Corporate Governance Factors Research Articles

Decoding tax management: The role of corporate governance mechanisms

While tax pressure remains a major concern in corporate management, it is legitimate to ask whether tax has always been among the core factors of corporate governance (Chytis et al., 2020). This study aims to examine the influence of corporate governance on tax management practices within Moroccan firms listed on the Casablanca Stock Exchange (CSE). Focusing on three dimensions of corporate governance — board composition, audit committee structure, and external audit quality — we employed multiple regression analysis on data spanning 2014–2019 from a sample of 48 listed firms, totaling 288 firm observations. Significantly, board size, chief executive officer (CEO) duality, and external audit quality are found to be pivotal factors shaping tax management practices. Other corporate governance variables, notably the independence of the board of directors and the structure of the audit committee, do not appear to exert a significant influence on the tax management of listed Moroccan companies. Our study is one of the few to have addressed the issue of tax management in the Moroccan context. Moreover, it may also serve as a fundamental resource for researchers exploring the complex dynamics of tax practices in the organizational context.

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

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

Impacts of Corporate Governance on Corporate Sustainability Disclosure in the Food and Beverage Industry Vietnamese listed firms.

This study investigates how corporate governance factors impact corporate sustainability disclosure (CSD) within Vietnam's food and beverage industry. It crunches numbers from 2014 to 2022 for companies in this sector. Using regression analysis on panel data, the study examines variables like company size, financial leverage, regulations, board structure (including duality and independent board size), gender diversity in boards and CEO positions, and ownership (state and foreign). The findings reveal that larger firms, a supportive regulatory environment, and male board chairs lead to more CSD. Conversely, higher financial leverage and foreign ownership seem to hinder it. On the other hand, factors like board duality, CEO gender, and state ownership did not show significant impacts. This study enhances our understanding of CSD and offers practical insights into how corporate governance shapes disclosure practices. It emphasizes the importance of regulatory frameworks in driving CSD in Vietnamese firms, suggesting that relying solely on voluntary disclosure might not suffice to achieve desired outcomes.

The Impact of Corporate-and Country-level Governance Mechanisms on the Firm's Disclosure Quality: Evidence from MENA Countries

Purpose: The paper aims to investigate the impact of corporate and country-level governance mechanisms on the firm's disclosure quality.
 Design/methodology/approach: The paper employs a panel dataset comprising 96 financial institutions listed on the stock markets of four countries in the MENA region: Palestine, Jordan, Kuwait, and Qatar. This dataset spans five years, from 2016 to 2020. Data primarily originate from the annual reports of these institutions and are subjected to analysis through pooled OLS, fixed effect (FE), and random effect (RE) methodologies.
 Findings: The main findings of this study reveal that corporate governance (CG) factors, including board size, board meetings, and audit committee size, have a positive impact on disclosure quality. Additionally, concerning country-level governance, the role of law positively influences disclosure quality, whereas political stability and corruption negatively influence disclosure quality.
 Research limitations/implications: This study's main limitations are missing data, especially regarding the audit committee information, and the lack of a database covering the firms in the MENA region. The findings can help managers, policymakers, and other stakeholders enhance the firm's disclosure by adopting good corporate and country- level governance practices.
 Originality/value: The study develops a disclosure quality index that examines various disclosure requirements attributes, encompassing financial and non-financial disclosure aspects. Such an index adds value to prior research on disclosure quality. Additionally, this study expands the scope of previous research by incorporating wide aspects of CG attributes and investigating the role of country-level governance.

Bank Soundness Level Analysis With The RGEC Approach

This study aimed to determine the soundness level of banks using the rgec approach at Bank Agro, Bank Bukopin, and Bank BTN in the period 2016 -2018. This research evaluates four RGEC factors including Risk Profile factors through NPL and LDR ratios, Good Corporate Governance factors, Earning factors through ROA and NIM ratios, and Capital factors through CAR ratios. The population in this study are conventional banks listed on the Indonesia Stock Exchange from 2016 to 2018. Sampling was carried out in this study using purposive sampling. Based on the criteria set, the number of samples obtained is 3 companies. The data source used in this study is secondary data obtained from the company's annual financial reports published by each bank through the website of each bank. The data obtained in this study were analyzed descriptively. The results of this study indicate that the 3 banks, namely Bank Agro, Bank Bukopin and Bank BTN in the period 2013 to 2015 were overall healthy according to the RGEC approach. Keyword:

The Impact of Corporate Governance and Ownership Structure on The Level Of Corporate Social Responsibility Disclosure of Listed Manufacturing Companies on The Ho Chi Minh Stock Exchange – Vietnam

Purpose: The study has provided an overview of the theoretical foundation and empirical evidence on the impact of corporate governance on the level of corporate social responsibility (CSR) disclosure among listed manufacturing companies on the Ho Chi Minh Stock Exchange in 2021, utilizing secondary data from 118 manufacturing firms. Theoretical framework: In accordance with Agency Theory, the Separation of Ownership and Management, and the Stakeholder Theory, this study aims to investigate the influence of corporate governance characteristics on the extent of corporate social responsibility (CSR) disclosure in the manufacturing sector. Results and conclusion: The quantitative research model is constructed with five corporate governance factors and one control variable related to company characteristics, including the board size, the proportion of female members in the board, the proportion of independent board members, the foreign ownership ratio, the state ownership ratio, and the company size. The results from the Ordinary Least Squares (OLS) regression analysis indicate that the majority of the corporate governance variables are correlated with the level of CSR disclosure, except for the proportion of independent board members. Research implications: The study suggests managerial implications to help businesses recognize the importance of corporate governance in CSR disclosure, aiming to enhance reputation and attract investments. Originality/value: Additionally, the results also demonstrate that company-specific factors, such as company size and financial leverage, significantly impact the company's profitability.

Executive compensation as a corporate governance issue and factors determining executive compensation

Executive Compensation refers to the monetary and non-monetary benefits provided to executives as a form of payment or recognition for their completed work. The topic of Executive Compensation is regarded as intricate and contentious, garnering the interest of numerous groups for additional investigation. This research employs a qualitative methodology, specifically utilizing a literature review. The findings of this study indicate that the primary objective of carefully crafted Executive Compensation is to effectively attract, retain, and incentivize top-level management while also addressing issues related to agency conflicts. Nevertheless, these incentives have the opposite effect, leading to the financial collapse of major corporations and giving rise to issues in corporate governance as executives exploit them for their own personal gain.

Beyond the Balance Sheet: Analyzing the Relationship between Corporate Governance, Financial Performance, and Stock Prices in Pakistan's Non-Bank Financial Industry

This study explores the complex relationship among corporate governance, financial performance, and stock prices in Pakistan's non-bank financial industry from 2017 to 2021. Employing panel least squares and generalized method of moments for empirical analysis, our research highlights the substantial and positive correlation between stock prices and earnings per share, emphasizing the significance of profits per share. Corporate governance factors, such as board meetings, board size, and board independence, exhibit shaded impacts on stock prices. Board meetings transition from insignificance in static analysis to a negative, substantial association in dynamic analysis. Conversely, board size and board independence remain insignificant, suggesting a limited influence on stock price fluctuations. Institutional ownership emerges as a robust driver, displaying a positive impact in both static and dynamic analyses. In contrast, managerial ownership yields mixed impacts, with static analysis revealing a nonsignificant negative relationship and dynamic analysis unveiling a significant negative association. The study underlines the need to consider both static and dynamic perspectives when evaluating these relationships, highlighting the temporal dynamics and lagged effects in assessing the influence of managerial ownership on stock prices. Additionally, return on assets demonstrates an insignificant impact on stock prices in Pakistan's non-bank financial industry, consistent across both static and dynamic analyses.

How Does Governance, Individual Internal Factors and Supervisory Functions Affect the Quality of Savings and Loans Cooperative Financial Reports?

Cooperatives are essentially a financial institution that functionally plays a major role in the running of the economy in micro-regions that cannot be reached by banks. In 2022 hundreds of cooperatives in Karangasem district will not carry out financial reporting which will have an impact on public confidence in the sustainability and security of cooperative financial conditions. The author aims to analyze empirically whether management, individual factors from the cooperative and the existence of supervisors can affect the quality of a financial report which will be an indicator of performance evaluation at the annual member meeting. Cooperatives in the sidemen sub-district of Bali province are used as research areas. The data was obtained directly from 30 respondents who are cooperative staff and come from ten active cooperatives in the sidemen area. Data collection was supported by a paper questionnaire and analyzed using the regression method. The results of the tests conducted found that corporate governance as measured by good corporate governance and individual factors as measured using education and level of understanding of accounting had a positive impact on the quality of financial reports in contrast to the function of the oversight body and individual factors as measured using work experience did not show any impact significant.

The Influence of Corporate Governance on Sustainability Reporting of Insurance Companies Registered on the IDX

In the contemporary business landscape, prioritizing sustainability is not merely an ethical choice but a strategic imperative for companies seeking long-term viability. Recognizing the multifaceted nature of sustainability, companies engage in sustainability reporting to address the concerns of various stakeholders and to secure their sustained success. This study, conducted over the period 2015-2021, focused on 15 insurance companies, employing a quantitative methodology with purposive sampling. Sustainability reporting, represented by dummy variables, served as the dependent variable, while corporate governance factors such as independent commissioners, gender diversity among commissioners, audit quality, and institutional ownership constituted the independent variables. The empirical analysis, executed using SPSS version 25, yielded nuanced findings. Firstly, the presence of independent commissioners within insurance companies did not exhibit a statistically significant impact on sustainability reporting. Conversely, the inclusion of female independent commissioners displayed a positive correlation with enhanced sustainability reporting. Additionally, the study found that being audited by KAP BIG 4 had no discernible influence on sustainability reporting. However, institutional ownership emerged as a factor significantly affecting sustainability reporting within insurance companies. These research insights contribute to the evolving discourse on corporate sustainability and offer valuable guidance for companies navigating the complex intersection of financial performance and environmental, social, and governance considerations.

Kinerja Bank Syariah Pada Masa Pandemi Covid-19 Menggunakan Metode RGEC

This research was conducted to determine the performance of Islamic banks during the Covid-19 pandemic. This research method is descriptive with a quantitative approach. The data were obtained from the financial reports and Good Corporate Governance reports of 5 Islamic commercial banks that were sampled. The results showed that the performance of Islamic banks during the Covid-19 pandemic was seen from the Risk Profile with the NPF ratio the bank's performance was in good condition, while based on the FDR ratio the bank's performance was in quite good condition, on the Good Corporate Governance factor the bank's performance received a good predicate. The Earnings factor with the ROA ratio indicates that the bank's performance is in fairly good condition, based on the ROE ratio it indicates the bank's performance is in poor condition, while the assessment with the NOM ratio indicates the bank's performance is in very poor condition. Assessment using CAR shows that the performance of all Islamic banks is in the very good category

Determinants of Voluntary International Financial Reporting Standards Application: Review from Theory to Empirical Research

IFRS has become a global financial reporting standard, with many countries adopting it as their primary framework and others contemplating its adoption. Research on voluntary IFRS adoption sheds light on global convergence progress and its impact on accounting practices. This study aims to elucidate the factors influencing the voluntary adoption of IFRS by examining, analyzing, and synthesizing findings from empirical studies conducted worldwide. The research scrutinizes 185 relevant studies on the voluntary adoption of IFRS published before August 2023, employing a systematic literature review methodology. Our assessment reveals that, in prior research, the factors influencing the voluntary adoption of IFRS are categorized into seven main factors, including corporate operations, capital structure, ownership structure, internationalization, financial performance, corporate governance, and several other factors. These studies employ various methodologies, including data surveys and cross-sectional data, to estimate the relationships between these factors and the voluntary adoption of IFRS. In addition to providing an evaluation of the research in this field, this study can serve as a framework for future researchers to link and compare the results of different studies. We anticipate that this research will be beneficial for future scholars interested in the factors influencing the voluntary adoption of IFRS. Furthermore, the study proposes essential guidance for future research considerations.

Does effective corporate governance mitigate the negative effect of ESG controversies on firm value?

This study examines the effect of corporate governance on the relationship between ESG controversies and firm value. Panel data consisting of 883 non-financial Chinese listed firms from 2018 to 2022 are analyzed. We find a significant and negative impact of ESG controversies on firm value. The presence of effective corporate governance is found to mitigate the negative impact of ESG controversies on firm value. The findings are robust to the two step GMM, 2SLS method and heteroskedasticity test. Then we explore the influence of internal governance factors and external corporate governance factors respectively. Among the internal factors, we find that board gender diversity, board independence, equity incentive, and high reputation VC/PE shareholdings all have a significant and positive impact, while board size and sustainability committees have no significant impact. In terms of external governance factors, ESG controversies in regions with fierce market competition have a relatively small impact on firm value, while those in regions with perfect legal environment have a more severe impact on firm value. Further analysis shows that environmental, social and governance controversies urge enterprises to improve their environmental and social performance and reduce inefficient investment respectively, and these effects are more pronounced in the corporate governance group with high level. However, governance controversies have no impact on accounting information quality. These findings have important policy implications for managers and practitioners by supporting the idea of companies adopting appropriate corporate governance practices that can effectively mitigate the negative effects of corporate controversies.

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.

Good Corporate Governance Factors Toward Financial Performance

This research was conducted to examine the effect of Good Corporate Governance on the Company's FinancialPerformance. The purpose of this study is to determine the influence of Good Corporate Governance on theFinancial Performance of Companies listed on the IDX 80 IDX index for 2019 - 2021. Good financialperformance will affect many stakeholders because company performance is a picture of the company'scondition, if the company's performance is bad, it will affect stakeholder decisions. Factors can affect financialperformance are Good Corporate Governance. Good Corporate Governance research is proxied by thenumber of board of directors, the number of boards of commissioner meetings and managerial ownership. Thisstudy uses quantitative methods of secondary data with the population of companies listed in the IDX 80 indexin 2019 – 2021. The sample method is the purposive sampling method. The data used is the company's annualreport obtained through the Indonesia Stock Exchange website. The results of the study obtained the resultsare that the number of boards of directors does not have a significant effect on financial performance, thenumber of meetings of the board of commissioners has a significant positive effect on financial performance,managerial ownership has a positive effect on financial performance.

Corporate Governance, Liquidity Risk, and Sustainable Growth Rate in the Nigerian Banking Industry

Purpose: The objective of this study was to investigate the impact of board independence, liquidity risk management, and other bank-specific factors on the sustainable growth rate of banks in a developing country. Theoretical framework: The study relied on two major theories: the Agency Theory, which explored the conflicts of interest between owners and managers, and the Resources-based View Theory (RBV), which examined how banks utilised unique resources to achieve competitive advantages and sustain growth. Design/methodology/approach: The study analysed panel data from twelve banks listed on the Nigerian Stock Exchange from 2008 to 2021. This study utilised the Feasible Generalised Least Squares (FGLS) regression technique, chosen for its effectiveness in addressing serial correlation and heteroskedasticity, to examine the effect of various factors on the sustainable growth rate. Findings: The study found that the sustainable growth rate (SGR) of banks was significantly affected by the interaction between corporate governance variables and factors such as liquidity risk, dividend payout ratio, bank size, asset quality, and operating margin. Additionally, board independence and bank performance may not be enough to ensure a bank’s resilience in volatile conditions. Research, Practical & Social implications: The study illuminated previously neglected factors that affect the sustainable growth rate of banks. Bank boards and policymakers can utilise these insights to enhance governance structures, risk management practices, and regulatory frameworks. This enhanced comprehension can contribute to a more stable financial system, improving public confidence and economic stability. Originality/value: This study addresses a notable research gap by examining the influence of board independence and bank-specific factors on the sustainable growth rate of banks. Prior research has predominantly focused on the non-financial services industry, leaving this area understudied.

The combination of environmental, social and corporate governance factors has an important place in business today

The combination of environmental, social and corporate governance (‘ESG’) factors has an important place in business today. These factors require businesses, among other things, to protect workers, incorporate environmental considerations, ensure consumer safety, increase health benefits for employees and perhaps reduce executive bonuses to help avoid layoffs. The ESG considerations have become relevant to business models, services and products of businesses and have become inherent in investment analysis and investment decisions. Corporate boards should take them on board in their decision-making process.

Theoretical Framework for Board Structure and Its Relationship with the Performance of Commercial Banks in Vietnam

<p>In order to build up the theoretical framework to examine the relationship between board structure and the performance of commercial banks in Vietnam, this paper examines the wide range of literature reviews on corporate governance factors, agency theory, and board structure attributes. This framework is served as an academic premise for further studies in the corporate governance and banking sector in the Vietnam context.</p> <p> </p>

The Communist Party of China embeddedness in corporate governance and total factor productivity: Evidence from private firms in China

This research offers a comprehensive exploration into the influence of the Communist Party of China's involvement in corporate governance and its subsequent effect on the total factor productivity of firms. Drawing data from publicly listed firms spanning from 2008 to 2021, we employ a multi-period difference-in-differences analytical approach. Our investigations reveal that the establishment of party organisations within private firms notably enhances their productivity. Empirical evidence consistently underscores the positive role of the Communist Party of China in elevating productivity standards. This outcome is further corroborated through rigorous validation tests.

THE EFFECT OF FINANCIAL AND CORPORATE GOVERNANCE FACTORS ON THE FORCED FINANCIAL RESTATEMENT LIKELIHOOD: EVIDENCE FROM MALAYSIA

Background and Purpose: Forced financial restatement (FFR) creates a major concern as it has an instantaneous and disastrous effect on a firm’s share price. Whilst studies focusing on FFR are limited, this study investigated the financial and corporate governance influences that affect the FFR likelihood within the emerging background of Malaysia. This study aims to provide new evidence and insights to Malaysian regulators in developing strategies to reinforce financial reporting quality.
 
 Methodology: The influences of board independence, political connection, audit committee financial expertise, government-related institutional ownership, family ownership and control, corporate reporting quality, and financial distress on FFR occurrence were investigated. A multivariate logistic model was employed on 4,759 firm-year observations from 2002 until 2012.
 Findings: Findings revealed that aggressive accounting influences the FFR likelihood. Based on the results, the number of independent board directors, the presence of politically connected investors or management, working capital accruals management, real earnings management, and the financial health of the firm amplified the FFR occurrences.
 
 Contributions: This study enriches the body of knowledge on FFR by investigating a wider range of financial and corporate governance factors as possible determinants of FFR.
 
 Keywords: Forced financial restatement, opportunistic, accruals management, real earnings management, Malaysia.
 
 Cite as: Slack, R., Othman, I. W., Stratling, R., Syed-Yusuf, S. N., & Wan Mohd Radzi, W. S. (2023). The effect of financial and corporate governance factors on the forced financial restatement likelihood: Evidence from Malaysia. Journal of Nusantara Studies, 8(TI), 147-176. http://dx.doi.org/10.24200/jonus.vol8issTIpp147-176