Importance Of Corporate Governance Research Articles

Sam Altman, OpenAI, and the Importance of Corporate Governance

Sam Altman, OpenAI, and the Importance of Corporate Governance

The Impact of Intellectual Capital and Corporate Governance on Bank Performance in Vietnam

Purpose – The importance of corporate governance and intellectual capital on financial performance has largely been ignored in emerging markets. The banking sector is considered to accumulate a higher level of intellectual capital and to adopt a better corporate governance system. We aim to examine the contribution of these two important aspects to the performance of Vietnam's banking sector. Design/methodology/approach – This paper utilizes data collected from the annual reports of banks in Vietnam from 2011 to 2021. The modified value-added intellectual coefficient (MVAIC) model is adopted to measure a bank's intellectual capital efficiency. In addition, the generalized method of moments is utilized to ensure the robustness of the findings. Findings – Empirical results strongly confirm that intellectual capital positively contributes to a bank's performance. In terms of corporate governance, the findings indicate that board size, board remuneration and major shareholders holding more than 20 percent of outstanding shares are the three most important factors that contribute positively to banks' performance. In addition, human capital efficiency and capital employed efficiency positively impact a bank's profit. Practical implications – Our study provides valuable evidence and implications for policymakers in managing and enhancing corporate governance and intellectual capital efficiency within the Vietnamese context, particularly in the banking sector. Originality/value – To the best of our knowledge, this is the first empirical paper conducted to examine the contribution of corporate governance and intellectual capital on banks’ performance in Vietnam.

Motif Tanggung Jawab Sosial Lembaga Keuangan Mikro Syariah dalam Perspektif Ekonomi Syariah

The primary issue addressed in the text is the importance of corporate governance, specifically within Sharia microfinance institutions, in achieving profitability and success. The study emphasizes the role of market share as an indicator of operational success for Sharia microfinance institutions, with a focus on meeting the needs of small communities. This study uses the library research method by extracting data from primary sources such as economics books and Sharia microfinance institutions. Data analysis is carried out using critical analysis and content analysis. The research findings highlight that these institutions use corporate social responsibility (CSR) as a strategic tool to promote their products and services. This, in turn, contributes to an increase in market share by introducing the company to the public. The text suggests that the implementation of CSR by Sharia microfinance institutions is motivated not only by economic considerations, such as marketing and promoting products but also by social motives, including a desire to assist others. In the context of Islamic or Sharia-compliant finance, the study underscores the integration of economic activities with ethical and socially responsible principles. The economic motive is evident in the use of CSR as a marketing tool to reach a wider community and promote financial products. The findings suggest that in the pursuit of economic goals, Sharia microfinance institutions also align themselves with social values by engaging in activities that benefit the broader community. This dual motive reflects the unique intersection of economic and ethical considerations within the framework of Sharia-compliant financial practices.

The Importance and Characteristics of Family Governance for Firm Performance and Competitive Advantage: A Short Literature Review

The importance of corporate governance is growing due to globalization and the current changes in the business environment caused by the Covid 19 pandemic. The application of good corporate governance practices can prepare small businesses for future development.

The impact of corporate governance on financial performance: a cross-sector study

Corporate governance remains the focus of current research and a concept that continues to evolve to meet the needs of business managers. Faced with the need for companies to cope with a world characterized by perpetual change and successive economic crises (Prowse in Revue d'économie financière 31:119–158, 1994), the identification of the results of the implementation of good governance mechanisms in the structure of the management of companies on financial performance remains a necessity that helps managers and researchers specialized in management sciences and financial accounting to have a better visibility on the importance of corporate governance. It should be mentioned that the economic environment and the characteristics of the sectors of activity of the companies remain a relevant criterion in the study of the relation between the governance of the companies and their financial performance. In this sense, we have tried through this research work to study the impact of the implementation of effective corporate governance on the financial performance of 160 companies in the UK between 2005 and 2018 while taking into account the specificity of the business sectors. Through our study, we used multivariate regressions based on FGLS models while dividing our sample to several clusters. As a result, we found that the implementation of good corporate governance leads to the improvement of the financial performance of companies measured by the return on equity. As a motivation, it must be said that this study can be of major importance for future studies that want to make comparisons on the sectoral and temporal level. Indeed, this study gives the possibility for future research work to make comparative studies based on comparisons for different sectors of activity in the UK before and after the Brexit and also after the COVID 19 period.

Dynamic relationship between corporate governance practices and managerial efficiency: special reference to Nigeria Port Authority

There are continuous growing in the awareness and interest of the corporate governance practices in modern-day corporations in which most of this public corporation because of the unexpected liquidations of the corporation’s examples like the Enron Corporation, WorldCom, Parmalat, Barings Bank and other global brands. The fall of all these corporations among others in the world has been cause by an unethical business conduct; accounting fraud, poor corporate governance practices and managerial inefficiencies these became lesson points for corporate organisations the world over, including Nigeria. The challenges facing the cooperate governance has become a serious and devastated problem for the Nigerian firms which leads to a reduction rate in the contributing to the gross domestic product which in turn decrease the rate of unemployment. The importance of corporate governance is to ensure compliance with all the processes, rules and regulations for well-organized delivery of managerial efficiencies in the development of a nation. This also has become an important argument among the scholars, reasons because of the failure of government, which is sponsored by the previous large state corporations across the globe. This study, therefore, study the dynamic relationship between Corporate Governance Practices and managerial efficiency: special reference to Nigeria port authority, the study adopted a cross-sectional descriptive research approach using quantitative research method, in which a self-administered questionnaire in the gathering of data, the regression model, ANOVA results and Duncan's post hoc tests are the statistically technique which was used for the data analysis. In which six (6) of the questionnaires retrieved were found to be improperly filled -that is, which means that there are incomplete data which was not included in the analysis. The study concludes that the study reflects the results shows that there is a high level of corporations in the measures of the extent of compliance with corporate governance practices, also returning equally high percentages in the measures of level of perceived managerial efficiency recorded in them. The results later show that the public corporations falls into same group level of compliance of the practices corporate governance practices as in level of managerial efficiency.

The influence of corporate governance and corporate social responsibility on corporate performance: an Iberian panel data evidence

PurposeThe main goal of this paper is to study the influence of some corporate governance, corporate social responsibility (CSR), and corporate-specific characteristics on the performance of Iberian-listed companies.Design/methodology/approachTo achieve the paper's aim, the authors have used data from 33 Portuguese-listed companies, and 60 Spanish-listed companies, for the period 2011 to 2018. To test the hypotheses, the authors employed the generalized method of moments (GMM) estimation method, developed by Arellano and Bover (1995) and Blundell and Bond (1998).FindingsThe results point out that the performance determinants vary depending on the country under analysis and the variable used to measure performance. Despite being neighbors and historically commercially close, these countries have differences in their governmental, social and economic structure that lead to different stakeholder perceptions on the determinants of corporate performance. Specifically, when the authors use Tobin's Q as a market performance variable, board independence and the existence of a CSR committee have different signs in the two countries. The same happens when return on assets (ROA) is used as an accounting variable for internal management, implying that both, managers and potential investors of the two countries have different understandings about the variables that influence their performance.Originality/valueTo the best of the authors' knowledge, this is the first study to comparatively analyze the two countries of the Iberian Peninsula, analyzing the effect of corporate governance and social responsibility characteristics on the performance. The authors' results show that managers and potential investors have different points of view regarding the importance of corporate governance and social responsibility characteristics in corporate performance.

Importance of Corporate Governance: Evidence from Kosovo’s Banking Sector

This study identifies and assesses the impact and effect of corporate governance (CG), as a good practice mechanism, as well as some specific financial indicators on the performance of the banking sector in Kosovo. The data used in the research are defined as secondary data that include nine (9) commercial banks and cover the period 2013–2020. The analysis applied to data processing is the dynamic approach through 2SLS estimation for the dependent variables ROA, ROE, and NIM. The results obtained at the end of the study show that all variables applied in this research, depending on the variable defined for evaluation, have a significant impact on the performance of the banking sector. The results also show that the most adequate measure for assessing a bank’s performance is the net interest margin (NIM). This research paves the way for debate and discussion on the governing structures of financial institutions and policymakers.

CORPORATE GOVERNANCE DISCLOSURE PRACTICES OF TELECOM INDUSTRY: EVIDENCE FROM INDIA

In the corporate world, the importance of corporate governance is gearing up day by day. As per the new regulations in India every company has the responsibility to disclose required information to the stakeholders whenever they want. The seven pillars of good corporate governance include Accountability, fairness, transparency, assurance, leadership, and stakeholder management. Among the seven pillars, disclosure practices are related to corporate transparency. Governance disclosure practices are one of the important pillars of good corporate governance which add value to the governance. Since the fiscal deficit faced by the Indian economy in 1991 Indian companies also urge good corporate governance. This paper aims to study the corporate governance disclosure practices in the top five companies in the Indian telecom sector. For the study, five year’s annual reports of the selected five companies have been analyzed and for evaluating the corporate governance disclosure practices an assessment model has been adopted. The company having the highest average score of corporate governance disclosure is considered as the company has good corporate governance and vice versa.

Impact of Corporate Governance on Financial Returns of Indian Listed Companies

Purpose- In this paper, we have evaluated the relationship of corporate governance with companies’ financial returns using return on assets (ROA) and return on capital employed (ROCE) as proxies. For this purpose, companies listed in Nifty-50 are considered as a sample. Design/Methodology- The present study is conducted on the NIFTY-50 Index with a final sample of 35 companies after excluding banking companies, financial services companies, and companies that did not have the required data in the sample period. Data has been collected for ten years from 2009-10 to 2018-19, and they are analyzed with the help of software packages such as SPSS and Stata. Findings- The results showed that firms’ financial return measures (ROA and ROCE) were significantly affected by governance measures, board committees, and CEO duality. Board size, board meetings, and board independence did show positive relation, but it was not significant. Our analysis observed that corporate governance significantly affected the financial return of Indian listed companies. Practical Implications- Our research work indicated the importance of corporate governance in generating financial returns for Indian listed companies. CEO duality is found to be increasing the ROCE of listed companies in India, and therefore investors should choose such companies where the CEO plays a dual role in the board. Also, policymakers should take into consideration the dual role of CEOs while making changes in company regulations.

The Empirical Analysis of Corporate Governance Mechanism and Political Influence on FRQ: An Insight from the Banking Sector in Iraq

The global corporate scandals in the banking industry have gained the government’s attention and other regulatory agencies on the importance of corporate governance, inducing legislation to prevent similar occurrences. Iraq has an emerging economy and corporate governance practices to establish and maintain a quality corporate culture. The study examined corporate governance and political influence on the financial reporting quality (FRQ) of 34 Iraqi banks listed under the 2015 – 2019 stock exchange. Specifically, the study provided a critical literature review on past studies to identify the strength and weaknesses and the literature gap. The study also used secondary data from financial reports. A total sample of 170 observation data was obtained as the analysis unit, selected through market capitalisation. Additionally, multiple linear regression was used to analyse the data using the Stata software. The results showed a positive and significant relationship between board size and FRQ. Conversely, board independence and audit committee independence had insignificant relationships with FRQ. Based on the ownership structure, managerial ownership significantly affected FRQ, whereas the political influence negatively impacted FRQ. Ultimately, the study contributes to the limited literature on the relationship between corporate governance and FRQ in Iraq’s developing economy. Keywords: Corporate Governance, Political Influence, Ownership Structure, FRQ, Iraq. DOI: 10.7176/RJFA/12-20-08 Publication date: October 31 st 2021

Corporate Governance's Policy on the Impact of Cash Holding in Indonesia

The Asian Financial Crisis in 1997 and various other scandals in large companies in Indonesia led to the emergence of good corporate governance (GCG). Regulators on the capital markets understand that good corporate governance promotes transparency and improves the quality of financial reporting, including cash management, responsibly. Furthermore, high cash levels lead managers to misuse the fund for personal gain, because the assets under their supervision increase thereby. This research analyzes the effect of corporate governance, such as board size, and independence on cash holding in Indonesia. Data were obtained from 373 firms in seven industries publicly tabulated on Indonesia Stock Exchanges (IDX) from 2008-2017 and 2,742 firm-year observations. The obtained data were analyzed using Common, Fixed, and Random Effects Models. The result showed that the total number of the board of directors, is positively and significantly proportional to Board Size thereby increasing the company holds cash. Meanwhile, the other corporate governance variable, known as Board Independence, is insignificant in any three models. The result also showed positive coefficients of board size on cash holding (CASH) in companies with and without CEO duality. The result further showed that the independent board had a significant and negative impact on cash holding (CASH), which is more pronounced in companies with CEO duality and used to strengthen corporate governance. The results have specific policy implications like the importance of corporate governance, in particular the role of the Board of Directors in the effective supervision of managers and transparency of enterprises.

Does Corporate Governance Mechanism Influence Financial Returns? Evidence from Indian Manufacturing Companies

The financial growth of a nation and its inherent organisations is being increasingly dependent on compliance with the corporate governance norms. It not only attracts investments into an organisation but contributes to its growth also. The manufacturing industry is one of the wheels of growth and is also emerging as one of the high growth sectors in India. The importance of corporate governance is rising with time and it is particularly significant for the manufacturing sector. In this article, an attempt has been made to assess the impact of corporate governance on the financial return (ROE and ROA) of manufacturing companies. The results of multiple regression showed that none of the corporate governance variables has a significant impact on both ROA and ROE.

The effect of corporate governance indicators on enhancing the financial performance of industrial listed companies on the Amman Stock Exchange

This paper investigated the impact of corporate governance on enhancing the financial performance of industrial companies. The sample of the research consisted of 55 industrial companies listed at the Amman Stock Exchange (ASE) during the period 2014-2018. Data were collected from the firms' annual financial statements using content analysis approach. The results confirmed that the audit committee and ownership structure had positive and significant effects on two dimensions of financial performance. In view of research findings, the study recommends companies to raise some awareness about the importance of corporate governance, in addition to strengthening supervisory procedures by legislators.

Corporate governance and banking performance in the context of globalization

Research background: Research background is written after the literature review. For example, Pham Q et al. (2020), emphasizes the effects of corporate governance, which is in a continuous development in the context of globalization. On the other hand, there is an obvious link between the banking activity, which is intended to be as efficient and governing as possible, which is also highlighted in the work of Arora A (2018). The impact of corporate governance on banking performance is also presented. Carrying out banking activity in compliance with the principles of corporate governance, leads to shaping an efficient and conducive environment for both employees and the company itself. At the same time, the application of the concept aims at the overall management of the entities, which allows the common functioning of the internal components and the performance of internal control. Purpose of the article: This paper aims to present the most important theoretical and practical aspects of the importance of corporate governance in banking performance. Corporate governance is currently receiving special attention, an argument being the numerous studies conducted and the growing interest that companies have in this concept Methods: This paper starts from the hypothesis of the influence of globalization on corporate governance and banking performance. The article was based on the study of the literature and the identification of recent data on certain banking indicators. At the same time, values of banking dynamics at the level of the period 2016-2019 were analyzed and calculated. Last but not least, the method of comparison regarding the financial performances at the banking level and the profitability rate was used. Findings & Value added: Following these researches, it was found the link between globalization and the magnitude that corporate governance currently has, in close connection with banking performance, determines the corporate variety of activity worldwide or regionally. The main results were disseminated through the article and it adds value through the analysis created at global and regional level (at European level) and the interpretation of statistical data related to banking.

Corporate governance and product market competition: evidence from import tariff reductions

Using large reductions in import tariffs as an exogenous shock to the competitive environment, this paper examines how an increase in foreign competition affects the importance of corporate governance. Consistent with prior studies, weak governance is associated with lower firm value, lower operating performance, lower labor productivity, higher capital expenditures, higher non-production expenses, and higher wages in the absence of increased competition. However, the differences between weak and strong governance firms along each of these dimensions are reduced or eliminated after a tariff cut. The effects are concentrated among firms in previously noncompetitive industries, defined as having sales concentration above the median or import penetration below the median in the year before the tariff cut. These conclusions are supported through the use of multiple alternative measures of operating performance and corporate governance. Altogether, the evidence indicates that an increase in competition can mitigate agency costs and serve as a substitute for traditional corporate governance mechanisms.

Corporate governance, boards of directors and corporate social responsibility: The Australian context

The challenge of corporate governance in Australian corporations is similar to those faced by the majority of corporations operating globally albeit the manner in which corporate governance is structured in Australia represents a strong reflection of the island continent’s people, egalitarian culture, and legislative framework. This article considers the legal framework in which Australian corporations operate within, which includes a discussion of corporate governance principles, the role of directors and ownership structures of companies in Australia. Australian board of director practices are discussed in detailed and this article outlines how these practices are heavily influenced by the Australian Commonwealth Corporations Law (which sets out mandatory legal requirements that all Australian companies must adhere to). The article continues to explore briefly directors’ remuneration practices, recent shareholder’s rights protection and activism, the importance of corporate governance and the link to firm performance, and finally the importance of corporate social responsibility in the Australian context.

Value Relevance of Earnings Quality: Importance of Corporate Governance, Ownership Structure and Group Affiliations in the Listed Firms of Pakistan

This study is an endeavor to answer the question that does corporate governance, ownership pattern and business group affiliation effect value relevance of reported earnings quality in a sample of 300 listed Pakistani firms for the period of 2006-2018. The study uses earnings response coefficient and earning predictability as proxy of reported earnings quality. The panel data analysis shows that CEOduality and director ownership have significant inverse effect on the quality of reported earnings i.e. the two do not contribute towards improvement of quality of reported earnings. Whereas board independence, independence of audit committee and external audit from big4, institutional ownerships have significant direct effect on the quality of reported earnings. Moreover, it is observed that these effects are relatively more prominent in the case of group firms. Furthermore, firm size, earning persistence, growth and leverage have positive association with the quality of reported earnings while beta has significant negative effect on the quality of earnings. Further, it is found that in times of financial crisis, firms improve its reporting quality to uphold confidence of the investors where group firms showed relatively more tending to pursue this practice. This study has several implications for shareholders, prospect investors, external auditors and regulators. This is the first study of its nature that has investigated the role of group affiliation with reported earning quality. Key words: Earnings quality, corporate governance, ownership structure, business group affiliation, ERC.

Corporate Governance and its Importance in the Startup World

Corporate Governance research in the context of emerging economies has received increasing attention in recent years. Most of the big companies have already started following the standard protocols of Corporate Governance. However, the world of startup is not generally included when the importance of Corporate Governance is discussed. This attitude has led to a lot of early stage startup closure and undervalued acquisitions. Startups need to rope in a number of Corporate Governance guidelines so that these can contribute towards the growth of the organisation, as well as minimize failure and risk.

Bhushan Steel: a creditworthy company turned insolvent

Learning outcomes The purpose of this paper is to illustrate how a well-performing company can turn into a loss-making company on account of adverse industry cycle and poor management of risks in the business. The importance of factors like optimal level of leveraging, the ability of the management to deal with external and internal risks, and importance of corporate governance in the process of credit appraisal is understood from this case. Case overview/synopsis The case relates to the credit appraisal by the banks of a prominent steel company in India. The company, Bhushan Steel Limited, was doing very well. The banks lent aggressively to the company, based on their credit appraisal. However, the company soon turned insolvent on account of poor assessment of risks and deteriorating external factors. While this case may be analysed and studied through the eyes of both the Management and the lenders, the focus is currently on the latter. In a real-world scenario, the challenge for the lender is to sieve through the financial as well as non-financial data and make a valid conclusion on the level of credit worthiness of the borrowing company. This includes the topics of operational efficiency and synergies, commodity price cycles, external credit ratings, operating and financial leverage, regulatory risks and corporate governance. Complexity academic level Post graduate business management programmes – Finance specialisation. Supplementary materials Teaching Notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes. Subject code CSS 1: Accounting and Finance