Corporate Governance and Corporate Risk Taking: Theory and Evidence

2006 ◽  
Author(s):  
Lubomir P. Litov ◽  
Kose John ◽  
Bernard Yin Yeung
Keyword(s):  
Corporate Governance ◽  
Risk Taking ◽  
Corporate Risk

Does corporate governance influence corporate risk-taking? Evidence from the Institutional Shareholders Services (ISS)

2015 ◽  
Vol 13 ◽  
pp. 105-112 ◽  
Author(s):  
Pornsit Jiraporn ◽  
Pattanaporn Chatjuthamard ◽  
Shenghui Tong ◽  
Young Sang Kim
Keyword(s):  
Corporate Governance ◽  
Risk Taking ◽  
Institutional Shareholders ◽  
Corporate Risk

The effects of ownership concentration and corporate governance on corporate risk-taking

2019 ◽  
Vol 33 (1) ◽  
pp. 252-267 ◽  
Author(s):  
Seksak Jumreornvong ◽  
Sirimon Treepongkaruna ◽  
Panu Prommin ◽  
Pornsit Jiraporn
Keyword(s):  
Corporate Governance ◽  
Risk Taking ◽  
Ownership Concentration ◽  
Corporate Policies ◽  
Content Type ◽  
Instrumental Variable Analysis ◽  
Developed Economies ◽  
Concentrated Ownership ◽  
Corporate Risk ◽  
Variable Analysis

Purpose This study aims to investigate the effects of ownership concentration and corporate governance on the extent of risk-taking in an important emerging economy – Thailand. Design/methodology/approach The results are corroborated by additional analysis, including an instrumental-variable analysis and propensity score matching. Findings Large owners are under-diversified and are thus more vulnerable to the firm’s idiosyncratic risk. Therefore, they tend to advocate less risky corporate policies and strategies. Consistent with this notion, the authors find that more concentrated ownership induces firms to take significantly less risk. Originality/value Ownership in Thai firms is substantially more concentrated than that in developed economies, providing a unique opportunity to study the effect of highly concentrated ownership on risk-taking.

Board composition and corporate risk-taking: a review of listed firms from Germany and the USA

2019 ◽  
Vol 20 (4) ◽  
pp. 526-542 ◽  
Author(s):  
Zahid Irshad Younas ◽  
Christian Klein ◽  
Thorsten Trabert ◽  
Bernhard Zwergel
Keyword(s):  
Corporate Governance ◽  
Risk Taking ◽  
Audit Committees ◽  
Board Composition ◽  
Corporate Boards ◽  
Content Type ◽  
Listed Firms ◽  
The Usa ◽  
Corporate Risk ◽  
The Impact

Purpose Corporate governance is a crucial factor when considering excessive corporate risk-taking. Since corporate boards play such an important role in corporate governance, the purpose of this paper is to empirically examine the impact of board composition and further board characteristics on excessive corporate risk-taking. Design/methodology/approach This study investigates listed firms from Germany and the USA from 2004 to 2015 based on data from Thomson Reuters Data Stream. The authors apply the fixed effect and random effect estimation method to demonstrate the impact of board composition on corporate risk-taking. Findings This study provides empirical evidence that an increase in the proportion of independent directors is associated with less corporate risk-taking. These effects are stronger among German firms. Lastly, the effects of board size and audit committee effectiveness (AUCE) on risk-taking have mixed results. Research limitations/implications The results favor continued efforts to strengthen the composition of corporate boards and improve the effectiveness of audit committees to curb unhealthy corporate risk-taking. The recommendations from the research will provide regulators and corporate management with the necessary information needed to design an appropriate independent board structure, and board size (BOSI). The research will, furthermore, fortify the indispensability of financial experts on audit committees. Originality/value This study contributes to the agency theory debate with these findings. Stronger board independence enables a better monitoring of the CEO, which leads to decision making based on a more appropriate level of risk.

scholarly journals Corporate risk-taking behaviour: Corporate governance perspective

2020 ◽  
Vol 2 (1) ◽  
pp. 1-12
Author(s):  
Aryestantya Fikri Dewanta ◽  
Johan Arifin
Keyword(s):  
Corporate Governance ◽  
Risk Taking ◽  
Corporate Risk

scholarly journals Corporate governance and risk taking of Jordanian listed corporations: the impact of board of directors

2019 ◽  
Vol 16 (1) ◽  
pp. 79-88 ◽  
Author(s):  
Mohammad O. Al-Smadi
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Risk Taking ◽  
Negative Impact ◽  
General Meeting ◽  
Negative Influence ◽  
Compliance Level ◽  
The Board Of Directors ◽  
Corporate Risk ◽  
The Impact

The aim of this study is to evaluate the compliance level of corporate governance rules and examine the impact of this compliance on risk taking of corporations in Jordan. This study used panel data of the listed corporations in Amman Stock Exchange from 2013 to 2017. Corporate governance index was constructed to gauge the compliance level of corporate governance rules. The results show a good level of overall compliance of corporate governance rules. As for the compliance of the categories of corporate governance rules, rules of transparency and disclosure are ranked first, while rules of general meeting assembly are ranked fourth. The regression results report a negative influence of corporate governance and corporate risk taking. In addition, four governance variables concerning the features of the board of directors are used in the study. The results reveal a negative impact of the size of the board of directors, independence of the board, and committees of the board on corporate risk taking. It is expected that the outcomes of the study can be used by management of the corporations in addition to the Jordanian Securities Commission that seek to enhance confidence in the Jordanian capital market.

Does Corporate Governance Influence Corporate Risk-Taking? Evidence from the Institutional Shareholders Services (ISS)

2015 ◽  
Author(s):  
Pornsit Jiraporn ◽  
Pattanaporn Kitsabunnarat-Chatjuthamard ◽  
Shenghui Tong ◽  
Young Sang Kim
Keyword(s):  
Corporate Governance ◽  
Risk Taking ◽  
Institutional Shareholders ◽  
Corporate Risk

Effect of Decision Makers' Education Level on their Corporate Risk Taking

2013 ◽  
Vol 41 (7) ◽  
pp. 1225-1229 ◽  
Author(s):  
Yonghai Wang ◽  
Wei Zhou ◽  
Ke-Chiun Chang
Keyword(s):  
Corporate Governance ◽  
Negative Correlation ◽  
Risk Taking ◽  
Significant Negative Correlation ◽  
Education Level ◽  
Decision Makers ◽  
Sample Population ◽  
Educational Choices ◽  
Highly Educated ◽  
Corporate Risk

We examined whether or not the education level of corporate decision makers helps explain their level of corporate risk taking. Using a sample population of listed companies in China, we documented a significant negative correlation between decision makers' education level and their level of corporate risk taking. Corporations run by more highly educated decision makers were found to have lower leverage and less volatile earnings. These results have important implications for corporate governance and educational choices.

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