Nature Of Corporate Governance Research Articles

CORPORATE GOVERNANCE STRATEGIC PERFORMANCE AS A SIGNIFICANT STRATEGIC MANAGEMENT TO PROMOTING PROFITABILITY: A STUDY IN UAE

The aim of this study is to objectively investigate how board size, firm size, and firm age impact the financial performance of organizations listed in Dubai. A quantitative technique was employed using a sample of 40 non-financial firms listed on the Dubai Stock Exchange for the fiscal year 2022. This selected group of businesses is expected to provide valuable data to achieve the study's objectives and address the relevant research questions. The results of the research shed light on the relationship between the variables of interest through data analysis and statistical testing. It was found that the size of the board has minimal to no influence on the financial performance of the sampled companies. However, the study revealed a significant and positive correlation between company age and size and firm performance, as measured by ROA. It suggests that as businesses develop over time and increase in size, they tend to demonstrate higher levels of profitability. These findings emphasize the importance of considering factors other than board size when examining the connection between corporate governance characteristics and firm performance. Other organizational attributes, such as age and size, exert a more substantial influence on financial performance, even if board size may not be a significant driver. Within the context of Dubai-listed companies, these findings provide valuable insights into the nature of corporate governance and its impact on firm performance. The results of this study underscore the need for a comprehensive understanding of corporate governance processes and their effects on financial outcomes.

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Annotation. Introduction. The mechanism of property valuation in Ukraine at the present stage of its development deals with the formation of a database on the state and dynamics of changes in the real estate market and the development of methodological tools for property valuation. This article is devoted to the study of such a category of tools as factors influencing the valuation of real estate when selling it in Ukraine. Purpose. The purpose of this article is to consider the factors that affect the valuation of real estate when selling it, and their classification. Results. The task of property valuation depends on its purpose. Properly defined purpose of the assessment establishes the cost base (or its type). Depending on the goal, a number of factors have been formed, which are taken into account in the evaluation process and affect its size, and the approach to their interpretation. The article considers four groups of factors. Physical factors take into account the condition of the property, its location and the characteristics of the stage of the life cycle of the territory. Analysis of this group allows you to determine the prospects of the object in accordance with the general condition of the area in which it is located. Economic factors have been determined by the demand in the local real estate market, risks, construction costs and related factors related to its course, taxes, proximity to roads and utilities. Considerable attention is paid in the article to the assessment of the value of enterprises and such specific factors of influence as liquidity of assets and the nature of corporate governance. Social factors consist of changes in the number and employment of the population in the territory, gender and age characteristics of the population, income level and so on. For enterprises, this group of factors includes the social composition of employees. The last group of factors, administrative (political), has a global character – it is determined by the nature of public policy in the area related to real estate or construction. Conclusions. Drawing conclusions in the article, the author emphasizes the constant nature of changes in factors – both the emergence of new and reassessment of others. It can change even depending on who is conducting it, so the evaluation should be independent, and a number of recommendations should be implemented to improve its transparency. Keywords: property; property management; management efficiency; territorial community.

Financial Performance and Corporate Governance in Microfinance: Evidence from Vietnam

Good corporate governance is considered a building block of success for microfinance institutions (MFIs) as it is presumed to help them in achieving their social and financial goals. This study analyzes the corporate governance and financial performance relationship for MFIs in Vietnam. We construct a corporate governance index based on seven measures pertaining to board size and composition, CEO characteristics, and ownership type. We then estimate the two-way relationship between this index and each of five different financial performance indicators. To address the likely simultaneity between corporate governance and financial performance, we adopt a two-stage least squares estimation approach with instrumental variables. The results confirm the endogenous nature of corporate governance and financial performance. We conclude that profitability and sustainability of MFIs improve with good governance practices and conversely that more profitable and sustainable MFIs have better governance systems. Keywords: Corporate governance, financial performance, microfinance. DOI : 10.7176/EJBM/12-3-12 Publication date: January 31 st 2020

Politics versus Economics Philosophical Reflections on the Nature of Corporate Governance

In this article, we philosophically reflect on the nature of corporate governance. We raise the question whether control is still a feasible ideal of corporate governance and reflect on the implications of the epistemic insufficiency of economic institutions with regard to grand challenges like of global warming for our conceptualization of corporate governance. We first introduce the concept of corporate governance from the perspective of economics and politics. We then trace the genealogy of the concept of governance based on a selective reading of Giorgio Agamben’s work, who has pointed at two interdependent paradigms of governance in the Christian tradition, and apply his categories in the context of corporate governance. We finally engage in a critical reflection on the concept of corporate governance and develop four characteristics of corporate governance that can guide future conceptual as well as empirical research in the field of corporate social responsibility of economic institutions.

The nature of corporate governance and performance in the conditions of ownership concentration

The central research question and purpose of this topic is oriented on the analysis of concentration scope of share capital ownership in Serbia, and their relation to corporate performance. The article also attempts to give a suitable reply to the question as to what extent the concentration of share capital ownership has changed in comparison to previous, which was formed at the beginning of the process of transition and privatisation of the public property, which was used as the foundation for forming the corporate sector. The answers to these questions will be used to point to the nature of the corporate sector in Serbia, and the degree of development of the securities market. Research methodology involves the use parametric procedures due to the characteristics of the selected variables and the number of observations in the sample. Univariate ANOVA procedures and Pearson's correlation coefficient will be used. The corporate sector in Serbia achieves positive results but does not receive adequate market verification due to extreme ownership concentration and the dominant influence of the majority, or several large shareholders. Due to the privileged position of a small number of privileged shareholders, such a situation results in the expropriation of small shareholders, who remain helpless due to underdeveloped mechanisms of legal and institutional protection.

Corporate Governance and Performance of Foreign Firms in India

This article examined the issues related to corporate governance in foreign firms working in India. The three questions examined are: What is the nature of corporate governance in terms of board size, independence and quality of its functioning or its effectiveness? Does board independence and size of the board show difference in compliance with corporate governance? What is the relationship between corporate governance and firms’ performance? These three questions are examined with reference to board size, board composition, board independence, conduct of the board and its committees. The data relate to the period from 2005–2006 to 2011–2012 for 42 foreign firms listed in the National Stock Exchange (NSE). The analysis is based on compliance of the firms with corporate governance mandatory requirements. The degree of compliance with corporate governance is fairly good. Majority of the firms fulfilled the mandatory requirements in all sub-indices of the clause .

Changing perspectives of corporate governance in India

The nature of corporate governance in India is constantly changing due to the interactions of Indian firms with global markets. The existing corporate governance regime in India has borrowed largely from the UK and US systems. The compatibility of these models to the Indian situation is being questioned in recent days. The Indian corporate governance reform process and the recommendations of various committees have been examined in detail to substantiate the basic argument. This paper argues that convergence towards the Anglo-American model of corporate governance may not suit the Indian circumstances. The study indicates that the corporate governance model followed in a country should be specific to its micro and macro environment. A unique model that considers the social, political, economic and legal systems of India would be the most appropriate one. But the practicability of such a concept would require ample time and motivation.

Women on Boards of Malaysian Firms: Impact on Market and Accounting Performance

We seek to offer some reconciliation for the conflicting theoretical arguments and empirical findings regarding the impact of women’s participation in boards on firms’ performance.We suggest that this impact differs in relation to market- and accounting-performance, and it is firm-specific, and varies by firms’ ownership type and the composition of their boards.These arguments find theoretical underpinnings in agency and resource-dependency theories, combined with behavioral and discrimination theories that articulate women behavior in the workplace and market perception of gender equality.The empirical analysis is based on a dataset of 841 publicly-listed firms in Malaysia.The results show positive impact of women’s participation on accounting-performance and negative impact on market-performance, suggesting that women directors create economic value, which is undervalued by the market. We interpret the findings with reference to the perception of women’s role in society and business in Malaysia, and the nature of corporate governance and ownership types prevalent among Malaysian firms.We suggest that the relationships might be context-specific, and hence the desired level of women’s participation varies across countries.We discuss the normative implications of the findings for government authorities considering legislation of gender-quota on boards, and for firms.

Does corporate governance risk at home affect investment choices abroad?

Disparity between control and ownership rights gives rise to the risk of tunneling by the controlling shareholder, and is prevalent in many emerging market economies and present in some developed countries. At the same time, international investors come from different countries whose home markets are characterized by varying degrees of control–ownership disparity. This paper studies whether this difference in investors' home countries affects their portfolio choice in an emerging market. It combines two unique data sets on ownership and control in business groups, and investor-stock level foreign investment in Korea. A key finding is that investors from low-disparity countries disfavor high-disparity stocks in Korea, but investors from high-disparity countries are indifferent. Moreover, investors from low-disparity countries became averse to disparity only after the Asian financial crisis. These results suggest that the nature of corporate governance in international investors' home countries affects their portfolio choice abroad, and therefore these investors should not be lumped together in the analyses of their portfolio choice.

Corporate governance: beyond convergence? A comparative analysis in the wake of the global credit crunch

The relative merits of shareholder versus stakeholder models of corporate governance have long been contested. Liberalisation and globalisation of financial markets resulted in the suggestion of potential convergence along shareholder principles. Research has attempted to justify the supremacy of one system over the other, however empirical evidence is weak. The culturally embedded nature of corporate governance within institutional frameworks suggests that transposition of single features may be inappropriate and may disrupt the overall efficiencies of a national system. The proportionality debate remains a key limiting factor in attempts at alignment. This paper will review the current state of the debate. It will employ comparative analysis to identify the path dependent evolution of corporate governance, contrasting differences within and between specific shareholder and stakeholder models. It will demonstrate alternative national responses to globalising pressures, to consider whether or not the contemporary situation can indeed, be regarded as one: beyond convergence?

How Does Corporate Governance Risk at Home Affect Investment Choices Abroad?

Disparity between control and ownership rights gives rise to the risk of tunneling by the controlling shareholder, and is prevalent in many emerging market economies and present in some developed countries. At the same time, international investors come from different countries whose home markets are characterized by varying degrees of control-ownership disparity. This paper studies whether this difference in investors' home countries affects their portfolio choice in an emerging market. It combines two unique data sets on ownership and control in business groups, and investor-stock level foreign investment in Korea. A key finding is that, investors from low-disparity countries disfavor high-disparity stocks in Korea, but investors from high-disparity countries are indifferent. Moreover, investors from low-disparity countries became averse to disparity only after the Asian financial crisis. These results suggest that the nature of corporate governance in international investors' home countries affects their portfolio choice abroad, and therefore that these investors should not be lumped together in the analyses of their portfolio choice.

Now let'sreally reform governance

Corporate governance reform has become a growth industry around the world. In most countries, new expectations about transparency, conflicts of interest, and composition have taken the voluntary form of “conform or explain.” In the United States, reforms came in the more authoritative form of legislation the Sarbanes-Oxley Act of 2002 (SOX), sponsored by Senator Paul S. Sarbanes and Congressman Michael G. Oxley. The law was passed in response to various recent corporate debacles. It is not the first such reform, nor will it be the last, although due to its legal force it is the most conspicuous in recent history. Although SOX applies to listed companies, many boards of nonprofit organizations and units of local government mistakenly thinking SOX is the last word in good governance have tried to apply its provisions to their own situations voluntarily. In fact, SOX does improve many widespread corporate practices, but it is not a complete gover nance system and in fact does nothing to address the nature of corporate governance itself. In other words, SOX, along with less legalistic reforms around the world, provides some useful patches for the primitive state of corporate governance but leaves it only in a newly patched condition. The following article originally appeared in Directors Monthly.

Managerial Fiduciary Duty and Social Responsibility: The Changing Nature of Corporate Governance in Post-War America

Enron's demise and the corporate investigations that ensued have reinvigorated the debate on managerial fiduciary duty. Some have argued that the recent stock bubble and the ensuing revelations of managerial malfeasance merely repeat history: Capitalism regularly corrects market exuberance and redirects resources along an efficient path. True, each bubble has its particular causes. The most recent one arose in concert with over-investment in high technology and recently deregulated industries. Those who claim that the 1990s bubble marked a significant change point to evidence that Enron's practice of misreporting information to bolster performance figures and executive stock option values extended widely within the corporate sector. In this view, excess was connected to stock option incentive systems that allowed these managers to exploit information asymmetry between themselves and investors. Even Alan Greenspan, the Chairman of the Federal Reserve Bank, expressed this view when he openly questioned the market's ability to disperse information in an accurate and timely manner and the wisdom of reporting rules that did not demand that stock options be included as business expenses. In this essay, we elaborate this theme - that the stock market's deflation exposed a structural reworking of managerial incentive hierarchies and managerial ideology. During the 1990s, U.S. managerial capitalism underwent a profound transformation from a technocratic system to a proprietary one. In the former, managers functioned as teams to sustain the firm and to promote social welfare. In the latter, corporate bureaucratic teams broke up into tournaments in which managers competed for advancement toward the CEO prize. Because their reward system depended heavily on stock options that were accompanied by downside risk-protection, these tournaments turned managers into a special class of shareholders. And, like any other shareholder, managers sought to maximize their individual utility functions - even if it deviated from the firm's best interest. Once this new regime became established practice, managers discarded their technocratic, stakeholder creed and adopted a property rights ideology, originally elaborated in academia by financial agency theorists.

The Small World of the American Corporate Elite, 1982-2001

This paper examines the degree of stability in the structure of the corporate elite network in the US during the 1980s and 1990s. Several studies have documented that board-to-board ties serve as a mechanism for the diffusion of corporate practices, strategies, and structures; thus, the overall structure of the network can shape the nature and rate of aggregate corporate change. But upheavals in the nature of corporate governance and nearly complete turnover in the firms and directors at the core of the network since 1980 prompt a reassessment of the network's topography. We find that the aggregate connec tivity of the network is remarkably stable and appears to be an intrinsic property of the interlock network, resilient to major changes in corporate governance. After a brief review of elite studies in the US, we take advantage of the recent advances in the theoretical and methodological tools for analyzing network structures to examine the network properties of the directors and companies in 1982, 1990, and 1999. We use concepts from small-world analysis to explain our finding that the structure of the corporate elite is resilient to macro and micro changes affecting corporate governance.

Privatisation and Corporate Governance: An Overview

Over 2,700 public enterprises had been divested in Africa by 1997 as part of the structural adjustment programmes embarked on by many African countries. The degree of success of these privatisations will depend in great part on the nature of corporate governance. This article presents an overview of the papers appearing in the present issue on these twin subjects of privatisation and corporate governance. The overview covers (i) the institutional framework and the desirability of privatisation, (ii) international evidence on corporate governance, with implications for developing countries, (iii) lessons from transition economies on privatisation and corporate governance and (iv) the operating and financial performance of newly privatised firms in developing countries, with a focus on a sample of African firms. Copyright 2002 , Oxford University Press.

The Impact of the Board on Strategy: An Empirical Examination

Boards of directors are coming under increasing scrutiny, both in the wake of a number of serious corporate frauds and failures and through a more general debate about the nature of corporate governance and its role in achieving national competitiveness. Though research on boards is growing, there remains a lack of empirical studies on the perceptions of directors themselves as to their role and influence in the running of organizations, and in particular the strategic process.This article responds to widespread calls for direct study of boards of directors by using a multi‐method approach involving an in‐depth examination of 51 directors of UK public companies, a survey of 121 company secretaries and four case studies of UK plcs, where multiple board members were interviewed. Through the use of a grounded methodology, this article examines the impact of boards on strategy and shows that by establishing the business definition, gatekeeping, selecting directors, and confidence building, the board influences the boundaries of strategic action. Evidence for the managerial domination of boards was slight, but the results showed support for a number of theoretical frameworks, suggesting that multiple perspectives are required to fully understand the nature of board activity.

Stages of Corporate Governance In Transition Economies

We develop a model of corporate governance stages in transition economies,including bureaucratic control-based; relational; and rule, market-based corporategovernance. We demonstrate how institutions shape stakeholders’ dominant sourcesof control power and firms’ dominant origins of resources within and across thesestages. We then theorize how these driving forces influence the effectiveness of thesecorporate governance stages, and how the shift from one stage of corporate governanceto another comes about. Our paper therefore contributes to the understandingof the development and nature of corporate governance in transition economies.