Conclusions by the OECD Corporate Governance Committee

Market returns do not fully explain individual stock return changes, suggesting insynchronous movement between the two types of returns. The phenomena is widely called stock price synchronicity. Stock price synchronicity refers to the extent to which firm-specific information incorporated in stock prices. Prior studies suggest that price synchronicity is negatively associated with information quality. Firms with poor informational environment is likely to produce unreliable financial reports. Hence, it is a necessity for a firm to establish internal mechanisms, reflected in its corporate governance system, to promote conducive informational environment. One pillar of good corporate governance is the existence of effective Board of Commissioner. This study examines the association between Board of Commissioner composition and stock price synchronicity. Board of Commissioners composition includes Board independence, Board size, and gender diversity. In addition, this study also examine the role of Governance Committee in lowering stock price synchronicity. Regression analysis show that Board size and Board independence are negatively associated with stock price synchronicity. But no significant result were found for gender diversity. These findings suggest that larger Board size and more independent Board play significant role in improving the quality of financial reporting. And the presence of female commsioners do not affect financial reporting quality.

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KONTRIBUSI KARAKTERISTIK PERUSAHAAN DAN CORPORATE GOVERNANCE TERHADAP PUBLIKASI SUSTAINABILITY REPORT

EKUITAS (Jurnal Ekonomi dan Keuangan) ◽

10.24034/j25485024.y2015.v19.i3.129 ◽

2018 ◽

Vol 19 (3) ◽

pp. 340-359

Author(s):

Muhammad Khafid ◽

Mulyaningsih Mulyaningsih

Keyword(s):

Corporate Governance ◽

Annual Report ◽

Purposive Sampling ◽

Governance Committee ◽

Sustainability Report

Sustainability report adalah laporan sukarela untuk menyajikan laporan tanggung jawab perusahaan aspek sosial, ekonomi, lingkungan. Tercatat ada sekitar 47,1% perusahaan industri pertambangan yang membuat laporan keberlanjutan secara sukarela. Tujuan dari penelitian ini adalah untuk mengetahui pengaruh profitabilitas, leverage, ukuran perusahaan, dewan direksi, komite audit, dan governance committee terhadap publikasi sustainability report. Populasi penelitian ini adalah seluruh perusahaan industri pertambangan terdaftar di Bursa Efek Indonesia 2011-2013. Teknik pengambilan sampel dengan purposive sampling. Sampel yang masuk kriteria sebanyak 17 perusahaan. Unit analisis sampel untuk tahun 2011-2013 sebanyak 51 annual report. Metode analisis data penelitian ini yaitu regresi logistik. Hasil pengujian menunjukkan bahwa variabel profitabilitas, ukuran perusahaan, dan governance committee, berperan positif terhadap publikasi sustainability report. Leverage, dewan direksi, dan komite audit tidak berpengaruh terhadap publikasi sustainability report. Saran untuk penelitian selanjutnya dengan memperhatikan kualitas isi pengungkapan dari publikasi sustainability report sesuai pedoman GRI. Selain itu sebaiknya menggunakan pengukuran yang berbeda sebagai proksi dari variabel atau mempertimbangkan faktor ekonomi, seperti perubahan kurs tingkat bunga, atau tingkat inflasi untuk menghasilkan penelitian yang lebih baik.

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Duties and responsibilities of the nominating committee

Corporate Ownership and Control ◽

10.22495/cocv15i1c1p8 ◽

2017 ◽

Vol 15 (1) ◽

pp. 246-252

Author(s):

Maria Gaia Soana ◽

Giuseppe Crisci

Keyword(s):

Corporate Governance ◽

Boards Of Directors ◽

Annual Review ◽

Banking Supervision ◽

Strategic Issues ◽

Board Committees ◽

Corporate Governance Codes ◽

Governance Committee ◽

Nominating Committees

Many corporate governance codes and reports emphasize the importance of creating nominating committees within boards. Focusing on banks, the Basel Committee on Banking Supervision (2015) recommends that boards of directors should create an internal nomination/human resources/governance committee. In this context, we have analysed the presence and main characteristics of this committee in the 30 systemically important banks (G-SIBs). To the best of our knowledge, this is the first paper describing in depth the activities of the nominating committees. Our analysis shows that the nominating committee is often also a “governance committee”. Its main responsibilities towards the full board of directors usually include identifying individuals qualified to become board members, guiding the board in its annual review, reviewing succession plans and, occasionally, monitoring education programs for directors. Most charters also entrust the appointment committee with the role of identifying members, and/or reviewing the composition, of board committees and, in a minority of cases, reviewing the suitability of the charters adopted by each board committee. The nominating committee is also frequently required to oversee for the board corporate governance policies and occasionally required to review policies relating to public/strategic issues, relationships with external entities affecting the bank’s reputation and ESG matters. Many charters also entrust the appointment committee with reviewing/appointing directors to the boards of important subsidiaries (9 out of 29) and reviewing/appointing managers (14 out of 29). The nominating committees of G-SIBs are primarily composed of independent directors. The male gender is the most represented. In 2016, the effective average number of meetings of nominating committees in was seven.

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Does corporate governance spillover firm performance? A study of valuation of MENA companies

Social Responsibility Journal ◽

10.1108/srj-06-2018-0157 ◽

2019 ◽

Vol 15 (5) ◽

pp. 597-620 ◽

Cited By ~ 6

Author(s):

Mahmoud Arayssi ◽

Mohammad Issam Jizi

Keyword(s):

Corporate Governance ◽

Firm Performance ◽

Financial Performance ◽

Ownership Concentration ◽

Board Independence ◽

Mena Region ◽

Board Size ◽

Content Type ◽

Governance Committee ◽

The Relationship

PurposeThe aim of the paper is to examine the association of corporate governance (CG), the firms’ characteristics and the financial performance of firms operating in the Middle East and North Africa (MENA) region after Arab Spring. The study focuses on CG, exemplified by boards’ composition and ownership structure. It also explores the possible moderating effects of environmental social and governance characteristics (ESG), leverage and size on the relationship between CG and the company’s performance.Design/methodology/approachUsing Thomson-Reuters database, a sample of 67 firms was extracted in the MENA region to measure CG and financial performance post Arab Spring from 2012 to 2016. Panel GLS regression random effects is used to quantify the relationship; robustness is checked by using several alternative regressions and specifications to the performance measure.FindingsThe results reveal that board independence (BI) is negatively correlated with firm profitability but ownership concentration and board gender diversification contribute to profits. When firms that voluntarily form a governance committee are examined, ownership is less concentrated. We obtain a stronger impact of good governance on performance in these firms: board composition, in general, and workers’ satisfaction generate more profits; and undertaking ESG activities become a more dispensable activity. The effect of board size (BS) and forming a governance committee are studied and ensuing recommendations are drawn. In addition, relevant internal control of firms’ characteristics that strongly predict firms’ market values are discussed in the context of agency and stewardship theories.Originality/valueDespite the fact that governance-performance nexus has been extensively discussed and examined, the focus of this volume of research is on western developed countries. The growing economies of the MENA countries, and the limited governance-performance literature in the MENA context have created a demand to understand the governance environment in these countries and its influence on firm’s performance. In this region where firms’ owners are mainly family members, governments and/or institutions, governance is typically weak; moreover, ownership concentration is expected to guarantee good performance, as the role of independent directors becomes ineffective. For firms where ownership is more diluted, a sound governance system should be established to replace ownership concentration, and to more efficiently monitor management, and consequently improve firm performance. Therefore, this study not only contributes a summary of the prevailing corporate structure in MENA. Moreover, it explains the settings where both the stewardship and agency theories apply in MENA firms. Some recommendation on the importance of changes to the existing governance rules are highlighted in terms of more rules requiring board independence, board gender diversity, limits on board size and establishing governance committees.

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PRAKTEK PENGUNGKAPAN SUSTAINABILITY REPORT DAN FAKTOR-FAKTOR YANG MEMPENGARUHINYA

Journal Competency of Business ◽

10.47200/jcob.v3i1.669 ◽

2019 ◽

Vol 3 (1) ◽

pp. 51-64

Author(s):

Okta Agil Widodo

Keyword(s):

Corporate Governance ◽

Audit Committee ◽

Sampling Method ◽

Activity Ratio ◽

Stock Exchange ◽

Board Directors ◽

Sustainability Reports ◽

Governance Committee ◽

Sustainability Report ◽

Governance Disclosure

This study aimed to analyze the influence of the characteristics of the company and corporate governance disclosure of sustainability reports. Methods of sampling in this study using purposive sampling method in banking companiesin Indonesia Stock Exchange (IDX) during the years 2013-2017. As many as 34 companies are used as the population in the study produced 28 companies that the research sample. This research uses multiple regression. The result showed that the result of this study that significant profitability on the disclosure of sustainability reports, liquidity is not significant to the disclosure of sustainability reports, leverage is not significant to the disclosure of sustainability reports, activity ratio is not significant to the disclosure of sustainability reports, audit committee significant to the disclosure of sustainability reports, board directors significant to the disclosure of sustainability reports, governance committee significant to the disclosure of sustainability reports and firm size is not significant to the disclosure of sustainability reports.

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