The evolution of the monitoring board in Japan: how the board performs monitoring function in Japanese corporate governance

2019 ◽  
Vol 19 (5) ◽  
pp. 999-1014
Author(s):  
Kohei Miyamoto
Keyword(s):  
Corporate Governance ◽  
Design Methodology ◽  
Stock Exchange ◽  
White Paper ◽  
Lifetime Employment ◽  
Content Type ◽  
Legal Reforms ◽  
Legal Evolution ◽  
Commercial Code ◽  
Governance Institutions

Purpose The purpose of this paper is to trace a legal evolution of the monitoring board and to reveal what brought the evolution and what is expected to emerge. The paper points to unique complementarities in Japanese corporate governance institutions and norms which will affect how the monitoring board performs its functions. Design/Methodology/Approach Analysis is based on texts on corporate governance legislations in Japan from the revision of Commercial Code in 1950 to the revision of Companies Act in 2014. Other sources include Tokyo Stock Exchange regulations, White Paper on Corporate Governance and other academic literatures on Japanese corporate governance. Findings Changes of non-legal institutions and norms in Japanese corporate governance necessitated legal reforms toward the monitoring board. Persisting institutions and norms, in particular lifetime employment, influences how the monitoring board performs its functions in Japan. Originality/Value This paper explains how the evolution of the monitoring board in Japan emerged and what will cause different expected functions of the monitoring board in Japan and other jurisdictions.

Relationship between corporate governance and audit switching: Iranian evidence

2017 ◽  
Vol 59 (5) ◽  
pp. 673-686
Author(s):  
Mahdi Salehi ◽  
Ali Asgar Alinya
Keyword(s):  
Corporate Governance ◽  
Design Methodology ◽  
Stock Exchange ◽  
Listed Companies ◽  
Panel Analysis ◽  
Cross Sectional ◽  
Content Type ◽  
Effective Factors ◽  
Dependent Variables ◽  
The Relationship

Purpose This paper aims to investigate the relationship between corporate governance and auditors switching of listed companies on the Tehran Stock Exchange. Design/methodology/approach To achieve the objectives of this study, 12 hypotheses developed which and tests the relationship between corporate governance and selecting and switching auditors in Iran during 2008-20014 by selecting 116 listed companies on the Tehran Stock Exchange. To test the hypotheses, the cross-sectional time-series nature of research variables data, panel analysis is used. Also, to investigate the relationship between independent and dependent variables in each year, the logistic regression is used. Findings The results of the study indicate that there is a weak relationship between corporate governance auditors switching. Therefore, it could be concluded that there are some other effective factors on which selecting and switching auditors in studied companies are more dependent. Originality/value The current study is almost the first study which has been conducted in Iran, so the results of the study may be beneficial to the Iranian conditions as well as other developing countries.

The impact of financial safety act and corporate governance on the level of financial disclosure

2016 ◽  
Vol 58 (6) ◽  
pp. 618-633 ◽  
Author(s):  
Ali Ahmadi ◽  
Abdelfettah Bouri
Keyword(s):  
Corporate Governance ◽  
Design Methodology ◽  
Stock Exchange ◽  
Financial Disclosure ◽  
Content Type ◽  
Study Results ◽  
Before And After ◽  
The Subject ◽  
High Level ◽  
The Impact

Purpose This research paper aims to identify and measure the contribution of the financial safety act (FSA) regulation in improving the level of financial disclosure of listed Tunisian firms. To answer the problems of the subject, the authors tried to hold accountable several determinants of the level of financial disclosure relating to the particular characteristics of the firm, and the adoption of the recommendations envisaged by the FSA, as likely to have an impact on the level of financial disclosure of Tunisian firms. Design/methodology/approach With a sample composed by 20 companies during the period from 2003 to 2010 (160 observations), the contribution of the FSA regulation in improving the level of financial disclosure of listed Tunisian firms was identified and measured. After that, the levels of financial disclosure before and after the FSA were compared. Findings The study results confirm the positive and significant effect of the FSA on the level of financial disclosure. This impact seems to appear through the improvement of the disclosure level during the years which follow the adoption of the new regulation. The results of this study also show that firms with a high level of financial disclosure are those which have an independent board of directors, auditor BIG and joint audit. Originality/value This paper is devoted to evaluate the impact of the FSA n°2005-96 and corporate governance on the level of financial disclosure. The empirical study relates to a sample of 20 firms listed on the Tunis Stock Exchange observed over the period 2003-2010.

scholarly journals Firms’ legitimation through corporate governance and its association with risk and return in Brazil

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Kléber Formiga Miranda ◽  
Jefferson Ricardo do Amaral Melo ◽  
Orleans Silva Martins
Keyword(s):  
Corporate Governance ◽  
Design Methodology ◽  
Management Practices ◽  
Stock Exchange ◽  
Risk And Return ◽  
Content Type ◽  
Risk Return ◽  
Governance Practices ◽  
Practical Implications ◽  
Different Levels

Purpose This study aims to examine the listing of firms at the highest corporate governance level of the Brazilian stock exchange (B3) as a means of legitimation and its relationship with risk and return on investment. Design/methodology/approach This paper analyzes 205 companies from 2010 to 2019, in which firms listed at the Novo Mercado level were compared with groups composed of other firms traded on B3. Findings The main results demonstrate that a listing at the supposedly higher level of corporate governance in Brazil does not indicate lower risk, a higher return or even a better risk-return ratio. Research limitations/implications The findings are restricted to this sample, representing the association identified between the analyzed phenomena and not a cause-effect relationship. Practical implications The highest level of corporate governance in Brazil brings together firms that present a higher risk (at least systematic) and lower returns (at least financial) because they seek to legitimize themselves in the market as firms committed to better management practices. Social implications These findings are useful to investors, the stock exchange, regulatory agents and the companies themselves to reflect on the purpose and usefulness of different levels of corporate governance in Brazil. Originality/value This study differs from the others that relate corporate governance to risk or return because it does not deal individually with corporate governance practices, but rather the phenomenon that is listed in a special governance level, created by the stock exchange, serving as a kind of seal legitimation.

Fuzzy bundling of corporate governance practices and performance of Indian firms

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Pankaj Kumar Gupta ◽  
Prabhat Mittal
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Design Methodology ◽  
Stock Exchange ◽  
Decision Making Process ◽  
Specific Level ◽  
Content Type ◽  
Governance Practices ◽  
And Performance ◽  
Conventional Regression

Purpose This paper aims to develop a framework that aids in achieving the desired state of financial performance for corporate enterprises based on distinct configurations of corporate governance (CG) practices. Design/methodology/approach This study uses a fuzzy-based system to arrive at a definitive configuration of CG practices that lead to a specific level of firm’s performance. Findings This analysis of the panel data of 92 National Stock Exchange–listed companies conducted for RONW on selected CG variables shows that eight fuzzy configurations lead to a particular state of RONW. The authors compare the results with the conventional regression-based scoring models. Originality/value Corporate enterprises can use the derived bundles of CG practices leading to a specific set of financial performance (RONW) to aid the decision-making process in defining and implementing their governance structures. The regulators can modify or customize the law-mandated CG practices to reduce redundancies and promote the national agenda of economic efficiency.

Understanding decoupling in response to corporate governance reform pressures

2015 ◽  
Vol 23 (4) ◽  
pp. 369-382 ◽  
Author(s):  
Mario Krenn
Keyword(s):  
Corporate Governance ◽  
Design Methodology ◽  
Good Governance ◽  
Regulatory Change ◽  
Compliance Monitoring ◽  
Governance Reform ◽  
Firm Level ◽  
Content Type ◽  
Good Corporate Governance ◽  
Actual Use

Purpose – The purpose of this article is to explain under what circumstances firm-level adoption of codes of good corporate governance will more likely be superficial rather than substantive in nature. The article contains lessons for any agency or country that attempts to implement deep and lasting changes in corporate governance via codes of good corporate governance. Design/methodology/approach – The article reviews the literature on compliance with codes of good corporate governance and develops a conceptual model to explain why some firms that have formally adopted a code of good governance decouple this policy from its actual use. Findings – Decoupling in response to the issuance of codes of good corporate governance will be more attractive to firms and also more sustainable under the following conditions: firms’ compliance costs are relatively high firms’ costs of outright and visible non-compliance are relatively high and outsiders’ compliance monitoring costs are relatively high. Originality/value – The article contributes to the debate on compliance and convergence and provides policymakers with a conceptual framework for assessing the likelihood of successful regulatory change in corporate governance.

scholarly journals Stewardship theory: is board accountability necessary?

2017 ◽  
Vol 59 (6) ◽  
pp. 1292-1314 ◽  
Author(s):  
Andrew Keay
Keyword(s):  
Corporate Governance ◽  
Agency Theory ◽  
Design Methodology ◽  
Agency Problems ◽  
Stewardship Theory ◽  
Content Type ◽  
General Terms ◽  
Practical Implications

Purpose The purpose of the paper is to demonstrate that notwithstanding the fact that stewardship theory embraces things like trust of directors, their professionalism, loyalty and willingness to be concerned for the interests of others, as well as rejecting the foundations of classic agency problems that are asserted by agency theory, board accountability is as relevant to stewardship theory as it is to agency theory. Design/methodology/approach The paper applies the theory underlying board accountability in corporate governance, which is so often applied both in the corporate governance literature and in practice with agency theory in mind, to stewardship theory. Findings While the idea of accountability of boards is generally associated with an explanation and conceptualisation of the role and behaviour of directors as agents within classic agency theory, the paper demonstrates that board accountability is a necessary part of board life even if the role of directors is explained and conceptualised in terms of stewardship theory. Practical implications The paper suggests some accountability mechanisms that might be employed in a stewardship approach. Originality/value While many authors have talked in general terms about board accountability and its importance, this is the first paper that has engaged in a substantial study that links board accountability directly with stewardship theory, and to establish that accountability is necessary.

The effect of auditor narcissism on audit market competition

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hojat Mohammadi ◽  
Mahdi Salehi ◽  
Meysam Arabzadeh ◽  
Hassan Ghodrati
Keyword(s):  
Financial Markets ◽  
Significant Relationship ◽  
Design Methodology ◽  
Audit Quality ◽  
Stock Exchange ◽  
Market Competition ◽  
Competitive Pressure ◽  
Content Type ◽  
Listed Firms ◽  
Audit Market

Purpose This paper aims to assess auditor narcissism’s effect on audit market competition (auditor concentration, clients’ concentration and competitive pressure). Design/methodology/approach This paper’s method is descriptive-correlational based on published information from listed firms on the Tehran Stock Exchange from 2012 to 2018 using a sample of 188 firms (1,310 observations). The method used for hypothesis testing is linear regression using panel data. Findings The results show a negative and significant relationship between auditor narcissism and audit market competition and its indices, including auditor concentration, clients’ concentration and competitive pressure. Moreover, a positive and significant relationship was observed between audit quality and audit market competition and its indices, including auditor concentration, client concentration and competitive pressure. Originality/value To analyzes competition indices in the audit market (auditor concentration, clients’ concentration and competitive pressure). The variable is assessed once more using the exploratory factor analysis of the so-called three variables single variable, named audit market competition. So the central question of the study is investigated within a broader sense. Moreover, as the present study is carried out in the emergent financial markets with extremely competitive audit markets to figure out the effect of auditors’ intrinsic characteristics on such markets’ competitiveness, it can provide useful information in this field.

scholarly journals Corporate governance and conglomerate diversification strategy – evidence from Vietnam

2018 ◽  
Vol 13 (6) ◽  
pp. 1578-1596 ◽  
Author(s):  
Thi Xuan Trang Nguyen
Keyword(s):  
Corporate Governance ◽  
Stock Exchange ◽  
Board Composition ◽  
Governance Mechanisms ◽  
Content Type ◽  
Unrelated Diversification ◽  
Corporate Governance Mechanisms ◽  
Control Devices ◽  
Interest Alignment ◽  
The Relationship

Purpose The purpose of this paper is to examine the impact of internal corporate governance mechanisms, including interest alignment and control devices, on the unrelated diversification level in Vietnam. Additionally, the moderation of free cash flow (FCF) on these relationships is also tested. Design/methodology/approach The study is based on a balanced panel data set of 70 listed companies in both stock markets, Ho Chi Minh Stock Exchange and Hanoi Stock Exchange, in Vietnam for the years 2007–2014, which gives 560 observations in total. Findings The results show that if executive ownership for CEOs is increased, then the extent of diversification is likely to be reduced. However, the link between unrelated diversification level and executive stock option, another interest alignment device, cannot be confirmed. Among three control devices (level of blockholder ownership, board composition and separation of CEO and chairman positions), the study finds a positive connection between diversification and blockholder ownership, and statistically insignificant relations between the conglomerate diversification level and board composition, or CEO duality. Additionally, this study discovers a negative link between diversification and state ownership, although there is no evidence to support the change to the effect of each internal corporate governance mechanism on the diversification level of a firm between high and low FCF. Practical implications The research can be a useful reference not only for investors and managers but also for policy makers in Vietnam. This study explores the relationship among corporate governance, diversification and firm value in Vietnam, where the topics related to effectiveness of corporate governance mechanisms to public companies has been increasingly attractive to researchers since the default of Vietnam Shipbuilding Industry Group (Vinashin) happened in 2010 and the Circular No. 121/2012/TT-BTC on 26 July 2012 of the Vietnamese Ministry of Finance was issued with regulations on corporate governance applicable to listed firms in this country. Originality/value This research, first, enriches current literature on the relationship between corporate governance and firm diversification. It can be considered as a contribution to the related topic with an example of Vietnam, a developing country in Asia. Second, the research continues to prove non-unification in results showing the relationship between corporate governance and conglomerate diversification among different nations. Third, it provides a potential input for future research works on the moderation of FCF to the effects of corporate governance on diversification.

The big bath of demonetization in India: strike on black money for corporate governance

2018 ◽  
Vol 21 (4) ◽  
pp. 594-600 ◽  
Author(s):  
Sandeep Goel
Keyword(s):  
Corporate Governance ◽  
Design Methodology ◽  
Content Type ◽  
Positive Effects ◽  
Corporate World ◽  
The World ◽  
Future Improvement ◽  
Policy Measures ◽  
The Government ◽  
Practical Implications

Purpose This paper aims to focus on the concept of abolition of black money and the demonetization movement started in India for cleaning black money and its impact on corporate world and Indian economy. It discusses the corporate governance effect of the demonetization scheme and various policy measures taken by the government to unearth and curb the black money in the country. It also states the challenges in its process of implementation and implications for future. Design/methodology/approach It appraises and reviews the concept of demonetization and its process in India since its implementation on November 8, 2016. Findings The biggest positive effects of this move were eradication of stocked and staked up money, cleansing of the financial system and improving governance in India. But its implementation had mix outcomes with its own challenges for future improvement. Practical implications The lessons drawn from the experience are expected to pave way for the countries at large. Originality/value It is an original paper on demonetization in India, and it is hoped that the lessons learnt thereof will pave the way for the world at large.

The relationship between cost stickiness and financial reporting quality in Tehran Stock Exchange

2018 ◽  
Vol 67 (9) ◽  
pp. 1550-1565 ◽  
Author(s):  
Mahdi Salehi ◽  
Nasrin Ziba ◽  
Ali Daemi Gah
Keyword(s):  
Financial Reporting ◽  
Design Methodology ◽  
Stock Exchange ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Statistical Software ◽  
Testing Hypotheses ◽  
Content Type ◽  
The Relationship ◽  
Cost Stickiness

Purpose The purpose of this paper is to investigate the relationship between financial reporting and cost stickiness in companies listed on the Tehran Stock Exchange. Design/methodology/approach Data of all Iranian manufacturing listed companies gathered for testing hypotheses during 2010–2016 and R statistical software are employed in order to analyzing data. Findings The results of this study indicate that there is a significant relationship between administrative, sale, material, labor and overhead costs and the financial reporting qualities of the companies under study. Originality/value The study focuses on relationship between financial reporting and cost stickiness in companies listed on the Tehran Stock Exchange, which is the first study of its type in Iran.

Sign in / Sign up

Export Citation Format

Share Document