Pillars Of Corporate Governance Research Articles

The Synergistic Benefit Mechanism of Medical and Recreational Marijuana: Economic Gains of Cannabis Taxation based on US Federal Law for Corporate Governance and Sustainability

Purpose: Marijuana legalization is brought about by the demands of people as social utility either for medical or recreation consumption. It is essential that the control of cannabis fulfills the goals of corporate governance and sustainability. This paper aims to measure the profitability of marijuana taxation over a time period as trend analysis of economic gains.
 Methodology: The socio-legal taxation of marijuana in the United States follows a descriptive research design. The beneficial gains of marijuana as medical use created this substance to be controlled under contract law transactions. The removal of cannabis in US Pharmacopeia modified the tort law restriction for legalization of marijuana as recreational consumption. The recreational cannabis taxation together with medical marijuana state taxes are essential to fulfill the 4 pillars of corporate governance and sustainability for strengthening constitutional rights. The legalization of marijuana through votes of the people repeals the criminal punishments imposed by federal law to advocate the synergistic concepts of economic theory.
 Findings: State tax theory creates voluntary principles in transactions together with trend analysis in prices and demands of people resulting to efficiency in mutual gains through lessening the value of participation under a harmful environment. Hence, Pigouvian tax follows the public welfare of medical marijuana and common revenue of recreational cannabis diminishes the overall costs of social consumption. Federal laws control marijuana usage through Pigouvian taxes of medical use with lessened participation in externalities and common revenue in cannabis consumption, as a legalization process of other states in reinstating tort law for business purposes, while still enforcing criminal penalties to remaining states, in compliance with US federal laws, not in favor of medical and recreational marijuana use. The economic theory supports the legalization of medical and recreational cannabis use through taxation as profitable gains by allowing voluntary market transactions of marijuana as fulfillment to corporate governance and sustainability for more allocation of public funds. From 2002 to 2018, medical and recreational cannabis users increased to 70% of social utility through lessening the value of participation, a win-win in efficiency of economic design. In 2010, marijuana taxation generated $8.7 billion as federal public funds, with accompanied criminal penalties to other states.
 Recommendations: Economic theory is a conceptual design supporting the beneficial gains of legalizing marijuana via taxation. This economic design promotes fair responsibility of market gains while still in strict compliance of enforcing criminal punishments to violators. The people’s votes for legalization of marijuana taxation indicates that this economic policy has come by choice in a particular state as constitutional right of either a medical opinion or business ethics. However, cannabis is deemed to be a substance subject for criminal liabilities, similar to other patent drugs under taxation as well. Hence, it is suggested to create artificial intelligence using authorless works for clinical trials and other relevant studies subject to patent law of marijuana use, as advocacy of public welfare and safety since voluntary transactions are apparent harmful environment.

Is the Digitalisation Solution to COVID-19: A Corporate Governance Perspective

COVID-19 has affected almost all spheres of life. Many researchers focus on the impact of this pandemic on economic, social and political spheres neglecting its effects on the pillars of corporate governance. This paper explores the impacts of COVID-19 on corporate governance in Africa. This paper consulted a number of secondary sources in order to fill the inadequacy in academic gap on COVID-19 and corporate governance. This paper established that COVID-19 has adversely affected the corporate governance practices; cancellation and postponement of important meetings. Companies are advised to adopt alternative digital communication platforms to convey important information to stakeholders.

CORPORATE GOVERNANCE PRACTICES LEADS TO VALUE ENHANCEMENT OF STAKEHOLDERS OF LISTED COMPANIES IN TAMIL NADU

The study has made an attempt on the Corporate Governance practices of listed companies in the respective study area. It mainly focuses on the CG and rests upon four pillars, viz., Transparency, Full disclosure, Independent monitoring and being fair to all, especially to minority shareholders. Corporate Governance refers to myriad mechanisms that shape the structure of incentives, disincentives, and prohibitions, under which an issuer's management makes decisions. In a modern corporation operating in a globalised world, concepts of disclosure and corporate governance are intertwined. Disclosure mechanism can be associated with the broader view of corporate governance that is not just restricted to shareholders, but also the aggregate of institutional and organizational factors that influence large decisions of public companies because public companies generates capital from various constituents. Corporate governance is an area that secures how efficiently manages corporations by the use of incentive mechanism, such as contracts, organizations and legislations. Transparency, corporate fairness and accountability are the important pillars of corporate governance. It is known for formally establishing guidelines regarding how a company is going to function. Enhanced and revised corporate governance policies are required in order to reduce the effect of financial crisis. International investors also invest in companies who follow good governance principles. From the international point of view they are the basic building blocks of the market. The researcher has used both Primary data and Secondary data methods of data collection. Simple random sampling method has been adopted for the study. The statistical tools like percentage analysis, chi-Square test, ANOVA and t-Test has been used for the study. The study highlights that 60 per cent of the companies are organizing programmes/talks/training for Independent Directors in matters relating to Corporate Governance. It is found that 100 per cent of the listed companies i.e. all the listed companies have disclosed to the shareholders in the annual report in relation to financial calendar. The basis of non-mandatory provisions and suggested items are to be included in the corporate governance. It can be concluded that listed companies are following only forced regulation and are not showing much interest in the voluntary compliance of rules and regulations.

The Effect of Corporate Governance Practices on Internal Control Efficiency: Study of Selected Firms

This study is an attempt to examine t he effect of corporate governance practices on internal control elements of risk assessment and monitoring activities. The study also seeks to determine the extent to which the act of good corporate governance affect the internal control measures in selected firms in Lagos Nigeria. In order to achieve the objectives of this study, a questionnaire was developed and distributed to a sample of top executives like directors, senior managers and accountants of the 226 selected firms. The total number of 226 questionnaires were returned out of which 210 were usable were returned and were valid for analysis this gives a response rate of 92% . Based on the results of the statistical analysis, the study indicated that corporate governance practices do contribute immensely to effective risk assessment and monitoring act to a high degree. The study also revealed that the commitment to risk assessment and monitoring activities strengthens the pillars of corporate governance at a high degree. These results show that the practices of corporate governance in firms have a significant effect in enhancing risk assessment and monitoring activities

Different Vision of Stewardship: Understanding Interactions between Large Investment Managers and Activist Shareholders

The rise of a small group of investment (asset) managers with an enormous potential to influence corporate decision-making has reinforced attention to shareholder stewardship as one of the pillars of corporate governance. But weak incentives to invest in shareholder oversight and limited resources confine voting and engagement by large investment managers. According to an influential argument, activist shareholders can offer a solution by supplying large investment managers with company-specific information. This paper advances a thesis that stewardship efforts of large investment managers are unlikely to be informed by activist campaigns and offers empirical evidence and illustrative case studies supporting this claim. The paper argues that large investment managers and hedge fund activists – the most prominent group of activist shareholders – have different visions of stewardship with little scope for interactions. For large investment managers, general corporate governance and sustainability themes have priority over the traditional topics of activist demands targeting business and operating matters. Consistent with the different visions of stewardship, data from the FTSE 350 companies show that associations between activist demands and the voting behavior of the top investment managers vary based on activist types and demand topics. Activist demands initiated by hedge funds and on business and operating matters receive less support. Importantly, differences between fund groups with predominantly active or passive indexing strategies in the likelihood of opposing corporate managers in activist targeted firms are minimal. These findings offer better understanding of institutional investor stewardship and have important practical implications for building regulatory frameworks for effective stewardship.

The Steinhoff signals: The role of responsible investing for asset managers

Subject area of the teaching case: The case can be used in the subject areas of finance and in particular investments, corporate governance, ESG, or responsible investments. It is suitable for students from all financial backgrounds, from a novice in the financial markets to an expert in finance. It is, however, expected that the class should have a sound fundamental grounding in financial analysis and valuations. The purpose of this case is to prepare students for future investments they would make in whatever capacity – whether in private or listed companies – and to prepare them for future roles on boards of directors. The examples of real-life events in this case study are used to prepare students for future similar situations in which they might find themselves. Student level: This teaching case is aimed at postgraduate students pursuing an MBA or a specialist Masters in a finance programme. This case can be used as a master class in corporate governance, investments, or responsible investments. This case is also suited for an executive education class in management. It is particularly relevant to a module that focusses on investments, corporate governance, ESG, or responsible investments. Brief overview of the teaching case: The case study chronicles meetings held on 8 November 2017 at a fictional South African asset manager, Active Investment Management (AIM). These meetings discuss the firm's investment in JSE-listed Steinhoff International Holdings. The case deals with the questions that active fund managers need to address when balancing financial analysis; environmental, social, and governance (ESG) analysis; portfolio management; and the need to comply with their fiduciary duty to clients. It also looks at the need for responsible investing in decision-making. Expected learning outcomes: The understanding of the assessment around the complexities of asset management when it comes to responsible investment. To determine why institutional investors should apply responsible investment principles when making investment decisions. An understanding of the evaluation of the unique roles of the three pillars of corporate governance, namely asset managers, auditors, and the board of directors. The ability to assess how to integrate financial analysis and ESG principles in making investment recommendations.

The Strengths and Weaknesses of Lehman Brothers’ Corporate Governance Mechanisms and Internal Controls

Lehman Brother’s corporate governance mechanisms and internal controls had several flaws that led to the downfall of the organization. The company lacked corporate governance measures that could highlight the fraudulent activities within the company. Corporate governance in any organization is controlled by the shareholders (owners) of the company, the directors of the company and its managers who utilize the company’s assets. The four pillars of corporate governance are accountability, fairness, transparency and independence. The role of banking reforms in controlling financial institutions have been in place for long.

Role of Leadership and Corporate Governance: The Case of Tata Group and Infosys

Is your job secured? Do layoffs happen? How long do you plan to work in the same organization? How is your performance rated? These are the set of typical questions asked to bottom-level employees working in multinational corporations. Possibly, gone are the days when an employee used to engage with a firm for a long period of their career. Attrition rate is becoming higher in many firms due to endless reasons. But how far do such trends apply to top-level or C-suite employees? Are they equally impacted such as middle- and bottom-level employees in various circumstances or taken care well by founders and boards of the organization? In this case study, an attempt was made to see if we can get some answers to these questions by considering the recent issues that happened in Tata Group and Infosys during recent times. Expulsion of Cyrus Mistry from Tata Group in 2016 and Infosys 2017 saga rocked the Indian corporate image worldwide and raised issues concerning corporate governance practices. The journeys of an insider chairman of a conglomerate and a technocrat CEO were cut short by two business tycoons Ratan Tata and Narayana Murthy in a much unexpected manner which brought a bad reputation to them. It raises issues regarding leadership styles and roles in such business empires. Transparency, accountability and security are the three pillars of corporate governance, which seem to have failed in these two organizations. It also raises a serious question of credibility, integrity and business ethics of leaders in handling these two issues with the verbal criticism which continued for days in public forum.

The Role of Internal Audit Function on Corporate Governance and Management

The purpose of the paper is to examine the research question about the role of internal audit function on management and corporate governance. This paper is updated with the latest theories regarding the role of internal auditing on management and corporate governance. It has been made literature review so as to be revealed the role of internal audit function on management and corporate governance. It is found that internal auditing is an important part of the success of corporate governance. Especially, it is one of the pillars of corporate governance. Furthermore, it is found that internal audit function is a vital tool for the management and for the success of a company. The good operation of internal audit function can be a tool for the improvement of quality of the corporate governance and management. Both corporate governance and management can increase the competiveness of a company.

Institutional investors and voluntary disclosure and transparency: the case of Egypt

PurposeDisclosure and transparency are major pillars of corporate governance which need to be greatly promoted in Egypt. This research aims to understand how different kinds of institutional investors affect levels of voluntary disclosure and transparency.Design/methodology/approachThe research was conducted on the most active Egyptian companies over a period of five years. A voluntary disclosure checklist was first developed to assess levels of voluntary disclosure and transparency.FindingsEmpirical results support significant positive impacts of both bank ownership and foreign ownership on voluntary disclosure and transparency. Among the four firm characteristics controlled for in the research, firm size was the only one with a highly significant positive impact on voluntary disclosure and transparency.Research limitations/implicationsThe results of this research may not be generalized to all companies, as it was only conducted on the most active firms on the Egyptian Exchange. Therefore, it is recommended that future researches integrate a more diversified sample.Practical implicationsThe research provides empirical evidence that institutional investors are not a homogeneous group and that different kinds of institutional ownership impact differently on voluntary disclosure and transparency. As such, some institutional investors are more influential than others when it comes to increasing corporate voluntary disclosure and transparency and in reducing agency problems.Originality/valueThis research offers assistance to policy makers interested in enhancing corporate disclosure and transparency. It is particularly important during any adjustment to ownership policies in Egypt.

A governança corporativa como instrumento de apoio à gestão da inovação na agroindústria

Este estudo analisa a Governança Corporativa como balizador do modelo de gestão da inovação na Agroindústria, para tanto, aproxima duas vertentes teóricas onde as pesquisas aplicadas ainda são escassas. A complexidade das relações institucionais entre os agentes inseridos em um sistema de inovação requer mecanismos que salvaguardem os múltiplos interesses sem prejuízo à transparência e competitividade das organizações. Em função da natureza exploratória do estudo, utiliza-se uma abordagem metodológica qualitativa, a partir de um estudo de caso de uma das principais empresas agroindustriais no segmento de fruticultura do Brasil. Os resultados dessa pesquisa sinalizam para um modelo de gestão da inovação que tenha ligação com a estratégia da empresa e possa ter em sua base os pilares da governança corporativa, bem como, indicadores que possam mensurar o processo de inovação em cada uma das suas etapas, e que se estabeleça nesse modelo uma visão holística do processo. Também se destaca no modelo proposto a importância da retroalimentação das etapas do sistema (feedback), que essa retroalimentação possa via a corrigir eventuais falhas no processo.

The Role of Internal Control in Enhancing Corporate Governance: Evidence from Jordan

This study aimed to examine the role of internal control elements: control environment, risk assessment, control activities, communication and information, and monitoring, in enhancing the corporate governance pillars, which are: accountability, fairness, responsibility, and transparency. The study also seeks to determine the extent to which this commitment contributes to strengthening these pillars in the context of Jordanian insurance companies. In order to achieve the objectives of this study, a questionnaire was developed and distributed to a sample of non-executive members of the board of directors, financial managers, heads of accounting departments and internal auditors of 27 Jordanian insurance companies. The total number of questionnaires distributed was 162 questionnaires, of which 123 questionnaires were returned and were valid for data analysis, with a response rate of approximately 76%. Based on the results of the statistical analysis, the study indicated that the commitment to all elements of internal control contributes to strengthening the corporate governance pillars at a high degree. The study also revealed that the commitment to each element of internal control contribute to strengthening the pillars of corporate governance at a high degree. These results show that the internal control has a significant role in enhancing the corporate governance pillars in Jordanian insurance companies, and the successes of corporate governance requires compliance with all elements of internal control.

CONTROLADORIA COMO INSTRUMENTO DE GOVERNANÇA NO SETOR PÚBLICO

Controllership is considered a Corporate Governance instrument, to the extent that it can contribute to reduce information asymmetry ad conflicts of interest, deriving from agency problems between organizational owners and managers, by making available information that permit valuing the organization and the extent to which its goals are achieved. Disclosure and accountability are basic pillars of Corporate Governance as well as Controllership. The Public Sector Committee (PSC) of the International Federation of Accountants (IFAC) developed a study on governance for the public context, considering that governance principles should be present in public entities, reflected in four dimensions, two of which related to control and to the availability of external reports (Federacao Internacional dos Contadores [IFAC] (2001). The main goal in this research is to identify which information the Office of the Comptroller General (CGU) makes available on its website comply with the type and contents of IFAC recommendations for control and external reports, as governance dimensions in the public sector. Through a bibliographic and documentary research, it was verified that only information related to budgetary and financial reports comply with the type and contents recommended by IFAC. The research also revealed that information related to internal audit and annual Government accountability partially address the contents recommended by IFAC.

Corporate Governance 2.0: Assessing the Corporate Governance Green Paper of the European Commission

Starting with a short overview of the state of the art of European corporate governance features, the authors address the major issues of the Commission's green paper on corporate governance of April 2011. They identify three pillars of corporate governance and compare practices of governance in major economies in the world to advocate that major reforms could fall short of providing the adequate equilibrium between corporate law, corporate governance codes and contracts.

Shareholder Derivative Action in Europe: Monitoring the Management for Breach of Fiduciary Duty

The derivative action exerted by shareholders (i.e., by a single shareholder or by a minority of them) is usually activated to assert before the court administrators’ managing responsibility. Falling within the wider topic of the defence of shareholder minorities and considered as one of the pillars of corporate governance, the above mentioned subject tends to be a control tool as to the accurate execution of the managerial task. However, according to the most important empirical analysis, the action is still little used. I'm actually investigating the reasons for this phenomenon.

The shareholder derivative suits: disfunction and remedies against a "paradoxal" inactivity

The derivative action exerted by shareholders (rectius, by a single shareholder or by a minority of them) falls within the wider topic of the defence of shareholder minorities. Considered as one of the pillars of corporate governance, the above-mentioned subject tends to be a control tool as to the accurate execution of the managerial task. Some empirical studies show that, in spite of corporate fraud by managers, in listed companies there are no such lawsuits. This “physiological paradox” – under which the others’ indifference enables a few organised individuals to control the company – has urged the need for a deep re-examination of control power over management. According to the European Directive on the Cross-border Exercise of Shareholders’ Rights, effective shareholder control is a prerequisite to sound corporate governance and should, therefore, be facilitated and encouraged. But control power over management is usually based on “empty” procedures and frequently false meeting practices. The fundamental “hypocrisy” of corporate governance is due to different quality and quantity of information available for deeply different groups of people. From this point of view, the European Directive makes it easier to exercise some traditional rights, but still does not give a “full” right to be informed about management.

Shareholder Derivative Suits: A Comparative Analysis and the Implications of the European Shareholders' Rights Directive

The derivative action exerted by shareholders (rectius, by a single shareholder or by a minority of them) falls within the wider topic of the defence of shareholder minorities. Considered as one of the pillars of corporate governance, the above-mentioned subject tends to be a control tool as to the accurate execution of the managerial task. Some empirical studies show that, in spite of corporate fraud by managers, in listed companies there are no such lawsuits. This “physiological paradox” – under which the others' indifference enables a few organised individuals to control the company – has urged the need for a deep re-examination of control power over management. According to the European Directive on the Cross-border Exercise of Shareholders' Rights, effective shareholder control is a prerequisite to sound corporate governance and should, therefore, be facilitated and encouraged. But control power over management is usually based on “empty” procedures and frequently false meeting practices. The fundamental “hypocrisy” of corporate governance is due to different quality and quantity of information available for deeply different groups of people. From this point of view, the European Directive makes it easier to exercise some traditional rights, but still does not give a “full” right to be informed about management.

The Sarbanes-Oxley Act of 2002—Restoring Investor Confidence

To the many Americans who lost their livelihoods and pensions when Enron, WorldCom, and other buccaneer corporations collapsed under the weight of their malfeasance and corruption earlier this decade, there is little to be said that can console them or ease their suffering. History will no doubt pass a harsh verdict on these companies and their leaders. But if there is a silver lining in these scandals, it is that we learned an important lesson about transparency in corporate governance, and because of that we instituted essential reforms aimed at restoring confidence in the system and preventing such disasters from happening again. These corporate crimes cost our economy thousands of jobs, countless life savings and some eight trillion dollars in market capitalization. Thankfully, those responsible are being held accountable for their fraud and corruption. But in a larger sense the problems that riddled Enron and WorldCom reflected a more fundamental breakdown of our system of corporate governance. It was a system that depended solely on market discipline, the threat of civil liability and a system of penalties—criminal penalties in some cases—to deter financial dishonesty. We assumed that the gatekeepers of information—the lawyers, analysts, accountants, directors, and executives—would do their jobs to maintain financial transparency. Clearly that wasn’t enough. We often think of money as the currency of a free market system, but in truth the system rises and falls on the confidence of its investors. Those who invest capital do so based on an understanding and knowledge of the risks and potential rewards involved. Enron and WorldCom thus became both examples and symbols of a broken system. Investors turned skittish because they no longer had full and complete trust in all the financial information they were being given. We needed reform, and that was the genesis of the Sarbanes-Oxley Act of 2002. Sarbanes-Oxley has been able to restore investor confidence because it rebuilt and strengthened the two most vital pillars of corporate governance: transparency and accountability. In hindsight, the lack of transparency under the old system seems apparent. I remember studying in law school the reasons why “piercing the corporate veil” was so difficult, and it was largely because the legal standard essentially gave deference to corporations and anyone seeking to pierce that veil had to demonstrate extraordinary circumstances in a court of law. That was pretty much the standard that prevailed through the Enron and WorldCom scandals. Corporations may have used the word “transparency” in their disclosure statements, but in truth transparency requirements did not take into account a number of activities undertaken by

Risk Management: The Five Pillars of Corporate Governance

This article looks at challenges of risk management in modern firms. We review the different types of risk, the external and internal forces that shape risk exposures in firms, and the individual and group biases that confound decision making. Next we discuss the need for an enterprise-wide approach to risk management. The critical organisational factors for implementing an integrated approach to managing risk exposures are presented. These include the five pillars of ‘culture’, ‘leadership’, ‘alignment’, ‘structure’, and ‘systems’. We provide an overview of relevant tools and techniques for integrating risk management with business policy and governance. Finally, some implications for organisational change management are considered.