Corporate governance, resources, FDI commitment and firm performance

2014 ◽  
Vol 8 (3) ◽  
pp. 313-332 ◽  
Author(s):  
Ming-Tien Tsai ◽  
Wen-Hui Tung
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Stock Exchange ◽  
Chief Executive ◽  
Governance Structure ◽  
High Tech ◽  
Corporate Governance Structure ◽  
Ceo Duality ◽  
Content Type ◽  
Mean Values

Purpose – This study aims to explore the effects of corporate governance structure and resources on foreign direct investment (FDI) commitment and firm performance. Design/methodology/approach – The data are collected from high-tech firms listed by the Taiwan Stock Exchange. All selected 137 firms have complete FDI and other required data during 2007-2009. The mean values of the variables during the three-year period were used for analysis. Findings – The results indicate that both chief executive officer (CEO) duality and government shareholding affect a firm’s FDI; and the higher the management shareholding ratio, the lower the return on equity. Moreover, a large ownership of substantial shareholders can enhance a firm’s performance; and higher institutional ownership can lead to higher firm performance. Research limitations/implications – This study analyses the limited data from 137 high-tech firms in Taiwan during the three-year period of 2007-2009. Further analyses of other industries, countries and time periods are needed to generalize the conclusions. Practical implications – A firm with CEO duality should increase the ratio of government holding to mitigate the influence of CEO on FDI decisions. When a firm’s performance is poor, the ratio of managerial holdings should be reduced; conversely, the firm could attract more holdings from domestic securities and funds to improve performance. Originality/value – This study provides guidelines for shareholders to analyze governance structure and formulate their investment strategies. Corporate policymakers may use these as the principles for designing a corporate governance structure that could engender optimal firm performance.

The role of national culture in the impact of board gender diversity on firm performance: evidence from a multi-country study

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Navaz Naghavi ◽  
Saeed Pahlevan Sharif ◽  
Hafezali Bin Iqbal Hussain
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Generalized Method Of Moments ◽  
Gender Diversity ◽  
Governance Structure ◽  
Corporate Governance Structure ◽  
Data Set ◽  
Content Type ◽  
Board Gender Diversity ◽  
The Impact

PurposeThis study seeks to add more insights to the debate on “whether”, “how”, and “under which condition” women representation on the board contributes to firm performance. More specifically, the current study aims to investigate if the effect of board gender diversity on firm performance is dependent on macro factors of national cultures.Design/methodology/approachThe authors used the generalized method of moments regression and a data set consists of 2,550 company year observations over 10 years.FindingsThe results indicated that cultural variables interact with board diversity to influence firm performance. Having women on the board in countries with high power distance, individualist, masculine and low-uncertainty avoidance culture influences the firm performance negatively.Originality/valueThe findings indicate that the effects of corporate governance structure on firm performance depends on culture-specific factors, providing support for the argument that institutional norms that are governed by cultural norms affect the effectiveness of corporate governance structure.

The relationship between women’s presence in corporate positions and firm performance

2018 ◽  
Vol 10 (1) ◽  
pp. 83-100 ◽  
Author(s):  
Jorge Moreno-Gómez ◽  
Jonathan Calleja-Blanco
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Financial Performance ◽  
Family Firms ◽  
Developing Economies ◽  
Governance Structure ◽  
Corporate Governance Structure ◽  
Content Type ◽  
Top Executive ◽  
The Relationship

Purpose The purpose of this paper is to analyze, in the Colombian developing context, the relationship between the presence of women in corporate positions and the financial performance of the company and to know if there are differences between family and non-family firms. Design/methodology/approach Building on the contingency theory of leadership, which emphasizes that leader’s personality and the situation in which that leader operates influences corporate decision-making, the authors use panel data models on a sample of 54 Colombian public businesses for the period 2008-2015 to test the proposed hypotheses on the relationship between women´s presence in corporate governance positions and financial performance, as well as the difference between family and non-family firms. Findings The results support that women´s presence in corporate governance positions is positively associated with firm performance. More concretely, the authors find a relationship between women at the top corporate governance structure (as part of the board of directors, top management team and chief executive officer) and firm profitability. Results also indicate that family business, as a type of organization, (negatively) moderates the positive relationship between female participation in top executive positions (board and top executive team) and firm performance. Research limitations/implications First, this study is limited to women in corporate positions in large companies listed on the Colombia Stock Exchange, and thus, generalizability for smaller entities may be limited. Second, data limitations do not allow us to investigate ways in which women’s presence in corporate governance structures contributes to improve firm goals. Practical implications The authors provide support to the hypothesis that positively relates women’s presence in corporate governance positions and firm performance for the case of Colombia. This serves as a guidance to Colombian regulators, corporate decision-makers and policy-makers to promote the inclusion of women in top hierarchical structures through either mandatory laws or recommendation. Originality/value Few studies have addressed the women´s presence in corporate governance positions and contribution to firm performance in developing economies. This study contributes to better understand how women impact performance in contexts where women are underrepresented in corporate governance structure and where there are no laws that pressure firms to appoint women in corporate governance positions.

Corporate governance failure at Ricoh India: rebuilding lost trust

2018 ◽  
Vol 8 (4) ◽  
pp. 1-20
Author(s):  
Sonu Goyal ◽  
Sanjay Dhamija
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Multinational Corporations ◽  
Audit Committee ◽  
Governance Structure ◽  
Special Focus ◽  
Corporate Governance Structure ◽  
Content Type ◽  
External Auditors ◽  
The Board Of Directors

Subject area The case “Corporate Governance Failure at Ricoh India: Rebuilding Lost Trust” discusses the series of events post disclosure of falsification of the accounts and violation of accounting principles, leading to a loss of INR 11.23bn for the company, eroding over 75 per cent of its market cap (Financial Express, 2016). The case provides an opportunity for students to understand the key components of corporate governance structure and consequences of poor corporate governance. The case highlights the responsibility of the board of directors, audit committee and external auditors and discusses the changes required in the corporate governance structure necessary to ensure that such incidents do not take place. The case also delves into the classic dilemma of degree of control that needs to be exercised by the parent over its subsidiaries and freedom of independence given to the subsidiary board, which is a constant challenge all multinationals face. Such a dilemma often leads to the challenge of creating appropriate corporate governance structures for numerous subsidiaries. Study level/applicability The case is intended for MBA courses on corporate governance, business ethics and also for the strategic management courses in the context of multinational corporations. The case can be used to develop an understanding of the essential of corporate governance with special focus on the role of the board of directors, audit committee and external auditors. The case highlights the consequences and cost of poor corporate governance. The case can also be used for highlighting governance challenges in the parent subsidiary relationship for multinational corporations. The case can be used for executive training purposes on corporate governance and leadership with special focus on business ethics. Case overview This case presents the challenges faced by the newly appointed Chairman Noboru Akahane of Ricoh India. In July 2016, Ricoh India, the Indian arm of Japanese firm Ricoh, admitted that the company’s accounts had been falsified and accounting principles violated, leading to a loss of INR 11.23 bn for the financial year 2016. The minority shareholders were agitating against the board of directors of Ricoh India and were also holding the parent company responsible for not safeguarding their interest. Over a period of 18 months, Ricoh India had been in the eye of a storm that involved delayed reporting of financials, auditor red flags regarding accounting irregularities, a forensic audit, suspension of top officials and a police complaint lodged by Ricoh India against its own officials. Akahane needed to ensure continuity of Ricoh India’s business and also act quickly and decisively to manage the crisis and ensure that these incidents did not recur in the future. Expected learning outcomes The case provides an opportunity for students to understand the key components of corporate governance structure and consequences of poor corporate governance. More specifically, the case addresses the following objectives: provide an overview of corporate governance structure; highlight the role of board of directors, audit committee and external auditors; appreciate the rationale behind mandatory auditor rotation; appreciate the consequences of poor corporate structure; explore the interrelationship between sustainability reporting and transparency in financial disclosures of a corporation; understand management and governance of subsidiaries by multinational companies; and understand the response to a crisis situation. Supplementary materials Teaching notes are available for educators only. Please contact your library to gain login details or email [email protected] to request teaching notes. Subject code CSS 11: Strategy.

scholarly journals Corporate governance and corporate performance: evidence from Kuwait

2009 ◽  
Vol 7 (1) ◽  
pp. 334-349 ◽  
Author(s):  
Bader Al-Shammari ◽  
Waleed Al-Sultan
Keyword(s):  
Corporate Governance ◽  
Stock Exchange ◽  
Governance Structure ◽  
Board Size ◽  
Corporate Governance Structure ◽  
Accounting Performance ◽  
Corporate Scandals ◽  
Kuwait Stock Exchange ◽  
And Performance ◽  
The Relationship

An increasing number of recent corporate scandals and failures worldwide give rise to interest in the corporate governance structure in the performance of companies. This study investigates the relationship between corporate governance characteristics and performance of 66 non-financial companies listed on the Kuwait Stock Exchange (KSE) during the years 2004-2007. The findings of this study show that corporate governance characteristics such as board size, role duality, and less concentrated share ownership were positively associated with market performance, whereas only board size and role duality were positively related to accounting performance. The result is robust with respect to controls for company size, leverage, and industry.

scholarly journals Impact of independent directors and remuneration committee on firm performance? Evidence from Malaysian capital market

2010 ◽  
Vol 8 (1) ◽  
pp. 222-225 ◽  
Author(s):  
Huson Joher Ali Ahmed
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Capital Market ◽  
Corporate Performance ◽  
Governance Structure ◽  
Independent Directors ◽  
Corporate Governance Structure ◽  
Regression Methods ◽  
Developed Markets ◽  
Control Management

This study aims at re-examining whether or not the structure of the corporate governance as defined by the non-executive director matter that lead to better performance. This study is based on 100 firms listed in first board. The analysis is based on a period of 5 years from 1999 through 2003. This study employs a multiple regression methods to examine governance structure and its impact on firm performance. Although previous studies in developed markets exhibit the existence of relations between governance structure and corporate performance, this study however concludes that there is partial relation between corporate governance structure and corporate performance. However, the presence of both audit and remuneration committee serves an important monitoring device to control management actives that lead to increase firm’s performance.

scholarly journals The board of directors and firm performance: empirical evidence from listed companies

2019 ◽  
Vol 19 (3) ◽  
pp. 508-551 ◽  
Author(s):  
Alessandro Merendino ◽  
Rob Melville
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Agency Theory ◽  
Ownership Structure ◽  
Listed Companies ◽  
Independent Directors ◽  
Board Structure ◽  
Board Size ◽  
Ceo Duality ◽  
Content Type

PurposeThis study aims to reconcile some of the conflicting results in prior studies of the board structure–firm performance relationship and to evaluate the effectiveness and applicability of agency theory in the specific context of Italian corporate governance practice.Design/methodology/approachThis research applies a dynamic generalised method of moments on a sample of Italian listed companies over the period 2003-2015. Proxies for corporate governance mechanisms are the board size, the level of board independence, ownership structure, shareholder agreements and CEO–chairman leadership.FindingsWhile directors elected by minority shareholders are not able to impact performance, independent directors do have a non-linear effect on performance. Board size has a positive effect on firm performance for lower levels of board size. Ownership structure per se and shareholder agreements do not affect firm performance.Research limitations/implicationsThis paper contributes to the literature on agency theory by reconciling some of the conflicting results inherent in the board structure–performance relationship. Firm performance is not necessarily improved by having a high number of independent directors on the board. Ownership structure and composition do not affect firm performance; therefore, greater monitoring provided by concentrated ownership does not necessarily lead to stronger firm performance.Practical implicationsThis paper suggests that Italian corporate governance law should improve the rules and effectiveness of minority directors by analysing whether they are able to impede the main shareholders to expropriate private benefits on the expenses of the minority. The legislator should not impose any restrictive regulations with regard to CEO duality, as the influence of CEO duality on performance may vary with respect to the unique characteristics of each company.Originality/valueThe results enrich the understanding of the applicability of agency theory in listed companies, especially in Italy. Additionally, this paper provides a comprehensive synthesis of research evidence of agency theory studies.

Applications of business governance and the Unified BPM Cycle in public credit recovery activities

2019 ◽  
Vol 26 (1) ◽  
pp. 312-330
Author(s):  
Abimael Rondon Do Nascimento ◽  
Roquemar de Lima Baldam ◽  
Lourenço Costa ◽  
Thalmo de Paiva Coelho Junior
Keyword(s):  
Corporate Governance ◽  
Single Case ◽  
Governance Structure ◽  
Credit Recovery ◽  
Future Research ◽  
Corporate Governance Structure ◽  
Content Type ◽  
Public Credit ◽  
Operational Activities

Purpose The performance of the state machine has been the subject of research and innovative practices, which seek to explore its sources of knowledge and improve its internal processes. Business governance and business process management (BPM) occupy a prominent position in these studies. The purpose of this paper is to analyze the full implementation of the Unified BPM Cycle in operational activities to recover federal public credit, from the implementation of the corporate governance structure to the audit of the processes implemented. Design/methodology/approach The case was developed in a federal public advocacy body and used a predominantly qualitative multi-method approach. The phases were organized using the research project matrix, and the predominant research procedure was action research. The information was obtained through questionnaires, observation and focus groups. Findings A corporate governance structure was designed for the activities surveyed. Papers and responsibilities were defined. Processes were prioritized, improved and documented, and as a result of the implemented control, personal and organizational results gained greater visibility. Research limitations/implications Because this is a single case study, it would be advisable to apply the method used in similar organizations to enrich the analysis presented in this study and compare the results. Practical implications This paper contributes to the consolidation of the knowledge about the practical application of the researched subjects and foments the applied research to the public management. Originality/value This paper describes an empirical case study about the integrated application of activity governance and the Unified BPM Cycle in operational activities and studies all phases of implementation, providing a broader perspective of their impact on these activities. The road map used can serve as a reference for future research in the area of public credit recovery.

scholarly journals Board characteristics and earnings management in Sri Lanka

2019 ◽  
Vol 27 (1) ◽  
pp. 2-18
Author(s):  
Shanmugavel Rajeevan ◽  
Roshan Ajward
Keyword(s):  
Corporate Governance ◽  
Sri Lanka ◽  
Earnings Management ◽  
Management Practices ◽  
Stock Exchange ◽  
Governance Structure ◽  
Real Earnings Management ◽  
Content Type ◽  
Board Characteristics ◽  
Market Capitalisation

Purpose The purpose of this paper is to examine the association between designated corporate governance attributes and the degree of earnings management in selected quoted companies in Sri Lanka. Design/methodology/approach In total, 70 listed companies in Colombo Stock Exchange (CSE) were selected based on the highest market capitalisation for the period covering from 2015 to 2017 and representing beverage, food and tobacco, diversified, hotel and travel, manufacturing, oil palms and health care sectors, which accounted for 59.9 per cent of the total market capitalisation of CSE. Findings This study found a positive relationship between CEO-Chair duality and earnings management. Practical implications The insights may also provide investors, economic analysts and regulators with early caution indicators of potential problems in a corporation regarding corporate governance failures and aid stakeholders in assessing the effectiveness and efficiency of the board and corporate governance structure and earnings management methods. Originality/value This study extends the extant research on board characteristics and real earnings management by adopting prominent research design and modernised data. This study offers evidence on how selected audit and board committee’s characteristics influence real earnings management practices.

How concentrated owners improve the performance of Asian firms

2019 ◽  
Vol 28 (1) ◽  
pp. 39-63
Author(s):  
Marc van Essen ◽  
Pursey P.M.A.R. Heugens ◽  
Patricio Duran ◽  
Sabrina F. Saleh ◽  
Steve Sauerwald ◽  
...  
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Strategic Behavior ◽  
Meta Analysis ◽  
Chief Executive ◽  
Institutional Voids ◽  
Internal Governance ◽  
Content Type ◽  
Governance Practices ◽  
Nuanced Understanding

Purpose The purpose of this study is to investigate how concentrated owners add value to Asian firms. While prior research suggests that relational owners (i.e., business groups, top management team, board, government, banks, families, and corporation) may help firms fill institutional voids, this study proposes that it is transactional owners (i.e., foreign and institutional investors) lacking this ability who contribute most to firm performance. As these owners frequently hail from contexts with well-developed corporate governance traditions, they tend to have experience with the design and implementation of such governance practices. Design/methodology/approach This study involves a meta-analysis covering 276 studies from 17 Asian countries. Findings This study shows that transactional owners impose effective governance practices such as separating the chief executive officer (CEO) and Chair roles and assuring board independence. These practices promote decisions benefiting all shareholders, such as preventing diversification and financial over-leveraging. Originality/value This study contributes to the comparative corporate governance literature by showing that implementing internal governance practices helps improve firm performance in Asia. It also contributes to the owner identity literature by opening the black box of how transactional and relational owners differentially affect firms’ strategic behavior. Overall, this study yields a more nuanced understanding of what transactional owners contribute to Asian firms.

scholarly journals EFFECT OF CORPORATE GOVERNANCE ON REAL ACTIVITY-BASED EARNINGS MANAGEMENT: EVIDENCE FROM KOREA / ĮMONIŲ VALDYMO POVEIKIS, PAGRĮSTAS DARBO UŽMOKESČIO VALDYMU: KORĖJOS PAVYZDYS

2012 ◽  
Vol 13 (1) ◽  
pp. 29-52 ◽  
Author(s):  
Sun-A Kang ◽  
Yong-Shik Kim
Keyword(s):  
Corporate Governance ◽  
Data Analysis ◽  
Earnings Management ◽  
Stock Exchange ◽  
Investment Decision ◽  
Governance Structure ◽  
Corporate Governance Structure ◽  
Real Activity ◽  
Policy Makers ◽  
Reported Earnings

This paper aims to determine whether corporate governance affects manager's real operating or investment decision to control reported earnings. Through data analysis of firms listed on the Korean stock exchange, it was found that the aggregated measure of real activity-based earnings management decreases as the size of board is larger or as a greater proportion of external directors sit on the board. Those findings are almost the same, whether a corporate governance index composed by each BOD characteristics is employed, or problem caused by endogenous relationships among variables is controlled. The results provide the first empirical evidence that real activity-based earnings management is influenced by corporate governance structure. This focus on real activity-based earnings management suggests new avenues for research on corporate governance. The results offer some insights for policy makers interested in promoting legislation to ensure strong corporate governance in their nation. Santrauka Šiame straipsnyje siekiama nustatyti, kokią įtaką turi kompanijos vadovo sprendimai, susiję su gaunamų pajamų iš darbuotojų tiesioginės veiklos / operacijų ar investicinių sprendimų kontrole. Tyrime dalyvavo Korėjos kompanijos. Autorių atlikti tyrimai parodė, kad darbuotojų darbo užmokesčio valdymas yra efektyvesnis nei tiesioginė vadovo kontrolė. Straipsnyje minima, kad priėmus sprendimą valdyti darbo užmokesčius, būtina keisti visą įmonės valdymo struktūrą. Gauti rezultatai yra kaip siūlymas peržiūrėti atitinkamus nacionalinius teisės aktus Korėjoje.

Sign in / Sign up

Export Citation Format

Share Document