Economic Consequences of Corporate Governance Disclosure: Evidence from the 2006 SEC Regulation on Related-Party Transactions

2019 ◽  
Author(s):  
Ole-Kristian Hope ◽  
Haihao Lu
Keyword(s):  
Corporate Governance ◽  
Economic Consequences ◽  
Related Party Transactions ◽  
Sec Regulation ◽  
Governance Disclosure

Economic Consequences of Corporate Governance Disclosure: Evidence from the 2006 SEC Regulation on Related-Party Transactions

2019 ◽  
Vol 95 (4) ◽  
pp. 263-290
Author(s):  
Ole-Kristian Hope ◽  
Haihao (Ross) Lu
Keyword(s):  
Corporate Governance ◽  
Cost Of Capital ◽  
Securities And Exchange Commission ◽  
Economic Consequences ◽  
Related Party Transactions ◽  
Public Firms ◽  
Implied Cost Of Capital ◽  
Commission Regulation ◽  
Sec Regulation ◽  
Governance Disclosure

ABSTRACT This paper examines economic consequences of a 2006 Securities and Exchange Commission regulation that mandated public firms to disclose their governance policies on related-party transactions (RPTs). Employing hand-collected RPT data for S&P 1500 firms, we find that the initiation of RPT governance disclosure significantly reduces the occurrence of RPTs, and that the reduction in RPTs is negatively associated with the implied cost of capital (ICC) and positively related to Tobin's Q. These effects are more pronounced for low-monitored firms and for firms with RPTs that are more likely to be opportunistic. We further find that firms with a formal written policy, a designated committee to review and approve RPTs, or more extensive disclosure on RPT governance benefit in terms of lower ICC.

The drivers of corporate governance disclosure: the case of Nifty 500 Index

2018 ◽  
Vol 60 (2) ◽  
pp. 681-700 ◽  
Author(s):  
Androniki Katarachia ◽  
Electra Pitoska ◽  
Grigoris Giannarakis ◽  
Elpida Poutoglidou
Keyword(s):  
Corporate Governance ◽  
Financial Leverage ◽  
Policy Makers ◽  
Content Type ◽  
Explanatory Variables ◽  
Size Number ◽  
Governance Practices ◽  
Board Director ◽  
First Time ◽  
Governance Disclosure

Purpose Based on agency theory, the purpose of this paper is to investigate the determinants on the dissemination level of corporate governance disclosure (CGD). Design/methodology/approach The sample of the study incorporates listed companies in Nifty 500 Index for the period 2009-2014. The Governance Disclosure Score calculated by Bloomberg is used as a proxy for the dissemination level of corporate governance information. In total, eight explanatory variables are uses, namely, board’s size, number of board meetings, CEO duality, presence of women on the board, company’s size, financial performance, Tobin’s Q ratio and financial leverage. Findings The results of study suggest a need for improvement in CGDs by Indian companies, as they fail to comply the majority of the proposed disclosure items. Furthermore, it is revealed that the number of board director, the value of company, the financial leverage and the presence of women affect negatively the dissemination level of corporate governance information. While, the size of company is the only determinant that positively affects the extent of CGD. Practical implications The results are valuable because they reveal the attributes that determines which companies needs less or extra monitoring by shareholders and investors regarding the applied corporate governance practices. In addition, the study can be valuable to policy makers responsible for the regulation of company’s accountability in relation to corporate governance practices. Originality/value The study extents previous studies by incorporating for the first time Bloomberg’s rating approach regarding the dissemination level of CGD in Indian context.

scholarly journals The Effect of Corporate Governance Disclosure on Banking Performance: Empirical Evidence from Iran, Saudi Arabia and Malaysia

2020 ◽  
Vol 7 (3) ◽  
pp. 41-51
Author(s):  
Khanifah KHANIFAH ◽  
◽  
Pancawati HARDININGSIH ◽  
Asri DARMARYANTIKO ◽  
Iryantika IRYANTIK ◽  
...  
Keyword(s):  
Corporate Governance ◽  
Saudi Arabia ◽  
Empirical Evidence ◽  
Governance Disclosure

scholarly journals Is the market swayed by press releases on corporate governance? Event study on the Eurostoxx banks

2018 ◽  
Vol 15 (3) ◽  
pp. 23-31 ◽  
Author(s):  
Marina Brogi ◽  
Valentina Lagasio
Keyword(s):  
Corporate Governance ◽  
Event Study ◽  
Stock Prices ◽  
Investment Decisions ◽  
Press Releases ◽  
European Banks ◽  
Study Methodology ◽  
The Impact ◽  
Governance Disclosure ◽  
Event Study Methodology

Are press releases on Corporate Governance price sensitive? What is the impact of Corporate Governance information on stock prices of banks? This paper addresses these questions by applying an event study methodology on 70 press releases published by the Euro area banks listed on the Eurostoxx banks Index, from 2007 to 2016. Systemic shocks are explored as well idiosyncratic ones. Our results show that investment decisions are significantly but negatively influenced by the disclosure of a press release on corporate governance as if this kind of news leads investors to perceive the banks’ prospects negatively. The best of our knowledge this is the first paper that investigates European banks press releases on corporate governance. Findings are relevant for banks’ management and their disclosure policy. Nonetheless, further research is needed to investigate differences and similarities between an area of governance disclosure and another.

Sign in / Sign up

Export Citation Format

Share Document