scholarly journals The Impact of Economic Crises on Changes in Corporate Governance

Equilibrium ◽  
2011 ◽  
Vol 6 (4) ◽  
pp. 7-20
Author(s):  
Stanisław Rudolf

Over the last 10 - 15 years significant changes took place in principal systems of corporate governance i.e. in the Anglo-Saxon and German systems. These changes were of similar or the same character. This was an effect of economic crises, mainly crises of 1997 – 1998 and 2007 – 2009. The crises have influenced the changes either directly through amendments in the so-called hard law of national systems of supervision or indirectly through recommendations on corporate governance issued by international institutions and organizations. The OECD and the European Commission played the most important part in this respect. These organizations had a big impact on the formation and shape of the so-called codes of good practice, whose principles are generally implemented by companies, mainly listed companies. The principles happen to be of the so-called soft law character and after some encouraging experience with their use take on the form of legislation.

Author(s):  
Stanisław Rudolf

Abstract This study aims to define the impact of two largest crises of 1997–1998 and 2007–2008 on changes to the models of corporate governance. In order to achieve the assumed aim, a critical analysis of specialist literature and relevant legal regulations has been applied. The analysis is focused on changes in the main models of corporate governance, namely: in the Anglo-Saxon (monistic) model and in the German (dualistic) model. Generally, they can be defined as of evolutionary nature but some deeper changes have taken place under the influence exerted by the above-mentioned crises. The latter crisis has emphasized the important role of corporate governance in banks and other financial institutions. Changes in corporate governance are largely affected by international institutions or organizations, such as the Organization for Economic Cooperation and Development (OECD) or the European Commission. Their recommendations and guidelines have contributed to the dissemination of so-called good practice codes. The considerations presented below allow the author to state that in both analyzed models of corporate governance, changes occur in the same or similar direction lines (the phenomenon of convergence). It can be also observed that the first analyzed crisis has caused larger changes in the monistic model, whereas the second crisis has affected the dualistic model in a more significant way.


2018 ◽  
Vol 67 (4) ◽  
pp. 961-986 ◽  
Author(s):  
Barnali Choudhury

AbstractIn the wake of increasing corporate disasters, there has been an urgent need to address the impact of business on human rights. Yet business responsibilities for human rights are mainly voluntary and best understood as ‘soft law’. Recently, however, States have begun negotiations for an internationally binding treaty in this area, suggesting that there is a need to turn to ‘hard law’ to increase the efficacy of business and human rights (BHR) initiatives. This article argues that because soft and hard law concepts are not dichotomous, BHR governance need not become ‘hard law’ to be effective. Rather ‘hardened’ soft law instruments can be equally effective.


2021 ◽  
Vol 23 (2) ◽  
pp. 5-32
Author(s):  
Esat A. Durguti ◽  
◽  
Nexhat Kryeziu ◽  

This study identifies and assesses the impact and effect of corporate governance (CG), as a good practice mechanism, as well as some specific financial indicators on the performance of the banking sector in Kosovo. The data used in the research are defined as secondary data that include nine (9) commercial banks and cover the period 2013–2020. The analysis applied to data processing is the dynamic approach through 2SLS estimation for the dependent variables ROA, ROE, and NIM. The results obtained at the end of the study show that all variables applied in this research, depending on the variable defined for evaluation, have a significant impact on the performance of the banking sector. The results also show that the most adequate measure for assessing a bank’s performance is the net interest margin (NIM). This research paves the way for debate and discussion on the governing structures of financial institutions and policymakers.


2020 ◽  
Vol 1 (58) ◽  
pp. 68
Author(s):  
Jacopo PAFFARINI

ABSTRACT Objective: The objective of this paper is to expose some consequences of the economic globalization process – as well as of the recent “sovereign debt crisis” – on the normative enforcement of workplaces’ health and safety. Methodology: The methodology used is based on bibliographic and legislation research, as well as on doctrine and articles published in specialized journals. Results:It is concluded that after the Lisbon Summit of 2009, the whole matter of fundamental rights in the European Union has taken a new connotation. Local economic interests and social protests – in opposition to the “neoliberal agenda” of EU institutions – have played an important role in stopping the enforcement of the “Constitutional Treaty” and boosted an anti-Euro mobilization. In the meanwhile, the European bodies and transnational corporations have continued to settle a new and alternative basis for the integration. A radical shift can be observed, from the research of synthetic set of principles – as those established on the EU Charter of Fundamental Rights – to a deeply technical and detailed normative production. The regulation on safety and healthy workplaces is one of the best point of view to study this change. Far from calling into question the unbalanced positions between the parties in contemporary labour relationships, the European strategy for workers’ protection move through procedural issues and voluntary obedience to the soft law instruments. In the past, the legal doctrine described the creation of a multilevel architecture of institutions, sometimes implemented in a top-down approach. Along with this, recently, it was implemented the establishment of common organizational standards associated to a specific system of corporate governance to pursue a better integration between business and fundamental rights. Contributions: The main contribution of this study relates to the interdisciplinary approach, which has been carried out by means of a deep and careful study of “soft” law documents, i.e. the best practices, strategies and communications and a focus on how they can affect the enforcement/interpretation of the traditional sources of “hard” law. Keywords: Social rights; occupational health and safety; corporate governance; hard Law and soft Law; European Law. RESUMO Objetivo: O objetivo deste artigo é expor algumas consequências do processo de globalização econômica - bem como da recente "crise da dívida soberana" - na aplicação normativa da saúde e segurança dos locais de trabalho. Metodologia: A metodologia utilizada é baseada em pesquisas bibliográficas e legislativas, bem como em doutrinas e artigos publicados em periódicos especializados. Resultados:Conclui-se que, após a Conferência de Lisboa de 2009, toda a questão dos direitos fundamentais na União Europeia tomou uma nova conotação. Os interesses econômicos locais e os protestos sociais – em oposição à “agenda neoliberal” promovida pelas instituições europeias – têm desempenhado um papel importante em parar a execução do “Tratado Constitucional” e impulsionar uma mobilização anti-Euro. Neste interim, os organismos europeus e as empresas transnacionais instalaram uma base nova e alternativa para a integração. Uma mudança radical pode ser observada a partir da pesquisa de um conjunto (ainda) sintético de princípios – como os estabelecidos na Carta dos Direitos Fundamentais da União Europeia – para uma produção normativa profundamente técnica e detalhada. A regulação da segurança no local de trabalho é um dos melhores pontos de observação para estudar a transformação mencionada. Longe de pôr em causa as posições desequilibradas entre as partes nas relações de trabalho contemporâneas, a estratégia europeia para a proteção da saúde dos trabalhadores prefere as questões procedimentais e a adesão voluntária aos instrumentos de soft law. No passado, a doutrina jurídica descrevia a criação de uma arquitetura multinível de instituições, àss vezes implementada por meio de uma abordagem de cima para baixo (top-down approach). Junto com isso, recentemente, houve a implementação de padrões organizacionais comuns para a instituição de um sistema específico de governança corporativa que busca uma melhor integração entre os negócios e os direitos fundamentais. Contribuições: A principal contribuição deste estudo refere-se à abordagem interdisciplinar, realizada por meio de um estudo profundo e cuidadoso de documentos de soft law (lei não vinculativa), i. e, boas práticas, estratégias e comunicações, e um foco em como elas podem afetar a aplicação / interpretação das fontes tradicionais da hard law (lei vinculativa). Palavras-chave: Direitos sociais; segurança e saúde ocupacional; governança corporativa; hard Law e soft Law; Direito europeu.


2019 ◽  
Vol 44 (2/3) ◽  
pp. 259-277
Author(s):  
Nick Beech ◽  
Jeff Gold ◽  
Susan Beech ◽  
Tricia Auty

Purpose This paper aims to explore the impact discourse has on decision making practices within the boardroom and considers how personal proficiency in micro-language use can enhance an individual’s personal efficacy in influencing boardroom decisions. The work uses Habermas’ theory of communicative action to critique board talk, highlighting the need for greater understanding of the power of everyday taken for granted talk in strategy shaping. It illuminates the contribution that human resource development (HRD) professionals can make to the management of such behaviour and minimising dysfunctional behaviour and enabling effective boardroom practices. Design/methodology/approach Traditional governance theory from a business and organisational perspectives are provided before considering the boardroom environment and HRD’s role. The authors undertake ethnographic research supported by conversation analysis to explore how directors use talk-based interpersonal routines to influence boardroom processes and enact collective decision making. The authors provide one extract of directors’ talk to illustrate the process and demonstrate what the data “looks like” and the insights it holds. Findings The analysis suggests that the established underlying assumptions and rationale ideologies of corporate governance are misplaced and to understand the workings of corporate governance HRD academics and professionals need to gain deeper insight into the employment of talk within boards. Armed with such insights HRD professionals can become more effective in developing strategies to address dysfunctional leadership and promote good governance practice throughout their organisation. Social implications The work raises a call for HRD to embrace a societal mediation role to help boards to become a catalyst for setting good practice which is strategically aligned throughout the organisation. Such roles require a more dialogical, strategic and critical approach to HRD, and professionals and academics take a more holistic approach to leadership development. Originality/value The paper considers the role of the development of HRD interventions that both help individuals to work more effectively within a boardroom environment and support development to shape a boardroom culture that promotes effective governance practice by influencing boardroom practice thereby promoting strong governance and broad social compliance throughout the organisation.


Author(s):  
Vidya Sukumara Panicker ◽  
Rajesh Srinivas Upadhyayula ◽  
Sumit Mitra

AbstractFrom an agency perspective, the Anglo-Saxon features of corporate governance are predominantly explored by various studies in extant literature. However, it has recently been established that diverse and unique institutional configurations exist in different economies across the world and hence, the attitude of different actors within a firm, as shaped by institutional logics, can vary. Our study applies the institutionalized agency perspective to understand how the behaviour of different actors, within firms in the Indian institutional context, are shaped, consequently determining their roles in the strategic decisions of firms. We examine the representation of lenders in the board of directors, which is a characteristic of corporate governance in India. Our sample for this study consists of 985 unique Indian firms and 5513 firm year observations across the 2006–2017 time-period. We find a negative association between the proportion of lender representatives on board of directors and internationalization of firms. In addition, we also find that family ownership positively moderates this relation, whereas foreign institutional investors and domestic banks and financial institutional investors moderate this relationship negatively. In this manner, we explore the impact of institutional environment on a very specific actor (lenders) and their representatives towards internationalization.


2012 ◽  
Vol 40 (4) ◽  
pp. 509-523 ◽  
Author(s):  
Vanitha Sundra-Karean ◽  
Sharifah Suhanah Syed Ahmad

Abstract This article examines the potential for corporate social responsibility (CSR) and other soft law initiatives in generating change for blue-collar migrant workers in the Malaysian workplace. We explain the absence thus far of adequate protection for blue-collar migrant labour in formal law and corporate governance from a ‘path-dependence’ perspective and examine the potential of soft law options and government policies on labour migration as possible catalysts of change. The impact of the 1997 Asian financial crisis in creating new corporate governance rules and government support for the development of CSR is discussed along with international initiatives, such as the United Nations Global Compact, whereby Malaysian companies have committed to playing a positive role in creating favourable outcomes for labour and human rights. Avenues of development vis-à-vis CSR and other soft law mechanisms for blue-collar migrant workers are offered. We conclude with a comment on the trajectory for CSR, soft law options and blue-collar migrant employee relations in Malaysia by highlighting the potential for hybrid labour regulation, whereby soft law may be hardened through creative methods of interpretation by the courts.


2014 ◽  
Vol 10 (1) ◽  
pp. 71-83
Author(s):  
Emma Grech

The corporate governance debate has, in the last two decades, reached a stronghold in Europe. Perhaps the most valuable aspect of a company’s governance is the constitution of its boardroom. Nonexecutive directors, in their independent and impartial, supposedly external nature, serve to keep the company’s managerial section in check. Indeed, their function is primarily supervisory, working to ensure that the company’s interests are looked to by the company’s executive guise. Unfortunately, Maltese law does not regulate the post of the non-executive director in a hard and fast manner. Instead, the authorities have chosen to recognise this entity through the inclusion of his role in various non-binding guidelines and soft law mechanisms. The question that shall be tackled in this paper is whether it is acceptable, in this day and age, for the non-executive director is post which deserves a proper defining of its role and obligations within hard law. A brief comparison to foreign jurisdictions has been included for the sake of completeness.


2017 ◽  
Vol 17 (3) ◽  
pp. 511-523 ◽  
Author(s):  
Isabel Acero ◽  
Raúl Serrano ◽  
Panagiotis Dimitropoulos

Purpose This paper aims to analyse the relationship between ownership structure and financial performance in the five major European football leagues from 2007-2008 to 2012-2013 and examine the impact of the financial fair play (FFP) regulation. Design/methodology/approach The sample used comprises 94 teams that participated in the major European competitions: German Bundesliga, Ligue 1 of France, Spanish Liga, English Premier League and the Italian Serie A. The estimation technique used is panel-corrected standard errors. Findings The results confirm an inverted U-shaped curve relationship between ownership structure and financial performance as a consequence of both monitoring and expropriation effects. Moreover, the results show that after FFP regulation, the monitoring effect disappears and only the expropriation effect remains. Research limitations/implications The lack of transparency of the information provided by some teams has limited the sample size. Practical implications One of the main issues that the various regulating bodies of the industry should address is the introduction of a code of good practice, not only for aspects related to the transparency of financial information but also to require greater transparency in the information concerning corporate governance. Social implications Regulating bodies could also consider other additional control instruments based on corporate governance, such as for example, corporate governance practices, corporate governance codes, greater transparency, control of the boards of directors, etc. Originality/value This study tries to provide direct evidence of the impact of large majority investors in the clubs and FFP regulation on the financial performance of football clubs.


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