scholarly journals An attempt at defining the impact of financial crises on changes to the models of corporate governance

2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Stanisław Rudolf
Keyword(s):  
Corporate Governance ◽  
Financial Institutions ◽  
Financial Crises ◽  
Critical Analysis ◽  
International Institutions ◽  
Good Practice ◽  
Legal Regulations ◽  
Anglo Saxon ◽  
The Impact

Abstract This study aims to define the impact of two largest crises of 1997–1998 and 2007–2008 on changes to the models of corporate governance. In order to achieve the assumed aim, a critical analysis of specialist literature and relevant legal regulations has been applied. The analysis is focused on changes in the main models of corporate governance, namely: in the Anglo-Saxon (monistic) model and in the German (dualistic) model. Generally, they can be defined as of evolutionary nature but some deeper changes have taken place under the influence exerted by the above-mentioned crises. The latter crisis has emphasized the important role of corporate governance in banks and other financial institutions. Changes in corporate governance are largely affected by international institutions or organizations, such as the Organization for Economic Cooperation and Development (OECD) or the European Commission. Their recommendations and guidelines have contributed to the dissemination of so-called good practice codes. The considerations presented below allow the author to state that in both analyzed models of corporate governance, changes occur in the same or similar direction lines (the phenomenon of convergence). It can be also observed that the first analyzed crisis has caused larger changes in the monistic model, whereas the second crisis has affected the dualistic model in a more significant way.

scholarly journals The Impact of Economic Crises on Changes in Corporate Governance

Equilibrium ◽  
2011 ◽  
Vol 6 (4) ◽  
pp. 7-20
Author(s):  
Stanisław Rudolf
Keyword(s):  
Corporate Governance ◽  
European Commission ◽  
International Institutions ◽  
Good Practice ◽  
Soft Law ◽  
Anglo Saxon ◽  
Economic Crises ◽  
Hard Law ◽  
The Impact ◽  
National Systems

Over the last 10 - 15 years significant changes took place in principal systems of corporate governance i.e. in the Anglo-Saxon and German systems. These changes were of similar or the same character. This was an effect of economic crises, mainly crises of 1997 – 1998 and 2007 – 2009. The crises have influenced the changes either directly through amendments in the so-called hard law of national systems of supervision or indirectly through recommendations on corporate governance issued by international institutions and organizations. The OECD and the European Commission played the most important part in this respect. These organizations had a big impact on the formation and shape of the so-called codes of good practice, whose principles are generally implemented by companies, mainly listed companies. The principles happen to be of the so-called soft law character and after some encouraging experience with their use take on the form of legislation.

scholarly journals Importance of Corporate Governance: Evidence from Kosovo’s Banking Sector

2021 ◽  
Vol 23 (2) ◽  
pp. 5-32
Author(s):  
Esat A. Durguti ◽  
◽  
Nexhat Kryeziu ◽  
Keyword(s):  
Corporate Governance ◽  
Financial Institutions ◽  
Banking Sector ◽  
Good Practice ◽  
Secondary Data ◽  
Financial Indicators ◽  
Dynamic Approach ◽  
Net Interest Margin ◽  
Dependent Variables ◽  
The Impact

This study identifies and assesses the impact and effect of corporate governance (CG), as a good practice mechanism, as well as some specific financial indicators on the performance of the banking sector in Kosovo. The data used in the research are defined as secondary data that include nine (9) commercial banks and cover the period 2013–2020. The analysis applied to data processing is the dynamic approach through 2SLS estimation for the dependent variables ROA, ROE, and NIM. The results obtained at the end of the study show that all variables applied in this research, depending on the variable defined for evaluation, have a significant impact on the performance of the banking sector. The results also show that the most adequate measure for assessing a bank’s performance is the net interest margin (NIM). This research paves the way for debate and discussion on the governing structures of financial institutions and policymakers.

scholarly journals Corporate governance on financial performance of insurance industry

2015 ◽  
Vol 13 (1) ◽  
pp. 1201-1209 ◽  
Author(s):  
Gardachew Worku Fekadu
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Financial Institutions ◽  
Insurance Industry ◽  
Insurance Companies ◽  
Regulatory Body ◽  
Discretionary Power ◽  
Insignificant Effect ◽  
The Impact

The role of corporate governance in financial institutions differs from that of non- financial institutions for the discretionary power of the board of directors would be limited especially in regulated financial systems where financial institutions are obliged to function through legislative and prescriptive procedures, policies, rules and regulations. This study, therefore, was aimed at examining the impact of corporate governance on the performance of closely regulated Ethiopian insurance Industry. The study employed explanatory research design with an econometric panel data of 10 Insurance companies that covers the period 2007 to 2014. Board size, board independence and board diversity have negative and insignificant effect on the performance of insurance companies while size and independence of audit committee and frequency of board meetings have positive but insignificant effect on the performance of insurance companies in Ethiopia. Thus it could be concluded that all corporate governance mechanisms have insignificant effect on the performance of insurance companies measured by return on asset. This vividly affirms that the role of board of directors in closely regulated financial sector is dismal and insignificant for they have limited discretionary power to exercise as board of directors. Thus it would be recommendable if the regulatory body could relax its prescriptive and stringent policies and devolve its power to board of directors without endangering the viability of insurance companies.

scholarly journals Ownership structure and debt policy of Tunisian firms

2012 ◽  
Vol 9 (4-2) ◽  
pp. 253-261
Author(s):  
Fakher Hentat ◽  
Abdelfettah Bouri
Keyword(s):  
Corporate Governance ◽  
Corporate Finance ◽  
Financial Institutions ◽  
Ownership Structure ◽  
Remuneration System ◽  
Financial Decisions ◽  
Econometric Tests ◽  
The Impact ◽  
Debt Policy

The relation between corporate governance and the financial decisions presents a rich subject but less pronounced in corporate finance. The purpose of this article is to study the impact of the ownership structure on the debt policy of the Tunisian companies. From the econometric tests applied to Tunisian data of panel, the results obtained corroborate the assumptions of the entrenchment theory. The ownership structure is unable to orient the management of the leaders towards the maximization of the shareholders’ richness. The companies with concentrated property don’t use the debt like mean to encourage the leader to act according to their interests. The remuneration system does not encourage the leaders to privilege the financing of the investments by debt. The presence of the financial institutions in the capital of the Tunisian companies does not influence the policy of financing of the company. They don’t exert a particular role of control on the management of the leaders in place by the debt

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.

Corporate governance and the social performance: investigation on Tunisian financial institutions

2018 ◽  
Vol 60 (6) ◽  
pp. 1412-1431
Author(s):  
Nejia Nekaa ◽  
Sami Boudabbous
Keyword(s):  
Corporate Governance ◽  
Financial Institutions ◽  
Financial Institution ◽  
Stock Exchange ◽  
Social Performance ◽  
Financial Sector ◽  
Content Type ◽  
The Social ◽  
Questionnaire Method ◽  
The Impact

Purpose The purpose of this study is to show the specificities of the corporate governance of Tunisian financial institutions and the impact of the internal mechanisms of corporate governance of these institutions on their social performance. It is therefore interesting to establish the existing relationship between these mechanisms of corporate governance and the performance of a financial firm. Design/methodology/approach This study aims to study the financial sector, generally characterized by its opacity, its regulation, its evolution and its obscurity. Therefore, a study based on the questionnaire method was recommended. The questionnaire is intended for managers. Therefore, the authors interviewed 138 managers of Tunisian financial institutions dispersed between agencies and headquarters in different regions (Gabes, Tozeur, Gafsa, Sfax, Sousse and Tunisia). Findings As a result, an impact on performance was observed according to the empirical study. Therefore, the authors can conclude an essential role of internal mechanisms for improving the social performance of a financial institution. The empirical findings in this paper lead to important conclusions. Indeed, the variables measuring the governance mechanisms have divergent effects on the social performance of the financial institutions subject to the sample. For the variables board of directors, confidence, culture, auditing, they have a positive effect. While, the incentive remuneration effect negatively the social performance. Originality/value This study will be based essentially on the financial sector in Tunisia: the credit institutions (22 banks), the establishments of leasing (eight companies of leasing), two factoring companies and two banks of cases which are listed on the Stock Exchange of Tunis (BVMT).

scholarly journals Financial system and growth and economic development

VUZF Review ◽  
2021 ◽  
Vol 6 (2) ◽  
pp. 160-170
Author(s):  
Małgorzata Hala
Keyword(s):  
Economic Growth ◽  
Economic System ◽  
Financial Institutions ◽  
Financial System ◽  
Financial Sector ◽  
Real Sector ◽  
The Real ◽  
State And Local ◽  
The Impact

The aim of the article is to present the role of the financial system in economic growth and development. The first part presents the traditional understanding of the relationship between the economic system and economic growth. The second part presents the experience of financial crises and their impact on the conversation on the mutual relations between the financial sector and the real sector. The third part shows the role of the state in the financial system. The article describes the arrangement of interrelated financial institutions, financial markets and elements of the financial system infrastructure.  It shows what part of the economic system the financial system is, and whether it enables the provision of services allowing the circulation of purchasing power throughout the economy. The article presents the important role of the financial system, the role related to the transfer of capital from entities with savings to entities that need capital for investments. It shows the financial system as a set of logically related organizational forms, legal acts, financial institutions and other elements enabling entities to establish financial relations in the real sector and the financial sector, and this system forms the basis of activity for entities using money, enabling the conclusion of various economic transactions, in which money performs various functions. The article also presents the concept of a financial crisis as a situation in which there are rapid changes in the financial market, usually associated with insufficient liquidity or insolvency of banks or financial institutions, and as a result, a decrease in production or its deepening. The article also includes issues related to the impact of public authorities (state and local authorities) on the financial system in the economy.

scholarly journals An Empirical Study to Determine the Role of Credit in the Betterment of the Farmers’ Life: A Study with Special Reference to Cachar District of Assam

2021 ◽  
Vol 6 (1) ◽  
pp. 36-47
Author(s):  
Subhash Sinha ◽  
Vanlalchhawna
Keyword(s):  
Factor Analysis ◽  
Regression Analysis ◽  
Financial Institutions ◽  
Statistical Tools ◽  
Agricultural Credit ◽  
Rural People ◽  
Rural Sector ◽  
The Impact ◽  
Structured Questionnaire

The study focuses on the significance of agricultural credit that can bring change in the life of farmers and rural people. The rural sector is mostly neglected and lacks adequate finance that’s needed to back the sector. However, there are certain financial institutions that work for the welfare of the sector and lend credit facilities to farmers and associated people, for their wellbeing. The current study majorly recognizes the impact and benefits of these credit facilities in improving the situation of farmers at several unnoticed places, including Cachar district. The present study is exploratory in nature. It has explored the role of credit in farmer’s life. The data was collected through a structured questionnaire from 283farmers of Cachar district. The statistical tools applied for the study were “Exploratory Factor Analysis (EFA)”, and “Multiple regression analysis.” The factors identified were Economic Development, Agro Development and Family and Social Development. It was found that there is a significant role of credit in the development of all the three factors.

scholarly journals Foreign Shareholdings Impact on Banks Efficiency and Moderating Role of Corporate Governance

2019 ◽  
Vol 8 (2S9) ◽  
pp. 414-425
Keyword(s):  
Developing Countries ◽  
Corporate Governance ◽  
Country Of Origin ◽  
Developed Countries ◽  
Moderating Effect ◽  
Due Diligence ◽  
The Board Of Directors ◽  
The Impact ◽  
Moderating Role

The research investigate the impact of foreign shareholding originated from developed and developing countries on the efficiency of acquired local banks in Indonesia during 2007-2017 by including Corporate Governance as a moderating variable. Methodology: Using the secondary aggregate data of 29 commercial banks acquired by foreign shareholders, a panel regression model using econometrics methods of GLS, and DEA were applied to examine the effects of percentage of foreign shareholdings on efficiency of the acquired local banks. The main findings; First, percentage of foreign shareholdings positively affecting efficiency of acquired local banks only if the foreign shareholders is originated from developed countries. Second, the level of economic advancement of the country of origin of foreign shareholders has significant effects on the efficiency of the acquired local banks. Third, the increase in the size of the Board of Directors tends to decrease the efficiency of the acquired local banks and fourth, the presence of Foreign Director has a positive moderating effect on strengthening the effect of percentage of foreign shareholdings on the efficiency of the acquired local banks. Overall, the originality of this studies is that the percentage of foreign shareholdings and its country of origin are two combined factors that cannot be separated in affecting the level of efficiency of its acquired local bank and the fact of significant positive moderating effect of Foreign Director. As policy consideration, monetary authority need to perform strict due diligence on prospective foreign shareholders specifically originated from developing countries, advise banks to maintain the existence of Foreign Director and to encourage small local banks to be merged prior to the acquisition by foreign shareholders.

Memories and Uses of the Past

2021 ◽  
pp. 1-17
Author(s):  
Youssef Cassis ◽  
Catherine R. Schenk
Keyword(s):  
Financial Crisis ◽  
Financial Institutions ◽  
Financial Crises ◽  
Academic Disciplines ◽  
Conceptual Frameworks ◽  
Historical Perspectives ◽  
The Past ◽  
Past Experiences ◽  
The Impact

This chapter establishes the conceptual frameworks for assessing memories of financial crises and the ways that the past is used in periods of financial crisis. We use this framework to address three fundamental questions: first, are financial crises remembered, and if so how? Second, have lessons been drawn from past financial crises? And third, have past experiences been used in order to make practical decisions when confronted with a new crisis? These questions are of course related, yet they have been approached from different historical perspectives, using methodologies borrowed from different academic disciplines. One of the objectives of this book is to explore how these approaches can complement each other in order to better understand the relationships between remembering and learning from financial crises and how the past is used by financial institutions. It thus recognizes financial crisis as a recurring phenomenon and addresses the impact that this has in a range of public and policy contexts.

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