State Of Corporate Governance Research Articles

Corporate governance and banking performance: A comparative study between Islamic and conventional banking sector in the context of Bangladesh

Corporate governance (CG) is a set of principles that should be included into every aspect of the firm in order to ensure accountability and responsibility. The purpose of this research is to look at the state of corporate governance (CG) in banking sector of conventional banks and Islamic banks. Because the rules, regulations, and operating processes of conventional and Islamic banks differ significantly, the corporate governance (CG) practices of these two banking sectors are likewise distinct. In this work, the authors attempt to give a clear comparative assessment of corporate governance (CG) practices in these two banking sectors. This research looked at four dimensions of corporate governance: board size, board diversity, board diversity, and CEO duality. Return on Equity (ROE) and Return on Assets (ROA) have been used to evaluate banking performance. Regression analysis is used to evaluate the banking performance of the said banking sectors. It is found that BS, IND and BD have positive impact on ROE in Islamic banks sample. On the other hand, in terms of the coefficient of independent variables from sample banks of conventional sector are found to be negative influence on ROE in where IND and CEO duality shows significant result. Both conventional and Islamic banks are under pressure to enhance their corporate governance (CG) practices, since both banking sectors are seeing considerable improvements. However, when compared to conventional banks, Islamic banks lag behind in terms of corporate governance (CG). Companies must comprehend the advantages of implementing strong governance techniques and accompanying activities that aid in enhancing financial performance.

RISK MANAGEMENT IN THE CONTEXT OF CORPORATE GOVERNANCE: DOMESTIC EXPERIENCE

Abstract. The purpose of this article is to assess the formal manifestations of taking into account the principles of risk management in the domestic corporate governance system. A low or satisfactory tendency of the domestic corporate sector to assimilate the rules of corporate governance abroad may also indicate in advance the lack of active risk management in domestic companies in the context of corporate governance. The survey participants' awareness of the importance of the "Risk Management" function of the supervisory board regarding the state of corporate governance in Ukraine does not automatically guarantee the implementation of this function in practice. The results of the analysis of the reporting of joint-stock companies, whose shares are included in the calculation of the PFTS index, indicate the absence and/or lack of disclosure of information regarding the relationship between risk management and corporate governance at domestic enterprises. The leading role of corporate management bodies, in particular the supervisory board, in the formation of long-term risk management policy, including and corporate. The domestic corporate sector as a whole is characterized by a satisfactory level of corporate governance, which indicates incomplete compliance with the principles of corporate governance developed by the international community. Domestic practitioners of corporate governance have formed the correct attitude in theory to the role of the supervisory board in risk management. In practice, according to the results of the assessment of joint-stock companies included in the calculation of the PFTS index, in the context of corporate risk management, insufficient attention is paid, and the reports are of a formal nature. Strengthening the relationship between corporate governance and risk management is possible provided that measures and disclosure of information are implemented in the following directions: constant monitoring of the risk management system and disclosure of information regarding risk management; identification of significant risks; determination of the risk profile of corporate bodies; remuneration for risk management in the short and long term; principles of risk management; reporting to the board.

Organizational and Financial Mechanism of Anti-Crisis Management of Business Entities

The article proposes to consider crisis management of the entity on the basis of a systematic approach according to which the entity through a specific organizational and financial mechanism to diagnose and monitor crisis phenomena and threats, ensuring the efficiency and growth of the value of the entity taking into account risk-based approach. It is substantiated that the anti-crisis management should implement the strategic target «the costs of overcoming the crisis should be less than the costs of rehabilitation and liquidation of the business entity». It is proved that anti-crisis management as a continuous management process at the enterprise is preventive, anticipatory, reactive and rehabilitation. It is proposed to consider the organizational and financial mechanism of crisis management as a set of methods, tools, forms and levers for preventive and reactive measures of crisis management on the basis of subject-object relations, through which a certain goal is achieved — ensuring, restoring efficiency and increasing value of the business entity. Subjects and objects of anti-crisis management are specified. The subjects include the management of the enterprise depending on the forms of ownership and the state of corporate governance. The object of management is defined as potential, real and acute crisis phenomena. Crisis management methods are specified in the framework of tactical and strategic. Crisis management tools include: reduction of general administrative expenses, optimization of organizational structure, restructuring of enterprise assets, re-profiling, liquidation of receivables, SWOT-analysis, PEST-analysis. It is noted that the implementation of organizational and financial mechanism of crisis management of economic entities should provide crisis prediction and identification of potential risks, threats and dangers, assessment of financial and economic condition of the enterprise, its value, development of anti-crisis measures by mobilizing internal sources, implementation of financial measures, rehabilitation and reorganization, liquidation of the enterprise, controlling, monitoring and evaluation of anti-crisis management.

Nexus of Accounting Profession and Corporate Governance in Nigeria

This study attempts to investigate management bottlenecks in compliance , implementations of accounting principles, regulations and evaluation of accounting activities .The study adopted descriptive research and methodology to inquire on the state of corporate governance and accounting profession in Nigeria. The study reveals that despite the gorgeous principles of corporate governance and accounting professional gatekeepers and, others, corporate governance tends to be stifled. The study used secondary data such a journals and articles to examine the likely causes or drawbacks in achieving good and sustaining corporate governance in Nigeria which include: Management overriding in form of creative accounting , window dressing, nepotism, conflict of interest between the agent and the principal etc. The study highlighted on the core principles of corporate governance such as: Fairness, accountability, transparency, responsibility honesty etc. It also accentuates challenges of corporate governance in Nigeria, and the way-forward based on the investigation on the above subject, the study discovered that: Corporate governance is achievable only on commitments of entity’s directors, professional gate keepers, there association between practice of good governance professional skepticisms, ethic, code of conducts and conformability. Commitments of corporate governance directors and other professional gatekeepers impact greatly on corporate governance, there is often conflicts of interest between the equity owners, executive and management of corporate entities there by denying the equity owners’ right and equitable treatments. The study recommends that: Stock exchange operators should restructure new scheme of assessment of quoted or prospecting entities, adopting suitable policies and maintain strict and prompt compliance on the subject. Accounting bodies should unit and have one voice regarding professional transformation as it applies to ethics, code of conducts, creative accounting, and window -dressing accounting. Entities should base human resources employment on skills, performances and experiences, rather than only on certificates or degrees. Stock exchange operators and professional accountants and other gatekeepers of corporate firms should collaborate to ensure that paper and physical assets and liabilities of quoted and prospecting entities are verified and certified prior their endorsements. Also make provisions for entity’s executive and management to be co-owners to equity owners. Then corporate entities should adopt responsibility reports and reward systems in corporate affairs by reason of functions, performances and activities.

Current state of corporate governance practices in Colombia

In this paper, we review the current state of corporate governance in Colombia. First, we discuss the evolution of the legal framework of corporate governance including the main changes in the code of best corporate governance practices that took place since the global financial crisis of 2008. After this, we discuss key corporate governance issues such as the ownership structure of listed corporations and the market for corporate control, we analyze the practices of corporate boards of Colombian listed companies and their remuneration systems and the role of pension funds and hedge funds as shareholder activists. We also review the evidence regarding corporate governance and firm performance. Finally, we discuss the current state of corporate social responsibility (CSR) and an assessment of corporate governance specifics by industry. We conclude that there are opportunities for future research in several of these fields of study, especially regarding boards of director practices, director remuneration, and corporate social responsibility.

Governance Practices in Nepalese Commercial Banks

This article tries to to analyze the existing practices of corporate governance in commercial banks of Nepal. The state of corporate governance can have an important effect on all firms, and good corporate governance of financial firms is essential in fostering financial stability and healthy economic growth. This study found that good corporate governance frameworks help firms and countries improve accountability, more efficiently use capital, and attract quality and long-term investors at lower costs. These, in turn, contribute to a country’s competitiveness and thereby its development.The descriptive research design has been adopted for fact-finding and searching adequate information about effect of corporate governance on financial performance. In conclusion, the rapid globalization, international legal deregulation and rapid development in information technology has resulted both opportunity and challenges for the companies. In this context, the success of the organization in global arena is essentially determined by the level of corporate governance that the company is practicing. The efficient and effective corporate governance provides a competitive edge to the company. Management of commercial banks should follow the principles of sound corporate governance to ensure transparency, and accountability through their daily operational process and procedures with clients, and subsequently improve the performance, and enhance investors, shareholders, and stakeholders trust, which contribute to attain the banks goals. Banks require good corporate governance practices.

State of corporate governance in JSC “People’s bank of Kazakhstan”

High-quality corporate governance is a prerequisite for the success of the bank in the competitive market. In its turn, an efficiently built corporate governance system helps the company increase profits, build the right development vector, as corporate governance provides the basis for setting goals for the company, as well as identifying tools for their achievement and control. Banks that plan to increase their competitiveness over western competitors need to deal closely with corporate governance issues. On the one hand, to strengthen the corporate governance system or build an effective management system, as well as to establish the selection of reliable counterparties. JSC “People’s bank of Kazakhstan” implements a similar corporate governance practice also in other Halyk Group organizations, and believes that this contributes to the improvement and uniform understanding of corporate governance principles throughout the group. The topic of corporate governance is of interest to both companies in the real sector of the economy and their partners and contractors to increase capitalization. The corporate governance principles are designed to achieve economic goals, improving investor confidence, the correct distribution of capital of companies.

The trajectories of companies’ financial architecture in the real economy

The formation of an effective company’s financial architecture, which includes such basic elements as the capital structure, ownership structure, and the state of corporate governance, has a significant impact on maintaining a certain market position and ensuring stable profitability of activity. This research aims at determining the state of financial architecture, changing its trajectory, and its impact on company’s market position. Twenty-two (22) Ukrainian companies were selected for the study from the list of top 200 in terms of the largest volume of sales revenue received, and those that provided full financial statements for the period from 2007 till 2017. To determine the state of company’s financial architecture and the relevant market position, the authors used a cluster analysis using the method of the most remote neighbors. Algorithms of Kohonen’s self-organizing maps were applied. Harrington’s desirability function was used to determine the integral index. The selected sample demonstrated a high level of ownership concentration in almost all companies and showed that only a few individuals controlled a significant amount of assets, thereby confirming the oligarchic structure of the Ukrainian economy. As a result, seven cluster groups were obtained, reflecting the companies in terms of the quality of their financial architecture. Only five companies in the total sample were found to have high-quality financial architecture, i.e., capital structure and ownership structure are consistent and optimal and ensure that the company maintains a leading market position.

КОНЦЕПТУАЛЬНІ ЗАСАДИ ФІНАНСОВОЇ ДІАГНОСТИКИ В СИСТЕМІ ВАРТІСНО-ОРІЄНТОВАНОГО УПРАВЛІННЯ КОРПОРАЦІЯМИ

Formulation of the problem. globalization processes taking place in the world economy, uncertainty of the market environment, changing business conditions and the paradigm of corporate governance – all this sets before the economic science and practice the task of finding new approaches to financial diagnostics as a tool for information support of value-oriented management. Object of the research: financial diagnostics in the system of cost-oriented management of corporations. Methods used of the research: logical content, scientific knowledge, induction and deduction, analysis and synthesis, economic and mathematical modeling. Hypothesis of the research: the existence of a relationship between the value of the corporation, its financial stability, financial performance and net cash flow. Summary of the material: the results of the study substantiate the conceptual foundations of the development of financial diagnostics in the system of value-oriented management of corporate enterprises, the purpose of which is to ensure the sustainable development of business entities on the basis of increasing value and achieving high quality corporate governance. Originality and practical importance: are determined by the generalization of the practice of value-oriented management of corporate enterprises in the part: financial diagnostics of the external environment, value indicators based on financial reporting indicators, stock indicators of corporate enterprise value and the state of corporate governance. The practical significance of the results is to formalize the value drivers of individual confectionery corporations based on correlation-regression models that can be used for forecasting. Conclusions: methodological approaches to: providing information needs of stakeholders on the basis of mechanisms of financial control of corporate enterprises are substantiated; improving the quality of corporate governance models and rating the internal financial and value potential of enterprises; financial diagnostics of the investment attractiveness of corporate securities in the stock market based on expectations-based management.

An Assessment of Social Institutional Influences on Corporate Governance in Nigeria

The literature on corporate governance in developing economies have reported that concerns originating from the institutional environment are responsible for the state of corporate governance in these countries. Relying on this background and engaging Nigeria as its research context, this study explores the social institutional elements in the country and their impact on corporate governance outcomes. In doing this, an interpretivist research philosophy is adopted, with data collected via semi-structured, face-to-face interviews with two key stakeholder groups. Initials findings show that corporate governance in Nigeria reacts to three social institutional arrangements. This study further reveals that the robustness of these social institutional groupings is linked to the preferences of key actors in the social institutional domains. The latter finding adds to our understanding of the dominant standpoint amongst institutional theorists which posits that institutions constrain behaviour and restricts the e...

Ethical code of conduct: state of corporate governance in India

Ethical code of conduct: state of corporate governance in India

Ethical code of conduct: state of corporate governance in India

In the wake of large-scale corporate scandals and frauds like Enron, WorldCom and Volkswagen, a trend of aggressive legal mechanisms regulating the code of conduct of companies has been set in motion in several countries. In India, Clause 49 of the Listing agreement provides for the mandatory requirement of a code of conduct for the board of directors. The purpose of this paper is to analyse the need for a code of conduct in the effective transparency of company policies thus, better corporate governance by making a comparative analysis between provisions given under Sarbanes Oxley Act (US) and Clause 49 of Listing Agreement in India relating to Code of Conduct. The implication of the study showcases the pros and cons as to the flexibility of code of conduct, measures to be taken to induce compliance with provisions of the code. It also suggests as to how regulatory bodies should deal with companies in event of non-compliance by companies.

Current state of corporate governance: global business and cultural analysis

PurposeThe purpose of this study is to explore the current state of corporate governance in various aspects of business settings and to empirically examine the impact of national culture on corporate governance performance, with a view of supporting business corporations in further enhancing the effectiveness of their corporate governance system.Design/methodology/approachA pooled sample of 9,003 companies drawn from 50 countries across ten different regions is collected. A variety of statistical methods, including the paired samplet-test, the ordinary least squares regression and the Pearson product-moment correlation coefficient are implemented to analyze the current state of corporate governance. To empirically investigate the causal relationship between national culture and corporate governance, the multivariate regression analysis is also applied.FindingsThis study proposes a broad set of the empirical findings regarding the current state of corporate governance. Despite being accepted as a prerequisite building block for sustainable corporate social responsibility (CSR), corporate governance is still receiving far less attention among business corporations. The governance framework is widely adopted by business corporations, yet the intensity of implementing corporate governance is significantly different across regions. The variation of the intensity observed across regions can be explained by the national cultural characteristics that are all likely to impact the degree to which corporations act in corporate governance manners. Corporate governance performance is strongly related to three other aspects of socially responsible corporate performance – community, employee and environment.Research limitations/implicationsThis study provides both the motivation and a starting point for further investigation in the milieu of corporate governance. It would be interesting for future research to further explore the extent to which corporate governance has a positive indirect impact on a firm’s financial performance. There is potential to provide a more comprehensive analysis of the interaction effect of national culture and geographic region on corporate governance performance of the corporations embedded in that region through a statistical interaction method. In addition, it may be interesting to integrate corporate financial performance (CFP) into the analysis to identify a specific type/practice of the corporate governance that could provide the highest return on the investment. Last, another interesting avenue for future research would be to explore the ethical mechanisms that have been institutionalized to promote corporate governance practices.Practical implicationsThe present study is beneficial to both business corporations and policy makers. In essence, the study can potentially draw managers’ attention to applying modified corporate governance strategies according to their national culture. Furthermore, the study can alter business corporations to promote a strong corporate governance regime in chorus to CSR strategies so as to promote CSR development, which ultimately results in higher levels of competitiveness and CFP. In addition, policy makers who are responsible for inward foreign investment can use the findings of this study to evaluate the investors’ potential governance adoption.Originality/valueThe findings of this study are useful in encouraging the business corporations to further strengthen their corporate governance system. This study helps to fill the theoretical void regarding the cultural impact on corporate governance by exploring a broad set of national cultural characteristics under which good corporate governance is more or less likely to occur.

Democracy and shareholder's participation

Democracy and participation of shareholders or the demand for their active participation in the meetings of the Assemblyhas increasingly gained in importance in modern conditions. This is because, negative trends of passivation, the limitations of democratic potential of shareholders and shareholders' rights abuse by the management body, especially in the work control and compensation policy of shareholders, have been observed in a detailed analysis of the application and results of the Shareholder Rights Directive. The passivity of shareholders, as one of the most striking features of their position in the joint stock company today, is the biggest problem and threat to democratic processes within the company. If we bear in mind that the most common definition of shareholder democracy is 'ability of shareholders to influence the management of the company', we can notice a clear picture of the seriousness and importance of the lack of shareholder participation. This is the reason why the author of this paper gradually examines the causes and consequences of the passivity of shareholders, the proposed changes in this context in the Law of the European Union and the practical implications of such solutions in practice. In addition, the author examines contemporary forms and conditions for shareholder democracy and the legal framework in the European Union and the Republic of Serbia. In this way, we analyze the situation in this area and point out shortcomings of certain solutions, as well as the implications they cause in practice. The main thesis from which starts the scientific work and which will be gradually proven through theoretical and practical analysis is that the wider social processes directly reflect on the state of the joint-stock companies, or the state of corporate governance. This means that the negative trends of modern democracy (in the constitutional sense) are almost mirrored in economic capital (EC) and our attempt in this paper is to prove that, through the analysis of existing solutions. On the other hand, some solutions of shareholder democracy are applicable in terms of contemporary socio-political relations and can produce a certain positive impact on the democratic processes.

Corporate Governance: Board Structure, Information Technology and CSR Reporting

Good corporate governance practices are considered vital for attracting investment capital, improving the performance of companies and reducing risk for investors. This paper provides some general overviews on board structure, information technology (IT) and corporate social responsibility (CSR) reporting. This paper also discusses the various theories related to corporate governance in order to understand the corporate phenomena. This is important to understand each of the theory concept and its implications. These theories include agency theory, stewardship theory, stakeholder theory, resource dependency theory and legitimacy theory. Certainly, board structure, IT and CSR have significant bearing on a firm’s state of corporate governance and performance.

Asian’s Thoroughfare for Corporate Governance

This study examines the state of corporate governance in some countries in the Asia-Pacific region. Since the early 1990s, corporate governance has been receiving increasing attention from regulatory bodies and practitioners worldwide but the rhythm was very soft. But in Asia region the economic crisis realize the need of corporate governance with depth. That is also a key aspect of improving corporate governance in the region is that improved investor protection and more transparent disclosure will enhance the development of local capital markets and promote foreign investment to provide funds for long-term economic development. As a reaction of great slump East Asian countries develop reforms which defiantly create a good essence of corporate governance.

Are Ghanaian MFIs' performance associated with corporate governance?

PurposeThe purpose of this paper is to determine whether in Ghana, corporate governance, outreach to clients, reduced dependence on subsidies and use of modern technology (together called corporate governance plus) are associated with the performance of rural and community banks (RCBs), which are microfinance institutions (MFI), in the context of newly adopted codes of conduct and regulations, ownership rules and quality of management.Design/methodology/approachA total of 30 randomly sampled RCBs were categorized into four groups based on analysis of several dimensions of financial performance. Next, RCBs were again categorized into four groups based on their corporate governance plus. A chi‐squared test of independence between the two groupings was performed.FindingsThe authors found no association between RCBs' categories based on corporate governance plus and their categories based on financial performance.Practical implicationTo enhance performance, corporate governance plus must impact financial performance as documented by OECD. Laws and codes of conduct recently designed to guide the conduct of business should be allowed to work. The restriction on individual ownership of RCBs to 30 percent should be relaxed. And RCBs should pay attention to developing the competencies of their boards and senior management.Originality/valueThis is the first formal test of the association between state of corporate governance plus and financial performance of microfinance institutions in Ghana.

Insider Trading and Large Chapter 11 Bankruptcies in Usa

The Enron and WorldCom debacles raised questions about the state of corporate governance in the United States. Insider trading is one aspect of corporate governance highlighted in these cases. In this paper, we explore insider trading of large Chapter 11 bankruptcy filing firms during the twelve-year period of 1995-2006. We find that insiders in these firms, on average, do not use private information for gain or loss avoidance.

PERANAN DAN EVALUASI KINERJA BOARD OF DIRECTORS

This paper is investigation about practice corporate governance influencing role and evaluate the performance of Board of Directors. Role of Board of Directors early with studying organizational system Board Of Directors embraced by some world state namely system of continental and system of Anglo Saxon. Difference of system of management and culture will very determining effectiveness model the corporate governance state. Function of visible Board of Directors from responsibility and its duty and also the way of develop; build the effectiveness duty execution Evaluate the performance of big Board of Directors although its benefit still represent the new phenomenon. Not yet the wide-speeding of the evaluation practice because of assorted of cause, because that work not easy to be conducted For public company evaluate the performance of Board of Directors used to fulfill institutional investor desire, national and foreign. Evaluate the performance is generally done by institutional.

Business Ethics and Corporate Governance in Latin America

This article determines what the role of business ethics is within the Latin American corporate governance context. We analyzed five sources of information that provide vital information on the state of corporate governance in Latin America: the meetings of the Latin American Corporate Governance Network; the debates in the Latin America Corporate Governance Roundtables; the study Panorama Atual da Governança Corporativa no Brasil [Overview of Corporate Governance in Brazil], developed by the IBGC (Brazilian Institute of Corporate Governance) in partnership with Booz Allen Hamilton in 2003; the third version of the Code of Best Practices of Corporate Governance produced by the IBGC in March 2004; and the IBGC Corporate Governance Survey in Brazil. Based on the analysis of the above sources, conclusions are drawn on the role of business ethics within Latin American corporate governance.