Impact Of Corporate Governance Practices Research Articles

Exploring the role of corporate governance in driving financial performance: An empirical investigation of Nepalese commercial banks

This study delves into the substantial impact of corporate governance practices on a company’s financial performance, focusing specifically on Nepalese commercial banks in the Kathmandu Valley. With 419 participants from all 27 «A» grade commercial banks, the study concentrates on employees currently working in these banks, particularly top-level staff such as managers, department heads, and officers. The primary objective is to investigate the role of corporate governance in driving financial performance, using Return on Assets (ROA) and Return on Equity (ROE) as financial performance indicators of banks. The study explores various factors influencing corporate governance’s impact, including corporate governance policies, disclosure policies, board size, income diversity, and ethnic diversity. Data collection involves primary data from participants associated with the banks, and the analysis is conducted using the Statistical Package for the Social Sciences (SPSS). Descriptive, correlation, and regression analyses are employed to understand the relationship between corporate governance and financial performance variables. Notably, regular evaluations of the board of directors are found to have a beneficial impact on financial performance. A bank’s transparency in sharing performance information exhibits a stronger positive correlation with ROE (R=0.183) compared to ROA (R=0.060), suggesting that ROE is more sensitive to disparities in information availability. Furthermore, the study identifies a negative impact of board size on financial performance, with low-income diversity positively influencing it and board ethnic diversity exerting a negative and statistically significant influence.

Moderating effect of CSR on the Direction and Strength of the Relationship between Corporate Governance Mechanism and Integrated Reporting Quality: An Evidence from India

Grounding upon the perspective of agency theory, the current study intends to inspect the association between Governance Practices of Companies, in the form of board attributes and Quality of Integrated Reporting among selected listed Indian companies. Further the study also aims to evaluate, whether the association between the board’s attributes and IR quality is moderated by the Corporate Social Responsibility (CSR). For the purpose of testing hypothesis, the study has considered a sample of 25 top Indian corporates of energy industry listed in the BSE-500 group. The period of the study extends from 2017-18 to 2021-22. Pooled OLS regression analysis is used to test the impact of corporate governance practices on the IR quality and evaluate if CSR moderates the strength and direction of their relationship. To ascertain the IR disclosure score of the sample companies, a checklist is developed built on IR Framework devised by the International Integrated Reporting Council (IIRC) and the technique of visual content analysis is applied. Further board size, firm size, leverage, ROE, ROA, Market to Book value ratio are considered as the control variables to strengthen the panel data model. The study found that board characteristics had a positive relationship with IRQ. It is also revealed that CSR positively moderates the association between Corporate Governance mechanism and IRQ. The significance of Corporate Governance in the process of managerial decision making is the major theoretical development of this research.

Corporate Governance and Financial Performance of Listed Firms in Nigeria

The objective of this study was to investigate the impact of corporate governance practices on the financial performance of listed companies in Nigeria. The study encompassed three industries: manufacturing, finance, and oil and gas, spanning the years 2010 to 2020. Employing a content analysis approach, data were collected from corporate websites and the Securities and Exchange Commission website. A total of 33 businesses were selected for the study. The study's analysis revealed that a majority of the corporations disclosed the majority of their corporate governance policies. Notably, the banking industry exhibited the highest level of corporate governance disclosure compared to other sectors. This implies that a company's decision to publish its corporate governance information online in Nigeria might be influenced by the regulatory environment of the sector. However, intriguingly, the research did not establish a correlation between a company's corporate governance score and its financial performance. Nevertheless, there was notable variation in the extent of corporate governance reporting across different sectors. In light of these findings, the report recommends that the Securities and Exchange Commission's code of best practices should be made obligatory for all industries in Nigeria. Furthermore, the establishment of a compliance team is advised to ensure that businesses across all sectors in Nigeria adhere to the regulatory mandates outlined in the code of corporate governance.

Does Corporate Governance Practices Influence Financial Performance and Corporate Growth: Indian Perspective

This article endeavours to investigate the impact of corporate governance practices on financial performance and corporate growth considering a sample of leading 88 non-financial companies listed on the National Stock Exchange for the period 2011–2020. Using static panel data technique, the results show that the proportion of female directors in boardrooms maintains a significant and positive association with corporate financial performance, while board independence and corporate financial performance are associated negatively. On the other hand, no noticeable relationships are found between board size, CEO duality, and corporate financial performance. Moreover, the results show that the proportion of female directors on boards and corporate growth are associated positively, whereas board size, board independence and CEO duality appears to have no significant associations with corporate growth. The results are re-examined by employing several tests, including sensitivity analysis and alternative model specifications and are held robust. The empirical findings offer considerable impetus for corporate policy makers or regulators to set up the needed policies and regulations in the light of strengthening corporate governance practices.

The impact of corporate governance mechanisms on earnings quality during the COVID-19 Pandemic. Evidence from the UK

Abstract This study aims to analyze the impact of corporate governance practices on the earnings quality of 228 firms located in the United Kingdom throughout the period from 2019 to 2022. Our fundamental concept states that there is a negative relationship between the efficiency of corporate governance practices within the organization and the probability of participating in earnings manipulation. The findings of our empirical study offer substantiation for our claims, as they demonstrate that companies with boards of directors marked by notable autonomy and financial capabilities, along with the presence of effective audit and compensation committees, experience an improvement in the quality of their earnings. JEL classification numbers: G32, G34, M40, M41. Keywords: Corporate Governance, Earnings Quality, Board of Directors, Audit Committee, Compensation Committee.

The Impact of Corporate Voluntary Disclosure and Financial Leverage on The Relationship Between Corporate Governance and Shareholders' Value: Proposed Framework

Objective: The purpose of this study is to propose a conceptual framework that investigates the impact of corporate governance practices on shareholder value.   Theoretical framework: The proposed framework of this study is established based on agency theory and stewardship theory to establish the interrelationships among the models in this study.   Method: In line with previous research, corporate governance practices have been shown to improve information disclosure through voluntary disclosure.   Result and conclusion: This leads to maximizing the shareholders' value, as discussed in this paper. Financial leverage as a moderator factor is found to be a potentially significant factor in strengthening the effect of voluntary disclosure of information on the shareholders' value.   Conclusion: Corporate governance practices play a pivotal role in enhancing shareholder value, especially when considering the influence of voluntary disclosure and the moderating effect of financial leverage.   Originality/Value: The unique contribution of this research lies in its comprehensive analysis of the relationships between corporate governance practices, voluntary information disclosure, financial leverage, and their combined influence on shareholder value.

The Impact of Corporate Governance Practices on Firm-Level Innovations and their Market Value : Empirical Evidence from India

The Impact of Corporate Governance Practices on Firm-Level Innovations and their Market Value : Empirical Evidence from India

Impact of Corporate Governance Practices on Financial Performance of Listed Companies in Papua New Guinea

The main purpose of this research is to examine the impact of corporate governance practices on the financial performance of listed companies in Papua New Guinea from 2018 to 2022. The corporate governance practices are established to monitor and evaluate the conduct of the management of the public listed companies. The Corporate governance charter is established in Papua New Guinea as part of the best practice to assist decision-making on the board of directors. The attributes of corporate governance practices of this study are at the board size, board diversity and the frequency of board meetings. The literature review of the study covers the theoretical framework and research attributes. This study has selected a list of 7 companies out of the twelve companies in Papua New Guinea, where the capital market has very limited growth in the country. A quantitative research approach was employed to conduct this study and using the secondary data for this research. The secondary data were collected from the respective listed companies’ websites and those data are error-free since the financial statements of the listed companies were audited by external auditors. A total of 35 annual reports of the listed company were collected for the research and a convenient sample method is employed for the study. The overall findings of this research have established positive relationships between the board size and the board diversity with the return of equity. The negative relationship was established between board size, board diversity with the return of assets and the Tobin-Q respectively. Furthermore, the negative relationships were identified between the frequency of board meetings with return of assets, equity and the Tobin-Q respectively. The study has indicated that the frequency of board meetings had increased substantially during COVID-19 to mitigate contingency risk. The findings of this study can be used by the regulatory body and listed companies to enhance the effectiveness and efficiency of corporate governance practices so that the overall corporate governance practices could be improved in the future.

The Impact of Corporate Governance Practices on Financial Performance in Western Balkan Countries

The Impact of Corporate Governance Practices on Financial Performance in Western Balkan Countries

The Impact of Corporate Governance Practices on Non-Performing Loans in Iraqi Banks; The Moderating Effect of Concentrated Ownership

This study aims to examine the connection between corporate governance mechanisms and non-performing loans (NPLs) using agency theory. In addition, the study examines the moderating effect of concentrated ownership (CO) between NPLs and financial distress. The study adopts a sample of 42 Iraqi banks from 2017–2021 with 210 observations. Panel estimation utilised a regression estimator to test the research hypotheses of the study. Three regression models were used to test the hypotheses after obtaining the appropriate model. Our findings showed that non-executive directors, board financial experience, and risk management committee affected NPLs negatively. At the same time, the audit committee was an insignificant effect on NPLs. Moreover, concentrated ownership as moderating interacts with the relationship between corporate governance factors and NPLs. This study enhances the knowledge and implications of the theory used for corporate governance dimensions. It provides feedback and a map through which Iraqi regulators and decision-makers can improve the effectiveness of corporate governance practices in relation to NPLs control, which should enable Iraqi regulators and policymakers to improve the corporate governance system, especially since corporate governance is a new issue in Iraq. The study also offers the researchers, academics, regulators, and policymakers' proof of the detrimental impact of CO on NPLs since this study provided an original contribution by using CO in this position. Therefore, evaluating CO as a moderating function provides several literary and theoretical insights that can be a focusing area of future studies.

Corporate governance and tax avoidance: evidence from an emerging market

ABSTRACT This study investigates the impact of corporate governance practices (namely board characteristics, ownership structure, and audit committee characteristics) on corporate tax avoidance. For this purpose, this study uses generalised least squares regression on a sample of 138 companies listed on the Pakistan Stock Exchange. Ten-year data from 2009 to 2018 are collected from published annual reports, comprising 1380 firm-year observations. The findings highlight that board independence, concentrated ownership, and audit committee gender diversity are negatively associated with tax avoidance. Conversely, managerial ownership and audit committee independence positively influence aggressive tax behaviour. Additional analysis reveals that these impacts are nonlinear and change with the different levels of tax avoidance. Enhanced governance stifles tax avoidance at lower levels; however, it encourages tax avoidance when firms are already aggressively avoiding taxes. This scenario represents a ‘double down’ behaviour depicted by the Pakistani corporate sector. This is one of the foremost studies to explore the impact of corporate governance on tax avoidance in Pakistan. It contributes to the literature by examining the impact of under-researched factors such as board meetings and audit committee characteristics and provides insights into the conflicting findings on board characteristics and ownership structure.

The Impact of the Board of Directors' Characteristics and Ownership Structure on the Sustainable Development Disclosure in the Banks Listed on the Amman Stock Exchange

Purpose: This study tries to comprehend how corporate governance (CG) affects disclosures on economic, social, and environmental sustainability.   Theoretical framework: Recent literature has reported that CG has significant impact on disclosures on economic, social, and environmental sustainability. However, there is still much to investigate and learn about CG in sustainability process.   Design/methodology/approach: For the time period spanning 2015 to 2021, information about study variables was gathered from thirteen (13) banks listed on the Amman Stock Exchange (ASE) through annual reports and quantitative approach.   Findings: Study findings showed that CG components improve sustainability disclosures in general. The study results indicated that, a large board with a female director and a Corporate Social Responsibility Committee (CSRC) is better able to audit and control management choices related to sustainability issues (whether they be economic, environmental, or social) and produces better sustainability disclosure.   Research, Practical and Social implications: This study is proposed to help bank managers understand the real impact of corporate governance practices on sustainability, especially economic, environmental and social indicators of sustainability and how to improve and develop them.   Originality/value: Through quantitative and qualitative analysis, this study contributes methodologically and empirically to the literature on corporate governance and sustainability reporting in emerging and developing economies.

Does corporate governance affect the performance and stability of Islamic banks?

Purpose This paper aims to investigate the impact of corporate governance practices on cost efficiency and financial stability for a sample of Islamic and conventional banks. In the analysis, the author uses a set of corporate governance variables that include, the board size, board independence, director gender, board meetings, board attendance, board committees, chair independence and CEO characteristics. Design/methodology/approach The author uses corporate governance data of Islamic banks that is unique in this field. In the analysis, the author also uses stochastic frontier analysis and panel vector autoregression models to quantify long-run and short-run statistical relationships between the operational efficiency of Islamic Banks and corporate governance practices. Findings According to the results, Islamic and conventional banks exhibit important differences in the effects of corporate governance practices on cost efficiency and financial stability. Results show that with a blind general adoption of corporate governance practices, Islamic banks may suffer a loss in their value since the adoption of the third layer of binding practices, over and above the already existing ones, imposed by the Sharia Board and the Board of Directors, may lead to cumbersome business operations. This conclusion is of importance to Islamic Banks since they struggle to survive in a very competitive international environment. Practical implications The author believes that the results may be of a certain value to regulators, policymakers and managers of Islamic banks. Based on the results, the author postulate that Islamic banks should select carefully international corporate governance practices. Social implications Islamic banks should not adopt additional third layer of binding practices as that would result lower performance and instability that would be damaging for the economy Originality/value This study employs a unique sample of Islamic banks that includes corporate governance data hand collected. Our findings of the corporate governance impact on Islamic banks performance and stability are therefore unique in the literature.

The effect of corporate governance quality and its mechanisms on firm philanthropic donations: evidence from the UK

PurposeThis paper aims to investigate whether and how better corporate governance practices can lead to philanthropic behavior among companies in the UK. In particular, this study attempts to determine whether corporate governance quality in general, as well as its specific mechanisms, affects corporate giving.Design/methodology/approachThe analysis is based on a sample of Financial Times Stock Exchange All-Share nonfinancial companies. Data on firm donations, including donations amount and donations intensity, were manually collected from companies’ annual reports for the period 2018–2020. This paper uses panel data models to examine the research hypotheses.FindingsThe results of this study indicate that both donations amount and donations intensity are positively associated with the practice of better corporate governance. Board independence is positively associated with donations amount, but not with the intensity of donations. Furthermore, board size, board gender diversity and the establishment of a corporate social responsibility (CSR) committee are likely to have a positive impact on the amount and the intensity of firms’ donations. However, neither the chief executive officer board membership nor the audit committee’s independence is related to the firm’s donations.Practical implicationsThis study sheds light on specific governance factors that affect firm donations in the context of UK companies. This allows regulators and legislators to evaluate the donations activities in the country and issue more directives to reinforce corporate governance practices that support corporate donations. In addition, the findings of this study are considered crucial to investors who prefer investing in companies with significant CSR-related activities to improve the value relevance of their investments.Originality/valueThis study provides a shred of unique evidence on the impact of corporate governance practices on firms’ donations.

Corporate Governance and Return on Assets of Selected Cooperative Societies

Cooperative societies are business models formed by their members as a result of failure of the market to provide needed goods and services at affordable prices and acceptable quality. Hence, the absence of good governance had resulted in financial failure of these business models. This study, therefore ascertained the impact of corporate governance practices on return on assets (ROA) of selected Cooperative Thrift and Credit Societies (CTCS) in Lagos State, Nigeria. The research design adopted was Ex-post facto and data were analysed using descriptive and inferential statistics. The results of the study showed that there is significant effect of corporate governance on the return on asset (Adjusted R2 = 0.279; p = 0.000). there is evidence that training of board members and policy compliance have significant relationship with the return on asset (TR = 0.100, z-test = 4.167, p < 0.05 and PC = 0.657, z-test = 5.298, p < 0.05). Conversely, there is evidence that members participation, accountability, and gender composition have no significant relationship with the return on asset (MP = -1.086, z-test = -0.866, p > 0.05; AC = 0.564, z-test = 0.937, p > 0.05, and GC = -0.115, z-test = -0929, p > 0.05). The study concluded that there was a statistically significant effect of corporate governance on return on assets and suggests that the regulatory authority should promote the practice of corporate governance by the management committee and ensure compliance with regulatory directives.

Effect of Corporate Governance Practices on Performance of Manufacturing firms in Ireland

Corporate governance is a useful tool to minimize the conflicts of interests between stakeholders and management. The purpose of the study was to examine the impact of corporate governance practices on the performance of manufacturing firms in Ireland. The inferences of the study were based on the findings of the preceding studies. The study results showed that corporate governance practices have a positive effect on performance. The implementation of corporate governance standards improves the financial performance of the company as well as positively impacts the internal efficiency of the firms. Good corporate governance is fundamental for a firm as it improves company image, increases shareholders' confidence and reduces the risk of fraudulent activities. Moreover, it was established by the study that good corporate governance principles incorporate transparency, accountability, responsibility, independence and fairness. Corporate governance is the combination of mechanisms, procedures and relations utilized by different institutions to regulate and run a firm. The main purpose of better corporate governance is to increase value for investors and stakeholders in the long run. The study noted that corporate governance is a useful tool to minimize the conflicts of interests between stakeholders and management. The study recommended that manufacturing firms in Ireland ensure that corporate governance practices are effective. The firms need to build a system of rules and practices that determine how a company operates and aligns the interest of all its stakeholders. Further, it is suggested that the firms need to have a good corporate governance system that ensures it follows a sound, transparent, and credible financial reporting system Keywords: Corporate governance policies, performance, manufacturing firms, Ireland

Effect of Corporate Governance on Corporate Performance: Sri Lankan Evidence

Effective corporate governance practices contribute significantly to various aspects of an organization as a strategic direction. This study examines the impact of corporate governance practices on corporate performance. The top fifty companies from five industries listed in the Colombo Stock Exchange were selected as the sample. Secondary data was extracted from financial statements covering a five year period from 2014 to 2019. Six corporate governance practices; financial acumen, board independence, board size, CEO duality, board committees, and board gender diversity were tested against corporate performance indicators: return on assets, return on equity, and Tobin’s Q. Results of multivariate analysis indicated that board size and committees positively impact on corporate performance, while other variables do not provide any significance. The findings of the study will fill some gaps in extant literature in the corporate governance field. It may also facilitate significant policy implications relating to corporate governance by strengthening existing rules and regulations in the institutional framework.

EFFECT OF CORPORATE GOVERNANCE PRACTICES ON R&amp;D AND INNOVATION COSTS: A CASE STUDY ON BORSA İSTANBUL

This study aimed to reveal the impact of corporate governance practices (CGP) on research and development (R&amp;amp;D) expenses and innovation costs. The businesses registered in Borsa Istanbul (BIST), with complete data regarding R&amp;amp;D and innovation costs for 2009–2017, were analyzed. The panel regression analysis performed through the STATA 15.0 program revealed that the board size, number of independent board members, gender diversity in the board of directors, chairman’s tenure, board meeting frequency, and business scale had a statistically significant and positive effect on the realized R&amp;amp;D expenses. Furthermore, it was determined that the number of foreign members of the board of directors, board ownership, and the organizational age had a statistically significant and negative effect on the nominal R&amp;amp;D expenses. However, it was also discovered that the role duality and business scale had a statistically significant and positive impact. In contrast, the foreign member ratio on the board of directors and organizational age had a statistically significant and negative effect on innovation costs.

Corporate Governance Practices and Firm Performance in Emerging Markets: Empirical Insights from India and Gulf Countries

The purpose of this article is to analyse the impact of corporate governance practices on the performance of listed firms from countries like India and the Gulf countries. This research study relies on secondary data collected from annual reports of 100 companies covering 8 years, from 2010 to 2017, using manual content analysis. Fifty non-financial listed companies from each emerging market were selected; the selection is based on the market capitalization. Findings from countries’ dummy indicate that Indian companies perform better in corporate governance practices than Gulf countries. Moreover, corporate governance practices negatively impact Indian and Gulf countries’ firms’ performance measured by return on assets (ROA), except for governance effectiveness (GE) that has a positive impact. In contrast, corporate governance measured by board structure (BS) is negatively affected by the performance of Indian and Gulf countries’ listed companies measured by Tobin’s Q (TQ), whereas transparency and disclosure (TD), leverage (LEV) and GE have a positive impact. The results have implications for managers and policyholders to understand the corporate governance practices and their relationships with performance. Based on the best knowledge of the authors, this is one of the first studies that addresses the comparison between India and Gulf Cooperation Council (GCC) countries.

The impact of corporate governance on environmental reporting: Evidence from the Indonesian manufacturing industry

Environmental reporting is the preparation, presentation, and dissemination of information on how the company interacts with the natural environment. The report is commonly presented to its stakeholders in the company’s annual report. The purpose of this study is that empirically examine the impact of corporate governance practices on environmental reporting. The corporate governance characteristics utilized in the study are audit committee effectiveness, board size, and ownership concentration. While size and profitability is the control variable of the study. One hundred and two manufacturing companies listed on the Indonesia Stock Exchange (IDX) from 2015 to 2017 were used as a sample, resulting in 306 company observations. Employing data panel regression analysis, the results indicate that audit committee effectiveness and board size positively influence environmental reporting. These results suggest that the more effective the audit committee is, and the higher the number of commissioners in the company, the higher the company’s encouragement to provide environmental information in the company’s annual report. The study also found that size positively associate with environmental disclosure. The study offers additional perspectives on factors that can affect the listed companies to report environmental reporting within the G4 environmental framework of the Global Reporting Initiative (GRI). Hence, the capital market authority agency may strengthen the regulation related audit committee to improve environmental awareness in IDX.