Impact Of Corporate Governance Practices Research Articles

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.

The Impact of Corporate Governance Practices on the Firm Financial Performance of the Non-Financial Firms

The study focuses on whether the Corporate Governance characteristics influence the firm performance of Non-Financial Firms in Pakistan. In this study, three types of industries like pharmaceutical, cement, and food were analyzed from the Pakistan Stock Exchange for the period of 2010 to 2019. The authors used the diagnostic test on data that argued that the model is better, like the fixed effect model or random-effect model for analysis. Multiple regression-based methodologies were developed to use a fixed-effect model for both dependent variables, Return on Assets and Tobin-Q variables, to discover the association between corporate governance and firm performance. It is concluded that board size, board education board experience, board nationality and board compensation have significant the ROA and board size, board experience, the board size, and board compensation shows significance with Tobin-Q.

The Impact of Corporate Governance Practices on Improving Accountability and Transparency and Sustainable Development in the Egyptian Higher Education Institutions

The Impact of Corporate Governance Practices on Improving Accountability and Transparency and Sustainable Development in the Egyptian Higher Education Institutions

Corporate governance and financial performance: evidence from Romania

PurposeThe purpose of this research is to evaluate the impact of adopting the principles of corporate governance on the financial performance of companies listed on the Bucharest Stock Exchange (BSE). To assess the implementation of corporate governance principles, the authors built an index based on the principles specified in the BSE Corporate Governance Code (CGC).Design/methodology/approachAn econometric analysis was conducted to estimate the impact that the authors’ corporate governance indicator had on financial performance, measured successively through Tobin's Q, return on equity (ROE), economic value added (EVA) and total shareholder return (TSR).FindingsFollowing the regression model, the authors noticed the absence of a significant impact of corporate governance practices on performance measured by ROE, EVA and TSR but instead, a significant and positive relationship for Tobin's Q rate was found.Research limitations/implicationsDue to the lack of data before the implementation of the BSE Code of Corporate Governance, the research period is limited to 2010–2015, but the authors’ future studies will try to extend the research period.Originality/valueAlthough numerous studies have been conducted to analyze the empirical relationship between corporate governance and financial performance, no conclusive results have been obtained. The diversity of these findings can refer to methods used in the construction of a corporate governance measure as well as to the accuracy of financial reporting.

Corporate Governance Practices and Their Impacts on Corporate Risk: Evidence from Sri Lanka

The cost of failure of a single corporate has a fatal impact on the economy. In addition to the macro-economic conditions leading to corporate collapse, management is responsible for developing and implementing a sound system of risk management and internal control in order to avoid such collapses. As a result, discussions on governance and risk have reached an unprecedented level for academics and practitioners. Moreover, risk exposure and management are increasingly becoming the foremost functions of modern business enterprises. However research that integrates corporate governance and risk has been limited. This study examines therefore the impact of corporate governance practices on corporate risk of listed companies in the Colombo Stock Exchange in Sri Lanka. The Board structure, Board Independence and Board procedures were considered as independent variables, whereas, corporate risk as dependent variable. The corporate risk represented the financial, operational and market risks faced by the companies. Furthermore the study used data from a sample of 64 listed companies for 5 years from 2014 to 2018 and employ panel regression to uncover the relationship that exists between these variables. The independent sample t-tests was used to test whether there was a statistically significant difference exist between the corporate governance practices of distress and non-distress companies. The results show that the corporate governance practices of distress companies was significantly lower than that of non-distress companies. The findings of the regression results suggest that Board independence was significantly and negatively impact on corporate risk. However, Board structure and Board procedures have no significant impact on corporate risk. The study therefore, concludes that the increased representation of independent non-executive directors of the board contributed to the significant decrease of corporate risk.

Communication Climate as Predictor of Perceived Corporate Governance and Organizational Success

Communication Climate as Predictor of Perceived Corporate Governance and Organizational Success

Impact of Corporate Governance Practices on Firm Performance in Malaysia

Impact of Corporate Governance Practices on Firm Performance in Malaysia

Impact of corporate governance practices on financial performance: evidence from non-financial sector of Pakistan

This study aims to investigate the impact of corporate governance practices on the financial performance of Pakistani listed firms. For this purpose, we use the panel data of 65 non-financial listed firms from 2010 to 2017. Our framework of analysis is based on the agency and stewardship theories. We measure corporate governance practices through various gauges, including board size, board independence, CEO duality, institutional ownership, managerial ownership, ownership concentration, and foreign ownership. Applying the fixed-effect and random-effect models in a panel setting, this empirical investigation reveals that board size, institutional ownership, managerial ownership, and ownership concentration accelerate the financial performance of the non-financial sector of Pakistan. However, we could not find such evidence on CEO duality, board independence and foreign ownership. Consistent with the convergence theory, our empirical findings reveal that higher managerial ownership reduces agency cost issue and ultimately enhances the performance, profitability, and shareholder's wealth.

Impact of corporate governance practices on financial performance: evidence from non-financial sector of Pakistan

This study aims to investigate the impact of corporate governance practices on the financial performance of Pakistani listed firms. For this purpose, we use the panel data of 65 non-financial listed firms from 2010 to 2017. Our framework of analysis is based on the agency and stewardship theories. We measure corporate governance practices through various gauges, including board size, board independence, CEO duality, institutional ownership, managerial ownership, ownership concentration, and foreign ownership. Applying the fixed-effect and random-effect models in a panel setting, this empirical investigation reveals that board size, institutional ownership, managerial ownership, and ownership concentration accelerate the financial performance of the non-financial sector of Pakistan. However, we could not find such evidence on CEO duality, board independence and foreign ownership. Consistent with the convergence theory, our empirical findings reveal that higher managerial ownership reduces agency cost issue and ultimately enhances the performance, profitability, and shareholder's wealth.

Corporate Governance and Financial Performance in SMEs: A Case of the Kapenta Industry in Kariba

The argument of corporate governance is SMEs has assembled much momentum over recent years. Corporate governance is broadly defined by many scholars as the way in which business are run or the way business is conducted in an ethical manner. Although a considerable corporate governance knowledge base exists in Zimbabwean SMEs, there have been no comprehensive studies on corporate governance which has been conducted. In Kariba, Zimbabwe SMEs have not been adhering to corporate governance. Corporate governance has become a strategic issue in small and medium enterprises (SMEs) in Kariba. However corporate governance practices by SMEs in Kariba, Zimbabwe are currently unknown. It is against this background that this study investigated Corporate Governance and financial performance in SMEs: A case of the Kapenta Industry in Kariba. This study sought to investigate the impact of corporate governance practices on the financial performance of SMEs in the Kapenta fishing industry of Kariba, to assess the current state of corporate governance structures within the Kapenta fisheries SMEs, to assess the role of corporate governance practices in enhancing the financial performances of the SMEs in the Kapenta industry, to assess corporate governance weaknesses within the existing SMEs in the Kapenta industry in Kariba and to recommend strategies that can enhance effective corporate governance structures to the SMEs in the Kapenta industry in Kariba. The literature on corporate governance presented that the following areas have not been deduced: the meaning attached to corporate governance by SMEs in Kariba, Zimbabwe is currently unknown, the impact of corporate governance in enhancing the performance of SMEs in Kariba, Zimbabwe is currently unknown, and corporate governance weaknesses within the existing SMEs in the Kapenta industry in Kariba are currently unknown. Data for this study was collected through 29 questionnaires in the Kariba Region of Zimbabwe. The systematic random sampling method was used to select respondents. The SPSS version 21.0 was chosen to analyze quantitative data while the reduction method was also chosen for qualitative data. Findings reveal that there is the current state of corporate governance is improving. Structures in SMEs can be seen as frameworks which are helping organizations to achieve long-term success for their stakeholders. This study also concluded that corporate governance practices play a pivotal role in enhancing the financial performances of the SMEs in the Kapenta industry. The study recommended that the organization should mount relevant workshop to educate the employees on how corporate governance systems should be adopted.

Impact of Corporate Governance Practices on Corporate Social Responsibility: Evidence from Listed Banks, Finance and Insurance Companies in Sri Lanka

The objective of this study is to examine the impact of corporate governance practices on corporate social responsibility of the listed banks, finance and insurance companies in Sri Lanka over the period of 2013 to 2017. A sample of 20 firms out of 72 banks, finance and insurance firms listed on the Colombo Stock Exchange was considered for this study. The study utilized secondary data which were collected from annual reports of the sampled firm. Corporate social responsibility was measured by a 40-item disclose index. Corporate governance practices were measured by board size, board independence, women on board and size of audit committee. Return on assets and firm size were considered as control variables. Results of the study revealed that independent directors, return on assets and firm size have significantly positively influenced corporate social responsibility. Board size, women on the board and size of audit committee have not shown any significant impact on corporate social responsibility. The result of this study is deemed to benefit external investors and shareholders who will be able to know that how the firm committed their Corporate Social Responsible activities rather than profit maximization. Further the finding is useful for interested people such as public, government, and other financial institutions. Moreover, it will help to future researchers for further investigation related to this topic. Keywords: corporate social responsibility, corporate governance practices, stakeholder theory

Impact of Corporate Governance on Corporate Sustainable Growth

It is believed that good corporate governance practices assist significantly in uplifting corporate performance, and brings in business success and sustainability. This study aims to shed light on the impact of corporate governance practices on corporate sustainable growth in India. A sample size of leading 139 non-financial companies listed in NSE for five years has been used in this study. Using longitudinal data analysis, the findings of the study suggest that Board Size (BS) and the Board Independence (B-IND) exercise strong influence in explaining the Corporate Sustainable Growth in India after controlling the effect of Leverage (LEV). Keywords : corporate sustainable growth, corporate governance, longitudinal data analysis, control variable, India. * Department of Commerce, The University of Burdwan, West Bengal, and St. Xavier’s University, Kolkata, India **Department of Commerce, The University of Burdwan, West Bengal, India. https://doi.org/10.21632/irjbs.12.2.167-184

The impact of corporate governance practices on firm’s performance: An empirical evidence from Indian tourism sector

The impact of corporate governance practices on firm’s performance: An empirical evidence from Indian tourism sector

The Impact of Corporate Governance Practices on Corporate Financial Performance in Ethiopia

This research was carried out to examine the impact of corporate governance practices on share companies’ financial performance by using panel regression approach. Data sources from 24 share companies for five years. The findings of robust FGLS estimation of panel regression using ROA and ROE as measures of financial performance revealed board of directors’ gender diversity (BDGD sig. at 5%) and size of share companies (SIZE sig. at1%) have a positive association with return on assets and board of directors meeting attendance rate (BDMAR) in person has a positive association but not significant. The board of directors’ size (BS sig. at 5%), board of directors meeting frequency (BMF sig. at 5%) and board of directors’ leadership practice (BDLPR sig. at 1%) have a negative impact on return on assets. The paper also empirical findings ROE has a significant and positive association with board meeting frequency (p<0.05); board of directors’ gender diversity (p<0.05) and size of share company (p<0.01). And board of directors meeting attendance rate in person has a significant and negative relationship with ROE (p<0.01). However, no significant but negative association was found between ROE with board size and board of directors’ leadership practice. State ownership has also a positive association with ROA as well as ROE. The model is good fit with R-square value of 84 and 93% for model one (ROA) and two (ROE) respectively. The study concluded that corporate governance practices of Ethiopian share companies are not going on the way what it should be in line with the changing landscape of corporate business environment for the reason that boards of directors elected and working in companies lack true independence and the required skills and knowledge. Awareness gap as to corporate governance; mal-governance practice in recruitment and selection, lack of up to date regulatory framework; absence of specific policy framework, national principles and codes results unstructured governance practices to be practiced. All these cause the problem of ethics, disclosure and transparency, corruption, nepotism, tribalism etc. and this research can be extended further by incorporating variables that can show the external corporate governance practices and other sectors.

The impact of board structure of corporate governance on credit risk: special reference to the banks listed in Colombo Stock Exchange in Sri Lanka

The recent financial crisis and corporate failures at the beginning of the millennium, the emphasis of the business community in corporate governance has shifted towards internal control and risk management issues. As a result, discussion on the impact of corporate governance practices on risk has reached an unprecedented level for academics and practitioners. The rising Non-Performing loans is a threat to any bank since it exposes the bank to many risks. Credit risk is the potential threat to a bank due to a borrower or a counterparty failing to meet its obligations in accordance with the agreed terms. It would expose a bank to many other related risks such as liquidity risk and solvency risk. Accordingly, prudent management of credit risk would ensure the long-term solvency of a bank. Credit risk remained the main risk area of concern to the Sri Lankan banks owing to higher share of loans and advances in the total assets portfolio. Therefore, the purpose of this study is to investigate the impact of board structure on credit risk of banks listed in Colombo Stock Exchange in Sri Lanka. The study was based on the secondary data. Thirteen companies were selected from the listed companies in Colombo Stock Exchange during the period of 2013 to 2017. The Board Size, Board Independence and Meeting Frequency were considered as independent variables, whereas, credit risk as dependent variable. The credit risk was proxied by Non-Performing Loan ratio. The control variables were Financial Leverage and Firm Size. A regression model was used to establish the relationship between board structure and credit risk. The overall results and findings statistically confirmed that the board size and board independence have significantly and negatively impact over the credit risk. Board meeting frequency, firm size and financial leverage have no significant impact on credit risk. Hence, the evidence suggests that the bank increases its board size and majority representation of independent non executive directors in the board are important factors as they help the reduce the credit risk expose by the banks.. The participation of independent non-executive members in large proportion improves the independence of the board and increases the capacity of corporate boards to effectively advise, monitor and consequently, reduces the credit risk.

Value Boosters or Dampers? Insights of Corporate Governance Practices From Pakistan

Rampant corporate failures have placed corporate governance in the limelight again however not all governance practices help firms in enhancing value. This empirical research examines impact of corporate governance practices on shareholders' value represented by earning per share of 243 listed firms on Pakistani Bourse. It ensued in the conclusion that overall corporate governance tends to have significant impact on earnings per share and reveals dichotomy of corporate governance practices based on direction of their association with share holders' value and terms them as value boosters and value dampers. It has also been found that pro-entrenchment practices tend to lower earnings per share in the listed firms either due to complacency or vested interests while rest of the practices help in enhancing value earned on each share thus endorsing the theoretical perspectives emanating out of agency and shareholder activism theories. This study emphasizes the significance of Board Attendance, Board Independence, Non-duality of CEOChairman Role for listed firms' value. It also shows that entrenchment acts like larger boards, directors' ownership, large block holders and disclosure of such ownership can adversely impact the firms' value and thus play a significant role in scaring away the potential investors who primarily look at earnings per share for buying of stocks of a particular company. It entails policy implications that implementation of counter-entrenchment regulations needs strengthening as the existing seem to have cosmetic effect. Identification and implementation of good governance practices can be best ensured when propagated in the perspective of value enhancement.

Short-run price performance of IPOs and corporate governance practices: Evidence from a frontier market

The short-run price performance of Initial Public Offerings (IPOs) indicates that the prices are often underpriced which is widely documented as a universal phenomenon. Corporate governance refers to the set of systems, principles and processes by which a company is governed. Establishing good corporate governance system in an IPO company makes good decisions which attract more outside investors. Therefore, this study examines whether there is any impact of corporate governance practices on short-run price performance of Sri Lankan IPOs. Study examined 44 fixed price IPOs which were listed on the Colombo Stock Exchange (CSE) during the period of 2003 – January to 2015- December. The study found that Sri Lankan IPOs underprice by 30% on AR, which is statistically significant at 5% level. Further, it found that block holder ownership (ownership concentration), CEO duality and existence of the non-executive directors in the board are positively related to the short-run underpricing, which are statistically significant at 5%. But, the board size has a significant negative impact on underpricing. These relationships are in line with the international literature which confirms that the corporate governance practices have significant impact on short-run price performance of IPOs in Sri Lanka. These findings also support the agency and signaling theories.

Corporate governance as a suggested solution for family business sustainability problem

This study examines the impact of corporate governance practices on family businesses' survival and sustainability. Our research identified the common factors affecting the lifespan of family businesses, and the impact of main corporate governance elements: leadership, accountability, transparency and system, on their 'sustainability DNA'.

Corporate governance as a suggested solution for family business sustainability problem

This study examines the impact of corporate governance practices on family businesses' survival and sustainability. Our research identified the common factors affecting the lifespan of family businesses, and the impact of main corporate governance elements: leadership, accountability, transparency and system, on their 'sustainability DNA'.