Corporate Governance Variables Research Articles

Pengaruh Islamic Corporate Social Responsibility Terhadap Nilai Perusahaan: Studi Empiris pada Jakarta Islamic Index-70

This study aims to examine the direct and indirect effects of corporate governance variables, profitability, on firm value through Islamic corporate social responsibility. The population used in this study are companies listed on the Jakarta Islamic Index-70 on the Indonesia Stock Exchange for the 2018-2020 period with a purposive sampling technique. The data analysis technique used Structural Equation Modeling (SEM) techniques, using AMOS 22 software. The results showed that ICSR had a positive effect on firm value. Profitability has a significant effect on ICSR. Corporate governance has no significant positive effect on ICSR. Profitability has no significant positive effect on firm value. Corporate governance has a negative effect on firm value. Profitability affects firm value mediated by ICSR. ICSR cannot mediate the relationship of corporate governance to firm value.

Pengaruh Good Corporate Governance Terhadap Penghindaran Pajak (Tax Avoidance) (Studi Empiris Perusahaan Perbankan Terdaftar di BEI Tahun 2015-2019)

This study aims to determine the effect of corporate governance variables consisting of managerial ownership, institutional ownership and the proportion of independent board of commissioners as well as, audit committee and audit quality on tax avoidance (Empirical Study of Banking Companies listed on the IDX 2015-2019). The population of this research is banking companies listed on the IDX in 2015-2019. The sampling technique used purposive sampling. There were 40 companies that met the criteria as samples and took 5 years of research, so the research data was 40 x 5, which amounted to 200. The software used for data processing was SPSS version 22. The results of this study are that the corporate governance variable which consists of institutional ownership , the audit committee and audit quality have an effect on tax avoidance. Meanwhile, managerial ownership and the proportion of independent commissioners have no effect on tax avoidance.

Good Corporate Governance And Corporate Social Responsibility On Company Value With Financial Performance

This study was conducted to see how much influence the variables of Good corporate governance and corporate social responsibility have on firm value with financial performance as the intervening variable. This type of research is quantitative research, which uses SmartPLS to analyze data by taking annual financial reports from 2017- 2019 from pharmaceutical sector manufacturing companies on the Indonesian stock exchange. The sample of this research is 11 companies. The results of the study show that the 4 indicators that have a significant positive effect on GCG are: Managerial Ownership, Institutional Ownership, Independent Commissioner and Audit Committee on Firm Value (Tobin's) and Financial Performance (ROA), while CSR has a significant positive effect on Financial Performance (ROA) but CSR has a positive and insignificant effect on Firm Value (Tobin's), Financial Performance (ROA) has a positive and significant effect on Firm Value (Tobin's), and Financial Performance (ROA) can mediate GCG and CSR has a positive and significant effect. The results of this study can also be used for the company to determine the ability to manage the company in generating profits and achieving success in the company in the future, also as a source of information and reference for further researchers in conducting research on topics related to this research, either continuing or complementary.

Corporate governance impact on dividend policy of NIFTY-500 indexed Indian pharmaceutical companies (2014–2019)

PurposeThis study aims to evaluate the influence of corporate governance index (CGI), ownership concentration (OC) and other features on the dividends of listed Indian pharmaceutical companies. The other features included are leverage, excess return over cost of equity and stock-market return. This study thus helps to provide more insights on the dividend distribution issues for a shareholder in the challenging and demanding pharma industry, especially when stakes are high.Design/methodology/approachThe data for all 26 pharmaceutical companies which form part of the NSE NIFTY-500 index for six years (2014–2019) is procured using Centre for Monitoring Indian Economy’s (CMIEs) Prowess database. An eight-pointer scale (unweighted scale) is used to develop the CGI. For OC, this paper considers the proportion of promoters’ shareholding, domestic institutional investors’ shareholding and foreign owners’ shareholding. Both static and dynamic panel data models are used to evaluate the effect of CGI and OC on dividends.FindingsThe panel data analysis depicts that CGI significantly positively influences the dividends of pharmaceutical companies in India. Thus, the authors find support for La Porta et al.’s outcome agency model. The results also reveal that only promoters’ holdings are significantly inversely related to dividends out of the three OC variables used for this study. This discussion implies that family-run pharmaceutical companies in India tend to retain profits instead of distributing dividends.Research limitations/implicationsThis study provides two direct insights for policymakers and stakeholders. First, because this study shows that CGI significantly positively influences dividends, corporate governance (CG) is an essential factor for determining dividends. Second, because the results also reveal that OC in the hands of promoters hurts dividends, it implies that the higher the promoter holding, lesser is the dividend distributed by the company. Both these results can be used as a quantitative tool by investors to assess Indian pharmaceutical companies better. However, a similar study could be directed to assess the impact of CGI and OC on dividends of other industries. Moreover, additional variables of CG and OC can also be evaluated in further detail. There is also a need to empirically validate the impact of CG and OC on a company’s performance.Originality/valueThe results are robust and reveal that variation in CGI does impact dividend policy. This aids in confirming that CG is a crucial aspect influencing dividends. The findings also add to the increasing studies across the globe evaluating the influence of CG and OC on dividends.

The Influence of Investment Decisions, Funding, and Profitability on Company Value with Corporate Governance as Moderator

This study aims to examine and analyze the effect of investment decisions, funding decisions, and profitability on firm value with corporate governance as the moderating variable. With the existence of corporate governance as a moderating variable, it is expected to make company managers to choose and decide on investment decisions, funding decisions and profitability correctly. This research was conducted on companies that went public on the Indonesia Stock Exchange in the period 2014 to 2018. The study tested samples using the purposive sampling method on 10 companies in the infrastructure, utilities and transportation sectors from 50 financial statements that were observed. The independent variables consist of market book value, debt to equity ratio, and return on assets, while the dependent variable is price book value, and the moderating variable is managerial ownership. Test analysis using multiple linear regression using Statistical Product and Service Solutions (SPSS) software. The results of the analysis show that the investment decision variables and funding decisions have a positive effect on firm value. While the profitability variable has no effect on firm value, and the corporate governance variable does not moderate the influence between investment decisions, funding decisions, and profitability on firm value.

Does sustainable corporate governance have an impact on materiality disclosure quality in integrated reporting? International evidence

AbstractThis study examines the influence of sustainable corporate governance on the materiality disclosure quality (MDQ) in integrated reporting in an international setting. Referring to stakeholder theory, we focus on gender diversity, sustainability committees, and sustainability‐related executive compensation. Based on European and South African firms (672 firm‐year observations) between 2014 and 2019, we found that board gender diversity and sustainability‐related executive compensation were significantly positively linked to MDQ. However, the implementation of sustainability committees does not affect the MDQ. Thus, only specific sustainable corporate governance variables in concrete contexts may be related to integrated reporting decisions. We also included Chief Executive Officer (CEO) power (pay slice, ownership, and tenure) as a moderator variable due to the strategic impact of CEOs, based on upper echelons theory, and found that the link between our included sustainable corporate governance variables and MDQ was weakened. Our results are robust to several variations and provide valuable insights for research, business practice and future regulations on integrated reporting. In view of massive regulatory reform initiatives on sustainable corporate governance and integrated reporting, sustainability expertise (also with regard to CEOs) should be better addressed in boards of directors during the next years to come.

Firm performance, vertical agency crisis and corporate governance of Indian listed companies

PurposeThis study aims to examine the influence of corporate governance variables on firm performance and also to find out whether the corporate governance mechanism is capable of mitigating the vertical agency crisis. Here the researcher uses corporate governance mechanisms such as board meeting frequency, board independence, percentage of non-executive directors, percentage of woman directors on board and the board size to measure the firm performance and, at the same time, tries to mitigate the agency crisis, which is measured through return on asset and asset turnover ratio.Design/methodology/approachThe present study considers period from 2009 to 2020 with data corresponding to a panel of 271 non-financial firms listed in 500 NSE index, India. The study introduces a panel regression model to analyze the data collected from the sample firms.FindingsThe study detects a positive as well as a statistically significant relationship between board size and vertical agency cost. The study also observes a negative relationship between board independence and agency cost. Further, the study finds a positive relationship between corporate governance variables and firm performance, though it is non-significant.Originality/valueAs the study progresses, the study detects a negative relationship between non-executive directors and agency costs. This study tries to give policy prescription to the corporate policymaker regarding various measures to be taken by the firm for the improvement of firm performance and reduction of owner and manager conflict inside the company. The study fills the literature gap by revealing a significant relationship between corporate governance, vertical agency crisis and firm performance.

The link between corporate governance, corporate social sustainability and credit risk of Islamic bonds

PurposeMotivated by lack of empirical research on sukuk (Islamic bonds) defaults and factors influencing the credit risk in sukuk industry, the study investigates the impact of corporate governance (CG) practices and corporate social sustainability (CS) disclosures on default risk of Islamic bonds in an emerging market.Design/methodology/approachIn the Malaysian context the authors use generalized method of moments (GMM) to examine the mitigating effect of CG structure and CS disclosures on distance to default (DD) of sukuk issuers.FindingsThe results show that although both CG and CS have a significant and positive relationship with distance to default, the contribution of CS to augment DD is higher. Moreover, different CG variables have a varied relationship with distance to default, while the association is positive for all three pillars of CS, videlicet economic, social and environmental sustainability.Practical implicationsThe findings of the study hold important implications for issuers, subscribers and regulators in the sukuk industry.Originality/valueLimited research investigates the relationship between CG, CS and default risk of Islamic bonds. In light of this, the study attempts to fill the theoretical void in literature by examining the relationship among the underlying variables.

IMPLEMENTATION OF GOOD CORPORATE GOVERNANCE ON PERFORMANCE OF EMPLOYEES IN HOSPITAL X

The implementation of good corporate governance is very important in improving the quality of work of employees in a hospital. This study aims to provide an overview of the implementation of good corporate governance in improving the quality of employee performance in hospital agencies. The research design used a cross-sectional approach. This research was conducted at a hospital; the sample in this study was 120 employees. The research instrument used a questionnaire. Bi-variate data analysis with chi-square test and simple regression test and path test analysis. The results show that the good corporate governance variable has a positive effect on employee performance at Hospital X with a p-value of 0.018 <0.05, the results of path analysis also show that the correlation of the good corporate governance variable to the performance variable is 0.303 which means that good corporate governance has a contribution to increasing. Quality of work of employees.

This Pengaruh Return On Asset dan Leverage terhadap Tax Avoidance dengan Corporate Governance sebagai Variabel Pemoderasi pada Perusahaan Properti dan Real Estate di BEI

Purpose - This study aims to answer the effect of return on assets (ROA) and leverage on tax avoidance with corporate governance as a moderating variable.
 Research method - The data used in this research is secondary data, namely data in the form of annual financial reports on property and real estate companies that have been listed on the Indonesia Stock Exchange in 2018-2020. Sampling in this study used a purposive sampling method, namely taking samples according to certain criteria. The data analysis method used was multiple linear regression analysis, using the eviews version 9.0 program.
 Findings - The results of testing the hypothesis show that ROA has no effect on tax avoidance. Leverage has a positive and significant effect on tax avoidance. Simultaneously ROA and leverage have a positive and significant effect on tax avoidance. Corporate governance can moderate the effect of ROA on tax avoidance. Corporate governance can moderate the influence of leverage on tax avoidance.
 Implication - The corporate governance variable can strengthen the level of tax avoidance because the data obtained by the researcher describes the independent commissioner as a party who is not bound in any way with the controlling shareholder, has no affiliation with the board of directors or the board of commissioners and does not serve as a director in a company.

CORPORATE GOVERNANCE MECHANISM AND STOCK PRICE PERFORMANCE: INSIGHTS FROM NIGERIA

Over the years, firms from financial, real estate and construction sectors in Nigeria have been challenged heavily by corporate governance lapses. This seems to have affected major spheres of performance and specifically market stock price of the firms, thereby necessitating investigation into its level of influence. This study assessed how corporate governance practices affected listed businesses in Nigeria's firm performance. The study's goal is to assess the impact of board diversity, independence, size, and ownership on the stock price performance of a sample of Nigerian public companies. In order to achieve this, the study used secondary data, which was based on an ex post facto research strategy and used a pooled data set gathered from sixteen (16) quoted businesses during the period between the 2006 and 2019 financial period. Descriptive statistics, correlation matrices, and robust least squares regression analysis techniques were used to analyze the data that had been gathered. The Agency theory and entrenchment hypothesis served as the study's pillars. The results support the entrenchment hypothesis, which contends that large board ownership percentages have a negative impact on stock price performance. In particular, we discover that the stock price performance of listed companies in Nigeria throughout the study period was negatively impacted by the corporate governance variables of board size and board ownership, both of which are statistically significant at1%, 5%, and 10%. The entrenchment effect, which is already at work among our sample companies, leads us to urge, among other things, that consideration be given to the review of board ownership and size in light of the study's findings.

Determinants of Social and Environmental Accounting Information Disclosure: An Analysis of Top 50 Firms in New Zealand

In this study, we examine the determinants of voluntary disclosures of Social and Environmental Accounting (SEA) among the top 50 firms in New Zealand over the period of 2011 to 2017. The study is an extension of Hackston and Milne’s (1996), however distinct in various ways; we use a relatively larger dataset spanning over seven years, we look at both qualitative and quantitative SEA information, and we include some additional industry and corporate governance variables that provides insightful results. The study is timely in that New Zealand is the first country to implement mandatory climate risk reporting according the New Zealand Minister for Climate Change, Mr. James Shaw (Climate Disclosure Standards Board, 2020), which is a significant step towards supporting SEA disclosure. Whilst realizing that it is optional for firms to be engaged in SEA disclosures, we come up with a more appropriate research design to examine both qualitative- and quantitative-types of SEA disclosure using probit and logit regressions. To contribute to this area of SEA, we extend our analysis to show the impact of industry-type, board size and board composition. The regression results show that profitability is positively associated with quantitative-type disclosure, and size is positively associated with both quantitative- and qualitative -type disclosures. The big four auditors are indifferent to the types of SEA disclosure; and board size is negatively associated with qualitative-type disclosure, and positively associated with quantitative-type disclosure. At sectoral level, building sector is positively associated only with the qualitative-type, whereas energy, retail and service sectors have positive associations in general. Interestingly, we note that female (male) directors have positive (negative) association with both type of disclosures. This study contributes to the SEA literature by categorizing and looking at both qualitative and quantitative SEA disclosures, looking at the type of industry preferring SEA disclosures, and extending the analyses to include corporate governance variables. In addition, the study presents some important factors that can influence the publication of both quantitative and qualitative SEA information for the interest of researchers, practitioners and regulators working in this domain in order to improve the overall SEA disclosure for firms. Finally, this paper shows the importance of gender balancing on boards in order to be engaged in voluntary disclosures such as SEA.

Corporate failure in the UK: An examination of corporate governance reforms

In the context of major corporate collapses, executive compensation, board network, gender diversity and oversight committees have all received attention in a package of corporate governance (CG) reforms that were recently issued in the UK. This paper examines whether these reforms of CG can influence the likelihood of corporate failure (CF). It also investigates how efficient they are when CF approaches. After controlling for variables that prior research shows to be related to CF, we find that CF is less likely when a firm is characterized by a lower executive compensation, larger size of the board's social network, and smaller degree of the board's managerial network. However, board gender diversity and independence of oversight committees do not reduce the likelihood of CF. We further observe that the explanatory power of these CG variables is significant but relatively decreased as the time to CF closes. This implies that despite the capability of these variables to render early warning alerts of CF, they are less helpful (efficient) as failure becomes closer. Our results remain robust after a battery of sensitivity tests and addressing potential endogeneity problems. Collectively, the evidence provided by our paper should be of interest to the UK's regulatory bodies (Financial Reporting Council) and legislators (the UK's Parliament), since it shows the practical implications of the UK's CG Code and other governance regulations on reducing future corporate collapses. This paper provides timely evidence-based insights to major recent structural reforms aiming at proposing remedies to CG problems in the UK.

The Impact of Corporate Governance, Leverage, and Profitability on Intellectual Capital Disclosure with Company Size as a Moderating Variable

This research focuses to examine the impact of Corporate Governance, Leverage, and Profitability on Intellectual Capital Disclosure with Company Size as a Moderating Variable. This research method is descriptive method with a quantitative approach. The data used in this study is secondary data, namely the annual report obtained from www.IDX.co.id and the corporate governance perception index report obtained from The Indonesian Institute for Corporate Governance. The number of samples is 46 data with the technique of taking using the purposive sampling method. The findings of this study demonstrate that the Corporate Governance variable has no impact on Intellectual Capital Disclosure, Leverage and Profitability variables have a negative and significant impact on Intellectual Capital Disclosure, the company Size variable cannot moderate the relationship linking Corporate Governance and Intellectual Capital Disclosure, and the company Size variable can strengthen the relationship linking Leverage and Profitability on Intellectual Capital Disclosure. This study can be implemented by corporates to analyze the role of corporate governance, leverage, and profitability on intellectual capital disclosure with company size as a moderating variable and is expected to be a reference in policy making by corporates management to increase its intellectual capital.disclosure.

Earnings Management in Small Listed Firms in Malaysia Using Quantile Regression

This study examines the role of board independence and audit committee expertise in accounting on earnings management in small listed firms in Malaysia, which have been neglected in corporate governance research. Due to their small size, the listing requirements imposed on them by Bursa Malaysia are less stringent. Hence, these firms are predicted to have a higher tendency to manage earnings compared to large listed firms. All firms listed on the Bursa Malaysia ACE Market during the financial years 2012 to 2014 inclusive were selected. The data were analysed using quantile regression to enable the determination of the effects of the corporate governance variables across the quantiles in the conditional distribution of discretionary accruals. The results show that small listed firms have a very high propensity for accrual management compared to large listed firms. The study also reveals that board independence is not associated with either the incidence of accrual management or the direction of discretionary accruals. It also shows that audit committee expertise can mitigate the propensity for discretionary accruals and if discretionary accruals are present, the objective was to reduce the firm’s earnings. However, this evidence only holds in firms where the utilization of discretionary accruals is pervasive.

Management or market variables in the assessment of corporate performance? Evidence on a bank-based system

PurposeThis paper aims to study the influence of some company-specific characteristics, corporate governance factors and macroeconomic factors on the Portuguese companies’ performance.Design/methodology/approachTo achieve this aim, the authors have used data from 39 Euronext Lisbon companies for the period between 2014 and 2019. The authors used panel data methodology, specifically the generalized method of moments estimation method by Arellano and Bover (1995) and Blundell and Bond (1998).FindingsThe results point out that the sign and significance of the determinants of corporate performance change depending on the variable used to measure performance. The Tobin’s Q variable, as a market variable and variable of interest to potential investors, is explained by some corporate governance variables and company-specific factors. Specifically, potential investors are confident in the leadership power of the chief executive office (CEO) and the members of the Board of Directors, which contributes positively to corporate performance. However, the firms’ age has a negative impact on Tobin’s Q. Considering an accounting variable managed internally by the organizations, the results show that return on assets is negatively influenced by leverage, and positively affected by CEO duality, which the manager believes is decisive to maintain performance levels.Originality/valueTo the best of the authors’ knowledge, this study is the first to analyze specific characteristics of companies and corporate governance factors, in a specific macroeconomic environment of high dependence on banking, considering the nonlinear effect of company age on company performance.

PENGARUH FRAUD PENTAGON DAN CORPORATE GOVERNANCE TERHADAP FINANCIAL STATEMENT FRAUD BENEISH MODEL

This study aims to obtain evidence related to the effect of fraud pentagon theory and corporate governance on financial statement fraud. This study is conducted by selecting a sample of a manufacturing company which is listed on the Indonesia Stock Exchange in year 2014 – 2018. The samples obtained are 450 data. The independent variable in this study is the fraud pentagon which are consist of pressure, opportunity, rationalization, competence, arrogance also corporate governance variables. This study uses multiple linear regression analysis and is processed by using IBM SPSS 22 software. The result of this study partially indicates that pressure, opportunity, rationalization, arrogance and corporate governance variables have no positive effect on financial statement fraud. While the competence variabel has a positive effect on financial statement fraud.

Capital Intensity, Tanggung Jawab Sosial Perusahaan, Dan Tax Aggeressiveness: Good Corporate Governance Sebagai Variabel Moderasi

Purpose: This study aims to examine the effect of capital intensity and corporate social responsibility on tax aggressiveness with good corporate governance as a moderating variable. Method: This study uses samples obtained from manufacturing companies listed on the Indonesia Stock Exchange (IDX) in 2016-2020, using a purposive sampling method with a sample of 40 companies with 142 annual financial statements. The method used in this research is multiple regression analysis and absolute difference value test. Finding: The results of this study indicate that capital intensity has a negative effect on tax aggressiveness. Corporate social responsibility has no effect on tax aggressiveness. Good corporate governance is able to moderate capital intensity on tax aggressiveness. Good corporate governance is not able to moderate corporate social responsibility towards tax aggressiveness. Novelty: The researchers added a moderating variable of good corporate governance, because it has a considerable influence in overseeing the performance of management to run the company's operations and to see how much influence good corporate governance has moderated in the study.

Research on the Relationship between Audit Risk Assessment and Risk Governance: Evidence from Tunisia

ABSTRACT The study examines the relationship between corporate governance mechanisms and audit risk in firms listed on the Tunisian Stock Exchange (TSE). The study covers the period 2006–2013. Panel regression analysis was used to estimate the relationship between corporate governance variables and audit risk. The results show that board size, board independence and institutional ownership were negatively related to audit risk. It is also discovered that audit risk index level increases as poor corporate governance. These findings may have important implications for analysts, investors, regulators and academics. First, the identifying factors that may influence the audit risk can help guide the reforms to improve the functioning of the financial market. Second, the study provides ample evidence of risk governance problems in the Tunisian market, highlighting the necessity of new corporate governance requirements. This study is unique in providing Tunisian evidence on the effect of corporate governance on audit risk. This paper is also relevant as it develops an index of audit risk and risk corporate governance.

Impact of Selected Corporate Governance Variables on the Financial Performance of Selected Quoted Deposit Money Banks in Nigeria

This study examined the impact of selected corporate governance variables on the financial performance of selected quoted deposit money bank in Nigeria. More specifically, the study explores the relationship between board size, board composition, audit committee independence, gender diversity, and financial performance - return on equity (ROE) and return on assets (ROA). Arguing from the agency and resource dependency theories, data covering the period 2010-2019 were collected from the audited annual accounts of ten purposively-chosen deposit money banks. To provide robust analysis of data and ensure triangulation of methods, the multiple regression analysis in SPSS version 21 and the Smart PLS structural equation modeling (SEM) were applied. Findings indicate that while board size and audit committee independence are negatively related with corporate financial performance, gender diversity showed positive relationship, and board composition demonstrated mixed relationship. The study recommends among others that firms should try to reduce their board size to plus or minus ten, and also reduce the number of outside (external or non-executive) board members, but with strict adherence to the regulatory guideline. The study proposes a SEM-based model to guide financial institutions post-Covid-19.