Corporate Governance Framework Research Articles

Framework of Green Banking and Green Corporate Governance in Indonesian

Inflation is one of the most widely tested economic variables both theoretically and empirically. Stable inflation is a sign that sustainable economic growth provides benefits for improving people's welfare. This study aims to analyze the impact of Covid-19 on volatility inflation in Indonesian. The method used in this study is the ARIMA model. The results of this study are the ARMA (1.1.0) model suitable for testing inflation volatility in Indonesia. Forecasting results show that inflation over the next 5 months or until December 2022 tends to decrease. From the prediction results, the policy that can be applied to business sector actors is to carry out operational (marketing) activities carried out with an online system. The next policy that can be applied to companies is tax relaxation and easy access to credit to banks. Finally, the policies that can be applied due to the decline in commodity prices in the food and beverage and tobacco sectors are capital assistance and production equipment assistance for business actors.

Revisiting corporate governance and financial risk‐taking

AbstractCorporate governance attributes have varying effects on risk taking when variables are examined separately. We study the effects of a large range of corporate governance attributes on risk taking using a comprehensive US sample. Our findings confirm that although there are certain characteristics that drive this positive effect such as compensation structure, there are those which have the opposite effect such as board‐level attributes. Our paper contributes to the broader literature on the relationship between corporate governance and risk in financial institutions, which are often overlooked in traditional studies. We shed light on the importance of studying corporate governance at a granular level rather than using a single index. The findings offer insights to regulators in determining suitable corporate governance frameworks to ensure the protection of investors rights in financial institutions.

The Congruence of Sustainable and Learning Organizations: An Insight into the ESG Disclosures of Shell plc

Companies are pledging to improve their environmental and social performance to a huge extent. They have made sustainability their goal or adopted the “triple bottom line” term which is a harmony between their financial, social, and environmental performance. Nowadays, Environmental, social, and governance (ESG) factors are one such category of information that is becoming more and more well-known and considered by mainstream investors around the world. Learning organizations can learn at a remarkable rate and improve their performance. This paper focuses on the unity of sustainability and learning organization. Thus, using dimensions of learning organizations and disclosures of a chosen company this paper inspects whether an organization that fulfills the requirements of a learning organization has elaborated ESG disclosures. The chosen company is Shell plc. ESG data covers a wide range of topics, such as accounting for a company's carbon footprint, its labor and human rights practices, and its corporate governance frameworks. ESG aspects are being emphasized by policymakers, asset owners, and the public to support sustainable business practices and goods. It can be said that an organization that can be termed as one that learns will have a sustainability element. The phrase "sustainability-focused organizational learning" (SFOL) be used to represent the early experiences of businesses that are seeking to pursue sustainability or the triple bottom line while making significant changes to their organizational cultures.

Indigenous activism debut in Brazil: the case of Rumo

Learning outcomes By the end of the case study discussion, it is expected that students will have learned to assess what makes it likely that firms will respond to episodes of stakeholder activism; establish the interplay between nonmarket strategies and corporate governance mechanisms in assessing shareholder activism; explain about the board of directors as a corporate governance mechanism; evaluate the threats of nonmarket dimensions as a strategic response from the board; and understand the impact and increasing power of shareholders over board decisions. Case overview/synopsis In April 2019, to pressure Rumo S.A. regarding the duplication of the Itirapina–Cubatão railroad, indigenous peoples from 12 São Paulo villages bought six Rumo shares, which were quoted on Tuesday, April 23, 2019, at around BRL17 each. Duplication of the railroad started in 2011 and affected the lives of the Indians. The company promised to implement more than 100 improvements to the villages, but as of 2019, half of the improvements were at a standstill. After buying enough shares to entitle them to participate in the annual general meeting (AGM) of shareholders, the Indians went to Rumo’s AGM to voice their concerns and show how the villages had been affected. It was the audit committee that needed to discuss and solve the case of the indigenous peoples. What steps would Rumo take next? What was the best thing to do with regard to the claims of the Indians? This case shows the start of corporate activism in Brazil. This case reports the dilemma that Rumo faced with the indigenous activism at the beginning of 2019 because of the expansion of their railroad network across indigenous lands. Complexity academic level This case is suited for a class in which the students are exposed to a corporate governance framework and internal and external governance mechanisms. The case can be applied at the graduate and executive levels in relevant courses such as corporate governance, corporate responsibility, strategic management, and the stock market. Supplementary material Teaching notes are available for educators only. Subject code CSS 11: Strategy.

The Interplay of Firm, Industry, and Macroeconomic Factors in the Stock Returns of the Non-Financial Sector in Nepal

This research paper focused on the impact of firm-specific, industry-specific, and macroeconomic variables as it examined the dynamics of stock returns in the Nepalese non-financial sector. The study incorporated a comprehensive analysis of existing literature, methodology, and empirical findings from various studies conducted in Nepal and other countries. Five hydropower companies were the sample of the study. Pearson correlation result showed a negative correlation with a strong inverse relationship between the tangibility of a firm's assets and its stock returns. A significant negative correlation with inflation indicates a moderate inverse relationship between the inflation rate and stock returns. Regression results showed that companies' asset tangibility significantly impacts stock return. Firm size and gross domestic product did not have a statistically significant effect on stock return. However, the inflation rate and exchange rate significantly impacted stock return. Based on the study's findings, policymakers can consider implementing measures to promote a conducive environment for stock market development. This may include improving corporate governance frameworks, enhancing transparency and disclosure requirements, facilitating investor education programs, and ensuring macroeconomic stability through sound monetary and fiscal policies.

Corporations vs. Countries. Fostering Governance Sustainability in a Global Environment

This research study integrates the results from theoretical and real-world scenarios in the frameworks of corporate governance, state governance, and public administration. Whether it be via the tight examination of the private sector or the public sector, the strategy adopted in this research involved constructing a 360-degree focus on real occurrences that generate the formal and informal processes that keep the globe going. In the first portion of the article, the global mechanism as viewed from the perspective of business and the worldwide mechanism as seen from the standpoint of the economy are both given their own section.
 Keywords: corporate governance, economic growth, free trade, global accountability

Corporate Social Responsibility in India: An Examination in the Context of Corporate Governance

Abstract: Corporate Social Responsibility (CSR) has emerged as a significant aspect of corporate behavior globally, driven by ethical concerns, stakeholder expectations, and regulatory mandates. In India, the integration of CSR into corporate governance practices has garnered increasing attention in recent years. This abstract provides an overview of the examination of CSR in India within the framework of corporate governance. This study aims to explore the intricate relationship between CSR and corporate governance in the Indian context. It delves into the evolving landscape of CSR in India, particularly since the enactment of the Companies Act, 2013, which made it mandatory for certain qualifying companies to allocate a portion of their profits towards CSR activities. The analysis encompasses a review of legislative developments, the evolution of CSR reporting, and the role of stakeholders in shaping CSR strategies.

Corporate governance and performance of state-owned enterprises in a least developed economy

Purpose: The main objective of the study was to investigate how corporate governance affects the performance of state-owned enterprises (SOEs) in a least developed economy.Design/methodology/approach: Both primary and secondary data from nine state-owned companies that operated between 2001 and 2016 were analysed in the study. The investigation used a quantitative methodology. Fixed effects, random effects and generalised method of moments (GMM) estimations were used to conduct regression analysis.Findings/results: The findings show that corporate governance characteristics affect SOE performance in a least developed economy. The performance of SOEs is influenced favourably by board structures, director tenure, reduced government ownership and leverage. Conversely, increased state ownership leads to subpar performance. The study also reveals that the presence of civil servants and directors with political affiliations in government-controlled companies has a negative effect on enterprise value.Practical implications: The use of multiple case studies to investigate SOEs in their natural setting has given some insights for both professional managers and policymakers interested in developing corporate governance frameworks to improve SOEs value in least developed economies, particularly in sub-Saharan Africa, even though the results are limited in terms of statistical generalisation because the study was based on a single country.Originality/value: The study fills a gap in the literature about how SOE performance is affected by corporate governance in least developed nations, where such research is underdeveloped.

A Framework for Corporate Governance and Firm Performance in the Fourth Industrial Revolution

A Framework for Corporate Governance and Firm Performance in the Fourth Industrial Revolution

Имущественные и неимущественные риски в системе российского корпоративного управления

Introduction. Corporations today are the basis of any state’s economy, and within the framework of corporate governance, key strategic decisions are made that determine the fate of corporations. Accordingly, the problem of corporate governance risk management is one of the key economic problems, as it affects the interests of not only the participants of corporate relations, but also a huge number of economic agents. Theoretical analysis. The article presents the views of Russian scientists on the characteristics and classification of corporate governance risks, defines the property and non-property risks of corporate governance, considers the causes of their occurrence, as well as the mechanisms of influence on the corporation, its participants, creditors, public law entities. Also, a distinction is made between the objectively existing normal business risk and the predominantly subjective risks of corporate governance. Empirical analysis. Based on statistical data on bringing controlling persons to subsidiary liability, it is shown that the number of bankruptcies of Russian companies due to the manifestation of corporate governance risks is steadily growing. Results. The author’s typology of corporate governance risks, characterized by their relationship and interdependence is developed. Property and non-property risks of corporate governance are identified, the impact of which on the activities of Russian corporations is currently the most significant. Among them are those to which it is possible to adapt in the modern conditions of doing business. It is concluded that in the process of managing corporate risks based on the use of corporate law institutions existing in Russia and their combinations, it is impossible to nullify completely the occurrence and manifestation of the risks in question. Nevertheless, to ensure the necessary mutual control of the corporate relations subjects, limiting their ability to act in bad faith and unreasonably to the detriment of the company, is quite an achievable task.

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

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

A non-parametric synthesize measure for corporate governance: empirical evidence from Indian banks

The purpose of the present study is to craft a corporate governance index for Indian banks by eliminating the subjectivity in assigning weights. The present framework includes six corporate governance dimensions, which include the attributes related to the board committee, audit committee, risk management committee, remuneration committee and transparency of the banks. The study considers measuring the index value for corporate governance framework via a novel extension of the classical data envelopment analysis technique known as the benefit of doubt analysis, as this approach assigns the weights objectively to the different dimensions of corporate governance and thereafter provides a synthesised score to be termed as the corporate governance index. Further, the present study attempts to know any variation in the index score when the whole sample is divided into sub-sample for two different groups in terms of duality and non-duality of CEO leadership board and other is based on the large and small size of banks. The analysis reveals that non-duality boards and small-size banks are more adaptable to the governacne norms. The analysis further documented that in an emerging economy effective implementation of governance norms is not only beneficial in protecting the interest of the shareholders but also contributes to the business performance. Thus, based on the novel analysis the study provides few policy implications in terms of identifying the key areas for an effective corporate governance framework.

Ownership Concentration, Firm Risk taking and Performance: Evidence from Developing Economy of Pakistan

Ownership structure has a substantial impact on corporate decision-making and plays a significant part in the corporate governance framework. Ownership structure can accomplish a significant purpose in aligning interest of managers and owners. The legal protections provided to shareholders in a country have a significant impact on ownership concentration. From 2008 to 2018, data on 225 non-financial companies were obtained from the Pakistan Stock Exchange in order to analyze the effects of ownership concentration on business risk-taking and performance. Results postulated that Single large shareholder negatively affect corporate risk taking in act to preserve their personal benefits and support conservative investment policy. Presence of Multiple large shareholders proved to be a significant cause of internal governance mechanism, such firm’s charades higher risk taking profile because agency conflict between Single large shareholder and other shareholders were unfriendly and multiple large shareholders can enforce value exploiting risky investments by their voting power. Individual ownership (diffused ownership) is significantly negative associated with risk taking and performance measures. Diffuse ownership imparts power to managers because disperse owners cannot directly monitor managers’ practices and monitoring cost is very high. In such case mangers take those decisions which are in their personal favor and therefore favor low risk portfolio. Multiple conflicts between management and diffuse shareholders ultimately results in poor performance of the firm.

ESPEG model and corporate governance system for ensuring sustainable development of enterprises

In 2023, there is a pressing requirement to promote enterprise growth and guarantee enduring sustainability, therefore, it is timely to craft an effective model for sustainable progress and establish a corporate governance framework. The aim of the research was to develop innovative approaches to ensure the sustainable development of enterprises through the development of a sustainable development model and corporate governance system. The essence of the concepts of “corporate governance” and “corporate management” is also defined in the article using the categorical method of two-level triadic decoding. The research is based on the principles of sustainable development, systemic and holistic approaches. The article proposes a four-component model of the enterprise sustainable development concept (ESPEG model), which reflects the hierarchical arrangement of the environmental (E), socio-political (SP), economic (E), and governance (G) spheres of the enterprise. This model identifies the directions for the application of management tools to influence specific interacting spheres. The result of the work is an improved model of enterprise sustainable development that enables the structuring of the key components of the concept to ensure effective management of the enterprise based on the balance of its key elements. The model of corporate governance system has been improved, incorporating the paradigm of sustainable development and considering the necessity of integrating various management subsystems within the company. The proposed corporate governance system identifies the control loop of corporate management and defines the governing and controlled subsystems along with their components. It has been established that a corporate governance system built on the principles of sustainable development will contribute to achieving positive results in the company’s development, ensuring the sustainability of its social, environmental, and economic aspects. The implementation of the proposed corporate governance system will facilitate further research into its essence and application specifics in modern companies

Corporate Governance, Commercial Arbitration And Resolution Of Corporate Disputes In Nigeria: Losses Or Lessons?

There is no doubt that companies do have conflicts with other companies or internal conflicts within the company. In essence, conflict resolution is inevitable in corporate governance and arbitration has proven to be one of the means through which it can be resolved. This paper seeks to evaluate the importance and efficiency of Alternative Dispute Resolution (ADR) mechanisms, particularly arbitration in corporate governance and in solving corporate governance disputes, its growth and success rate compared to the traditional court systems. The paper further assesses the capability and effectiveness of the system in, and against corporate disputes. It also identifies its weaknesses as a whole and within the framework for corporate governance, while identifying and recommending international best practices for its use in resolving corporate governance disputes in Nigeria when juxtaposed with other jurisdictions. In addition, the paper stresses the importance of having a convenient business dispute resolution mechanism in order for businesses to thrive even in times of adversity, while also maintaining a cordial relationship, important to corporate governance in order to achieve the goals and objectives of the investors. The paper adopts the doctrinal methodology of research through analysis of opinion of authors, case laws, and statutory provisions relating to the subject, which are examined for the purpose of further analysis and contribution to existing body of knowledge. The paper recommends among others the holistic adoption of arbitration in resolving corporate governance from litigation process as it is done in sports disputes by organisations such as FIFA in order to maximise the gains arbitration brings to the commercial investment.

Corporate Governance Practices in India: Problems & Importance

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

Does overconfidence blur out the investment efficiency? The managerial overconfidence and internal financing effect on investment efficiency: evidence from MENA region

PurposeThis paper aims to investigate whether managerial overconfidence has an impact on investment inefficiency beyond its influence on the use of internal financing or whether internal financing behaves as a full intermediary.Design/methodology/approachThe study employed three dependent variables, namely business investment scale, overinvestment and underinvestment, and analyzed data from 282 firms across five different industries listed in 11 Middle East/North Africa (MENA) countries between 2013 and 2019 using regression analysis via least square dummy variable (LSDV).FindingsThe findings indicate that while internal financing can provide funding for investment opportunities and address capital shortages, it may also result in overinvestment, particularly in companies led by overconfident managers.Practical implicationsStakeholders, including shareholders and board of directors, should pay attention to the chief executive officer (CEO)'s behavioral aspects such as overconfidence in decision-making while undertaking new investment projects. Additionally, regulators and policymakers in emerging markets like MENA should re-evaluate the corporate governance framework, devise a corporate governance index and promote boardroom gender diversity as it can significantly reduce risk.Originality/valueThis study adds to the limited research on the impact of managerial overconfidence on investment efficiency in the MENA region. By focusing on this region, which has unique economic, political and social characteristics, the study provides new insights into the role of behavioral biases in investment decision-making in emerging markets.

Shari'ah governance quality and environmental, social and governance performance in Islamic banks. A cross-country evidence

PurposeThe paper aims to examine the impact of Shari'ah governance quality on environmental, social and governance (ESG) performance in Islamic banks.Design/methodology/approachThe study's sample consists of 66 Islamic banks from 14 countries over 2015–2019. The research uses the Heckman model, which is a two-stage estimation method to obtain unbiased estimates, as ESG scores are only observable for 17 Islamic banks in Eikon Refinitiv database at the time of the analysis.FindingsThe analysis shows that Shari'ah governance has a beneficial role to achieve ESG performance. The analysis also shows that enhanced profiles of Shari'ah supervisory boards' (SSB) attributes are more efficient than the operational procedures to promote ESG performance. In addition, the analysis shows that enhanced SSBs' attributes strengthen the bank's corporate governance framework, while sound-designed procedures increase the bank's social activities by emphasizing their roles to ensure Shari'ah compliance. Finally, the analysis sheds light on the failure of Shari'ah governance to promote environmental performance.Research limitations/implicationsThe existing databases providing companies' ESG-related information still do not offer sufficient data to conduct an international study with a larger sample of Islamic banks (IBs) having ESG scores for a more extended period.Practical implicationsThe research provides policy insights to Islamic banks' stakeholders to promote social and governance performance in the Islamic finance industry through improving Shari'ah governance practices. However, raising environmental awareness is imminent among all actors implicated in the Shari'ah governance processes to help overcome the anthropogenic risks.Originality/valueThe research complements the governance-banks' ESG performance literature by examining the role of Shari'ah governance. The research also extends the literature on Islamic banks' sustainability by pointing to the Shari'ah governance failure to enhance environmental performance and thus achieve Maqasid al-Shariah regarding the environment.

Analysis of China Unicom Corporate Governance Problems and Solutions

Tian Guoqiang, an economist, pointed out that "the mixed ownership economy with cross-shareholding and mutual integration of state-owned capital, collective capital and private capital is an important form of realizing the basic economic system. “The implementation of mixed ownership is conducive to expanding the functions of state-owned capital, maintaining and increasing its value, improving its competitiveness, and helping all kinds of ownership capital learn from each other, promote each other and develop together (Tian, 2005). This shows that China has taken a big step in the reform of mixed ownership with mixed ownership enterprises as the main body. In enterprise management, corporate governance determines the long-term development plan and strategic direction of enterprises. Therefore, the reform of corporate governance structure of mixed ownership enterprises is of great significance to deepen the reform of mixed ownership and the related development of China's economic field (Tian, 2005).The purpose of this paper is to explore the establishment of corporate governance framework of mixed ownership enterprises under China's national conditions, analyze the existing problems of China Unicom, such as the imperfect structure of the board of directors and the loopholes in the professional manager system, and put forward solutions such as optimizing the structure of the board of directors, strengthening the construction of managers, and establishing equity incentive mechanism, so as to improve the corporate governance structure of China Unicom. And provide solutions and experience for the follow-up development of China's state-owned enterprises.

Corporate Governance Needs, Framework and Trend In India

Corporate Governance Needs, Framework and Trend In India