The impact of internal attributes of corporate governance on firm performance

2013 ◽  
Vol 23 (1) ◽  
pp. 38-55 ◽  
Author(s):  
Nadeem Ahmed Sheikh ◽  
Zongjun Wang ◽  
Shoaib Khan
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
The Impact

The role of national culture in the impact of board gender diversity on firm performance: evidence from a multi-country study

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Navaz Naghavi ◽  
Saeed Pahlevan Sharif ◽  
Hafezali Bin Iqbal Hussain
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Generalized Method Of Moments ◽  
Gender Diversity ◽  
Governance Structure ◽  
Corporate Governance Structure ◽  
Data Set ◽  
Content Type ◽  
Board Gender Diversity ◽  
The Impact

PurposeThis study seeks to add more insights to the debate on “whether”, “how”, and “under which condition” women representation on the board contributes to firm performance. More specifically, the current study aims to investigate if the effect of board gender diversity on firm performance is dependent on macro factors of national cultures.Design/methodology/approachThe authors used the generalized method of moments regression and a data set consists of 2,550 company year observations over 10 years.FindingsThe results indicated that cultural variables interact with board diversity to influence firm performance. Having women on the board in countries with high power distance, individualist, masculine and low-uncertainty avoidance culture influences the firm performance negatively.Originality/valueThe findings indicate that the effects of corporate governance structure on firm performance depends on culture-specific factors, providing support for the argument that institutional norms that are governed by cultural norms affect the effectiveness of corporate governance structure.

New Directions in Corporate Governance and Finance: Implications for Business Ethics Research

2010 ◽  
Vol 20 (4) ◽  
pp. 673-694 ◽  
Author(s):  
Lori Verstegen Ryan ◽  
Ann K. Buchholtz ◽  
Robert W. Kolb
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Business Ethics ◽  
Boards Of Directors ◽  
Financial Regulation ◽  
Academic Fields ◽  
Board Processes ◽  
Ethics Research ◽  
New Directions ◽  
The Impact

ABSTRACT:Corporate governance and finance are dynamic academic fields that offer myriad opportunities for business ethics analysis. Within the corporate governance triad in recent years, shareholders have increased their power over boards of directors and executives through both regulation and movements to change corporate by-laws. The impact of board characteristics on firm performance has proven elusive, leading to questions concerning board processes and individual director beliefs and behaviors. At the same time, CEOs have lost considerable power, leaving many struggling to regain their control and maintain their compensation levels, while others adopt a stewardship approach to their posts. In the field of finance, the recent financial debacle has led to a reexamination of financial regulation and of the fundamental nature and purpose of the industry. All of these issues provide business ethicists fodder for investigation and analysis.

The impact of VC backing on the corporate governance of Chinese IPOs

2017 ◽  
Vol 29 (3) ◽  
pp. 330-355 ◽  
Author(s):  
Qing (Sophie) Wang ◽  
Hamish D. Anderson ◽  
Jing Chi
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Independent Directors ◽  
Board Independence ◽  
Board Size ◽  
Content Type ◽  
Shareholder Protection ◽  
Political Ties ◽  
The Impact ◽  
Industry Experience

Purpose The purpose of this paper is to investigate how venture capital (VC) backing influences the board size and independence and how VC backing and board structure impact firm performance in China. Design/methodology/approach Using hand-collected data from 924 initial public offering (IPO) prospectuses covering the period from January 2004 to December 2012, the authors investigate the impact of VC backing on board size, board independence and firm market performance through regression analysis. A two-stage approach is also used to address the endogeneity issue. Findings The authors find robust evidence that VC-backed IPOs have more independent boards, after controlling for CEO and firm characteristics, and the potential endogeneity concerns. Furthermore, firms backed by VCs with management political ties (PTs) have more independent directors with industry relevant expertise than other firms. While no significant relationship is found between board independence and firm performance, the authors present some evidence that IPOs which have a larger percentage of independent directors with industry relevant expertise exhibit higher long-term stock returns, and VCs with management PTs also improve IPO long-run stock performance. Research limitations/implications Although VC is new in China and the Chinese capital market has relative poor corporate governance and weak minority shareholder protection, the authors find support in this paper that VC backing is valuable to IPO firms in China not only through providing funding but also by providing political ties and industry experience. However, Chinese regulatory and institutional settings have strong impact on test results and they change rapidly, so the results may not apply to other period in Chinese markets. Originality/value This paper sheds lights on the influences of VC backing on corporate governance and firm performance in a transitional and emerging economy. It discovers the value of VC investors in a transitional economy as of providing political ties and industry experience. The new definition of independent directors suggested by Suchard (2009) is first used by our paper in the Chinese context.

scholarly journals The governance-performance relationship: evidence from Ghana

2016 ◽  
Vol 17 (3) ◽  
pp. 285-310 ◽  
Author(s):  
Andrews Owusu ◽  
Charlie Weir
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Fixed Effects ◽  
Developing Economies ◽  
Policy Makers ◽  
Content Type ◽  
Governance Index ◽  
Code Of Corporate Governance ◽  
The Impact ◽  
Post Code

Purpose The purpose of this paper is to investigate the impact corporate governance, measured by a governance index, on the performance of listed firms in a developing economy, Ghana. It also evaluates the effect of the introduction of a code of corporate governance on compliance rates across Ghanaian firms as well as assessing the impact of the code’s introduction on firm performance for the study period 2000-2009. Design/methodology/approach The paper develops a Ghanaian corporate governance index (GCGI) containing 33 provisions to measure corporate governance quality during the pre-code and the post-code sub-periods. The authors use a panel data analytical framework and fixed effects regressions to analyse the governance-performance relationships. Findings After controlling for endogeneity, the authors find a statistically significant and positive relationship between the GCGI and firm performance. The analysis shows evidence of a statistically significant increase in the degree of compliance with the Ghanaian Code from the pre-2003 sub-period to the post-2003 sub-period. The authors also find that the introduction of the code has led to improved firm performance. However, not all elements of corporate governance appear to have a significant effect on firm performance. Research limitations/implications One limitation of this study is the development of a corporate governance index. The binary coding used to construct the GCGI may not reflect the relative importance of the different corporate governance provisions. This means that all elements included in the index are given equal weighting. Future research may assign weights to each of the corporate governance provisions but this may have the disadvantage of making subjective judgements relative to the importance of each corporate governance provision recommended by the Ghanaian Code. Practical implications These results have important implications for both policy makers and companies. For policy makers, it is encouraging for the development of a code of corporate governance to regulate firms rather than enforcing rigid laws that may not be value relevant. For companies, the improvement in compliance with a code of corporate governance can provide a means of achieving improved performance. Originality/value This paper adds to the limited evidence on the governance-performance relationship in developing economies and in particular it analyses the role of a governance index. It is also the first paper to compare the pre- and the post-code governance index-performance relationship in an African or developing country.

scholarly journals CORPORATE GOVERNANCE AND FIRM PERFORMANCE NEXUS: A CASE OF CEMENT INDUSTRY OF PAKISTAN

2018 ◽  
Vol 1 (1) ◽  
pp. 1-6 ◽  
Author(s):  
Abdul Ghafoor Kazi ◽  
Muhammad Asad Arain ◽  
Payal Devi Sahetiya
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Ownership Structure ◽  
Significant Relationship ◽  
Stock Exchange ◽  
Study Data ◽  
Cement Industry ◽  
Annual Reports ◽  
Board Structure ◽  
The Impact

Corporate governance is the system of rules, practices and method by that business corporations are directed and controlled. The aim of this research is to examine the impact of the corporate governance on the financial performance of the enlisted cement industry on the Pakistan Stock Exchange from the year 2013-17. This research is a “quantitative research” which focuses on numbers and results based on empirical analysis of actual data and logic. Ten out of seventeen cement firms listed at PSX from the period 2013-17 are selected as sample of the study. Data was collected from documents and records. Descriptive statistics, Pearson’s correlation and multiple regressions were used for data analysis. The results showed that there is no significant relationship between leverage and firm performance, the board structure has no significant relationship with firm performance, and firm size has an insignificant relationship with firm performance. The results however suggested that ownership structure has significant relationship with firm performance. The future investors in cement industry of Pakistan must consider above factors before investments. This study helps shareholders and management in decision making about the effect of ownership structure on firm performance and how these can change ownership structure. This study helps students to gain knowledge and understanding about good corporate governance and its impact on firm performance. It will also help them to go through the annual reports of companies and to analyse the financial statements so that they could learn how to analyse the performance of the firm in terms of ROE. Moreover, the study would also be a direction for future researchers and students to further add value to the subject of corporate governance and firm performance.

scholarly journals Does a country’s financial and legal systems contemporaneously impact the governance and performance relationship: Further evidence?

2012 ◽  
Vol 9 (4-3) ◽  
pp. 279-308 ◽  
Author(s):  
Anne Anderson ◽  
Parveen P. Gupta ◽  
Andrey Zagorchev
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Stock Market ◽  
Investor Protection ◽  
Legal Systems ◽  
Market Capitalization ◽  
And Performance ◽  
Continuous Measures ◽  
The Impact ◽  
Stock Market Capitalization

We investigate the impact of continuous measures of the financial system and investor protection on the corporate governance-performance relationship. We find that shareholder suits rights/stock market capitalization (disclosure rights/stock market capitalization) has monotonic (non-monotonic) relation with firm performance and that high-levels of stock market capitalization and investor protection generate valuation synergies. Besides interactions of financial and legal systems with corporate governance, market- (bank-) orientation and development and stronger (weaker) investor protection along with better (worse) corporate governance are associated with higher (lower) valuations. A country’s migration to a developed stock market with enhanced investor protection is related to better corporate governance and firm performance.

scholarly journals Board of directors, capital structure, investment decisions and firm-performance: An empirical study of Nordic firms

2020 ◽  
Vol 17 (4, Special Issue) ◽  
pp. 377-390
Author(s):  
Shab Hundal ◽  
Anne Eskola
Keyword(s):  
Principal Component Analysis ◽  
Corporate Governance ◽  
Firm Performance ◽  
Capital Structure ◽  
Corporate Finance ◽  
Board Of Directors ◽  
Boards Of Directors ◽  
Investment Decisions ◽  
Principal Component ◽  
The Impact

Firms’ financing, boards of directors’ characteristics, investments, and firm-performance (financial and non-financial) occupy a pivotal place in corporate finance and corporate governance literature. The current study explores if causalities between the abovementioned four distinct albeit inter-related phenomena follow any pattern. The data comprising of 1240 firm-years belonging to Finland, Norway, Sweden, and Denmark for the period of 2003 to 2018 have been analyzed by applying multivariate linear regression and principal component analysis. The findings show that the impact of boards of directors’ characteristics is stronger on capital structure, however, weaker on investments and financial performance. The major contribution of the article is creating a set orderly and sequential causalities between financing, boards of directors’ characteristics, investments, and firm-performance.

scholarly journals CORPORATE GOVERNANCE UNDER MULTI- THEORETICAL PERSPECTIVE

2016 ◽  
Vol 12 (2) ◽  
Author(s):  
Muhammad Hassan ◽  
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Stock Exchange ◽  
Structural Characteristics ◽  
Theoretical Perspective ◽  
Empirical Literature ◽  
Data Set ◽  
Structural Variables ◽  
Using Data ◽  
The Impact

This study examines the impact of corporate governance reforms (SECP code in Pakistan) on board structural characteristics, board roles and firm performance. It uses an exclusive balanced panel data set of 200 companies listed on Karachi Stock Exchange. The study contributes to a sparse empirical literature on boards using data from Pakistan via multi-theoretic perspective to prove that if the boards’ monitoring and resource provision roles are strengthened through board restructuring, the financial performance of the organization will be strengthened. The main findings of the study indicate that the mediated relationship between board structural variables and firm performance is stronger. The study concludes that overall companies adopted a box-ticking approach for reporting corporate governance.

scholarly journals CORPORATE GOVERNANCE AND FIRM VALUE IN EMERGING MARKETS AN EMPIRICAL ANALYSIS OF ADR ISSUING EMERGING MARKET FIRMS

2012 ◽  
Vol 2 (1) ◽  
pp. 38-51 ◽  
Author(s):  
Aysun Ficici ◽  
C. Bulent Aybar
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Firm Value ◽  
Emerging Market ◽  
Market Value ◽  
Governance Structures ◽  
Market Values ◽  
Good Corporate Governance ◽  
Emerging Market Firms ◽  
The Impact

This study explores the value implications of good corporate governance for a sample of 54 ADR issuing emerging market firms (EMFs) from 9 countries primarily located in the regions of Asia, Eastern Europe and Latin America and the and employs recently constructed company composite corporate governance metric along with some alternative corporate governance measures associated with the origin of the issuing firm. Although the ADR literature primarily focuses on the impact of subscription to US disclosure requirements we contend that company and country specific corporate governance standards play a significant role in the risk reduction and ensuing value capture.  The fundamental inquiry in this study has the following foci: The primary focus is on the impact of corporate governance structures on firm performance as to whether adherence to standards creates market value for ADR issuing EMFs.  Do good corporate governance practices affect the value of EMFs? The secondary focus is concerned with whether the impact of corruption level and legal system in a firm’s home country affect the corporate structures of EMFs thus affecting the market value of firms.  In this study, we utilize Tobin’s q as the measure of firm performance/market value.  Our findings suggest that there is a significant correlation between corporate governance structures of ADR issuing EMFs and their market values and/or performances.  The results also indicate that the level of corruption and legal structures in home countries of EMFs strongly impact the corporate governance structures of these firms and sequentially affect their market values. Therefore, this research further contributes to the scholarly findings and suppositions that corporate structures of firms do create consequences on firm value.

scholarly journals Institutional change of compensation policy and its impact on CEO turnover and firm performance

2021 ◽  
Author(s):  
Chenli Yin ◽  
Dan Li ◽  
Maria Paz Salmador
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Negative Impact ◽  
Positive Impact ◽  
Critical Role ◽  
Ceo Turnover ◽  
Policy Adoption ◽  
Institutional Changes ◽  
Compensation Policy ◽  
The Impact

AbstractThe existing corporate governance literature has mostly focused on micro-level studies of executive compensation, with limited attention paid to influential macro-level factors such as institutions and institutional changes and their impacts on corporate governance and performance. The implementation of the new compensation policy that restricts CEO compensation ceiling in state-owned firms in China offers an ideal context for us to study how institutional changes and firms’ adoption of these changes can influence CEO turnover and firm performance. Our empirical analyses reveal that the positive impact of new compensation policy adoption on CEO turnover is stronger for CEOs with originally higher compensation. The impact of new compensation policy adoption on firm performance, however, is negative, and the negative impact is contingent upon a firm’s market share and tech intensity. Our research contributes to the literature on corporate governance by theorizing and empirically demonstrating the critical role that institutions play in corporate governance.

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