scholarly journals Corporate governance reform in Nigeria: upstream and downstream interventions

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Franklin Nakpodia ◽  
Femi Olan
Keyword(s):  
Corporate Governance ◽  
Qualitative Methodology ◽  
Resource Dependence ◽  
Developing Economies ◽  
Governance Reform ◽  
Structured Interviews ◽  
Top Down ◽  
Content Type ◽  
Corporate Governance Reforms ◽  
Governance Reforms

Purpose Internal (e.g. firm performance, internal stakeholders) and external pressures (e.g. globalisation, technology, corporate scandals) have intensified calls for corporate governance reforms across varieties of capitalism. Yet, corporate governance practices among developing economies remain problematic. Drawing insights from Africa’s largest economy (Nigeria) and relying on the resource dependence theorisation, this study aims to address two questions – what are the prerequisites for effective reforms; and what reforms yield robust corporate governance? Design/methodology/approach This study adopts a qualitative methodology comprising semi-structured interviews with 21 executives in publicly listed Nigerian firms. The interviews were analysed using the content analysis technique. Findings This study proposes two sequential reforms (i.e. the upstream and downstream). The upstream factors highlight the preconditions that support corporate governance reforms, i.e. government commitment and enabling environment, while the downstream reforms combine elements of awareness and regulation to proffer robust corporate governance interventions. Originality/value This research further stresses the need to consider a bottom-up approach to corporate governance in place of the dominant top-down strategy. This strategy allows agents to participate actively in corporate governance policy-making rather than a top-down model, which imposes corporate governance on agents.

Economic role of politics and corporate governance: reforms captured in Malaysia’s setting

2017 ◽  
Vol 59 (6) ◽  
pp. 839-853 ◽  
Author(s):  
Nurul Nazlia Jamil
Keyword(s):  
Corporate Governance ◽  
Emerging Market ◽  
Political Influence ◽  
Political Agenda ◽  
The Political ◽  
Content Type ◽  
Economic Role ◽  
Corporate Governance Reforms ◽  
Governance Reforms

Purpose This study aims to examine the economic role of politics on corporate governance reforms in one of emerging market, namely, Malaysia. Design/methodology/approach The paper is based upon a literature review analysis. Findings The Malaysian economic, political and social settings have resulted in undue state and detrimental political influence on business, and yet the corporate governance reforms undertaken seemed not be able to resolve the matter. It is suggesting that it would be beneficial for Malaysia to have more independent regulatory bodies representing a wide variety of stakeholders to improve the transparency and accountability to ensure that the reforms are effectively enforced without conflicting with the political agenda. Legal institutional reforms also may be needed to improve the structure, capacity and performance of judicial system, as it is capable to capture reliance of economic role of politics and promoting accountability in Malaysia. Research limitations/implications The economic role of politics on corporate governance reforms is merely to broaden the political strategy in the corporate sector as the change in politics can improve the effectiveness of corporate governance reforms. Moreover, the economic role of politics raises the tone of the corporate governance reforms, and it implies that policymakers need to have effective corporate governance strategy in dealing with the reforms initiatives in areas that have strong political interventions. Originality/value Regulatory and judicial implications are offered as a means to improve corporate governance in Malaysia.

scholarly journals Corporate governance reforms and shareholders’ confidence in emerging markets

2017 ◽  
Vol 14 (1) ◽  
pp. 60-74 ◽  
Author(s):  
Haseeb-Ur- Rahman ◽  
Mohd. Yussoff Ibrahim ◽  
Ayoib Che Ahmad
Keyword(s):  
Corporate Governance ◽  
Emerging Markets ◽  
Design Methodology ◽  
Market Price ◽  
Descriptive Statistics ◽  
Policy Makers ◽  
Content Type ◽  
Regression Estimators ◽  
Corporate Governance Reforms ◽  
Governance Reforms

Purpose The purpose of this paper is to investigate the relation of corporate governance (CG) attributes, such as separate leadership (SL) structure, independent chair (IC) of the board, and the proportion of independent directors on the board (Bind) recommended by the new Malaysian Code on Corporate Governance (2012), with firms’ market performance measured by share market price. Design/methodology/approach The paper uses a randomly selected sample of 150 non-financial Malaysian listed companies. To find the distinct impact of the code, the paper explicitly divides the sample into two-year pre-context (2010-2011) and two-year post-context (2013-2014) of the code. Besides descriptive statistics, the study also employs correlation and multiple regression estimators. Findings By comparing the pre-context and post-context of the code, the study found that SL and Bind have a significant positive relation while IC of the board has a significant negative relation with share market price after enactment of the code. Research limitations/implications The paper has a limitation of using only two years of data due to its non-availability particularly after enactment of the code. The findings show that the new code slightly improved compliance to the CG attributes investigated. Based on findings, the study also recommends further improvement in compliance to CG codes and other voluntary regulations in Malaysia. Originality/value Besides contributing to the limited and incongruent literature in pre-context and post-context of CG regulations, the paper also provides important insights for regulators and policy makers of the emerging markets like Malaysia.

An assessment of corporate governance reforms in Italy based on a comparative analysis of earnings management

2014 ◽  
Vol 14 (3) ◽  
pp. 407-423 ◽  
Author(s):  
Domenico Campa ◽  
Ray Donnelly
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Good Governance ◽  
Firm Level ◽  
Content Type ◽  
Good Corporate Governance ◽  
The Uk ◽  
The Impact ◽  
Corporate Governance Reforms ◽  
Governance Reforms

Purpose – The purpose of this paper is to evaluate the impact of corporate governance reforms in Italy. Design/methodology/approach – The authors argue that the effectiveness of corporate governance can best be assessed with reference to the choices made by management or controlling shareholders. They use the curtailment of earnings management as a desirable and measureable outcome of good corporate governance to assess Italy’s progress since the 1990s. The UK is used as a reference point because it is a European Union (EU) economy of comparable size and there is evidence that its firms managed earnings to a much lesser extent than their counterparts in Italy in the 1990s. A matched sample of UK and Italian firms was used for the empirical analysis. Findings – It was found that in contrast to the situation in the 1990s, firms in Italy do not manage earnings to a greater extent than their UK counterparts after the corporate governance reforms. In addition, firm-level governance has a greater effect on earnings management in Italy than in the UK. The authors attribute this to firm-level governance compensating for deficiencies in national institutions. Research limitations/implications – The restriction of earnings management is just one positive consequence of good governance. Other positive outcomes require to be studied to form a complete picture of the impact of governance reforms in Italy. Originality/value – This paper is the first to use an outcome-driven approach to evaluate the impact of governance reforms.

scholarly journals Corporate governance, ownership structure and capital structure: evidence from Chinese real estate listed companies

2020 ◽  
Vol 28 (4) ◽  
pp. 759-783 ◽  
Author(s):  
Yi Feng ◽  
Abeer Hassan ◽  
Ahmed A. Elamer
Keyword(s):  
Corporate Governance ◽  
Real Estate ◽  
Capital Structure ◽  
Ownership Structure ◽  
State Ownership ◽  
Board Structure ◽  
Data Set ◽  
Content Type ◽  
Corporate Governance Reforms ◽  
Governance Reforms

Purpose This paper aims to contribute to the existing capital structure and board structure literature by examining the relationship among corporate governance, ownership structure and capital structure. Design/methodology/approach The paper uses a panel data of 595 firm-year observations from a unique and comprehensive data set of 119 Chinese real estate listed firms from 2014 to 2018. It uses fixed effect and random effect regression analysis techniques to examine the hypotheses. Findings The results show that the board size, ownership concentration and firm size have positive influences on capital structure. State ownership and firm profitability have inverse influences on capital structure. Research limitations/implications The findings suggest that better-governed companies in the real estate sector tend to have better capital structure. These findings highlight the unique Chinese context and also offer regulators a strong incentive to pursue corporate governance reforms formally and jointly with the ownership structure. Finally, the results suggest investors the chance to shape detailed expectations about capital structure behavior in China. Future research could investigate capital structure using different arrangement, conducting face-to-face meetings with the firm’s directors and shareholders. Practical implications The findings offer support to corporate managers and investors in forming or/and expecting an optimal capital structure and to policymakers and regulators for ratifying laws and developing institutional support to improve the effectiveness of corporate governance mechanisms. Originality/value This paper extends, as well as contributes to the current capital structure and corporate governance literature, by proposing new evidence on the effect of board structure and ownership structure on capital structure. The results will help policymakers in different countries in estimating the sufficiency of the available corporate governance reforms to improve capital structure management.

The security market and the changing government role in Japan

2016 ◽  
Vol 5 (4) ◽  
pp. 388-407 ◽  
Author(s):  
Masao Nakamura
Keyword(s):  
Corporate Governance ◽  
Selective Adaptation ◽  
Security Market ◽  
Business Practices ◽  
Governance Mechanisms ◽  
Content Type ◽  
Security Markets ◽  
Corporate Governance Mechanisms ◽  
Corporate Governance Reforms ◽  
Governance Reforms

Purpose The purpose of this paper is to explain how current security market regulations in Japan have evolved following Japan’s corporate governance reforms, which began in the 1990s after the bursting of a massive financial bubble. As part of the reform, Japan aimed to introduce US-style corporate governance mechanisms. Design/methodology/approach This paper first explains the process behind Japan’s corporate governance reforms using the theory of selective adaptation. By doing so, the various changes that have taken place in the regulations of security markets are also explained. The paper concludes with a discussion of the limitations of transplanting US-style corporate governance mechanisms in Japan and the implications for the functioning of Japan’s security markets. Findings While applying a selective adaptation framework to Japan’s efforts to transplant US-style corporate governance mechanisms to its own markets, the author found that certain Japan-specific business practices, such as its heavy reliance on keiretsu corporate groupings, may interfere with the market-based business practices and free competition which characterize the US system. This in turn places limitations on the functioning of US-style security markets in Japan. Originality/value This paper explains the limitations of government regulation on security markets in Japan, which may be of interest to both public and private sector analysts. This paper focusses on Japan’s experience of transplanting US-style corporate governance mechanisms to Japan. The author expect that Japan’s experience will be of much interest to China, South Korea and other countries in East Asia, where pyramidal and other types of business groups play important roles in their economies.

Impact of corporate governance compliance and board attributes on operating liquidity in pre- and post-corporate governance reforms

2020 ◽  
Vol 20 (7) ◽  
pp. 1329-1347
Author(s):  
Javed Khan ◽  
Shafiq Ur Rehman
Keyword(s):  
Corporate Governance ◽  
Gender Diversity ◽  
Governance Mechanisms ◽  
Internal Governance ◽  
Content Type ◽  
Internal Governance Mechanisms ◽  
External Governance ◽  
The Impact ◽  
Corporate Governance Reforms ◽  
Governance Reforms

Purpose This study aims to investigate the impact of corporate governance compliance, governance reforms and board attributes on operating liquidity of Pakistani listed non-financial firms. The study further tests how these relationships vary in the pre- and post-corporate governance reforms. Design/methodology/approach Fixed-effect regression model is used on 10 years panel data from 2007 to 2016 for a sample of 170 firms listed on the Pakistan Stock Exchange. Two-stage least squares model is used for addressing the endogeneity problem. Findings The findings reveal that governance compliance and governance reforms negatively affect operating liquidity. Among the board attributes, board meetings, directors’ remuneration, board foreign diversity and board gender diversity are significantly related to operating liquidity. Further exploration indicates that internal governance mechanisms are less effective to safeguard shareholders from expropriation during weak external governance. This suggests that strong external governance is inevitable to the effectiveness of internal governance mechanisms. Overall, the study findings support the agency theory. Practical implications The findings provide valid recommendations to policymakers interested in safeguarding the investors to focus on macro-level governance for making the micro-level governance effective. Further, the results provide the executives with an insight to improve the compliance level with the code of corporate governance. Originality/value Unlike prior studies, this study examines the impact of corporate governance compliance and novel board attributes – directors’ attendance at board meetings, number of board committees, directors’ remuneration and board foreign diversity on operating liquidity. Further, the study subdivides its sample period into pre- and post-corporate governance reforms to examine how external governance influences internal governance effectiveness.

Accrual mispricing in the era of corporate governance reforms

2020 ◽  
Vol 28 (3) ◽  
pp. 373-394
Author(s):  
Lan Sun
Keyword(s):  
Corporate Governance ◽  
Stock Returns ◽  
Financial Reporting ◽  
Discretionary Accruals ◽  
Cash Flows ◽  
Accrual Anomaly ◽  
Content Type ◽  
Corporate Governance Reforms ◽  
Governance Reforms ◽  
Accrual Mispricing

PurposeThis study is primarily motivated by the increasing concern of the academic, practitioners, regulators and standard setters regarding the quality of earnings and financial reporting. The purpose is to investigate whether the accrual anomaly exists in Australia; whether the occurrence of the accrual anomaly is attributed to the discretionary accruals component stemming from managerial discretion; and the impact of corporate governance reforms on accrual mispricing.Design/methodology/approachThis study employs the Mishkin (1983) rational expectations test to examine whether the earnings expectations embedded in stock prices accurately reflect the differential persistence of earnings components. It also employs the hedge portfolio trading strategy to examine whether taking a long position in firms with low accruals and a short position in firms with high accruals will yield positive abnormal stock returns.FindingsThe results show that investors overestimate the persistence of accruals and underestimate the persistence of cash flows and subsequently, overprice the accruals and underprice the cash flows. The evidence of accrual mispricing is severe for the component of discretionary accruals. Nonetheless, the association between discretionary accruals and abnormal returns are weakened during the corporate governance reforms period.Research limitations/implicationsIt should be cautious to attribute the investors' ability to accurately price accruals and cash flows to the passage of corporate governance reform program. Despite there is control for firm size, book-to-market, PE multiple, growth and leverage, other macro-economic factors such as interest rates, inflation and GDP could potentially have an impact on stock returns.Practical implicationsThe passage of corporate governance reform program has increased the level of financial reporting disclosure and the monitoring of management, which subsequently improved accruals persistence and earnings quality. A direct practical implication is that investors should better understand the information in accruals for future earnings when the corporate disclosure environment is strengthened.Social implicationsThis study provides useful information to regulators, academics and investors interested in market efficiency and accrual mispricing. The results suggest that the reform of corporate governance is associated with more efficient prices. This may be of interest to the regulators who intend to improve earnings quality and financial reporting environment through the regulatory reform.Originality/valueTo test the accrual anomaly in the period of corporate governance reforms is particularly useful to regulators and policy makers. It allows regulators and policy makers to gain insight as whether the change of regulation has been effective – more transparent and timely reporting of financial information are supposed to help the investors to better understand the accruals and thus mitigate the potential for accrual mispricing.

Corporate governance reforms and bank performance: evidence from the Middle East and North Africa

2017 ◽  
Vol 17 (5) ◽  
pp. 822-844 ◽  
Author(s):  
Saibal Ghosh
Keyword(s):  
Corporate Governance ◽  
Middle East ◽  
North Africa ◽  
Operating Efficiency ◽  
Bank Performance ◽  
Content Type ◽  
Mena Countries ◽  
The Impact ◽  
Corporate Governance Reforms ◽  
Governance Reforms

Purpose The purpose of the study is to understand the importance of corporate governance reforms for the Middle East and North Africa (MENA) country banks. To address this issue, the author combines the staggered timing of corporate governance reforms for banks across MENA countries with bank-level data for the period 2000-2012 and examine the impact on bank performance. Design/methodology/approach The author employs fixed effects regression within a difference-in-differences specification for the analysis. Findings The analysis suggests that not all governance characteristics are equally effective and some of these characteristics exert a more pronounced effect on bank performance as compared to others. These results also vary across oil-exporting and -importing nations and differ during the crisis. Besides, the authors find that improved operating efficiency and access to finance are the key channels through which governance improves bank performance. Practical implications Corporate governance reforms in the MENA countries need to be carefully tailored, taking into account the inherent economic characteristics of the country for it to exert durable impact. The challenge for policymakers is to find the right balance that can ensure maximum benefits for the banking sector, while minimizing the challenges involved in its implementation. Originality/value To the best of the authors’ knowledge, this is one of the earliest studies for MENA country banks to examine the interface between corporate governance reforms and bank performance, while controlling for the possible endogeneity of such reforms on performance.

Sign in / Sign up

Export Citation Format

Share Document