Managerial Share Ownership Research Articles

Our Board, Our Rules: Nonconformity to Global Corporate Governance Norms

What drives organizational nonconformity to global corporate governance norms? Despite the prevalence of such norms and attendant conformity pressures, many firms do not adhere to them. We build on a political view of corporate governance to explore how different national institutional contexts and organizational conditions combine to produce over- and underconformity to global board independence norms. Using configurational analyses and data from banks in OECD countries, we identify multiple equifinal combinations of conditions associated with over- and underconformity. We also find that over- and underconformity have different drivers. We conjecture that while overconformity is associated with a shareholder–management coalition in liberal market economies, underconformity results from multiple complex combinations of national and organizational conditions that often include dominant blockholders, strong labor rights, and small organizational size. We leverage these findings to abduct theoretical insights on nonconformity to global corporate governance norms. Doing so sheds light on the role of power in conditioning the adoption of global practices and contributes to research on international corporate governance by informing discourse surrounding the globalization of markets.

Uncertainty, venture capital and entrepreneurial enterprise innovation—Evidence from companies listed on China's GEM

The innovation activities of entrepreneurial enterprises face high uncertainty. While entrepreneurs are experts in this aspect, venture capital (VC) still plays an important role. This study attempts to verify the direct and indirect effects and transmission mechanism through which VC promotes innovation. The interactive relation between VC and uncertainty is examined especially. Using the data of companies listed on China’ s Growth Enterprise Market (GEM), empirical analysis is conducted based on a newly constructed composite weighted innovation index. The results show that VC involvement can significantly improve the innovation level of entrepreneurial enterprises. After multiple rounds of robustness tests and resolving self-selection bias and endogeneity problems using propensity score matching and a treatment effects model, we find the core conclusions remain the same. Further analyses reveal that the greater the degree of uncertainty faced by enterprises, the higher the innovation level. VC can strengthen this positive relation even further. Additionally, VC positively moderates the incentive effect of management shareholdings on innovation, while innovation is indirectly promoted by the partially mediating mechanism of research and development investment. From the perspectives of innovation and uncertainty, this paper deepens our understanding of VC value-added services and provides policy suggestions about how both entrepreneurial and financing parties can cooperate in innovation and create value jointly.

Do government say-on-pay policies distort managers’ engagement in corporate social responsibility? Quasi-experimental evidence from China

Against the backdrop of a series of regulations issued by the Chinese Government in an effort to rein in top executives’ compensation in state-owned enterprises, this study investigates whether the exogenous shock resulting from restricting top executives’ pay levels modifies their incentives to conduct socially responsible activities. Our analyses, using a baseline regression and a difference-in-differences (DiD) approach, both reveal that the pay restriction on top executives imposed by the government adversely affects firms’ CSR performance. The results hold after conducting tests to alleviate the concerns about possible self-selection bias and reverse causality between the pay restriction and CSR. In addition, we reveal that the negative effect of the pay restriction on CSR is alleviated in regions with a high level of social capital, suggesting that the social expectation of firms serves as an influential factor in managers’ CSR decisions. Meanwhile, managerial shareholding mitigates the negative effect of the pay restriction on CSR performance because of an alignment of interests between managers and other stakeholders.

WHAT ARE THE AFFECTING FACTORS ON ENVIRONMENTAL DISCLOSURE ON THE COMPANIES?

The aim of this study is to determine affecting factors on Corporate Environmental Disclosure on Go Public companies listed in PROPER from 2015 to 2019. Companies with gold and green ranking and listed in PROPER are included the population in this study. This phrase could be omitted, samples were taken using a purposive sampling method with specific parameters. The findings of this research show that: (1) The size of the Audit Committee has a positive impact on the occurrence of corporate environmental disclosure. This is because if the number of audit committees within an organization exceeds the number of requirements set, it will lead to increased supervision and company controls to ensure that the expected environmental disclosures are made. (2) Managerial ownership has a negative impact on the occurrence of corporate environmental disclosure, indicating that the size of a company's managerial share ownership has little bearing on the company's environmental disclosures. (3) The incidence of corporate environmental disclosure is unaffected by environmental results. This explains why environmental success has had little effect on companies that are featured prominently in the PROPER ranking, allowing the public to better recognize and support the company's efforts.

Effect of Good Corporate Governance Mechanism on Company Profitability Ratios

Determining good corporate governance mechanisms’ effect on profability of company specifically companies that are a part of property and real estate sub-sector which also exist on the list that belongs to the Indonesia Stock Exchange (IDX) from year 2014-2019 is the purpose of this research. Purposive sampling is used as a research method, 12 companies are involved as sample. The results showed that the GCG-forming variables consisting of institutional share ownership, managerial share ownership, board of directors, independent board of commissioners and audit committee do have effect on company profitability. The profitability of said company wouldnt even be partially affected by institutional share ownership, managerial share ownership, board of directors and independent commissioners. Meanwhile, the audit committee partially affects the company's profitability. It is important for investors to look more into the aspects of Good Corporate Governance as a consideration in investing. Further researchers are expected to conduct research on Good Corporate Governance against profitability by taking a sector other than Real Estate and Property.

Mekanisme Good Corporate Governance terhadap Nilai Perusahaan yang Dimediasi Kualitas Laba dan Kinerja Keuangan

This research aims to find out the effect of good corporate governance mechanism proxied on managerial share ownership, independent commissioners and independent audit committee toward firm value which is intervining earning quality and financial performance on manufactured company which recorded in Indonesia Stock Exchange. Be sided, it observed 39 companies in a year, furthermore there were 117 observed companies during 2015-2017. With using path analysis, it’s found that Good Corporate Governance is advantageous on profit quality, financial performance and firm value. However, earning quality has no significant effect on firm value while financial performance has on effect on firm value. indirect impact, earning quality and financial performance is not intervining between the influence of good corporate governance mechanism (managerial ownership, Independent commisioneees board and independent audit committee) toward the company value.

Research on the Quality of Internal Governance and Accounting Information Disclosure

This paper focuses on the effect of ownership structure and management structure on the quality level of accounting information disclosure. Through empirical research methods, this paper applied the Shenzhen stock exchange information disclosure evaluation results as concerns the quality of accounting information disclosure standards, and nine years’ data of 2010-2018 as the research range. The empirical results show that the degree of equity concentration, management shareholding, institutional shareholding and the quality of accounting information disclosure are significantly correlated. The independence of the board of directors, the power characteristics of the management and the characteristics of the managers indicate a correlation with the quality of accounting information disclosure. This research found no significant relationship between the duality of the chairman's duty and the quality of accounting information disclosure.

Post-regulation effects on driving factors (no) environmental disclosures about greenhouse gas emissions in Italian companies

PurposeThe purpose of this study is to analyze the simultaneous effect of the regulation (non-financial information (NFI)- 254/2016) and the factors driving in (no)environmental disclosure (ED) and the reduction of greenhouse gases (GHG) of Italian companies.Design/methodology/approachThe study is supported by the theory of legitimacy. The level of ED regarding GHG was measured for 125 Italian companies in 2018, the companies were selected from Commissione Nazionale per le Società e la Borsa di Itália, because those included in the list of companies in the Dichiarazione Non Finanziaria all date back to December 31, 2019. Using a scoring system and content analysis of their annual reports, through 20 criteria supported by the literature. The study explores variables of the current legislation, the effect of disclosure and no disclosure, and the influence of the shareholding structure, managerial shareholding, economic power and industry classification at the ED level. The analyses were carried out using structural equation modeling because the authors seek to understand the cause-effect relationship between aspects of legitimacy with dissemination on GHG emissions.FindingsThis study finds that NFI.Research limitations/implicationsThe study is limited to understanding the effect of legislation on the level of mandatory disclosure in non-financial reports, and the Paris Agreement (voluntary) disclosure on GHG, so the choice of companies analyzed and the study variables are limited to companies that are required to publish non-financial reports, and the variables considered in the study take into account normative aspects and voluntary guidelines of the Paris Agreement. As implications, the results show that adherence to the Paris Agreement contributes more to the quality and comprehensiveness of the information than adherence to the European and Italian legislation (mandatory), which reinforces the understanding that even if the legislation has advanced, it is still soft regarding the quality of information on companies' practices regarding the reduction of GHG emissions.Practical implicationsThe findings suggest that non-financial reports are being adopted by listed Italian companies, however, there is variation in the scope of the reports, especially on GHG. For companies listed in Italy, non-financial reports comply with Italian Legislative Decree 254/2016 (mandatory), however, the quality of information on GHG is improved when companies' reports have greater adherence to the Paris Agreement (voluntary).Social implicationsThe results can encourage companies listed in Italy to incorporate NFI in annual reports based on the Paris Agreement, the global pact to reduce GHG emissions, thus building confidence in the capital market and society in general.Originality/valueThe findings contribute to the literature on non-financial reporting, the level of compliance with legal basis and international best practices, such as the Paris Agreement, providing empirical analyzes of non-financial disclosures in publicly available reports in Italy.

Determinats of Profitability and Implications on Corporate Value

This study aims to prove empirically the determinants of profitability and their implications for firm value in manufacturing companies listed on the Indonesia Stock Exchange during the 2015-2019 period by using a panel data regression model with 25 manufacturing companies as the research sample. Based on the empirical results, the influencing variables positive and significant impact on profitability is Managerial Share Ownership, Audit Committee Effectiveness, Corporate Social Responsibility, company size. and variables that do not have a significant effect are institutional stock ownership and the Debt To Equity Ratio. positively and significantly. Individual companies are affected by profitability; The biggest positive influence is the company Japfa Comfeed Indonesia Tbk, the smallest positive is the Lion Metal Work Tbk company, and the biggest negative influence is the Bata Shoe Company Tbk, the smallest negative is the company Holcim Indonesia Tbk. The results of this study have implications for firm value (Tobins Q); The variables that show a positive and significant influence are the variable of Audit Committee Effectiveness, Corporate Social Responsibility, Company Size, and Debt To Equity Ratio, Return on Asset variables that have no effect are Institutional Share Ownership, Managerial Share Ownership. the biggest positive influence on changes (Tobins Q) of the company Japfa Comfeed Indonesia Tbk. the smallest positive is the company Semen Batu Raja Tbk, the biggest negative influence is the Company Tempo Scan Pacific Tbk; The smallest negative influence is the company Holcim Indonesia Tbk.

Board faultlines and the value of cash holdings: Evidence from Chinese listed companies

Faultlines can affect a board of director’s effectiveness in supervising senior managers, which in turn affects the value of a company’s cash holdings. Based on sample data from Chinese A-share listed companies from 2004 to 2016, we examine the relationship between board faultlines and the value of cash holdings. The empirical results indicate that board faultlines have a significant inhibitory effect on cash holding value. This inhibitory effect is stronger for board faultlines resulting from deep-level attributes. Furthermore, the inhibitory effect of board faultlines is stronger in state-owned enterprises (SOEs) than in non-SOEs. As an important governance mechanism, management shareholdings can reduce agency costs and mitigate the negative impact of board fissures on cash holdings. Overall, we enrich the literature on the economic consequences of board faultlines and their influence on cash holding value. We also offer companies practical suggestions for improving the supervisory mechanism of their board of directors.

Employee Quality, Internal Information and Corporate Investment Efficiency: Firm Level Evidence

This study investigates the association between the quality of the entire workforces and corporate investment efficiency. We find that the superior internal information generated and collected by high quality employees can enhance managerial investment efficiency. This association is more pronounced in highly complicated firms, firms with more managerial shareholding or firms with higher board independence. The instrumental variable estimations help us establish a causal link between employee quality and investment efficiency. Finally, the validation tests show that firms operated by high-quality employees perform a more effective internal control system, and disclose high quality accounting reports, suggesting that the quality of internal information is indeed higher in these firms.

Stewardship Codes and the Role of Institutional Investors in Corporate Governance: An International Comparison and Typology

AbstractOver recent decades, share ownership of listed companies has concentrated into the hands of large institutional investors, challenging the traditional agency theory view of corporate governance as a mechanism to resolve the separation of ownership and control. Alternative theories have emerged to explain the role of institutional investors in corporate governance, each with a slightly different view on the motivations of these powerful shareholders and the nature of their relationship with corporate management. These theories share a common thread – the concept of investor stewardship – yet each theory applies it differently. This paper explores whether institutional investors should act primarily as stewards of their investee companies (agency theory), stewards of beneficiaries’ funds (agency capitalism), stewards of a market/economy (universal ownership) or stewards of society (stakeholder theory), and whether this varies internationally. Through an analysis of national stewardship codes, the paper determines which of these theoretical approaches are most strongly reflected in emerging stewardship policy across the world. It presents a typology of stewardship codes as a framework for understanding cross‐country variation in investor stewardship policy. Stewardship codes influence the shareholder–manager relationship and can encourage integration of wider economic and societal concerns into corporate finance.

Economic policy uncertainty and corporate tax avoidance: Evidence from China

This study investigates the influence of economic policy uncertainty (EPU) on corporate tax avoidance (CTA) for Chinese listed firms. We find that EPU significantly and negatively influences CTA. Moreover, state ownership, internal control quality and government subsidy attenuate the negative effect of EPU on CTA, and managerial shareholding and high financial constraint strengthen the negative effect of EPU on CTA.

Relationship Between Corporate Governance, Management Ownership and Capital Structure: Evidence from Pakistan Stock Exchange

This study examines the linkage between corporate governance and company’s capital structure proxy as leverage for 100 non-financial Pakistani companies listed on Pakistan Stock Exchange (PSX) from 2009 to 2013. The corporate governance’s features used for this research comprised of BS (Board Size), BC (Board Composition), CEO/CHAIR Duality, MSH (Managerial Shareholding) and control variable ROA. For appropriate model selection, apply Chow, Breusch Pagan and Hausman test. The results of these three test suggests that best model for this study is Pooled OSL model. Correlation and regression analysis is used to determine relationship between Corporate Governance to Capital Structure. The empirical results show that 36% change in leverage is explained by independent variables of the study. The empirical results of this study show that BS and ROA is negative statistically significant while BC is positive statistically significant to leverage. Furthermore, the results show that the independent variables CEO Duality and MSH are statistically insignificant to Leverage. The average analysis from 2009 to 2013 indicates that these companies followed lower debt policy with larger board size and ROA and pursued higher debt policy with the higher percentage of non- executive directors on the board.

Exploration of the Relationship between Management Shareholding, Investor Relationship Management and Corporate Performance

Academia has conducted a lot of research on the relationship between equity incentives and corporate performance in the past ten years. However, the research on the relationship between management shareholding, investor relationship management and corporate performance is still lack of comparative. This article uses qualitative research to conduct an empirical analysis, and conducts an empirical analysis of the relationship between management shareholding, investor relationship management and corporate performance. The study found that both management shareholding and investor relationship management can promote the improvement of corporate performance, and through the intermediary effect of investor relationship management, the impact of management shareholding on corporate performance is strengthened.

Cost stickiness, corporate risk and management shareholding

Normally, the cost stickiness in enterprises further reduces the efficiency of asset allocation and the accuracy of earnings decision, thus aggravating the risk taking. This paper takes Chinese A-share listed companies from 2009 to 2019 as samples to empirically test the impact of cost stickiness on enterprise risk and the moderating effect of long-term incentive mechanism on this impact. The results show that cost stickiness increases corporate risk significantly. Management shareholding further aggravates the impact of cost stickiness on corporate risk. After further analysis, it is found that cost stickiness significantly increases corporate investment risk, meanwhile, cost anti-stickiness also significantly increases corporate risk, and management shareholding also aggravates the impact of cost anti-stickiness. This study further expands the research on the economic consequences of cost stickiness, also provides new ideas for enterprises to control the level of management shareholding to further restrain the degree of cost stickiness.

Management Share Proprietory and Firm Value: Are There Peculiar Determinants?

The study examined the specific factors that influence management share holdings and how this impact on the value of the firm in Ghana. The study specifically sought to find the relationship existing between managerial ownership and firm worth, non-linear relationship between managerial ownership and firm value, how managerial ownership and firm value are affected by size of firm and firm growth opportunities. Using secondary data from Ghana Stock Exchange from the period of 2015 to 2019, ten financial institutions (Banks) and ten non-financial institutions (non-bank) were purposively selected for the study, considering data availability and accessibility. Inferential statistics was adopted in analysing the data collected. The study found a weak positive linear relationship between firm worth and management’s share holdings in the organization. The findings from the second research question revealed that the nature of the bond between management share holdings and firm value was the fact that it was nonlinear, however with no visible description of shape but rather fluctuating in nature. The study further found that there is a moderately weak positive association between firm worth and management share of holdings of the organization in the presence of firm size. The findings from the final research questions also revealed that connection between firm value and management holding of share is influenced by firm growth opportunities. The study recommends the development of a more robust and parsimonious model in the examination of the association between management ownership share and firm size to help improve on the strength and nature of the relationship as was revealed by weak correlation and coefficient of determination values.

RETRACTED: New sights for measuring the relations among environmental information disclosure, economic performance and corporate governance

Environmental information disclosure is gradually gaining popularity, especially under the severe environmental pollution. Analyzing the relations among environmental information disclosure (EID), corporate governance and economic performance by employing a cross-disciplinary and a cross-sectional approach is a new start for improving environmental disclosure. The Ordinary Least Square results suggest that, firstly, firm size and ownership structure have significant positive relations with EID and economic performance. Secondly, the factors of corporate governance including the equity concentration ratio, logarithm of management incentive, logarithm of management shareholding, the board size and the number of directors, all have positive influences on EID. Thirdly, corporate governance has an impact on firm’s economic performance. Lastly, this study reveals that EID positively affects firm’s financial performance—solvency, operational capability and profitability. It is expected that this study can highlight the importance of environmental awareness of professional genre and enhance the environmental disclosure.

Relationship between equity ownership groups and the amount of investment in companies admitted to the Tehran Stock Exchange

This study investigated the relationship between equity ownership groups and the amount of investment in the company. In order to examine the equity ownership groups of five categories: governmental ownership, institutional with short-term vision horizons, institutional with long-term vision, managerial, and minority. The statistical population of this research includes all companies accepted in Tehran Stock Exchange and a statistical sample of 120 companies in the period 2012-2017 using R software was examined. Research results showed that the concentration of governmental ownership would reduce the amount of investment in the company. Also, study showed that there is a positive, meaningful but weak relationship between institutional ownership and short-term vision horizons. On the other hand, other research findings suggest that there is a stronger relationship between institutional ownership with a long-term vision horizons and investment rate than institutional ownership with a short-term vision horizon. Finally, research findings indicate that managerial ownership and minority have no meaningful relationship with the amount of investment. Based on these results, it can be said that management shareholders do not properly play their supervisory role in corporate governance, and the ownership structure can be effective on the ability of managers to pursue their personal interests and the company's investment and value.

The Impact of Leadership Styles on Quality and Financial Performance in High Medicaid Nursing Homes

This study examines the association between leadership styles on resident quality and financial performance in under resourced nursing homes (70% or higher Medicaid census). The Bonoma/Slevin leadership model was used to classify managers into four categories, autocrat, consultative autocrat, consensus manager, and shareholder manager. Survey data from 391 nursing home directors (response rate of 37%) from 2017- 2018, were merged with secondary data from LTCFocus, Area Health Resource File, Medicare Cost Reports, and Nursing Home Compare. Two models were ran to examine the effect of leadership styles on the dependent variable(s) nursing home STAR data (quality) and operating margin (financial performance). The independent variables were composite scores for leadership styles, with autocrat as the reference group. Control variables included organizational (ownership, chain affiliation, size, occupancy, payer mix, staffing, and race/ethnicity), and county factors (Medicare Advantage penetration, per capita income, poverty, education, unemployment, and competition). Multivariate regression was used to model the relationship between leadership styles and nursing home quality and financial performance. The consultative autocrat was associated with lower quality (p < 0.05), while the consensus manager was associated with lower profit margin (p < 0.05), as compared to autocratic leadership. The consultative autocrat, who solicits information from the staff yet still makes all significant decisions, is associated in lower quality; however, a consensus manager, who delegates their authority to the group, is associated with lower financial performance. Under-resourced nursing homes who face dual pressures need to recognize trade-offs of different decision making styles for quality and financial performance.