Drivers of organizational performance in state owned enterprises

2017 ◽  
Vol 66 (3) ◽  
pp. 405-423 ◽  
Author(s):  
Mbako Mbo ◽  
Charles Adjasi
Keyword(s):  
Organizational Performance ◽  
Political Influence ◽  
Financial Statements ◽  
Legal Framework ◽  
Annual Reports ◽  
Content Type ◽  
Shareholder Engagement ◽  
Organizational Issues ◽  
Stakeholder Representation ◽  
The Right

Purpose The purpose of this paper is to examine empirical evidence on factors that influence performance of state owned enterprises (SOEs). With a focus on power utilities, the paper investigates how such several factors interact with each other to influence ultimate performance. Design/methodology/approach Data on the SOEs constituting the sample is predominantly obtained from the audited annual financial statements and other publicized reports of entities for a 20-year period spanning from 1994 to 2013. The audited annual financial statements provide quantitative data whilst the rest of qualitative information is available from narratives in the annual reports. The study takes liquidity, board strength, extent of stakeholder presentation on board and government’s involvement in pricing as proxy variables for resource-based agency, stakeholder and public choice theories, respectively. Using performance as the dependent variable, the study variables are modeled in a regression model. Findings The paper finds that good SOE performance could be explained in terms of the agency and resource-based theories, where the authors found strong boards and good liquidity profiles to be positively related to good performance. A wider stakeholder representation on SOE boards correlates negatively with performance. Similarly, the higher the level of government involvement in the tariff setting process the weaker the performance results. Based on the results, the paper concludes that SOEs performance is underpinned by a plethora of organizational issues: agency, public policy, stakeholder and resource-based issues. These issues must therefore inform the appointment of SOE management and also their performance contracts. Practical implications The study suggests that SOE governance structures should be centered around four main unifying themes; agency, stakeholders, resources and shareholder engagement. From an agency perspective, board appointments should first be based on merit and stakeholder representation comes in as a subset. Resources availability should be paired with objective imperatives and engagement with political leadership should be limited to matters of policy through a regulatory and legal framework. Originality/value This study provides some practical insights from both an administration and policy perspective. First, it reveals the importance of and a linkage between both adequate resources and strong boards, but also the need to find the right balance in managing stakeholder interests SOEs face. The study does not necessarily support the popular view of completely eliminating government interference in SOE affairs, but rather advances optimal political influence through regulatory and legal frameworks without giving up ownership rights.

A turnaround fuelled by transformational leadership

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mayuree Sengupta
Keyword(s):  
Decision Making ◽  
Transformational Leadership ◽  
Organizational Performance ◽  
Secondary Data ◽  
Management Style ◽  
Early Years ◽  
Annual Reports ◽  
Work Experiences ◽  
Content Type ◽  
The Rich

PurposeThe purpose of this paper is to understand how Chairman and Managing Director (CMD) of the National Research Development Corporation, India, Hanumanthu Purushotham had facilitated a turnaround of the organization and ensured profitability during his tenure there. This is one of the series of interview-based studies that focuses on a South Asian CEO, with the goal of ascertaining his leadership and management style in a volatile situation. This brief paper expounds how leader traits and transformational leadership can positively impact an organizational turnaround and fuel growth.Design/methodology/approachThis paper uses primary interviews and complements the findings with secondary data sources such as annual reports and management literature on leadership trait, transformational leadership and organizational turnaround.FindingsThe study found that socioeconomic factors have a bearing on leadership attributes. In this instance, the CMD's early years, diverse work experiences, bright traits and transformational leadership positively impacted organizational performance. Therefore, not only the qualifications but also the qualities of a leader are pivotal in shaping success of an organization.Originality/valueThe narrative provides an instance of how decision-making driven by strategic leadership can change firm performance. The rich experiences of the India-educated CMD, a government job holder all-through, provides a veteran's view to decision-making in a state-controlled firm and helps us understand how an organization can be transformed in a limited time and with scarce resources.

scholarly journals Integrated reporting in UK higher education institutions

2019 ◽  
Vol 10 (5) ◽  
pp. 844-876 ◽  
Author(s):  
Abeer Hassan ◽  
Mahalaximi Adhikariparajuli ◽  
Mary Fletcher ◽  
Ahmed Elamer
Keyword(s):  
Higher Education ◽  
Organizational Performance ◽  
Teaching And Learning ◽  
Higher Education Institutions ◽  
Annual Reports ◽  
Integrated Reporting ◽  
Content Type ◽  
Quantitative Evidence ◽  
International Integrated Reporting Council ◽  
Uk Higher Education

Purpose This paper aims to examine trends in the content of reporting within 135 UK higher education institutions (HEIs). It explores the extent to which integrated reporting (IR) content elements, reflecting integrated thinking, are disclosed voluntarily and whether HEI-specific features influence the resulting disclosures. Design/methodology/approach Existing IR guidelines given by the International Integrated Reporting Council (IIRC) and the adoption of content analysis have provided the opportunity to examine the trend and extent of IR content elements associated in HEI corporate reports. The evidence was obtained from 405 UK HEI annual reports covering the period 2014-2016. Findings The results indicate a significant increase in the number of IR content elements embedded in HEI annual reports. The HEI-specific characteristics examined, such as the establishment of HEI (before or after 1992), adoption of IR framework and size of HEI, are all significantly and positively associated with IR content elements disclosure. This paper argues that institutional theory, isomorphism and isopraxism are relevant for explaining the changes in the contents of HEI annual reports. The findings also suggest that universities are beginning to adopt an integrated thinking approach to the reporting of their activities. Research limitations/implications The study is based on IR content elements only and could be extended to include the fundamental concepts and basic principles of the IR framework. There are other factors that have a potentially crucial influence on HEI core activities (such as teaching and learning research and internationalisation) which have been omitted from this study. Practical implications The findings will allow policymakers to evaluate the extent to which integrated thinking is taking place and influencing the UK HEI sector in the selection and presentation of information. A further implication of the findings is that an appropriate a sector-wide enforcement and compliance body, for instance, the British Universities Finance Directors Group (BUFDG), may consider developing voluntary IR guidance in a clear, consistent, concise and comparable format. Also, it may pursue regulatory support for this guidance. In doing so, it may monitor the compliance and disclosure levels of appropriate IR requirements. Within such a framework, IR could be used to assist HEIs to make more sustainable choices and allow stakeholders to better understand aspects of HEI performance. Social implications The research has implications for society within and beyond the unique UK HEI sector. Universities are places of advanced thinking and can lead the way for other sectors by demonstrating the potential of integrated thinking to create a cohesive wide-ranging discourse and create engagement among stakeholder groups. Specifically, IR builds on the strong points of accounting, for instance, robust quantitative evidence collecting, relevance, reliability, materiality, comparability and assurability, to explain the sustainability discourse into a “language” logical to HEIs organisational decision makers. Consequently, IR may generate better visibility and knowledge of the financial values of exploiting capitals (financial, intellectual, human, manufactured, social and natural) and offer a multifaceted approach to reassess HEIs organizational performance in various sectors that support the growth of integrated thinking. Originality/value This is the first known study to explore HEI characteristics and link them with the level of voluntary IR content elements disclosed in UK HEIs.

Perceptions of external auditors, preparers and users of financial statements about the adoption of IFRS 8

2015 ◽  
Vol 16 (1) ◽  
pp. 2-27 ◽  
Author(s):  
Ghassan H. Mardini ◽  
Louise Crawford ◽  
David M. Power
Keyword(s):  
Financial Statements ◽  
Annual Reports ◽  
International Accounting ◽  
Reporting Standard ◽  
Accounting Standard ◽  
Content Type ◽  
External Auditors ◽  
Decision Usefulness ◽  
Ifrs 8 ◽  
The Impact

Purpose – The purpose of this paper is to explore the perceptions of external auditors, preparers and users (investors and analysts) of financial statements in Jordan about this new segmental reporting standard; a decision usefulness framework underpins the research. Design/methodology/approach – The objective of this study is to explore the perceptions of external auditors, preparers and users (investors and analysts) of financial statements in Jordan about this new segmental reporting standard; a decision usefulness framework underpins the research. Findings – The findings reveal that a majority of interviewees found that IFRS 8 was not a problematic standard, and that the management approach of IFRS 8 was an improvement on the previous standard – International Accounting Standard (IAS) 14R – because the information produced was seen as useful to users of financial statements. Moreover, the respondents indicated that there was an improvement in the quantity and quality of segmental information under IFRS 8 in annual reports for 2009; it was more understandable, relevant, reliable and comparable than the segmental information which had previously been reported. Research limitations/implications – No attempt was made to assess the usefulness of segmental information reported under IFRS 8 by Jordanian listed companies in their annual reports for other groups such as lenders, suppliers, customers, trade creditors and the general public (IASC, 1989). Thus, a survey about the impact of IFRS 8 on other groups may yield further insights about the decision usefulness of the new standard’s disclosures. However, Jordanians are not familiar with such research instruments and the culture within the society is relatively secretive (Piro, 1998). Practical implications – The findings of the current research should be valuable for international accounting standard setters at the International Accounting Standards Board. It provides some indication about the impact of this new standard. Originality/value – This research shows that segmental information reported under IFRS 8 is more useful for decision makers needs compared to segmental information that previously reported under IAS 14R. It also provides a great insight about the impact of this new segmental disclosure standard.

scholarly journals Board structure and supplementary commentary on the primary financial statements

2014 ◽  
Vol 15 (3) ◽  
pp. 273-290 ◽  
Author(s):  
Venancio Tauringana ◽  
Musa Mangena
Keyword(s):  
Impression Management ◽  
Voluntary Disclosure ◽  
Audit Committee ◽  
Balance Sheet ◽  
Financial Statements ◽  
Ordinary Least Squares ◽  
Annual Reports ◽  
Board Structure ◽  
Least Squares Regression ◽  
Content Type

Purpose – The purpose of this paper is to investigate the relationship between the extent and focus of supplementary narrative commentary (SNC) on amounts reported in the primary financial statements and board structure variables. Design/methodology/approach – The study uses the disclosure index methodology to measure the extent of SNC in annual reports of 167 FTSE 250 companies. Ordinary least squares regression analysis is employed to examine the association between the extent and focus of SNC and board structure variables. Findings – The findings show that the extent of SNC on amounts reported in the primary financial statements is about 30 per cent, suggesting that companies provide commentary on a small number of amounts reported in the financial statements. In terms of focus of SNC, companies provide greater SNC on amounts in the income statement relative to the balance sheet. The regression results indicate that the extent of SNC is negatively associated with board size, and positively associated with audit committee (AC) independence and financial expertise. Focus of SNC is negatively related to AC independence and finance expertise. Originality/value – The research contributes to both the voluntary disclosure and impression management literature streams. The findings provide evidence of the extent and focus of SNC on amounts in the financial statements. They also demonstrate that board structure variables are related to the extent and focus of SNC on amounts in primary financial statements. These findings have implications for policy makers who have responsibilities for ensuring that users of annual reports receive adequate information to make decisions.

scholarly journals Organizational And Legal Conditions For The Realization Of Member’s Right For Information In LLC And ALC

2019 ◽  
pp. 97-103
Author(s):  
V.V. Vasylieva
Keyword(s):  
Supervisory Board ◽  
General Rule ◽  
General Meeting ◽  
Financial Statements ◽  
Annual Reports ◽  
Corporate Rights ◽  
Right To Information ◽  
The Right ◽  
Audit Reports ◽  
Executive Body

This article defines the right to information as an important component of the corporate rights of a company member, on the security of which the effective exercise of its other competencies depends. The author states that the right to information is ensured by the statutory obligation of the company to storage a certain list of documents related to the activities of the company. The Art. 43 of the LLC provides a list of documents that the company is obliged to keep such as: documents related to the foundation of the company and the founding documents and changes thereto; documents on creation of branches, representative offices of the company (in case of their creation); documents related to the issue of the securities and documents certifying the ownership of the company to the property; documents regulating the activities of the company bodies and changes thereto (regulations, instructions, etc.); documents related to the work of the bodies of the company (general meeting, executive body, supervisory board): protocols, orders, orders; documents in which the results of the company’s economic activity are directly reflected: annual financial statements, documents of annual reports submitted to the relevant state bodies, accounting documents; documents from third parties regarding the company: audit reports and results of other audit services. As a general rule, the executive body of the company is responsible for keeping the documents, and the chief accountant (if assigned) - for the accounting documents and financial statements. Due to the latest updates in the legislation of Ukraine, the participant is guaranteed with the right to receive copies of documents required by him from the company. The right to information is also ensured by establishing the responsibility of officials for not providing information or providing false information about the activities of the company. This right is protected by applying to the court for compulsory in-kind performance.

scholarly journals Corporate governance and the timeliness of audited financial statements

2019 ◽  
Vol 9 (4) ◽  
pp. 473-501
Author(s):  
David Mutua Mathuva ◽  
Venancio Tauringana ◽  
Fredrick J. Otieno Owino
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Annual Report ◽  
Financial Statements ◽  
Positive Influence ◽  
Annual Reports ◽  
Board Diversity ◽  
Content Type ◽  
Corporate Reporting ◽  
Financial Expertise

Purpose The nature of corporate governance (CG) mechanisms in an entity may influence the timeliness of the audited annual report. The purpose of this paper is to argue that the “quality” of CG in a firm has a significant association with the time it takes the audited annual report and financial statements to be released. Design/methodology/approach Using a set of 543 firm-year observations over the period 2007–2016, the authors examine whether a validated CG-Index is associated with audit report delay (ARD). The authors employ both granular as well as aggregated approaches to the analyses. In addition, the authors include control variables known to have an association with ARD in the panel data regressions. Findings The findings, which are robust for self-selection among other checks, reveal that financial expertise in the audit committee, board size, board meetings and independence in the board are associated with longer ARDs. Some CG attributes such as board diversity (i.e. women and different nationalities in the board) are associated with improved timeliness of the annual reports. The results also reveal that a longer tenure for independent directors in the board is associated with a shorter ARD. Overall, the authors find that the composite CG score has a positive influence on the timeliness of annual reports. Research limitations/implications The study focuses on listed companies in one developing country. Additional studies focusing on other jurisdictions could yield more results. Practical implications The study is useful in highlighting those CG characteristics firms should focus on toward the attainment of timely corporate reporting to aid in decision making by users. Originality/value The study is unique since it emphasizes the importance of focusing on an aggregate CG-Index, and the contribution of the CG-Index toward the timeliness of annual reports.

Auditors’ quality, footnotes, and earnings persistence

2019 ◽  
Vol 46 (2) ◽  
pp. 267-282
Author(s):  
Mohammad A. Karim ◽  
Sayan Sarkar
Keyword(s):  
Financial Statements ◽  
Financial Statement ◽  
Annual Reports ◽  
Earnings Persistence ◽  
Content Type ◽  
Big 4 ◽  
Auditor Quality ◽  
One Year ◽  
The Relationship

Purpose The purpose of this paper is to investigate the role of auditors in financial statement readability. Using a simple proxy for financial statement obfuscation (number of footnotes), the authors examine the relationship between auditor quality, financial statement readability and earnings persistence. Design/methodology/approach The authors use regression analysis to test two hypotheses. In the first hypothesis, the authors investigate whether firms audited by Big 4 auditors have a lower number of footnotes than firms audited by non-Big 4 auditors. In the second hypothesis, the authors show that the firms with more footnotes have less earning persistence in comparison to the firms with less footnotes. Findings The authors find that firms audited by Big 4 auditors have fewer footnotes than firms audited by non-Big 4 auditors, and a larger number of footnotes reduces earnings persistence one-year and two-years ahead of the financial statement, although a larger number of footnotes does not reduce earning persistence when firms use Big 4 auditors. Overall, firms that use non-Big 4 auditors tend to obfuscate annual reports by using more footnotes and, in turn, reduce earnings persistence. Originality/value This is the first paper that has used number of footnotes in 10Ks as a proxy for financial statement readability. This paper shows how auditors’ reputation plays a key role in the readability of the financial statement. Prior studies related to readability have ignored the importance of auditors’ quality with respect to the readability of financial statements.

Does IPO prospectus in Malaysia disclose relevant risk?

2019 ◽  
Vol 11 (4) ◽  
pp. 301-323
Author(s):  
Sin Huei Ng ◽  
Chen Suen Lee
Keyword(s):  
Risk Factor ◽  
Initial Public Offering ◽  
Stock Prices ◽  
Relevant Information ◽  
Annual Reports ◽  
Risk Disclosure ◽  
Content Type ◽  
Public Offering ◽  
The Right ◽  
Risk Disclosures

Purpose The study intends to shed lights on whether the risk factors disclosed in the initial public offering (IPO) prospectus in Malaysia are able to reflect the actual risks of stocks once they are traded on the exchange. In other words, the purpose of this paper is to explore whether prospective investors will be able to benefit, in terms of the more accurate risk information, from the risk disclosures in the IPO-prospectus. Design/methodology/approach Using data obtained from 118 IPO prospectuses of Malaysian companies that issued shares on Bursa Malaysia in the period from 2009 to 2016, the authors investigated whether the “risk factor” section in the IPO prospectuses provides sufficient risk-relevant information to investors. To determine whether companies disclose risk-relevant information, a detailed content analysis of the risk sections was carried out to obtain an aggregate measure of risk disclosure. Findings The findings revealed that the aggregate measures of risk extracted from these texts did not successfully predict the following outcomes: the volatility of companies’ future stock prices, the sensitivity of future stock prices to market-wide fluctuations and the severe declines in future stock prices. Practical implications As indicated by the findings, the authors, therefore, deduce that the IPO prospectuses of Malaysian companies do not provide sufficient risk-relevant information in the risk factor section. The findings imply that overall the management of Malaysian companies would neither be able nor willing to disclose the right and relevant information to the public via IPO prospectus. Originality/value Many corporate risk disclosure studies focus primarily on the disclosures of annual reports of companies. The study intends to fill the gap by focusing on the risk disclosure in the IPO-prospectus. Risk disclosures in IPO-prospectus are farmore extensive than annual reports and, therefore, provide a richness of information that will not be available in the annual reports.

Accounting for certified emission reductions (CERs) in India

2019 ◽  
Vol 28 (2) ◽  
pp. 365-389
Author(s):  
Praveen Kumar ◽  
Mohammad Firoz
Keyword(s):  
Secondary Data ◽  
Financial Statements ◽  
Annual Reports ◽  
Accounting Standard ◽  
Content Type ◽  
Reporting Practices ◽  
Know How ◽  
Certified Emission Reduction ◽  
Disclosure Rate ◽  
Very High

Purpose The purpose of this paper is to analyse the certified emission reduction (CERs) disclosure and reporting practices followed by Indian firms. Design/methodology/approach The study is based on all 131 Indian firms who received the CERs under the CDM of UNFCCC. The content analysis is being used to examine the recognition, measurement, presentation and disclosure of CERs within the financial statements. Findings The study found that there is generally no uniformity of accounting for CERs. The firms adopted a diversity of accounting practices. More specifically, majority of companies (40.46 per cent) recognised CERs as the other income; a very high non-disclosure rate (91.60 per cent) for valuation of CERs inventories was found as only four companies (3.05 per cent) provided accounting treatment for CERs inventories at lower of cost or net realisable value followed by three companies (2.29 per cent) accounted for these inventories at Net realisable value at the end of the reporting period; similarly, a very high non-disclosure rate (92.36 per cent) for how companies account for expenses incurred in earning these credits was found. Research limitations/implications The study will be useful for a wide array of audiences ranging from accounting standard setter to the auditors. The present analysis is based on secondary data, as we examined only annual reports of the sample companies to know how they recognise their earned CERs within the financial statements. So, we did not cover the opinions of various key persons of companies like an accountant, auditors etc. which could be a limitation of this study in validating CERs disclosure practices followed by the Indian firms. Originality/value To the best of the author's knowledge, the present study is a first of its kind to analyse the carbon credit disclosure practices in the context of a developing country.

The use and determinants of credit derivatives in Italian banks

2014 ◽  
Vol 15 (4) ◽  
pp. 417-436 ◽  
Author(s):  
Eleonora Broccardo ◽  
Maria Mazzuca ◽  
Elmas Yaldiz
Keyword(s):  
Financial Distress ◽  
Economies Of Scale ◽  
Credit Derivatives ◽  
Financial Statements ◽  
Annual Reports ◽  
Probit Regression ◽  
Content Type ◽  
Before And After ◽  
The Usa ◽  
Available Information

Purpose – This paper aims to answer the following research questions: To what extent do banks use credit derivatives (CDs)? What are the differences between users and non-users? What are the main underlying motivations? Design/methodology/approach – The annual reports of 112 Italian banks are analysed during the 2005-2011 period. By estimating a probit regression model, two incentives for using CD are tested: managing credit risk, and increasing a bank’s income composition/diversification. Different sub-samples are considered. The motivations are further investigated to understand whether they vary before and after the crisis. Findings – A limited number of banks use CD and larger and listed banks are more likely to do so. The results do not support the hedging hypothesis. Signals pointing towards the financial distress hypothesis emerge. Less capitalised banks are more likely to use CD. For listed banks, the findings support the hypothesis that economies of scale exist. After the financial crisis, a number of determinants tend to gain significance, and a speculative driver emerges. Originality/value – Previous studies focus primarily on the USA, and single-country studies do not exist in the literature. Given the importance of risk management that the crisis has reinforced, investigating whether CD use has changed before and after the crisis is of interest. Given the incompleteness of the information on CDs, the paper contributes to increasing the available information on CDs by hand-collecting data from banks’ financial statements.

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