Foundations Of Corporate Governance Research Articles

Financial Big Data Based on Internet of Things and Wireless Network Communication

With the advent of the era of big data, Internet of things technology and wireless communication technology have been in a state of rapid development. Opportunities and challenges in all walks of life are being subverted. Financial management, as the foundation of corporate governance, is important for improving economic efficiency and achieving sustainable business development which plays an important role. In order to realize the management and classification of financial big data, better identify the financial data of different enterprises, strengthen the safe storage of financial information, and provide early warning for the security issues involved, this article is based on the Internet of things and wireless communication networks. In the method part, this article introduces the framework of the Internet of things, Bluetooth, and infrared data transmission in wireless network communication and the principles of financial big data. The algorithm introduces a single‐user MIMO system, free space propagation, and spectrum and energy efficiency. The analysis part analyzes the spectrum efficiency of different algorithms, social utility, average number of retransmissions, comprehensive scores of competitiveness in various fields of the Internet of things, and the significance of financial indicators. By comparing the data, it can be seen that the algorithm in this paper is superior to the two algorithms of IAN‐CoMP and IA‐CoMP. When the number of users is 100, the social utility of the algorithm in this paper is 4.45, while IAN‐CoMP is 3.43 and IA‐CoMP is 3.67. When the number of users increases to 700, the social utility of the algorithm in this paper is 28.34. The other two algorithms are, respectively, 24.45 and 25.99, and we know that the social utility of the algorithm in this paper is the best. Through comprehensive analysis, it is concluded that the financial big data model based on the Internet of things and wireless network communication in this paper can better realize data management and collection, so as to meet the needs of information developers.

The Research of Ownership Structure and the Quality of Accounting Information in GEM Listed Companies

The quality of accounting information is the hot topic nowadays. The accounting information disclosure is a system of corporate governance; ownership structure is the foundation of corporate governance, so ownership structure can give an impact on the quality of accounting information through corporate governance. This paper selects GEM listed companies’ data from 2012 to 2014 and researches the relationship between ownership structure and quality of accounting information from three aspects: ownership properties, ownership concentration and balanced concentrated ownership structure. The results show that the proportion of corporate ownership and the proportion of managerial ownership have positive correlations with the accounting information quality; the state-owned stake, ownership concentration and balanced concentrated ownership structure have not significant relationship with accounting information quality.

Challenges of financialised firm behaviour for Capital Markets Union

Capital Markets Union is a late but right project towards a truly single currency economic zone in the EU. However the CMU Green Paper chooses the wrong benchmark of US capital markets and is not based on evidence. The hegemonic corporate governance ideology of shareholder value maximisation that determines the financialised firm behaviour in the US has produced, since the 1980s, malign macroeconomic outcomes resulting in lower private investments, lower wages, regular stock market crises and socially and economically costly misalignment of the interests of owners and controllers of capital. The financialisation literature has amply examined these processes and recently international institutions like the OECD and the Bank for International Settlement have confirmed the findings of the financialisation literature with their own empirical evidence. Therefore the CMU project needs to be based on a better foundation of corporate governance that encourages long-term investments and true alignment of all stakeholders' and managers' interests.

Internalities and the Foundations of Corporate Governance

This paper considers the potential contained in an ‘internalities’ approach to corporate governance. Rather than viewing the company as a ‘black box’ that can only be regulated through state action, we argue that corporate governance holds in tension the relationship between investors, managers and the corporate board. It is from that tension that a change in corporate culture will emerge. We argue that a state focus on promoting and managing the dialogical character of corporate governance will limit the negative effects of corporate power.

Control Matters: Law and Economics of Private Benefits of Control

The standard approach to the legal foundations of corporate governance is that corporate law promotes separation of ownership and control by protecting minority shareholders from expropriation. This paper takes a broader perspective on the economic and legal determinants of corporate governance. It shows that legal entitlements to corporate control and their exchange on the market are as important as investor protection. This is based on a third category of ‘idiosyncratic’ private benefits of control, which supplements the more traditional specifications as inefficient consumption of control perquisites (‘distortionary’ private benefits) or outright expropriation of shareholder value (‘diversionary’ private benefits). The framework departs from the standard principal-agent models by assuming that private benefits of control also account for a further value to be appropriated as reward of entrepreneurship in the corporate structure. The quasi-rent nature of this value makes appropriation by corporate controllers a necessary condition for efficiency ex-ante, which implies that control rights are allocated separately from ownership at the going public stage. Under certain assumptions (corresponding to legal restrictions on the behavior of controllers and non-controlling shareholders), a constrained-efficient outcome is derived ex-post as Coasian bargain between the incumbent and the insurgent at the takeover stage. To preserve interdisciplinarity of the discussion, these results are illustrated with a limited degree of formalization. The above findings have important implications for corporate law. When legal institutions effectively constrain expropriation of non-controlling shareholders, they may still distort separation of ownership and control by making ownership structures either more concentrated or more dispersed than it would be efficient. This happens when corporate law fails to provide those who run the company with entitlements to control tenure independently of how much ownership they retain. Likewise, mandatory bid regulations undermine the takeover process by restricting side payments that ultimately support efficient bargaining over the value of corporate control.

Corporate Governance in Islamic Banking Institutions

Islamic Banking has come to a critical phase where it has to balance between performance and sanctity of the offerings. Keeping the investors happy and at the same time maintaining the reason for existence of Islamic Banking has not been an easy task. Since all the contracts and products in Islamic Banking need to be approved by Shariah board, there is a heavy reliance on Shariah. Shariah Supervisory Board is the main decision making body in the Islamic financial institutions. Their powers supersede the powers of the Board. Hence they play a crucial role in the Corporate Governance. The paper examines the critical role of Shariah Supervisory Board in Islamic Banks in relation to corporate governance. Shariah Supervision can make significant contribution to the strategic direction of the organization while adhering to corporate governance principles. It can also help in maintaining the sanctity of the Islamic offerings thus fulfilling the prime role. It is evident that there is a strong link between the principles of Islamic Finance and corporate governance. The fundamental principle of avoiding Gharar lays down the foundation of corporate governance in Islamic Banking. Avoiding uncertainty and deceit are the basic rules of Islamic Banking. Following the corporate governance is thus not a matter of choice but a fundamental requirement and thus channelling it for providing the strategic direction to the organisation is the responsibility of the Shariah Board. There are several factors affecting Corporate Governance in Islamic Banking. A Governance Committee as proposed on the lines of IFSB is a viable option as a first step for corporate governance in the Islamic Banks. It should be noted that the disclosure requirements are more stringent in case of Islamic Banks as compared to conventional banks due to the fundamental principle of complete disclosure in Islamic Banking. Thus, Shariah Supervisory Board can provide critical direction to the organization while adhering to the principles of corporate governance in the Islamic banks.

Establishing a baseline for assessing the frequency of auditors' comments concerning perceived client integrity

PurposeThe purpose of this paper is to examine whether comments made by Big‐Six auditors about their post‐audit perceptions of the client's integrity were influenced by their firm's rating of the client's integrity prior to the start of the current audit.Design/methodology/approachThe paper uses an established fraud detection case study with a manipulation of client integrity. The participants include 152 managers and 342 seniors from five of the then Big‐Six firms.FindingsThe findings indicates that auditors were insensitive to client integrity ratings in the audit planning/risk assessment stage of the audit.Practical implicationsThe very foundation of corporate governance and the value of the audit are weakened when client integrity is questionable and may not result in implementing more rigorous audit procedures suggested by Mautz and Sharaf.Originality/valueThe existent literature cannot be used to determine whether or not Auditing Standards enacted since 1991 have had any effect on the practice of auditing in this area. Consequently, this paper contributes to the literature by establishing a 1991 (i.e. before Statement of Auditing Standards 82) baseline for evaluation purposes. (A baseline being a point of reference to compare the results of future research.)

Rethinking Corporate Law and Economics in a Theory of Private Benefits of Control

The standard approach to the legal foundations of corporate governance is based on the 'law matters' thesis, according to which corporate law promotes separation of ownership and control by protecting minority shareholders from expropriation. This paper takes a broader perspective on the economic and legal determinants of corporate governance. It shows that protection and exchange of corporate control is at least as important as investor protection, and so are the legal institutions that support them. This result is derived by defining a third category of 'idiosyncratic' private benefits of control, which supplements the more traditional specifications as inefficient consumption of control perquisites ('distortionary' private benefits) or outright expropriation of shareholder value ('diversionary' private benefits).The proposed framework departs from the standard principal-agent models in that it assumes that private benefits of control also account for a further value to be appropriated as reward to entrepreneurship in the corporate structure. The quasi-rent nature of this value makes appropriation by corporate controllers a necessary condition for efficiency ex ante, which implies that residual control rights be allocated separately from ownership. Under a number of reasonable assumptions, a constrained-efficient outcome is derived ex post as Coasian bargain between the incumbent and the insurgent over the value of corporate control.This result has a number of implications for corporate law. When legal institutions effectively constrain expropriation of non-controlling shareholders, they may still distort separation of ownership and control by making ownership structures either more concentrated or more dispersed than it would be efficient. This happens when corporate law fails to provide those who run the company with entitlements to uncontested control independently of how much ownership they retain. Likewise, regulation may undermine the takeover process when it restricts side payments that ultimately support efficient bargaining upon the value of corporate control.

Legal Deterrence: the foundation of corporate governance – evidence from China

To evaluate the Chinese government's recent market‐orientated efforts to promote good corporate governance, this paper conducts a re‐examination of the working mechanics for market competition and other market‐based governance mechanisms to ensure good corporate governance. The finding is that the utility of market mechanisms may have been exaggerated. Not only are they not effective in disciplining serious managerial misbehaviour that offers managers more gain than loss, even their limited value to discourage such misbehaviour as managerial shirking is conditioned on that the opportunities for illegitimate enrichment by managers are few. On the contrary, legal sanction is fundamental to good corporate governance, because it is the only feasible way to combat such serious misbehaviour and curb illegitimate enrichment. Current experience of corporate governance in China conforms to this finding and poor corporate governance in China is better explained by the lack of credible legal deterrence. This being the case, the top priority for China is to strengthen legal sanction in order to rein in the excessive misappropriation and flagrant fraud. Only once this has been done will the efforts to implement market‐orientated reforms bear any significant fruits.

Legal Deterrence: The Foundation of Corporate Governance - Evidence from China

Legal Deterrence: The Foundation of Corporate Governance - Evidence from China

Shareownership: The foundation of corporate governance

In this article, the authors explore the origins of share ownership and its implications for corporate governance. They trace some of the current problems with governance structure that exist in public companies and what solutions can be applied to correct these problems. The authors also offer some guidance on what it means to be a shareowner. They do not advocate changes to the securities laws and regulations. Rather, they argue for a change in investor attitudes‐a frame of mind that reminds investors of their ownership rights and duties.