Interests Of Shareholders Research Articles

Solving the insolvency of troubled banks: a theoretical and applied aspect

The European election of Ukraine takes place in the context of scaling military conflicts, global shifts from geo-economic fragmentation, and new economic challenges that require the determination of the legal status of the participants in insolvency relations, procedures of temporary administration, financial rehabilitation, and liquidation of banks. Methodological and applied approaches are characterized to track the growth of Ukraine's external financial vulnerability and the specific weight of cross-border banking operations in European integration. It is found that it is essential to determine the impact of gross flows on financial stability, geographical and financial determinants of cross-border banking requirements, and the impact of internal, external, and global factors. In the applied aspect, it is argued that in the event of insolvency, banks will use the same rights for protection, regardless of whether these measures were adopted under EU or national law. It was established that Ukraine's entry into international business cycles would spread financial innovations between countries, forming a critical channel for the transmission of financial shocks. The macroeconomic volatility of economies influences the occurrence of bank insolvency; the uncertainty of the macroeconomic situation affects the market balance and complicates the regulator's road maps. It was determined that monitoring trends between insolvency and illiquidity is expedient to form an additional equity buffer to cover additional costs. It was established that it is expedient to systematize measures to prevent insolvency from resolving the insolvency of problem banks and financial recovery considering modern realities; improve the efficiency of financial liability management; negotiations with debtors; protect the interests of managers and shareholders; consulting on issues of international insolvency. Keywords: bank insolvency, financial security, banking supervision, resolution tools, financial sector, financial recovery, capital, risks, creditors.

The role of internal auditing on corporate governance: its effects of economic and environmental performance.

Internal auditing has been an elementary and powerful component of corporate governance in business strategies. It is highly acknowledged as an important business control system in the realm of quality management. Business performance does not come by itself; it needs plenty of aids and capabilities. Existing studies have investigated the business performance with fewer outcomes in corporate sustainability, firm, and environmental performance. We present analysis and validated improvised hypothesis through structural equation modeling (SEM), using analysis of a moment structures (AMOS), on empirical evidence gathered from 304 Chief Executive Officer (CEOs) in Top Multinational Companies of Pakistan (TMCP). In this paper, we examine the role of internal audit functionality as an influencing factor via corporate governance in corporate sustainability, firm performance, and environmental performance. Moreover, business quality and performance are maintained using functions such as interests of shareholders, personnel and finance. Results suggest that internal audit functionality and corporate governance significantly influence corporate sustainability, firm performance, and environmental performance. Additionally, CEOs and top managers of TMCP are advised to concentrate on internal audit functionality with a mediating role of corporate governance that in turn encourages corporate sustainability, firm performance, and environmental performance.

Systemwandel und Systembrüche im Gesellschaftsrecht

Before identifying changes or disruptions of a system, we need to define the system. Stefan Grundmann’s research pioneered such systematic thinking in a European and international context. The rather abstract concept of “investor ownership”, common to corporations, includes attributions of ownership besides different or conflicting shareholder interests. “Shareholder primacy” is mostly a business judgment issue. Changes in corporate law increasingly introduce general social policy, e.g., gender quotas or CSR goals. Legislation is moving from disclosure to incentives to substantive regulation which sometimes disrupts the corporate legal system. The general board structures are not controversial but responsibilities are shifting towards compliance and risk management. Accountancy includes more management reports and disclosures beyond financial accounting. That also changes the role of audits and auditors. Group accounts gain in importance, sometimes beyond their reasonable function. A definite interference with systematic corporate thinking is an underdefined treatment of corporate groups as a homogenous entity. More careful calibration is needed here. Corporate law, commonalities in corporate law, investor ownership, corporate social responsibility, disclosure, regulation, compliance, accounting, corporate groups

Integrating Corporate Governance Practices into New Financing Projects and Executive Pay Structures

Purpose: This study aims to explore the integration of corporate governance practices into new financing projects and executive pay structures, highlighting their impact on organizational performance, transparency, and stakeholder trust. It addresses the growing need for robust governance mechanisms to align executive incentives with long-term value creation and effective decision-making in financing projects. Research Design and Methodology: A quantitative descriptive research design was employed, utilizing survey instruments, statistical analysis, and regression modeling to examine the integration of governance practices across diverse corporations. The study focused on the prevalence, determinants, and outcomes of governance integration in financing projects and executive compensation structures. Findings and Discussion: The findings reveal that robust corporate governance mechanisms significantly influence firms' financing decisions and executive compensation structures. Effective governance practices enhance transparency, accountability, and risk management, leading to lower financing costs, greater investor confidence, and improved project outcomes. The study also highlights the role of performance-based executive compensation schemes in aligning executive incentives with shareholder interests, fostering long-term value creation. Implications: The research underscores the importance of integrating corporate governance practices into financing and compensation frameworks to enhance organizational performance and stakeholder trust. It offers practical insights for policymakers, practitioners, and scholars on developing governance mechanisms that ensure prudent decision-making and value optimization. The findings advocate for continuous improvement in governance practices to meet evolving regulatory, shareholder, and societal expectations.

KESAN HUBUNGAN PENGARAH BEBAS DAN PRESTASI SAHAM DI NEGARA-NEGARA ASEAN: TINJAUAN SISTEMATIK

The composition of directors on boards of directors has always been a major topic in studies related to corporate governance to examine its impact on firm performance as well as share performance. Independent directors have become a crucial element in academic debates regarding their presence on boards. Issues related to independent directors have prompted governments and policymakers to update or enforce existing regulations to ensure compliance among firms in increasing their numbers on boards for making the best decisions and overseeing management to safeguard the interests of shareholders. Many academic studies have been conducted in specific areas to assess the effects of independent directors on firm performance, operations, value, and share performance, including in business, economics, finance, accounting, and social sciences. However, the results of previous empirical studies have not yet been consistent enough to serve as a reference for stakeholders such as boards of directors, firms, shareholders, investors, and governments. Meanwhile, such studies are still lacking in ASEAN countries. Therefore, this study aims to critically review existing literature on the impact of the relationship between independent directors and share performance in three ASEAN countries (Malaysia, Thailand, and Indonesia). Furthermore, to identify existing gaps, this study identified several key aspects from a theoretical, contextual, operational, methodological, and measurement perspective in previous empirical research. Based on the results of research in the existing literature, they have not yet been generalized to a broader context, sector, and population. Therefore, to enhance deeper understanding, this study will propose various research avenues related to independent directors and share performance. Hence, based on this study, it can be concluded that the results of existing research are still inconclusive and mixed. Finally, the implications of this study on policy, theory, and practice are discussed.

Research on the Legal Review Standard of Anti-hostile Takeover by Listed Companies

With the acquisition and merger of various companies in the international economic market becoming more and more common, the phenomenon of hostile takeover in order to obtain the interests and competitiveness of the company is also more and more, the target company to prevent hostile takeover also created a lot of anti-hostile takeover measures. The legal regulations of anti-hostile takeover are different in different countries, but the types of anti-hostile takeover events are rich, so that the current legal regulations are not perfect, the legality premise of anti-hostile takeover cannot be effectively guaranteed, and the legality of anti-hostile takeover cannot be effectively reviewed. Therefore, this paper will use research method, case analysis method and summary method to solve the problem that the current legal review standard is relatively vague and insufficient. It holds that a more reasonable legal review standard of anti-hostile takeover should be established by establishing relevant legal principles, reasonably distributing the decision-making rights of shareholders and the board of directors, confirming the rights and obligations of the decision makers of anti-hostile takeover, and protecting the interests of minority shareholders and employees.

Proxy favors: Confidential proxy voting with institutional dual holders

AbstractResearch Question/IssueFor firms with institutional dual holders, is proxy voting affected by whether the vote is confidential? Does confidential voting affect firms' cost of debt?Research Findings/InsightsConsistent with social exchange theory and reciprocity norms, we find that, in the absence of confidential voting, firms with institutional dual holders gain more favorable votes for proposals and, in particular, for management‐sponsored compensation proposals. Further, these firms pay a higher cost of borrowing. This reciprocity relation does not exist if the firm has confidential voting in place.Theoretical/Academic ImplicationsThe results are consistent with reciprocity norms creating a psychological obligation to repay valuable favors between firm managers and institutional dual holders when proxy votes are not confidential.Practitioner/Policy ImplicationsThe findings support the popular position that confidential voting is in the best interests of shareholders and rigorous external corporate governance.

Roles of board of directors and earnings management across SMEs life cycle: evidence from the UK

PurposeThis study aims to examine the role of the board of directors in affecting earnings management practices across small- and medium-sized enterprises (SMEs) life cycle.Design/methodology/approachData is collected from 280 SMEs listed on the London Stock Exchange during the period of 2009–2016. Fixed effects regression analysis is used to test the hypotheses.FindingsThis study shows that the impact of the board of directors' roles on earnings management practices varies depending on the SMEs life cycle stage. In the introduction, growth and decline stages of SMEs, the wealth creation role of the board is negatively significant with earnings management, while the wealth protection role of the board is positively significant in the growth and maturity phases. Results suggest that the board's responsibility to create wealth deters early-stage earnings management strategies, while protecting shareholder interests, in latter stages, leads to a decrease in earnings management.Practical implicationsThe findings suggest that corporate governance should be customized to the specific stage of the SMEs life cycle. Additionally, different life cycle stages may impose different requirements on corporate boards to shape the effectiveness of these mechanisms and constrain earnings management practices.Originality/valueTo the best of the authors’ knowledge, this study offers one of the first insights on the UK SMEs to understand how board functions and earnings management practices vary over SMEs life cycles. It will offer important information on the effect of board features on earnings management in SMEs in the UK and is anticipated to be of importance to policymakers, regulators, investors and practitioners.

Who Should Control Healthcare?

No abstract available. Article truncated after 150 words. The American Academy of Emergency Medicine (AAEM) is urging stiffer enforcement of decades-old statutes that prohibit the ownership of medical practices by corporations not owned by licensed doctors (1). These century-old laws and regulations were meant to fight the commercialization of medicine, maintain the independence of physicians, and prioritize the doctor-patient relationship over the interests of investors and shareholders (2). Thirty-three states (click to see list of states that prohibit corporate ownership) plus the District of Columbia have rules on their books against the so-called corporate practice of medicine. In Arizona ownership by nonprofit entities is permitted, however as most of us know, nonprofit healthcare organizations are nonprofit in name only. Furthermore, over the years, companies have successfully sidestepped bans on owning medical practices by buying or establishing local staffing groups that are nominally owned by doctors and restricting the physicians so they have no direct control. Those campaigning for …

Precautionary motive or private benefit motive for holding cash: Evidence from CEO ownership

This study examines how CEO ownership affects the motivation of firms to hold cash. We document a monotonic and positive relationship between CEO ownership and cash holdings. The effect is more pronounced for firms with higher firm-specific risk and larger external financing costs, suggesting that CEO ownership encourages firms to hold more cash as precautionary savings. However, we find no evidence that CEO ownership leads to cash hoarding in firms with weak corporate governance. Moreover, we show that firms with high CEO ownership and excess cash holdings have more capital expenditures and R&D expenses but do not have higher dividend payments and share repurchases. Nonetheless, shareholders’ perceived value of cash increases with CEO ownership, indicating that shareholders place a positive value on high levels of cash holdings associated with CEO ownership in the context of growing investment prospects. Overall, our findings support the notion that firm ownership aligns the interests of CEOs and shareholders, rather than encouraging managers to extract private benefits through hoarding cash.

Legal Reformulation of Derivative Action Regulations for Protection of Minority Shareholders in Indonesia: Comparative Study of Indonesia and Australia

Arrangements related to legal protection for minority shareholders regulated in Law no. 40 of 2007 concerning Limited Liability Companies (hereinafter referred to as UUPT) still found limitations both in filing rights to sue, objections, and implementation of derivative actions in terms of arrangements regarding the protection of minority shareholders due to a corporate action or certain decisions that take refuge behind the legality of the validity of the General Meeting Shareholders (GMS) whose enactment is heavily influenced by the interests of the majority shareholders. The existing arrangements are felt to be far from justice for minority shareholders. This study will examine whether the Derivative Action arrangements contained in the Company Law as a legal umbrella in providing protection for minority shareholders are adequate and how the legal systems are compared with regard to Derivative Action arrangements in Indonesia and Australia. The purpose of this study is to find out to what extent the Derivative Action regulations contained in the Company Law can protect minority shareholders and to compare the legal systems between the two countries as input and consideration for corrections and improvements to the national legal system. This research uses a type of normative research with a statutory approach and a comparative approach. The results of this legal research found certain aspects of the Australian Corporation Law which can provide a sense of justice and legal certainty as legal benefits for minority shareholders which can be used as legal reformulations in Indonesia.

Protection of interests of minority shareholders in the case of the delisting of a company in the light of regulations binding in Europe

Protection of interests of minority shareholders in the case of the delisting of a company in the light of regulations binding in Europe

Can minority shareholders’ “hand-voting” promote green innovation of Enterprises—Empirical evidence from Chinese listed companies

China’s listed companies have serious Principal-agent problem of the second kind. Large shareholders have violated the rights and interests of minority shareholders in an endless stream of cases. However, the voice of encouraging minority shareholders to actively participate in enterprise decision-making is growing day-by-day. However, there is no consensus on whether the enthusiasm of minority shareholders in decision-making can have a positive impact on enterprises. Therefore, this article takes China’s A-share listed companies from 2016 to 2020 as the research sample, and from the perspective of green innovation, discusses whether the minority shareholders’ active participation in enterprise decision-making can improve the level of green innovation of enterprises. The study found that the minority shareholders’ active participation in enterprise decision-making can improve the level of green innovation. Moreover, the minority shareholders’ “hand voting” improves the green innovation level of enterprises by influencing the media attention; A higher level of legal environment is conducive to strengthening the role of minority shareholders’ participation in the shareholders’ meeting in green innovation. Based on the property right nature, regional and industrial level, further research found that the minority share-holders’ role in improving green innovation capacity is more significant in non-state-owned enterprises, eastern regions and heavy pollution industries. The research results show that minority shareholders, as an important force to monitor the senior executives’ behavior and enhance corporate value, actively participate in corporate decision-making, can not only improve corporate governance, but also benefit the sustainable development of enterprises.

Corporate governance Role between CEO compensation and earnings management: A developing economy Perspective Evidence from Pakistan

The purpose of this research is to examine the relationship of compensation of CEO and management of earnings of firm and further investigated the corporate governance role as a moderator in this relationship in developing country, Pakistan. In this research, a sample of 100 Pakistani listed firms is used from 2012 to 2022. In e-views software, the technique of panel data is performed as the data is both time series and cross sectional, and the results of fixed effect model are used for analysis. The study finds that the impact of compensation of CEO on earnings management is positive and the relationship is moderated by governance structure of the firm. The association between compensation of CEO and management of earnings is positive and it is strengthened in weak governance system of company but this relationship weakens in strong governance system of firm. The sample of the study comprises of only CEO’s of firm. Other top management can be used to conduct this research. This study allows a clear understanding of how top management responds and reacts if corporate governance structure of the firm is weak or strong. Strong corporate governance structure can help the firm to control the manipulative behavior. The structure of CEO compensation may be designed in such a way that the interests of shareholders and managers are aligned and information asymmetry is reduced. This research adds significantly to the current literature by considering governance structure of company as a moderator between compensation of CEO and management of earnings in the perspective of Pakistan.

Oppression and Mismanagement the Notion of Rule of Majority

The Prevention of Oppression and Mismanagement1 is a fundamental clause in the Companies Act that seeks to protect the interests of minority shareholders and prohibits firm management from abusing authority. However, although being a major clause of the Companies Act2, oppression and mismanagement3 are not defined. Because the meaning of mismanagement or oppression prevention might be broad, these phrases must be construed based on the facts of each instance. However, if we try to define Mismanagement, it relates to practises that violate the Memorandum of Association, Articles of Association, or other legislative rules, resulting in mismanagement inside the organisation. This provision empowers shareholders to sue the company’s management or majority owners in court if they think their rights are being violated or the business is being mishandled. The purpose of this article is to examine the portions of the Companies Act’s Prevention of Oppression and Mismanagement Act4, which is found in Chapter XVI of the Companies Act5, and contains its purposes, scope, and implementation as found in sections 241 to 246. It discusses the many behaviours that may constitute oppression and mismanagement, as well as how minority shareholders can seek redress through the legal system. The study also highlights the role of the Company Law Board and the National Company Law Tribunal6 in resolving oppression and mismanagement issues, as well as other particular directives such as A member’s shares or interest are purchased by another member, resulting in a capital decrease. Transfer/allotment of shares is restricted. Contracts between the company and the MD, or any other director or administration, may be cancelled or set aside as the tribunal thinks necessary. Any further agreements between the firm and anyone other than those stated above shall be dissolved. Only with proper notification and the approval of the affected party may the agreement be cancelled. Putting aside any transfer/delivery/payment/execution or other act pertaining to property made by or against the corporation during a period of three months of the date of the request under this section, which would be constituted fraudulent preference if done by or against the individual.7 Overall, this paper provides a thorough examination of the Companies Act’s Prevention of Oppression and Mismanagement provision and its significance in protecting minority shareholders’ interests and encouraging effective corporate governance.

Director awards and board effectiveness

AbstractWe explore the impact of prestigious director awards on effectiveness in setting CEO compensation. Consistent with the positive announcement effect for firms with awardees, CEO compensation aligns more closely with shareholder interest and includes enhanced risk‐taking incentives for boards with awardees. The effect is most pronounced when the awardee is on the compensation committee or a committee chair, and results are robust to a 2SLS estimation using an instrumental variable based on connections to prior award winners. We find evidence that both additional prestigious board appointments and enhanced scrutiny of firms with awardees are channels for improvements in CEO compensation.

Examining the Effect of CSR on Financial Performance in China: Agency Cost as Mediator

Purpose: The aim of this study is to examinethe relationship between CSR and corporate financial performance, mainly discussing the relationship between CSR and ROA, also use the agency cost as the mediating variable, using a sample of listed companies in China to conduct the study and provide relevant suggestions for the subsequent development of the company Theoretical framework: As for external social responsibility, the government, the media, the public and corporate governance should strengthen the reporting and monitoring of external social responsibility and establish a multi-governance monitoring system. Design/methodology/approach: Theresearcher used quantitative analysis to explore the relationship between the independent variable and the dependent variable, to reflect how the independent variable affect the dependent variable, and in turn, how to improve the financial performance of firms in China. Findings: The results showed that ccompanies should be restrained from fulfilling external social responsibility as a way of giving back to society without compensation, and should not aim to win the market through speculation or malicious collusion, otherwise it will hinder their long-term development and become a double-edged sword Research, Practical & Social implications: The study is based on heterogeneity and finds that internal social responsibility is conducive to enhancing employee motivation, maintaining the interests of shareholders and internal stakeholders such as suppliers and customers, thus providing a favourable internal environment for green technology innovation. In contrast, an excessive level of external social responsibility fulfilment can lead to companies making the maintenance of external social relations a corporate priority and viewing external social responsibility fulfilment as a tool for speculation to gain access to the market, so that in this way companies may neglect their development. Originality/value: The value of the study highlighted the economic agents, enterprises should actively fulfil their internal social responsibility and strengthen the maintenance of relationships with internal stakeholders such as employees, shareholders, suppliers and customers.

Does neglecting the instruments of financial failure play a role in the bankruptcy of companies?

Corporate financial analysis tools are an important factor in corporate efficiency. Low-quality accessories for corporate financial analysis tools really brutally violate the interests of shareholders and can lead to the collapse of the business. The paper examines the development of models for predicting financial crises and compares the capabilities of existing models that can help alert management to current activity regarding an economic decision to buy shares or make loans. In the example of the NCA RUIBA company, Kida and Sherrod models were considered for predicting the financial failure of a firm. Based on the results of the calculations, it can be noted that NCA RUIBA had a good financial position when calculating the indicators according to Kida’s model, and according to the calculated data of the Sherrod model, the organization relies on external financing through high-risk loans, which is associated with the growth of non-current liabilities, especially long-term and medium-term ones. The results suggest that although corporate financial analysis tools alone are not sufficient to accurately predict financial distress, they can increase the predictive power of financial indicators and macroeconomic factors.

Ownership Concentration, Capital Structure and Stock Returns of Firms Listed at the Nairobi Securities Exchange

Ownership concentration enables majority shareholders to influence the capital structure; a key financing decision that is independently linked to firm performance. Ideally, firm managers should strive to maximize stock returns by selecting an appropriate optimal capital composition that maximizes the trade-off between the cost of leverage and gains. However, the performance benefits are not always realized because the controlling shareholders may adversely affect stock returns by extracting private benefits at the expense of the minority shareholders, leading potential investors to consider the firm as a risky and unattractive investment, hence lowering stock demand and price. This research sought to determine the intervening effect of capital structure on the ownership concentration and stock returns relationship. A census survey was done on sixty-seven firms listed at NSE from 2006 to 2019 and data was obtained from sixty firms that had been listed for at least two years. A fixed effects model was then utilized to conduct data analysis. The four-step mediation process showed that capital structure mediated the connection between ownership concentration and stock returns. The results contribute to the empirical literature by reducing the conflicting positions on the link between ownership concentration and stock returns by introducing capital structure into the relationship and confirming the role of capital structure in performance management. The study recommends that agents be given incentives through monitoring and regulation to ensure that management interests and those of their principals are aligned when important financing decisions are being made to serve the interests of both majority and minority shareholder. This will promote and enhance corporate performance and increase stock returns.

Towards a framework for the protection of citizen rights of capital market shareholders: evidence from Iran

PurposeThe citizen-shareholder approach in the capital market is considered a knowledge-enhancing and emerging concept in financial and accounting offerings. Its reliable background in management and human sciences makes it an essential basis for protecting the interests of shareholders and investors. Shareholders are considered a necessary part of the social platforms that are companies and regulatory institutions in the capital market; beyond being obligated to protect their material and intellectual rights, they are responsible for developing norms and facilitating investment values and gaining trust through mutual interactions based on respect for their interests. The purpose of this paper is to perform interactive qualitative analysis of the requirements for protecting the rights of citizens of capital market shareholders.Design/methodology/approachThe methodology of the research is mixed, so that in the qualitative part, through content screening, the dimensions related to the protection of the citizen rights of the capital market shareholders were identified through a systematic review of 10 research in the period of 2017–2022. Then, the reliability of the specified dimensions was examined through Delphi analysis; in the quantitative part of the research, the criteria identified through the pairwise comparison matrix were first determined by the level of their relationships to determine based on the pattern of systemic representation of drivers and the consequences of requirements to protect the rights of citizens of capital market shareholders.FindingsThe research results in the qualitative part indicated the existence of 12 primary themes; during the two stages of Delphi analysis, three themes were removed, and a total of nine themes entered the quantitative phase. The results in a quantitative part indicate the creation of specialized and active committees of the board of directors as the primary driver and the reliability and timely disclosure of information in the long term as a systemic consequence.Originality/valueTo the best of the authors’ knowledge, this is the first research that presents the new concept of citizen shareholders to strengthen the requirements of protecting the rights of shareholders in the capital market while developing new theoretical literature.