scholarly journals Corporate governance: the impact of director and board structure, ownership structure and corporate control on the performance of listed companies on the Ghana stock exchange

2016 ◽  
Vol 16 (2) ◽  
pp. 259-277 ◽  
Author(s):  
Josephine Darko ◽  
Zakaria Ali Aribi ◽  
Godfrey C. Uzonwanne
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Ownership Structure ◽  
Audit Committee ◽  
Corporate Control ◽  
Sub Saharan Africa ◽  
Board Structure ◽  
Content Type ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to examine the relationship between corporate governance and firm performance of listed Ghanaian companies. Design/methodology/approach The paper adopts a longitudinal and cross-sectional data set of 20 sampled companies over a period of five years. The data were analyzed using a panel regression and ANOVA analysis to establish the relationship between corporate governance and firm performance. Corporate governance is defined in terms of three indices – board structure, ownership structure and corporate control, while firm performance is measured by return on assets, return on equity, net profit margin and Tobin’s Q. Findings The empirical results show that ownership concentration and female representation on board have a positive impact on performance. Although the results revealed no evidence to support the impact of board size and audit committee size on performance, there is significant evidence to support the fact that independent directors and audit committee frequency both adversely affect firm performance. Research limitations/implications The scope of this paper can be expanded to include non-listed firms. In addition, other corporate governance mechanisms could be considered to broaden the scope of the paper. Originality/value This paper contributes to the scarce literature on corporate governance and firm performance in developing countries, especially in sub-Saharan Africa. The paper provides useful information that is of great value to policymakers, academics and other stakeholders.

Corporate governance and firm performance: an empirical evidence from Syria

2018 ◽  
Vol 11 (4) ◽  
pp. 591-607 ◽  
Author(s):  
Zukaa Mardnly ◽  
Sulaiman Mouselli ◽  
Riad Abdulraouf
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Ownership Structure ◽  
Audit Committee ◽  
Political Stability ◽  
Foreign Ownership ◽  
Content Type ◽  
Governance Indicators ◽  
Governance Index ◽  
The Impact

Purpose This study aims to examine the impact of aggregate and individual corporate governance provisions on firm performance on all firms listed at Damascus Securities Exchange (DSE) for the period between 2011 and 2015. In addition, it disentangles ownership structure provision to ownership concentration and foreign ownership and investigates which component of ownership structure stands behind the significance of ownership structure in explaining firm performance. Design/methodology/approach The study uses multiple linear regression models to analyze the relationship between aggregate corporate governance index and its provisions and firm performance. A corporate governance index is built on the basis of four mechanics (i.e. board of directors, audit, disclosure and ownership structure) for all firms listed at DSE. On the other hand, the dependent variable (firm performance) is measured using Earnings Per Share (EPS) and Return On Assets (ROA). The authors capture current war conditions using political stability and absence of violence indicator, one of Worldwide Governance Indicators accumulated by the World bank. Findings This study finds that ownership structure is the only significant corporate governance provision in determining Syrian firms’ performance, as it loads positively and significantly on firm performance proxies (ROA and EPS). Moreover, the analysis of ownership structure items shows that foreign ownership is the main source of this positive and significant impact. This result is robust for both measures of firm performance and in the presence of political stability indicator. Originality/value This paper provides evidence on corporate governance measures from Syrian Arab Republic, a developing country with an emerging stock exchange. It examines board structure, ownership structure, audit committee and disclosure in a period of crisis because of the war in this country. Moreover, it uncovers that foreign ownership is the only influential provision affecting firm performance at DSE. Furthermore, it combines firm-level governance indicators with country governance indicator of political stability and absence of violence.

Corporate governance and firm performance: empirical evidence from Jordan

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ahmad Yuosef Alodat ◽  
Zalailah Salleh ◽  
Hafiza Aishah Hashim ◽  
Farizah Sulong
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Performance Measures ◽  
Ownership Structure ◽  
Audit Committee ◽  
Superior Performance ◽  
Tobin’S Q ◽  
Tobin's Q ◽  
Content Type ◽  
The Impact

Purpose This study aims to assess the effect of director board and audit committee attributes and ownership structure on firm performance. In general, resource dependency and agency theories have underlined the superior performance of firms equipped with stronger Corporate Governance (CG) versus those of deficient governance. Concurrently, the study delineated the provisions of ownership structure provision, specifically foreign ownership and institutional ownerships, thus describing the component denoting the structural significance in explicating firm performance. Design/methodology/approach The current study implemented an empirical approach involving the construction of extensive CG measures thus, subjected to 81 non-financial firms listed on the Amman Stock Exchange spanning the period of 2014–2018. Findings The current study identified the positive and significant relationship between the board of directors and audit committee characteristics with the firm performance measures tested, namely, return on equity (ROE) and Tobin’s Q. In terms of ownership structure, both foreign and institutional ownerships yielded a significant and positive relationship with ROE. Meanwhile, Tobin’s Q led to an insignificant and negative relationship between both ownership types and firm performance measures. Practical implications The analytical outcomes substantiate the possibility of enhanced performance shown by growing global firms because of the implementation of CG mechanisms, specifically because of the practices resulting in minimised agency costs. Originality/value The current study offers novel evidence detailing the impact of CG effectiveness towards performance and its implementation in emerging markets following the minimal amount of scholarly efforts on the topic. It is a timely contribution towards the current understanding of the relationship linking governance and performance for the purpose of ensuring the adoption and imposition of a strong corporate governance code by the government.

Audit committee characteristics and the moderating effect of Malaysian code of corporate governance on IPO liquidity

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Amal Mohammed Al-Masawa ◽  
Rasidah Mohd-Rashid ◽  
Hamdan Amer Al-Jaifi ◽  
Shaker Dahan Al-Duais
Keyword(s):  
Corporate Governance ◽  
Initial Public Offerings ◽  
Audit Committee ◽  
Ordinary Least Squares ◽  
Moderating Effect ◽  
Least Squares Regression ◽  
Content Type ◽  
Code Of Corporate Governance ◽  
The Impact ◽  
The Relationship

Purpose This study aims to investigate the link between audit committee characteristics and the liquidity of initial public offerings (IPOs) in Malaysia, which is an emerging economy in Southeast Asia. Another purpose of this study is to examine the moderating effect of the revised Malaysian code of corporate governance (MCCG) on the link between audit committee characteristics and IPO liquidity. Design/methodology/approach The final sample consists of 304 Malaysian IPOs listed in 2002–2017. This study uses ordinary least squares regression method to analyse the data. To confirm this study’s findings, a hierarchical or four-stage regression analysis is used to compare the t-values of the main and moderate regression models. Findings The findings show that audit committee characteristics (size and director independence) have a positive and significant relationship with IPO liquidity. Also, the revised MCCG positively moderates the relationship between audit committee characteristics and IPO liquidity. Research limitations/implications This study’s findings indicate that companies with higher audit committee independence have a more effective monitoring mechanism that mitigates information asymmetry, thus reducing adverse selection issues during share trading. Practical implications Policymakers could use the results of this study in developing policies for IPO liquidity improvements. Additionally, the findings are useful for traders and investors in their investment decision-making. For companies, the findings highlight the crucial role of the audit committee as part of the control system that monitors corporate governance. Originality/value To the authors’ knowledge, this work is a pioneering study in the context of a developing country, specifically Malaysia that investigates the impact of audit committee characteristics on IPO liquidity. Previously, the link between corporate governance and IPO liquidity had not been investigated in Malaysia. This study also contributes to the IPO literature by providing empirical evidence regarding the moderating effect of the revised MCCG on the relationship between audit committee characteristics and IPO liquidity.

scholarly journals The board of directors and firm performance: empirical evidence from listed companies

2019 ◽  
Vol 19 (3) ◽  
pp. 508-551 ◽  
Author(s):  
Alessandro Merendino ◽  
Rob Melville
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Agency Theory ◽  
Ownership Structure ◽  
Listed Companies ◽  
Independent Directors ◽  
Board Structure ◽  
Board Size ◽  
Ceo Duality ◽  
Content Type

PurposeThis study aims to reconcile some of the conflicting results in prior studies of the board structure–firm performance relationship and to evaluate the effectiveness and applicability of agency theory in the specific context of Italian corporate governance practice.Design/methodology/approachThis research applies a dynamic generalised method of moments on a sample of Italian listed companies over the period 2003-2015. Proxies for corporate governance mechanisms are the board size, the level of board independence, ownership structure, shareholder agreements and CEO–chairman leadership.FindingsWhile directors elected by minority shareholders are not able to impact performance, independent directors do have a non-linear effect on performance. Board size has a positive effect on firm performance for lower levels of board size. Ownership structure per se and shareholder agreements do not affect firm performance.Research limitations/implicationsThis paper contributes to the literature on agency theory by reconciling some of the conflicting results inherent in the board structure–performance relationship. Firm performance is not necessarily improved by having a high number of independent directors on the board. Ownership structure and composition do not affect firm performance; therefore, greater monitoring provided by concentrated ownership does not necessarily lead to stronger firm performance.Practical implicationsThis paper suggests that Italian corporate governance law should improve the rules and effectiveness of minority directors by analysing whether they are able to impede the main shareholders to expropriate private benefits on the expenses of the minority. The legislator should not impose any restrictive regulations with regard to CEO duality, as the influence of CEO duality on performance may vary with respect to the unique characteristics of each company.Originality/valueThe results enrich the understanding of the applicability of agency theory in listed companies, especially in Italy. Additionally, this paper provides a comprehensive synthesis of research evidence of agency theory studies.

Corporate governance mechanisms and corporate performance of firms in Nigeria and Ghana

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Martha Coleman ◽  
Mengyun Wu
Keyword(s):  
Corporate Governance ◽  
Ownership Structure ◽  
Financial Distress ◽  
Corporate Performance ◽  
Tobin’S Q ◽  
Tobin's Q ◽  
Content Type ◽  
Structure Index ◽  
The Impact ◽  
The Relationship

PurposeThis study investigates the impact of corporate governance (CG) mechanisms with inclusion of compliance and diligence index on corporate performance (CP) of firms in Nigeria and Ghana. It further examines the moderating effect of financial distress on the relationship between CG and CP.Design/methodology/approachThe study used panel data of 102 nonfinancial listed firms of Nigeria and Ghana stock exchange for the period 2012–2016 with total observation of 510. The study first used OLS in estimating the influence of CG mechanisms on CP. Due to multicollinearity in the independent variables, ridge regression was employed.FindingsIt was revealed that ownership structure index and board compliance and diligence index, board size, board disclosure, ownership structure, shareholders' right and board compliance and diligence index had positive influence on ROA and ROE. Growth of Tobin's Q depends on board procedure and board compliance and diligence index. Also, financial distress (ZFS) negatively moderates the relationship between board structure index, board disclosure index, board procedure index, shareholders' right and performance (ROA and ROE) but negatively moderates between ownership structure index and Tobin's Q.Practical implicationsThis study provides interesting findings to policymakers in full implementation of CG codes as stated by OCED (2015) by West African firms with greater emphasis on compliance and diligence index since it positively influences all CP measures.Originality/valueThe study provides evidence of the importance of the introduction of the new index: compliance and diligence, which looks at disclosure of CSR activities. This has been overlooked by most researchers especially in Africa in assessing quality CG mechanisms.

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.

The relationship between ownership structure and firm financial performance

2018 ◽  
Vol 25 (1) ◽  
pp. 319-333 ◽  
Author(s):  
Tariq Tawfeeq Yousif Alabdullah
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Emerging Economies ◽  
Ownership Structure ◽  
Foreign Ownership ◽  
Fiscal Year ◽  
Content Type ◽  
Firm Financial Performance ◽  
The Impact ◽  
Practical Implications

Purpose Previous studies that dealt with corporate governance have witnessed gradually significant growth that created some new trends. The purpose of this paper is to be involved in such trends through examining the link between ownership structure as one of the important corporate governance mechanisms and firm performance in Jordan as one of emerging economies. Design/methodology/approach The current study used the multiple regression method to analyze available data for non-financial firms listed in the Amman Stock Exchange for the fiscal year 2012. Findings The findings revealed that managerial ownership has a positive impact on performance. On the other hand, the findings surprisingly showed no evidence to support the impact of foreign ownership on performance. Moreover, there is a significant evidence to support the fact that company size has no impact on firm performance. The findings also revealed that industry type has no impact on firm performance. Practical implications The practical implications of the current study demonstrated that good corporate governance is imperative to all organizations and must be encouraged for the interest of all stakeholders. Unlike the majority of the previous studies, the current study unexpectedly found that foreign ownership is not significantly contributing to the firm performance. Thus, Jordanian Government and other related/responsible parties should formulate policies for the foreign investors. Originality/value Interestingly, from developed and developing countries perspective, the study is the first of its kind that exclusively chose the mechanisms of ownership structure in its relationship with firm performance represented by market share, where no previous study has tested foreign ownership in such relationship. In that, this study is the first study in emerging economies to investigate such a link. Such new insights on this relationship by current study provide helpful information that is of great value to the government, academics, policy makers, and other stakeholders.

Dynamic study of corporate governance structure and firm performance in China

2019 ◽  
Vol 13 (2) ◽  
pp. 299-317 ◽  
Author(s):  
Lin Shao
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Generalized Method Of Moments ◽  
Supervisory Board ◽  
Governance Structure ◽  
State Ownership ◽  
Content Type ◽  
Listed Firms ◽  
The Impact ◽  
The Relationship

Purpose The paper aims to provide a comprehensive investigation of the relationship between corporate governance (CG) structure and firm performance in Chinese listed firms from 2001 to 2015. The authors’ motivation derives from the fact that the CG system in China is different from those in the US, the UK, Germany, Japan and other countries. Design/methodology/approach A large unbalanced sample, covering more than 22,700 observations in Chinese listed firms, was used to explore, by means of a system-generalized method-of-moments (GMM) estimator, the relationship between CG structure and firm performance to remove potential sources of endogeneity. Findings Results show that Chinese CG structure is endogenously determined by the CG mechanisms investigated: there is no relationship between board size (including independent directors) and firm performance; CEO duality has a significantly negative effect on firm performance; concentration of ownership has a significantly positive influence on firm performance; managerial ownership is negatively correlated with firm performance; state ownership has a significantly positive effect on firm performance; and a supervisory board is positively correlated with firm performance. Practical implications The findings provide policymakers and firm managers with useful empirical guidance concerning CG in China. Originality/value Few integrative studies have examined the impact of CG structure on firm performance in China. This study adds new empirical evidence that the relation between CG structure and performance in China is endogenous and dynamic when controlling for unobserved heterogeneity, simultaneity, and dynamic endogeneity.

Audit committee effectiveness and family firms: impact on performance

2019 ◽  
Vol 58 (6) ◽  
pp. 1021-1034
Author(s):  
Jihad Al-Okaily ◽  
Salma Naueihed
Keyword(s):  
Firm Performance ◽  
Fixed Effects ◽  
Audit Committee ◽  
Family Firms ◽  
Family Firm ◽  
Fixed Effects Model ◽  
Minority Shareholders ◽  
Content Type ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to empirically examine the relationship between audit committee characteristics and firm performance, and whether family ownership and involvement moderate the latter relationship. Design/methodology/approach Following Anderson and Reeb (2003), this paper estimates a two-way fixed effects model. A sub-sample analysis is used by first examining the impact of audit committee effectiveness on firm performance only in non-family firms and then only in family firms. A fully interacted model was also analyzed in the robustness tests. Findings This paper finds that the audit committee characteristics of size, expertise and meeting frequency are positively and significantly related to non-family firm performance, while insignificantly related to family firm performance. Research limitations/implications The evidence reported in this paper may be of use for regulators and policy makers pondering corporate governance reforms, as well as for investors, managers and minority shareholders concerned with firm performance and valuation. Originality/value To the best of the authors’ knowledge, this is the first study of its kind to examine the moderating effect of family control and involvement on the relationship between firm performance and audit committee effectiveness in terms of size, expertise and meeting frequency.

Effect of ownership structure and board structure on firm value: evidence from India

2017 ◽  
Vol 17 (4) ◽  
pp. 700-726 ◽  
Author(s):  
Rakesh Mishra ◽  
Sheeba Kapil
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Performance Measures ◽  
Board Structure ◽  
Tobin’S Q ◽  
Reverse Causality ◽  
Tobin's Q ◽  
Data Set ◽  
Content Type ◽  
The Relationship

Purpose This paper aims to explore the relationship of promoter ownership and board structure with firm performance for Indian companies. Design/methodology/approach Corporate governance structures of 391 Indian companies out of CRISIL NSE Index (CNX) 500 companies listed on national stock exchange (NSE) have been studied for their impact on performance of companies. Panel data regression methodology has been used on data for five financial years from 2010 to 2014 for the selected companies. Performance measures considered are market-based measure (Tobin’s Q) and accounting-based measure (return on assets [ROA]). Findings The empirical findings indicate that market-based measure (Tobin’s Q) is more impacted by corporate governance than accounting-based measure. There is significant positive association between promoter ownership and firm performance. It is also indicated that the relationship between promoter ownership and firm performance is different at different levels of promoter ownership. Board size is found to be positively related to ROA; however, board independence is not found to be related to any of the performance measures. Research limitations/implications Limitations of the study are in terms of data methodology and possible omission of some variables. It is felt that endogeneity and reverse causality might be better addressed using simultaneous equation methodology. Originality/value The paper adds to the emerging body of literature on corporate governance performance relationship in Indian context using a reasonably wider and newer data set.

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