Corporate Governance Perception Research Articles

A RESEARCH ON THE EFFECT OF CORPORATE GOVERNANCE ON COMMITMENT TO ORGANIZATIONAL CULTURE

The aim of this research is to determine the effects of corporate governance perceptions of teachers working in primary education institutions on their organizational commitment. The questionnaire form prepared in accordance with the purpose was applied to 152 teachers working in Beykoz district of Istanbul province who accepted the questionnaire application. The survey results were analyzed in a computer environment using the SPSS 17.0 statistical package program. Frequency and percentage statistics were used to determine the descriptive characteristics of the teachers participating in the study, and mean and standard deviation statistics were used to determine corporate governance perceptions and organizational commitment levels. The relationships between teachers' perceptions of corporate governance and organizational commitment levels were examined by correlation analysis, and the dec of teachers' organizational commitment levels being affected by corporate governance perceptions was examined by regression analysis. As a result of the research, it was determined that teachers have a high level of corporate governance perception and organizational commitment, attendance and emotional commitment levels are not affected by corporate governance perceptions, and normative commitment levels are positively affected. As teachers' perceptions of corporate governance increase, their level of normative commitment also increases.

Corporate governance and postcolonialism: the experience of Sri Lanka

This paper explores the perceived adequacy of Anglo-American corporate governance reforms in an emerging market. Using a perception survey of Sri Lanka's corporate governance stakeholders, 277 questionnaire survey responses from five stakeholder groups in Sri Lanka are used in factor and regression analyses. This empirical study finds that adoption of best practice Anglo-American policies and regulations do not result in the perception of good corporate governance by stakeholders. The application of postcolonial theory offers an insight into this discrepancy. Current technical modes of investigation only replicate the modernity narrative. Policy setters and regulators should consider corporate governance as a cultural practice as well as a technical practice, to better serve stakeholder perceptions. This study introduces postcolonial theory as a means of cultural evaluation of corporate governance practices.

Auditors’ Perceptions of Corporate Governance in Hong Kong

Corporate governance system plays an important role in the contemporary accounting and management literature. The purpose of this study is to examine the auditors’ perceptions on corporate governance in the Hong Kong market. 92 experienced professionals of Big 4 audit firm auditors are interviewed to summarize the ideas of how to maintain an efficient corporate governance system. Results of the study show that effective corporate governance should avoid family directors to dominate the board. Second, effective audit committee plays a crucial role in order to maintain sound corporate governance. The study would be advantageous for listed companies in HK to adopt a better corporate governance structure in the firm.

Accountants’ perceptions of corporate governance in public limited liability companies in an emerging economy

Purpose– This paper aims to examine the perceptions of accountants on corporate governance (CG) practices in public limited liability companies in Barbados, and the perceived effectiveness of these mechanisms.Design/methodology/approach– A three-stage approach was utilized. First, an Internet-based questionnaire was sent to members of the Institute of Chartered Accountants of Barbados to gain accounting perspectives on CG practices by listed Barbadian companies. Second, feedback on the survey results was obtained from the attendees of a panel session at a regional accounting conference. Third, interviews were conducted with five qualified accountants to further explore issues that emerged from the previous stages.Findings– The results suggest that the most important mechanisms for effective CG were the board of directors, auditors and professional accountants. The timely provision of relevant information, board room culture, qualifications and independence of directors were the tasks considered most vital to enhancing board effectiveness. However, the high concentration of ownership in family-controlled firms, interlocking directorates, weak regulatory systems and cultural issues influenced the effectiveness of CG mechanisms. Recommendations for overcoming these barriers and improving CG included purposive training, whistle-blowing mechanisms, stronger legislation and adequate disclosures.Research limitations/implications– The study’s small sample increases the likelihood of bias and important differences being missed, thus reducing the generalizability to the accounting profession as a whole.Practical implications– The research sheds light on the value being placed on CG practices by the accounting profession. The study would assist companies, board of directors and accounting practitioners in developing CG mechanisms that are suitable for emerging countries.Originality/value– The paper contributes to the dearth of literature on perceptions of accountants on CG practices in emerging economies.

Can Corporate Social Responsibility Counteract Personal Incentives to Manage Earnings?: Examining Mechanisms that Influence Managers’ Discretionary Accrual Decisions

Regulators and investors have expressed concern over the number of companies that have had to restate earnings because of their inappropriate use of discretionary accruals to manage earnings. In many cases, this behavior has resulted in serious negative effects (e.g., loss of market capitalization). Thus, it is important to identify factors with the potential to mitigate such behavior. We examine a possible mitigating characteristic of an organization that may influence managers’ willingness to manage earnings: its level of commitment to social responsibility. A company’s commitment to socially responsible actions may serve to heighten its managers’ awareness of a broader range of stakeholders’ interests. This, in turn, may color managers’ perceptions of their organization’s corporate governance, thus influencing their willingness to manage earnings. We conduct an experiment in which experienced managers are placed in the role of a division manager facing a year-end accrual decision. We find that a company’s demonstrated commitment to social responsibility moderates both upward and downward earnings management attempts. Further, we respond to recent calls to identify mechanisms through which corporate social responsibility influences managers’ decisions. We propose, and find support for, a complex model in which a company’s demonstrated commitment to social responsibility influences the consideration managers give to the organization’s broader set of constituents and, in turn, managers’ perceptions of corporate governance. Perceptions of corporate governance then differentially affect the level of accruals, depending on the direction of the earnings management incentive.

Investors’ perception of corporate governance: a spillover effect of Taiwan corporate scandals

The discovery of a series of corporate scandals in Taiwan between 16 June and 15 September 2004 offers a unique opportunity to investigate the perceptions of investors on the value of corporate governance, whilst avoiding any interactions with other exogenous factors such as the lower expected returns on all firms’ investment opportunities during the East Asian or Global financial crises. The main line of reasoning in this study is that at times when news of scandals flows into the market, the perceptions of certain type of investors will lead to a change in their trading habits for non-scandal portfolios. With a comprehensive analysis of order and trade data for all investors identified by investor code, it is found that a substantial proportion of investors ceased trading altogether during the scandal period. This response was particularly discernible among small and medium individuals, despite the fact that the firms in these portfolios were not associated with the scandals. We further examine the ordering behavior of those investors who still traded in the market. It shows that small individual investors began to enter the market more passively, regardless of whether the firms’ ownership structure. And they consistently underperformed in both ownership-structure portfolios. However, foreign institutions and large individuals place more aggressive orders for stocks in firms with strong cash-flow rights leverage and perform particularly well in those portfolios.

Insider Perceptions of Insider Trading and Corporate Governance at Nigerian Banks

This study investigates the perceptions of uncertainty associated with Nigerian banks from an insider viewpoint. A critical review of Nigerian corporate environment shows that there have been several cases of trust abuse by board of director members at some banks. When banks’ stability is questioned by the public or investors, it negatively impacts the economy. However, it may be difficult to know what is going on unless those with inside knowledge are consulted. This study uses a confidential survey of bank employees, followed by correlation analysis, to assess perceptions of ethical corporate governance and performance. The findings reveal a strong positive correlation that bank practitioners perceive ethical corporate governance is linked to financial performance. Recommendations are given for financial practitioners and banking industry consumers.

The Next Stage of Reforms: Korean Corporate Governance in the Post-Asian Financial Crisis Era

AbstractFollowing the 1997 financial crisis, Korea underwent a dramatic overhaul of its corporate governance framework. Drastic changes in its legal and regulatory infrastructure led to more transparent and accountable companies. Boards of directors, shareholders, stakeholders, and auditors began to function effectively and even a corporate control market emerged. Many forms of internal and external corporate governance and market-oriented discipline were established. Korean companies are poised to make a quantum leap to reach the most competitive international levels of corporate governance. This paper argues that Korea must continue its reform efforts. It first discusses the Asian financial crisis and the first stage of reforms that followed. It then explores the areas where Korea needs to undergo the next stage of reforms. It will argue that only then can Korean corporations receive proper valuations. Korean companies have indeed come a long way but lingering perceptions of weak corporate governance thwart them from becoming world-class competitors.

A CONCEPTUAL FRAMEWORK FOR CORPORATE RISK DISCLOSURE EMERGING FROM THE AGENDA FOR CORPORATE GOVERNANCE REFORM

During the last decade an implicit conceptual framework for internal control and corporate risk management has arisen from risk management practice and policy within UK companies. An explicit conceptual framework for risk management is now emerging and is expressed in the Turnbull Report. In this paper, we develop a diagrammatic representation for the conceptual framework for internal control, risk management and risk disclosure. We consider the recent practical and policy developments in the disclosure of risk-related information in order to establish the current state of the art of corporate risk disclosure. Thus, we focus only on the disclosure aspect of the conceptual framework for internal control. We use a questionnaire survey to canvas the attitudes of UK institutional investors towards risk disclosure in relation to their portfolio investment decisions. Our empirical findings indicate that institutional investors do not generally favour a regulated environment for corporate risk disclosure or a general statement of business risk. The respondents agree that increased risk disclosure would help them in their portfolio investment decisions. However, for other aspects of the risk disclosure issue they are more neutral in attitude. Further, we found that the variation in the attitudes of institutional investors appears to be associated with the characteristics of the funds they manage as well as with their investment horizons. Further, we find that institutional investors’ perceptions of corporate governance are related to their investment horizons, among other factors.