Corporate Governance Perspective Research Articles

Drivers of environmental and social sustainability accounting practices in Nigeria: a corporate governance perspective

PurposeThis study aims to investigate corporate governance mechanisms affecting environmental and social sustainability accounting practice (SAP). Four internal (quality of information technology [QIT], market orientation, business strategy and structure of accounting department) and two external (environmental uncertainty and market competition) governance mechanisms were examined.Design/methodology/approachThe population of the study is comprised of 56 publicly listed manufacturing companies on the Mainboard of the Nigerian Stock Exchange. Data were collected using a questionnaire which was completed by senior finance personnel in each company in the sample. Structural equation modelling, logistic regression and quantile regression analysis were used to analyse data.FindingsThe results show that the extent to which Nigerian companies have implemented SAP is moderate. The authors find that the level of SAP implementation is significantly associated with market orientation and business strategy, but not with the QIT and structure of accounting department. The results also show that both external corporate governance mechanisms (i.e. environmental uncertainty and intensity of competition) have no significant effect on SAP.Practical implicationsThe insignificant influence of external corporate governance mechanisms on SAP corroborates the contention that external pressure on companies to implement sustainability initiatives in developing countries is weak.Originality/valueThis study contributes to the literature on sustainability in developing countries and incrementally adds to knowledge on the corporate governance mechanisms driving SAP in jurisdictions characterised by lax regulatory framework and weak institutional apparatus on sustainability.

Research on the Influence of Technological Innovation Enthusiasm on Innovation Performance from the Perspective of Nonlinearity—Empirical Evidence from Chinese Listed Firms

Taking Chinese listed companies from 2010 to 2019 as research samples, in this paper, the authors empirically analyze the impact of technological innovation enthusiasm on innovation performance from a nonlinear perspective. The research finds that an inverted, U-shaped relationship exists between technological innovation enthusiasm and innovation performance, that is, to a certain extent, the improvement of the enthusiasm for technological innovation can improve the innovation performance of companies. However, when the enthusiasm for technological innovation reaches a certain degree, the innovation performance declines with the improvement of technological innovation enthusiasm. In addition, the moderating effect of CEO succession on the relationship between technological innovation enthusiasm and innovation performance is investigated from the perspective of corporate governance, and the research conclusions show that CEO succession strengthens the inverted, U-shaped relationship between technological innovation enthusiasm and innovation performance. This study further enriches the theoretical framework of technological innovation and corporate governance, and the relevant conclusions can provide certain theoretical reference for the innovation performance improvement of listed companies in China.

Gender Diversity in the Board Room and Corporate Social Responsibility Decoupling

Prior research shows that information asymmetry and pressures to elude to stakeholders’ expectations are central to strategic accounts of corporate social responsibility (CSR) decoupling––a practice that has severe socio-economic consequences for firms. Adopting a corporate governance perspective to CSR decoupling, this paper investigates how board gender diversity (BDG) can curb CSR decoupling. Using a battery of sophisticated analyses and robustness tests on 11,835 firm-year observations for the period of 2002-2017, our results confirm that that broadly BGD is significantly and negatively associated with CSR decoupling. Adopting a nuanced view of BGD, we find that this effect is stronger for boards that are balanced, as opposed to skewed and titled boards and that independent women directors are more effective monitors of CSR decoupling, as opposed to executive women directors. Our study offers important theoretical and policy implications for the field of corporate governance and CSR.

Executive compensation and the financial performance of Polish listed companies from the corporate governance perspective

Research background: The level of compensation earned by CEOs and the relationship between executive pay and companies? performance is one of the most widely studied issues in the corporate governance literature. Studies conducted in the last several decades have provided evidence that CEO pay should be aligned with accounting financial measures. Purpose of the article: The main purpose of this paper is to determine the relationship between executive compensation and organizational financial performance. In particular, the effect of net income and comprehensive income as the accounting measures of financial performance on executive compensation is compared. Methods: The research comprised listed companies on the Warsaw Stock Exchange (WSE). The role and effect of accounting financial measures on executive compensation are analyzed based on three regression models. The period of analysis spanned ten years, from 2009 to 2018. Findings & value added: There are three conclusions that can be drawn from the study. Firstly, executive compensation in the analyzed companies largely depends on the accounting measures of financial performance, based on net income and comprehensive income (excluding ROE). Secondly, its level is significantly and positively influenced by the company?s size, Tobin?s Q ratio, debt ratio, and dividend rate. Thirdly, comprehensive income has a stronger effect on executive compensation than net income. Our findings add some potentially noteworthy dimensions to the economic literature on corporate governance, which is especially important to apply in the CEE region and other emerging economies. The Anglo-American assumption of corporate governance and executive compensation policy might not be suitable for the realities in much of the world.

A Diorama on the Perspective of Corporate Governance in Co-operatives

Co-operatives form a significant part of the world economy. They are significantly involved in wealth creation and are major employers of the workforce across the globe. It is believed extensively that the principles and ethics of co-operatives symbolize the aims and ideals of the cooperative movement. The collapse of a few of the biggest co-operatives has led to ponder corporate governance and its importance in co-operatives. While studying the peculiarities of co-operatives and what sets them apart from corporates the paper brings out the silent facets of principles, the requirement of appropriate leadership, and the relevance of corporate governance. Considerable work has focused on the area which associates issues of corporate governance to co-operatives. This paper reviews existing pieces of literature and attempts to identify the weaknesses/ limitations of co-operatives and suggest recommendations for applying them for achieving effective and sustainable corporate governance for co-operatives.

Mewujudkan etika dalam kegiatan perbankan syariah melalui penerapan prinsip tata kelola perusahaan yang baik

The world of banking is an activity based on the principle of trust. The public will place their funds in a bank that is considered trustworthy. If factually, the Bank is not trusted, then whether the Bank will succeed in controlling the market share of public funds, of course this will be difficult. The concept of Islamic banking that carries Islamic values based on Allah's guidance in the Qur'an and the example of Rasulullah in the hadith will certainly be an effective tool in increasing public trust in placing their funds in Islamic banking. This study uses a qualitative approach. Good Corporate Governance according to the general view, as well as good Corporate Governance according to the philosophical view of Islam from the perspective of Ontology, Epistemology and Axiology in general are the same. The fundamental difference is actually the value of Islamic mysticism in good corporate governance according to the Islamic view. This difference clearly affects the perspective of good corporate governance. If it is based on an Islamic view, there needs to be an internalization of values because not all of the variables can be seen with the naked eye or reality.

The effect of small business financing decision on business performance in Ghana: the moderated mediation role of corporate governance system

PurposeThe paper aims to investigate the role of corporate governance in the relationship between small businesses financing choice decisions on the business performance.Design/methodology/approachThe paper was situated within the financial growth cycle theory and stewardship theory and survey approach was adopted for data collection. The statistical analysis was conducted by using partial least square structural equation modelling.FindingsThe results indicate that the interaction of corporate governance and financing choice decisions strengthens the performance relationship. Further, corporate governance mediates the positive relationship between financing choice decisions and performance. Thus, suggesting that corporate governance can carry the effect of the financing choice decisions to business performance.Practical implicationsThe findings of our research reveal that, small businesses who follow solid corporate governance procedures should expect higher business performance. This is because financing decisions alone will not assure positive business performance unless they are tied to a broader perspective of effective corporate governance practices.Originality/valueTo the best of the authors’ knowledge, this is the first study that contributes to the small business financing choice and performance literature by combining the strengths of financial growth cycle theory and stewardship theory to explain the financing choice decisions and, in particular, the role of corporate governance in the relationship. Further, the study is unique in its nature because it presents a successful model for small businesses in emerging economies to concentrate more on the role of corporate governance in enhancing business performance.

Exploring the Nexus Between Fundamental Strength and Market Value in Energy Companies: Evidence From Environmental, Social, and Corporate Governance Perspective in Poland

Sustainable development is an important element of the interests of modern economics. In order to function on the market and develop, companies must adhere to the principles of sustainable development. In this context, the interest of companies in the implementation and application of ESG strategies is growing. In the long-term perspective, the use of this type of strategy is to generate an increase in the company’s value. This value is of interest to the company’s stakeholders, who may use the information about the company’s value, e.g., in terms of its management or investment. The aim of the article is to examine the relationship between the company’s value and its fundamental strength. The analysis covers companies from the energy sector (listed on the Warsaw Stock Exchange) that declare the use of ESG practices. The time range of the research covers the years 2013–2020. For the purpose of the study, selected statistical measures and the Fundamental Power Index (FPI) were used. This indicator synthetically evaluates all areas of the company’s operations. The results of the research show that the value of the company is not influenced by its fundamental strength. Therefore, the investors do not reduce the company’s value in the light of information on its fundamental strength. In addition, companies vary in terms of fundamental strength measured by FPI.

Do Largest Shareholders Incentively Affect Financial Sustainability Under Holdings Heterogeneity? Regulation/Intermediary of Financial Constraints Through Managerial Behavior Games.

The real estate industry is characterized by a high degree of financial intensity and is more significant in certain areas. The relative enterprises require certain financial ability and large shareholders’ controlling power to support their survivals and competitiveness. However, due to the multiple adverse impacts of current state policies on banks and private capital, the problem of capital restraints of real estate has become increasingly serious. From a corporate governance perspective, this paper studies the interactions among financial constraints, ownership concentration and corporate performance under different shareholding states: by analyzing the quantitative characteristics of equity structure and searching for the appropriate range of the largest shareholder holding ratio, which has considered both the financial sustainability and characteristics. It is found that raising the ownership concentration could enhance supervision effect rather than encroachment, effectively ease the financial constraints and improve the performance of enterprises, both of which are significant under high ownership concentration. Financial constraints play a significant intermediary effect in absolute holdings and have obvious regulatory effects in decentralized equity. Also, the mechanisms of ownership concentration are reflected in the strengthening of corporate supervision, reduced agency costs, improved operating efficiency, and increased investment attractiveness. The adjusted behavior adds to the responsibility awareness rather than free-ride psychology, forming a dynamic game on financial decisions. Their financial sustainability in areas would provide a nationwide reference for governance reform and managerial behavior.

Audit research from the perspective of corporate governance: role and development

The separation of ownership and management rights is the cause of corporate governance, as well as the cause of internal audit and external audit. Based on the core keyword search results of many domestic mainstream academic websites, this paper selects relevant topic articles based on core journals to reveal the research status of auditing from the perspective of corporate governance, explore the coordinated development path of auditing and modern corporate governance systems, and the challenges and suggestions faced by audit work in the governance process in order to provide reference for relevant researchers and practitioners.

Political connections, opaque financial reports and stock price synchronicity

From the perspective of corporate governance, stock price synchronicity can be understood as a lack of disclosure. This study investigates the effect of political connections, government ownership, and the opacity of financial reporting on the stock price synchronicity of public companies in Indonesia. Our analysis shows that political connections and government ownership increase stock price synchronicity. The synchronicity of stock prices is also positively affected by the opacity of financial reports. Furthermore, when the opacity of financial reports increases, the influence of political connections and government ownership on stock price synchronicity tends to increase. These results imply that political ties impede disclosure of firm-specific information, and poor quality of financial reporting exacerbates this impediment.

Elaborating on a new entrepreneur typology from the corporate governance perspective

Objective: This work aims to build a new entrepreneur typology in line with corporate governance approaches adopted by the enterprises and therefore to adequately implement public policy and strategy about entrepreneurship, since governance is an important basis for decision-making. Research Design & Methods: To achieve the above objective, associations are established between entrepreneur types and corporate governance approaches via multiple correspondence analysis with grouping method for discretization and variable principal for normalization. Findings: Findings highlight a new entrepreneur typology, which comprises four types of entrepreneurs with regard to corporate governance approaches. The new typology is as follows: structure-oriented shareholder; behaviour-oriented stakeholder; legal control oriented and economic-managerial control oriented. Implications & Recommendations: This work has theoretical implications which reside in the need to use corporate governance for strategic modelling. It also has practical implications in that it is easier and more appropriate to make decisions from corporate governance approaches than from types of enterprises. Thus, enterprises and the state must take advantage of these implications to improve the entrepreneurship productivity. Contribution & Value Added: This work conceives a new entrepreneur typology in line with corporate governance. Thus, it allows promoting strategic modelling based on corporate governance in business and public areas.

Challenges in enterprise architecture management: Overview and future research

Due to the ongoing digitalization, today’s business world is changing rapidly. To stay competitive, companies need to adapt quickly to a fast changing-environment. This can be difficult, as organizations are complex systems consisting of many technical and infrastructural elements. Enterprise architecture management (EAM) is therefore increasingly important to companies when managing their infrastructure and adapting it to environmental changes. Despite its relevance, many companies struggle with challenges related to EAM tasks. Up to now, research lacks comprehensive reviews about the field of EAM and the related challenges. This article aims to close this research gap by conducting an iterative systematic literature review (SLR) to identify relevant EAM challenges in different EAM tasks. Hereto, based on Schmidt and Buxmann (2011), the tasks of EAM are divided into six dimensions — EA documentation, EA planning, EA communication and support, EA programming, EA implementation, and EA governance — which are investigated separately. This article’s result is a comprehensive overview of research in the field of EAM challenges. Additionally, interdependencies between the dimensions are assumed. Furthermore, an outlook on future research opportunities from an organizational, corporate governance, project, and technical perspective is provided.

Institutional Analysis of Drinking Water Supply System in East Nusa Tenggara Province

The regulatory mandate states that the implementation of SPAM in the regions is prioritized for BUMD as the SPAM manager. If SPAM services are not reached by BUMD, then the implementation of SPAM remains the responsibility of the Central Government or Regional Governments may form a Technical Implementation Unit or Service Technical Implementation Unit to serve areas or areas that have not been reached by these services but can also be implemented by Community Groups and Business Entities to meet their own needs. The purpose of this paper is to analyze how the implementation of SPAM in NTT Province with the perspective of Good Corporate Governance. The research method used is literature review by utilizing relevant journals, books, media also laws and regulations. The results of this study indicate that the implementation of SPAM 2020 is mostly carried out by PDAM (15 districts/cities from 22 districts/cities in NTT), the remaining 7 districts are still in the form of UPTD BLUD and UPTD. Institutions are important to ensure that drinking water services to the community can be served properly, and ensure the functioning of SPAM, both funded by the APBN and APBD.

The impact of environmental management on firm performance in the U.S. lodging REITs: The moderating role of outside board of directors

Recently, many firms that have caused direct pollution to the environment have begun to think about the necessity of environmental management. As buildings have played an important role in environmental issues, the real estate industry can no longer ignore demands for environmental management. Research on environmental management has mainly focused on its financial implications. However, there has been no consensus in the literature about the relationship between environmental management and firm performance. By comparing portfolios of environmentally certified properties of 19 lodging Real Estate Investment Trusts, this study explores the relationship between environmental management and firm performance, while taking into account the moderating role of outside board of directors. The relationship between environmental management and firm performance appeared to have mixed results, but this study found a positive moderating effect of outside board of directors. This study provides new insights into the hospitality and the real estate literature from a corporate governance perspective.

Varieties and Mechanisms of Common Ownership: A Calibration Exercise for Competition Policy

Abstract Minority shareholdings have been on the regulatory agenda of competition authorities for some time. Recent empirical studies, however, draw attention to a new, thought-provoking theory of harm: common ownership by institutional investors holding small, parallel equity positions in several competing firms within concentrated industries. While critical voices abound, EU and U.S. antitrust agencies closely follow these developments indicating an appetite to act. This article connects the common ownership debate to merger control and explores: i) the aims and scope of legal control as regards partial acquisitions in different jurisdictions; ii) the nature of potential competition effects arising from passive minority shareholding; and iii) the plausibility of common owners’ anticompetitive strategies from a corporate governance perspective. Drawing a distinction between “concentrated” and “diffuse” common ownership, it sheds light on the different supporting mechanisms and varying harm potential of each variety. “Passive influence” mechanisms characterizing “diffuse” common ownership may not only generate plausible and material competition concerns in given circumstances but present challenges for the effective jurisdictional and remedial design of merger law frameworks. Competition policy should stay current by explicitly recognizing these novel insights in enforcement practice and developing guidelines on how to treat common ownership cases in the future.

Executive Compensation, Executive Character, Audit Committee, and Audit Quality on Tax Avoidance

Tax avoidance turns into become most part satisfactory tax assessment practice, despite the fact that the practice isn’t in opposition to the law that can’t be acknowledged , should be forestalled, and gone against. This study expect to inform the impact of executive compensation, executive character, audit committee and audit quality on tax avoidance of mining companies listed on the Indonesia Stock Exchange. The sample selection method in this study uses purposive sampling. The sample of this study is mining companies listed on the Indonesia Stock Exchange. The data analysis technique used in this study is multiple linear regression. The results of this study proved that executive character has positive effect on tax avoidance and executive compensation, audit committee, and audit quality have no effect on tax avoidance. This research is required to be the reason for decision making by the management to not to rehearse tax avoidance and make thought for investor to not settle on speculation choices dependently on the evaluation of corporate governance perspectives that don’t influence the organization in carrying out tax avoidance practice.How to Cite:Ardillah, K., & Prasetyo C, A. (2021). Executive Compensation, Executive Character, Audit Committee, and Audit Quality on Tax Avoidance. Akuntabilitas: Jurnal Ilmu Akuntansi, 14(2), 169-186.

Ranking of Banks’ Risk Reporting Using Data Envelopment Analysis

The present study aimed to rank banks in terms of board of directors report and notifying the users of reports. In addition, we evaluated factors affecting risk disclosure from the perspective of corporate governance. Moreover, we assessed risk disclosure based on linguistic analysis of board report text and capital adequacy ratio. Words were applied as measurement units to measure risk disclosure. The advantage of this technique is the unique analysis of words. According to the theoretical foundations presented in the present study, we first identified risk disclosure words in reports provided to financial information users and divided them into two categories of positive and negative risk disclosure words. Another variable selected for risk disclosure was capital adequacy ratio. Effective variables in corporate governance system in banks included the board independence, duality of CEO duties, and major shareholders as input variables in data envelopment analysis (DEA) model. On the other hand, the BCC model of DEA was selected as output-based nature. The statistical population included all banks listed in Tehran Stock Exchange. In total, 20 year-bank units listed during 2016-2017 were assessed. In the end, seven year-bank units were considered efficient while the rest were inefficient. Moreover, we estimated the amount of shortage in outputs to reach inefficient banks to the desired level of efficiency.

Effectiveness of industrial policy in supporting innovation: the role of internal and external corporate governance mechanism

ABSTRACT Focusing on supporting the new and high-tech industries, China’s high- and new-technology enterprise (HNTE) programme aims to stimulate the innovation and creativity of enterprises. Centering on China’s HNTE programme, this paper investigates the impact of industrial support policy on firm innovation, and further examines the boundary conditions of policy effectiveness from the perspective of corporate governance. The results show that industrial support policy can significantly promote firm innovation. Moreover, we find that internal governance (executive equity incentive) and external governance (product market competition) have a significant moderating effect on innovation support of industrial policy, and the role of executive equity incentive depends on the level of product market competition. And product market competition and executive equity incentive are complementary in influencing policy effectiveness only at low competition level. The tests of the boundary conditions of policy incentive effectiveness and the complementary relationship between internal and external governance hold interesting implication for research on innovation policy and corporate governance.

How Financial Performance and State-Owned Enterprise (SOE) Values Are Affected by Good Corporate Governance and Intellectual Capital Perspectives

The implementation of good governance and attention to resources will affect company survival. The purpose of this study was to examine the effect of good corporate governance and intellectual capital on financial performance and company value through statistical and econometrical tests on SOEs in Indonesia. This is quantitative research with state-owned enterprises (SOEs) listed on the Indonesia Stock Exchange. The total study population was 16 SOEs. This study used a saturated sample. Furthermore, the exogenous variables in this study were good corporate governance (GCG) and intellectual capital, whereas the endogenous variables were the company and financial performance. This study used the statistical analysis inferential because the variables used indicators and were formative. The results indicated that GCG and financial performance have positive effects on firm value, intellectual capital does not affect company value, and GCG and intellectual capital have positive effects on financial performance. The evaluation of indirect effects in this study showed that financial performance mediates the effect of intellectual capital and GCG on company value.