The impact of political connections on the quality of corporate governance

2016 ◽  
Vol 7 (3) ◽  
pp. 247 ◽  
Author(s):  
Saidatou Dicko
Keyword(s):  
Corporate Governance ◽  
Political Connections ◽  
The Impact

Do disclosure and transparency affect bank’s financial performance?

2019 ◽  
Vol 19 (6) ◽  
pp. 1344-1361
Author(s):  
Isaiah Oino
Keyword(s):  
Risk Management ◽  
Corporate Governance ◽  
Financial Performance ◽  
Financial Institutions ◽  
Content Type ◽  
Loan Portfolios ◽  
Cent Level ◽  
Transparency And Disclosure ◽  
The Impact

Purpose The purpose of this paper is to examine the impact of transparency and disclosure on the financial performance of financial institutions. The emphasis is on assessing transparency and disclosure; auditing and compliance; risk management as indicators of corporate governance; and understanding how these parameters affect bank profitability, liquidity and the quality of loan portfolios. Design/methodology/approach A sample of 20 financial institutions was selected, with ten respondents from each, yielding a total sample size of 200. Principal component analysis (PCA), with inbuilt ability to check for composite reliability, was used to obtain composite indices for the corporate governance indicators as well as the indicators of financial performance, based on a set of questions framed for each institution. Findings The analysis demonstrates that greater disclosure and transparency, improved auditing and compliance and better risk management positively affect the financial performance of financial institutions. In terms of significance, the results show that as the level of disclosure and transparency in managerial affairs increases, the performance of financial institutions – as measured in terms of the quality of loan portfolios, liquidity and profitability – increases by 0.3046, with the effect being statistically significant at the 1 per cent level. Furthermore, as the level of auditing and the degree of compliance with banking regulations increases, the financial performance of banks improves by 0.3309. Research limitations/implications This paper did not consider time series because corporate governance does not change periodically. Practical implications This paper demonstrates the importance of disclosure and transparency in managerial affairs because the performance of financial institutions, as measured in terms of loan portfolios, liquidity and profitability, increases by 0.4 when transparency and disclosure improve, with this effect being statistically significant at the 1 per cent level. Originality/value The use of primary data in assessing the impact of corporate governance on financial performance, instead of secondary data, is the primary novelty of this study. Moreover, PCA is used to assess the weight of the various parameters.

scholarly journals Corporate Governance, Political Connections, and Bank Performance

2019 ◽  
Vol 7 (4) ◽  
pp. 62 ◽  
Author(s):  
Haris ◽  
Yao ◽  
Tariq ◽  
Javaid ◽  
Ain
Keyword(s):  
Corporate Governance ◽  
Profit Margin ◽  
Political Connections ◽  
Return On Assets ◽  
Board Size ◽  
Bank Profitability ◽  
Return On Equity ◽  
Net Interest Margin ◽  
The Impact ◽  
Interest Margin

This study investigates the impact of corporate governance characteristics and political connections of directors on the profitability of banks in Pakistan. The study uses the data of 26 domestic banks over the latest and large period of 2007–2016. Our findings firstly affirm that bank profitability is negatively affected by the presence of politically connected directors on the board, reporting significantly lower return on assets, return on equity, net interest margin, and profit margin. Secondly, our findings also affirm the negative political influence on the sustainability of the banking industry, reporting significantly lower return on assets, return on equity, net interest margin, and profit margin during the government transition of banks having politically connected directors sitting on their board. Our findings further report an inverted U-shaped relationship between board size and bank profitability, suggesting that a board size beyond 8–9 members decreases the profitability. The study further finds a positive impact of board composition, board independence, and director compensation on bank profitability, while also finding a negative impact of frequent board meetings, presence of foreign directors, and audit committee independence.

scholarly journals Corporate Governance Role in Improving the Financial Information Quality within the Saudi Electricity Company: دور حوكمة الشركات في تحسين جودة المعلومات المحاسبة في الشركة السعودية للكهرباء

2020 ◽  
Vol 4 (1) ◽  
Author(s):  
Arwa Hassan Baabbad
Keyword(s):  
Corporate Governance ◽  
Significant Relationship ◽  
Information Quality ◽  
Survey Methodology ◽  
Governance System ◽  
And Performance ◽  
The Right ◽  
Descriptive Survey ◽  
The Impact

The present study aimed to find out the role of corporate governance in improving the quality of information in the Saudi Electricity Company. The researcher used the descriptive survey methodology. As to achieve the study objectives، the researcher utilized the questionnaire tool، in which the study sample (50) members of SEC distributed into employees، managers and decision makers. The study concluded to many results، among of which are: there is a statistically significant relationship between the availability of corporate governance system and performance improvement of the Saudi Electricity Company، there is a statistically significant relationship between corporate governance and appropriateness in improving the performance of the Saudi Electricity Company، it was also found that there is a statistically significant relationship between corporate governance and optimal disclosure in improving the performance of Saudi Electricity Company. The study also found that there is a statistically significant relationship between corporate governance and the right timing in improving the performance of the Saudi Electricity Company. The study suggested number of recommendations، among of which are: the importance of the shareholding companies to comply with the corporate governance regulations considering the interest of companies and their shareholders and all other parties benefiting from the financial statements، attempting to take advantage of the multiple benefits of corporate governance and expand its application in the various economic units in Saudi Arabia، conduct studies on companies that applies the requirement of the Corporate Governance Regulations، and the impact of the application of corporate governance on the shares of these units to find out the relationship between the quality of accounting information in light of the application of corporate governance and the stock market from another angle، imposing deterrent penalties concerning the Corporate Governance Regulations on companies that did not apply this regulation.

scholarly journals The Overseas Experience of Audit Committee and Audit Fees: Empirical Evidence from China

Complexity ◽  
2021 ◽  
Vol 2021 ◽  
pp. 1-16
Author(s):  
Chengai Li ◽  
Lin Pan ◽  
Meilan Chen
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Learning Experience ◽  
Accounting Information ◽  
Audit Fees ◽  
Positive Influence ◽  
Positive Role ◽  
Quality Of Accounting Information ◽  
The Impact

The complexity of audit committee experience, including the overseas experience, has an important impact on corporate governance. In this paper, we study the impact of the overseas experiences of the members of audit committee on audit fees. Our empirical analysis and results show that the audit committee overseas experience can significantly increase audit fees. Further, the positive influence of the audit committee overseas experience on audit fees is more pronounced in state-owned enterprises and regions with weak marketization. In addition, we divide the overseas experience into overseas learning experience and overseas working experience. We find that both types of experience present in the audit committee significantly increase the audit fees. Finally, we find that the audit committee overseas experience can significantly improve the quality of accounting information and play a positive role in corporate governance.

scholarly journals Large pension funds and the corporate governance practices of Brazilian companies

2012 ◽  
Vol 9 (2) ◽  
pp. 76-84 ◽  
Author(s):  
Rodrigo Miguel de Oliveira ◽  
Ricardo Pereira Câmara Leal ◽  
Vinicio de Souza Almeida
Keyword(s):  
Corporate Governance ◽  
Institutional Investors ◽  
Pension Funds ◽  
Brazilian Government ◽  
Good Corporate Governance ◽  
Political Views ◽  
Governance Practices ◽  
Corporate Governance Quality ◽  
The Impact

We do not find any consistent evidence that the presence of the largest Brazilian pension funds as relevant shareholders is associated to higher corporate governance scores by public Brazilian companies. Even though companies with institutional investors as relevant shareholders presented a higher average corporate governance score than other companies, they were also larger and had greater past profitability than other companies, which are common attributes of firms with better corporate governance according to the literature. The impact of Brazilian institutional investors on the corporate governance quality of their investees is either negligible or cannot be captured by the proxies we employed. Finally, we note that these two pension funds may represent the policy and political views of the incumbent Brazilian government and that the actions of their board appointees may or not reflect what is understood as good corporate governance practices.

scholarly journals The Impact of Sustainable Financial Data Governance, Political Connections, and Creative Accounting Practices on Organizational Outcomes

2019 ◽  
Vol 11 (20) ◽  
pp. 5676 ◽  
Author(s):  
Tha’er Amjed Mahmoud Ababneh ◽  
Mehmet Aga
Keyword(s):  
Decision Making ◽  
Accounting Information ◽  
Financial Data ◽  
Political Connections ◽  
Equation Modeling ◽  
Data Governance ◽  
Creative Accounting ◽  
Information Reporting ◽  
The Impact

Decision-making and financial information quality are key facets of corporate sustainability. The literature is devoid of inquiries investigating the collective impact of sustainable financial data governance and political connections on creative accounting practices, the quality of financial reporting and decision-making effectiveness. The present study integrates these critical factors by obtaining survey data (n = 180) from publicly listed firms in Amman Stock Exchange, Jordan. By applying partial least squares structural equation modeling (PLS-SEM), this study found that (i) sustainable financial data governance does not influence creative accounting practices, (ii) political connections influences the level of firms creative accounting practices, (iii) creative accounting practices influences the quality of financial and accounting information reporting, and (iv) the quality of financial and accounting information reporting influences firms decision-making effectiveness. Implications, limitations, and future research courses are discussed.

scholarly journals CORPORATE GOVERNANCE AND BUSINESS PERFORMANCE: EVIDENCE FOR THE ROMANIAN ECONOMY

2015 ◽  
Vol 17 (3) ◽  
pp. 458-474 ◽  
Author(s):  
Monica-Violeta ACHIM ◽  
Sorin-Nicolae BORLEA ◽  
Codruţa MARE
Keyword(s):  
Corporate Governance ◽  
Business Performance ◽  
Stock Exchange ◽  
Policy Makers ◽  
Governance Practices ◽  
Corporate Governance Practice ◽  
Corporate Governance Quality ◽  
The Impact ◽  
A Company

Our finding contributes towards the understanding of movements regarding the adoption of corporate governance practice in emerging countries such as Romania and its impact on business performances of a company. We have developed two econometric models to assess the business performances of the companies listed on Bucharest Stock Exchange, in order to point out the impact of corporate governance on business performances. Our results are inconsistent for the period 2001–2011, but if we consider only 2011, the results document a positive correlation between corporate governance quality and market value of companies, such it is reflected by Tobin’s Q. Therefore, our results contribute to the studies relating corporate governance and business performances, as it confirms a positive relationship between the two variables which appears once the Romanian emerging economy has began to adopt the best corporate governance practices. Firstly, our research has important implications for managers in order to know that the adoption of the best corporate governance practices could contribute to the financial success of the firm. Secondly, the results are useful for any investor who needs to consider the quality of corporate governance as a good predictor for the best rate of return of theirs investments. Moreover, our findings have also implications on policy-makers and regulatory authorities in European developing countries and offer them a barometer of adopting the best corporate governance practices in European space.

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