Institutional Investor Preferences for Corporate Governance Mechanisms

2013 ◽  
Vol 26 (2) ◽  
pp. 123-149 ◽  
Author(s):  
Brian J. Bushee ◽  
Mary Ellen Carter ◽  
Joseph Gerakos
Keyword(s):  
Corporate Governance ◽  
Institutional Ownership ◽  
Institutional Investor ◽  
Shareholder Rights ◽  
Revealed Preferences ◽  
Governance Mechanisms ◽  
Corporate Governance Mechanisms ◽  
Growth Firms ◽  
High Level ◽  
Jel Classifications

ABSTRACT We examine institutional investors' preferences for corporate governance mechanisms. We find little evidence of an association between total institutional ownership and governance mechanisms. However, using revealed preferences, we identify a small group of “governance-sensitive” institutions that exhibit persistent associations between their ownership levels and firms' governance mechanisms. We also find that firms with a high level of ownership by institutions sensitive to shareholder rights have significant future improvements in shareholder rights, consistent with shareholder activism. Further, we find that factors describing the characteristics of institutions' portfolios are correlated with governance preferences. Large institutions, those holding a large number of portfolio stocks, and those with preferences for growth firms are more likely to be sensitive to corporate governance mechanisms, suggesting those mechanisms may be a means for decreasing monitoring costs and may be more essential for firms with a high level of growth opportunities. Finally, our results suggest that common proxies for governance sensitivity by investors (e.g., legal type, blockholding) do not cleanly measure governance preferences. JEL Classifications: G11; G20; G34.

scholarly journals The Relationship between Corporate Governance Mechanisms and Going Concern Evaluation: Evidence from Firms Listed on Amman Stock Exchange

2014 ◽  
Vol 4 (4) ◽  
pp. 100
Author(s):  
Bilal Nayef Zureigat ◽  
Faudziah Hanim Fadzil ◽  
Syed Soffian Syed Ismail
Keyword(s):  
Corporate Governance ◽  
Stock Exchange ◽  
Negative Relationship ◽  
Institutional Ownership ◽  
Board Independence ◽  
Board Meeting ◽  
Governance Mechanisms ◽  
Going Concern ◽  
Corporate Governance Mechanisms ◽  
The Relationship

This study aims to examine the relationship between corporate governance mechanisms (representative by each of managerial, institutional ownership, board independence and board meeting) and going concern evaluation among Jordanian listed firms. Through using multiple regression analysis, the results of this study illustrates that there is a positive relationship between managerial ownership, board independence and board meeting and going-concern evaluation, while a negative relationship is found with institutional ownership. There are four main hypotheses, two of them which are managerial and institutional ownership are accepted, while board independence and board meeting are not supported. This study shed more light on the importance of complying with the requirements of governance code and instructions by the companies and the need to impose fines or sanctions on non-compliant companies. The results of this study contribute to the creditors’ interest to be more alert to companies which may possess characteristics that contribute in manipulation of future companies.

scholarly journals Pengaruh Mekanisme Corporate Governance Terhadap Konservatisme Akuntansi Dengan Intensitas Fair Value Sebagai Pemoderasi

2020 ◽  
Vol 8 (1) ◽  
pp. 65
Author(s):  
Kazbarani Alvino ◽  
Nurzi Sebrina
Keyword(s):  
Corporate Governance ◽  
Ownership Structure ◽  
Audit Quality ◽  
Institutional Ownership ◽  
Fair Value ◽  
Foreign Ownership ◽  
Accounting Conservatism ◽  
Manufacturing Companies ◽  
Governance Mechanisms ◽  
Corporate Governance Mechanisms

The purpose of this research is to examine the effect of corporate governance mechanisms that are moderated by fair value on the level of accounting conservatism. The corporate governance mechanism consists of an independent commissioner, an institutional ownership structure, a foreign ownership structure and audit quality.  Research conducted on manufacturing companies and financial companies listed on the Stock Exchange period 2016-2018, purposive sampling method was used to determine the research sample so that 93 manufacturing companies and 52 financial companies was obtained. Hypothesis testing is done by multiple regression methods. The results showed that the independence of commissioners had a positive effect on the level of accounting conservatism. In manufacturing companies, institutional ownership structure does not affect the level of conservatism, whereas in financial companies, institutional ownership structure influences the level of accounting conservatism. Other corporate governance mechanisms, foreign ownership and audit quality, do not influence the level of accounting conservatism in both manufacturing and financial companies. The intensity of fair value in both sectors of the company has a negative effect, or weakens the relationship of corporate governance mechanisms to the level of accounting conservatism Keywords: Accounting Conservatism; Fair Value; Corporate Governance

scholarly journals The impact of corporate governance mechanisms on financial reporting transparency

2017 ◽  
Vol 14 (3) ◽  
pp. 25-33 ◽  
Author(s):  
Samin Kohansal ◽  
Shoeyb Rostami ◽  
Zeynab Rostami
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Financial Reporting ◽  
Institutional Ownership ◽  
Board Independence ◽  
Governance Mechanisms ◽  
Management Behavior ◽  
Ceo Tenure ◽  
Corporate Governance Mechanisms ◽  
The Impact

Corporate governance has been raised as one of the most important issues among the international business environment since the beginning of the twenty-first century. At first, corporate governance basic principles focused on firm’s strategies and the rights of their shareholders but these principles has been changed into the rights of all stakeholders and society through researchers new viewpoints. Although corporate governance codes and regulations are different in various countries, there is a common unanimity that better compliance of corporate governance improves financial reporting quality and transparency. The aim of this paper is to investigate the impact of corporate governance mechanisms on financial reporting transparency in Tehran Stock Exchange over a seven year period (from 2006 to 2012). Besides we have specially reviewed related researches and topics about corporate governance in various countries which their results were discussed in different parts of the article. In order to examine the hypothesis a sample of 67 companies is used. In this paper we used ownership concentration, institutional ownership, board independence, board size, CEO duality and CEO tenure as the corporate governance mechanisms. We also used earnings management behavior by employing Kasznik model (the absolute value of abnormal accruals) as a measure of financial reporting transparency. To test research hypothesis a multiple regression with estimated generalized least square method is employed. The findings indicate that ownership concentration, institutional ownership, board independence and CEO tenure has positively affected financial reporting transparency through earnings management behavior. On the other hand board size and CEO duality has negatively affected financial reporting transparency through earnings management behavior.

The Effects of Corporate Governance Mechanisms on Investment In Information Technology: Evidence from Tunisan Banks

2017 ◽  
Vol 7 (2) ◽  
pp. 472
Author(s):  
Nourhene Blibech ◽  
Mohamed Tahar Rajhi
Keyword(s):  
Information Technology ◽  
Corporate Governance ◽  
Ownership Structure ◽  
Audit Committee ◽  
Institutional Investor ◽  
Governance Mechanisms ◽  
It Investments ◽  
Corporate Governance Mechanisms ◽  
Information Technology Investments ◽  
The Board Of Directors

The aim of this paper is to investigate the influence of internal corporate governance mechanisms, the ownership structure and the board of directors, on the intensity of information technology investments of Tunisian banks during the period 2005 to 2104. Empirical evidence shows that ownership concentration of the first three shareholders and institutional investor ownership are significantly positive on IT investments, foreigner investors’ share in Tunisian banks has a negative and a significant impact. Board size has a negative and a significant impact on the intensity of IT investments. However, independence of the directors and the presence of an audit committee in the board have a positive and a significant effect.

scholarly journals Pengaruh Struktur Kepemilikan Dalam Mekanisme Corporate Governance Terhadap Cost Of Equity Capital

2009 ◽  
Vol 1 (1) ◽  
pp. 89
Author(s):  
Tarjo Tarjo
Keyword(s):  
Corporate Governance ◽  
Institutional Ownership ◽  
Equity Capital ◽  
Managerial Ownership ◽  
Strong Impact ◽  
Cost Of Equity Capital ◽  
Cost Of Equity ◽  
Governance Mechanisms ◽  
Corporate Governance Mechanisms ◽  
The Cost

AbstractCorporate governance mechanisms believed to have strong impact to the companies’ performance. Corporate governance mechanisms examined in this study are managerial ownership and institutional ownership structure. The purposes of this study are to know the variables effect of managerial ownership and institutional ownership on cost of equity capital. The samples of the study are firms listed in Jakarta Stock Exchange in 2005. The F-test on the all variables at the level confidence 1% indicates the effect of all variables on cost of equity capital is significant. The result of this study showed that managerial ownership and institutional ownership have positive significant impact (at the level of confidence 1% and 5%) on the cost of equity capital. However this result showed that corporate governance mechanisms fail to decrease the cost of equity capital.

scholarly journals PENGARUH MEKANISME CORPORATE GOVERNANCE TERHADAP TAX AVOIDANCE

2020 ◽  
Vol 13 (1) ◽  
pp. 115-120
Author(s):  
Agustina Mapadang
Keyword(s):  
Corporate Governance ◽  
Stock Exchange ◽  
Tax Avoidance ◽  
Institutional Ownership ◽  
Manufacturing Companies ◽  
Governance Mechanisms ◽  
Tax Rate ◽  
Corporate Governance Mechanisms ◽  
The Board Of Directors ◽  
Negative Effect

This study aims to analyze the influence of corporate governance mechanisms on tax avoidance. Corporate governance mechanisms are measured by Independent Commissioners and Institutional Ownership while tax avoidance is measured by the Avoidance Tax Rate. The research population is all manufacturing companies listed on the Indonesia Stock Exchange in 2012-2016 using purposive sampling method. The number of observations of 435 and the type of research is the analysis of causal relationships to see the effect of each variable. The results of the study show that corporate governance mechanisms negatively affect tax avoidance; the board of directors has a positive effect on tax avoidance and institutional ownership has a negative effect on the value of the company.

scholarly journals Peran Mekanisme Corporate Governance sebagai Pemoderasi Praktik Earning Management terhadap Nilai Perusahaan

TRIKONOMIKA ◽  
2013 ◽  
Vol 12 (1) ◽  
pp. 49
Author(s):  
Mochammad Ridwan ◽  
Ardi Gunardi
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Firm Value ◽  
Institutional Ownership ◽  
Audit Committees ◽  
Managerial Ownership ◽  
Governance Mechanisms ◽  
Corporate Governance Mechanisms

This study aims to determine how the effect of earnings management on firm value is moderated by the role of corporate governance mechanisms consisting of an outside independent director, institutional ownership , managerial ownership , audit committees , and the classification of public accounting firms ( KAP ) . In this study, the population of the entire company is listed on the Indonesia Stock Exchange totaling 111 companies , but only 103 of the 111 companies that companies used in this study . To find out how the effect of earnings management on firm value is moderated by the role of corporate governance mechanisms using Moderated Regression Analysis . The results prove that the earnings management significantly influence the value of the company . Institutional ownership , managerial ownership , and the classification of KAP is moderating variables influence earnings management relations while independent directors and audit committees is not a moderating variable.

scholarly journals PENGARUH CORPORATE GOVERNANCE (CG) TERHADAP KUALITAS LABA DENGAN MANAJEMEN LABA SEBAGAI VARIABEL INTERVENING PADA PERUSAHAAN MANUFAKTUR YANG TERDAFTAR DI BEI PERIODE 2015-2017

2019 ◽  
Vol 3 (2) ◽  
pp. 267
Author(s):  
Alvin Pranata Nanang ◽  
Hendang Tanusdjaja
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Audit Committee ◽  
Earnings Quality ◽  
Institutional Ownership ◽  
Annual Reports ◽  
Managerial Ownership ◽  
Manufacturing Companies ◽  
Governance Mechanisms ◽  
Corporate Governance Mechanisms

Penelitian ini dilakukan untuk menguji bagaimana pengaruh mekanisme tata kelola perusahaan (corporate governance) dalam hal ini yaitu: kepemilikan institusional, kepemilikan manajerial, komite audit, dan dewan komisaris independen terhadap kualitas laba dengan manajemen laba sebagai variabel intervening. Data yang digunakan dalam penelitian ini ialah data sekunder yang diperoleh melalui laporan keuangan dan laporan tahunan dari masing-masing perusahaan. Laporan keuangan dan laporan tahunan tersebut diperoleh melalui www.idx.co.id.  Analisis data dalam penelitian ini yaitu analisis jalur dengan SEM dengan menggunakan SMARTPLS 3. Populasi dalam penelitian ini ialah seluruh perusahaan manufaktur yang terdaftar di BEI pada periode 2015-2017, dengan total sampel sebesar 28 perusahaan. Hasil penelitian ini membuktikan bahwa mekanisme corporate governance dalam hal ini yaitu: kepemilikan institusional, kepemilikan manajerial, komite audit, dan dewan komisaris independen tidak memiliki pengaruh signifikan baik terhadap manajemen laba maupun kualitas laba. Manajemen laba berpengaruh signifikan terhadap kualitas laba. Mekanisme corporate governance dalam penelitian ini menunjukkan bahwa hanya kepemilikan institusional dan dewan komisaris independen yang memiliki pengaruh signifikan terhadap kualitas laba dengan manajemen laba sebagai variabel intervening, sedangkan kepemilikan manajerial dan komite audit tidak berpengaruh signifikan terhadap kualitas laba dengan manajemen laba sebagai variabel intervening. This study was conducted to examine how the influence of corporate governance mechanisms in this case, namely: institutional ownership, managerial ownership, audit committee, and independent board of commissioners on earnings quality with earnings management as an intervening variable. The data used in this study are secondary data obtained through financial reports and annual reports from each company. The financial statements and annual reports are obtained through www.idx.co.id. Analysis of the data in this study is path analysis with SEM using SMARTPLS 3. The population in this study are all manufacturing companies listed on the Indonesia Stock Exchange in the period 2015-2017, with a total sample of 28 companies. The results of this study prove that corporate governance mechanisms in this case are: institutional ownership, managerial ownership, audit committee, and the independent board of commissioners do not have a significant effect both on earnings management and earnings quality. Earnings management has a significant effect on earnings quality. The corporate governance mechanism in this study shows that only institutional ownership and independent board of commissioners have a significant influence on earnings quality with earnings management as an intervening variable, while managerial ownership and audit committees do not significantly influence earnings quality with earnings management as an intervening variable.

scholarly journals The effect of sharia share selection based on financial ratio and corporate governance mechanism on the quality of company profit

2021 ◽  
Vol 3 (2) ◽  
pp. 241-272
Author(s):  
Nida Ulya Sofana ◽  
Faris Shalahuddin Zakiy ◽  
Muchammad Fauzi ◽  
Singgih Muheramtohadi ◽  
Najim Nur Fauziah
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Earnings Quality ◽  
Institutional Ownership ◽  
Stock Index ◽  
Managerial Ownership ◽  
Governance Mechanisms ◽  
Corporate Governance Mechanisms ◽  
Equity Ratio

Purpose - This study aims to obtain empirical evidence regarding the effect of Islamic stock selection based on financial ratios (debt to assets ratio, debt to equity ratio, non-halal income ratio) and corporate governance mechanisms (managerial ownership, independent commissioners, institutional ownership, audit committee) on company earnings quality.Method - The population of this research is all companies that are members of the Indonesian Sharia Stock Index in 2017-2019. The sample selection used purposive sampling method and obtained 67 sample companies. This study uses secondary data with multiple linear regression analysis method.Result - Debt to assets ratio, managerial ownership, institutional ownership, and audit committee have no significant positive effect on earnings quality. The ratio of non-halal income has a negative and significant effect on earnings quality. Meanwhile, the debt to equity ratio and independent commissioners do not have a significant negative effect on earnings quality.Implication - Companies that are members of the Indonesian Sharia Stock Index are expected to be able to improve the quality of their financial reports. On the other hand, investors are expected to find out and study the company's annual report as a material consideration for investment decisions.Originality - The originality of the research is this study intends to develop previous research by examining the selection criteria for sharia shares and corporate governance mechanisms.

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