and Accounting Conservatism in Nigeria: An Empirical Investigation

This study investigated the effect of Corporate Governance (represented by Asymmetric Timeliness Measure and Market To Book Ratio) on accounting conservatism (represented by Gender Composition of the Board, Composition of Audit Committee and Risk Management Committee) of quoted firms in Nigeria. Ex-post facto research design was used. The population of this study comprised 17 food and beverage firms listed on the Nigerian Exchange Group (NGX) as at December 31st, 2021 from which 14 were selected by Purposive sampling technique. The study period was 10 years (2012 to 2021). Data were obtained from the published audited financial statements. The study used descriptive and inferential statistics for data analysis. Findings from the study revealed that Corporate Governance jointly had no significant effect on Asymmetric Timeliness Measure (ATM), AdjR2 = 0.035; F (6, 133) = 1.84, P-Value= 0.09 and Market To Book Ratio (MTB), AdjR2= 0.109; F = 11.70, P-Value= 0.07. This study concluded that Corporate Governance had no significant impact on Accounting Conservatism of quoted firms in Nigeria. It was recommended that policy makers should pay close attention to corporate governance policies and measures such as the Gender Composition of the Board, Composition of Audit Committee and Risk Management Committee in order to enhance accounting conservatism and bring about accounting conservatism and by extension improve the quality of financial statements.

Application of Corporate Governance Measures in Indian SMEs: A Way Forward

Application of Corporate Governance Measures in Indian SMEs: A Way Forward

Corporate Governance Practices in India: Problems & Importance

The paper seeks to explore the impact of corporate governance (CG) measures on the performance, importance and problems from the viewpiont of India.The focus on corporate governance has increased since the past few decades in most countries around the world, especially in the wake of corporate collapses in early 2000s. These corporate collapses have leads to the growing volume of academic and practical research in this area. Corporate governance refers to the set of rules and practices that ensure the effective and corporate efficient management of a company. In India, the Companies Act, 2013 lays down the legal framework for corporate governance, which is overseen by the Securities and Exchange Board of India (SEBI) and other regulatory authorities. Some of the key corporate governance practices in India include: Board of Directors: Companies in India are required to have a board of directors that oversees the management of the company. The board is expected to act in the best interests of the company and its stakeholders.Independent Directors: At least one-third of the board of directors of a listed company in India must be independent directors. These directors are expected to provide unbiased and objective advice to the board. Audit Committees: Listed companies in India are required to have an audit committee that oversees the financial reporting process and ensures that the company's financial statements are accurate and reliable. Shareholder Rights: Shareholders in India have a number of rights, including the right to vote on key issues such as the election of directors and the approval of major corporate transactions. Disclosure and Transparency: Indian companies are required to disclose a wide range of information to the public, including financial statements, annual reports, and information about the company's management and operations. In this paper we will study the concept and principles of corporate goverbance along with its importance from the viewpoint of India. Then we will discuss the various issues and challenges related to corporate governance.

Pengaruh Good Corporate Governance dan Ukuran Perusahaan Terhadap Manajemen Laba (Studi Empiris pada Perusahaan Manufaktur Sub Sektor Makanan dan Minuman yang terdaftar di BEI Periode 2019-2021)

The purpose of this study is to explore the impact of corporate governance measures on revenue management in the Indonesia Stock Exchange's manufacturing industry, especially the food and beverage sub-sector, over the period 2019-2021. Independent variables investigated included management ownership (X1), audit committee (X2), board composition (X3), and company size (X4). The study population consisted of 810 companies listed on the Indonesian Stock Exchange during the above period. The study used a targeted sampling method to collect samples from 11 companies that met the study criteria. Data analysis was performed using the multiple linear regression method. The findings of this study show that management ownership, audit committee and board composition, and company size have a significant and negative impact on revenue management. The conclusion of the findings is that good corporate governance practices are important to influence the revenue management of manufacturing companies on the Indonesia Stock Exchange. This study provides a deeper understanding of the relationship between corporate governance and revenue management variables and provides guidance for companies to optimize their corporate governance practices to achieve their sustainable long-term goals,

Antecedents of tax aggressiveness of listed non-financial firms: Evidence from an emerging economy

The study examined the antecedents of aggressive tax behaviour among listed non-financial firms in Ghana. With firm-level data for 19 non-financial firms covering the period 2010–2019, we employed the system GMM approach. Our findings underscore the significance of political connection and financial constraint as primary drivers of tax aggressiveness among listed non-financial firms in Ghana. The relationship between capital structure and tax aggressive behaviours is mixed. Our findings establish the ability of corporate governance measures – such as board size, board gender diversity and independent directors – to increase tax aggressive behaviours of listed non-financial corporations in Ghana. Policymakers could examine and evaluate the operability or enforcement of internal corporate governance practices among listed non-financial firms to limit the extent of tax aggressiveness which would, in turn, ensure high tax revenue mobilisation for the government. External governance measures such as institutional ownership and ownership structure policies could be evaluated to further ensure less tax aggressive behaviours from firms.