Disclosure by Indian companies following corporate governance reform

2015 ◽  
Vol 16 (1) ◽  
pp. 114-137 ◽  
Author(s):  
Santhosh Abraham ◽  
Claire Marston ◽  
Edward Jones
Keyword(s):  
Corporate Governance ◽  
Self Regulation ◽  
Annual Reports ◽  
Governance Reform ◽  
Content Type ◽  
Bonding Theory ◽  
Disclosure Requirements ◽  
Corporate Governance Reform ◽  
Clause 49 ◽  
Governance Disclosure

Purpose – The purpose of this paper is to investigate Indian companies’ compliance with the mandatory and voluntary corporate governance disclosure requirements of the Stock Exchange Board of India’s Clause 49. Design/methodology/approach – The authors develop a corporate governance disclosure index and sub-indices based on Clause 49. Annual reports of listed Indian companies are scored according to their disclosures in two periods – pre and post amendments to Clause 49. Findings – Indian companies are highly compliant with corporate governance disclosure requirements of Clause 49. Disclosure increases significantly after amendments to Clause 49 as the penalties for non-compliance increase in severity. Government controlled firms disclose significantly less than privately owned firms. Research limitations/implications – The findings are consistent with bonding theory and the authors note that the presence of an independent regulator (with powers to take action against violators) provides corporate India with additional incentives to comply with corporate governance reform. Practical implications – These findings have important implications for policy makers and regulators as they contribute to the debate on the choice between formal corporate governance regulation versus informal self-regulation. The study also has implications for understanding factors associated with the adoption of disclosure practices in general. Originality/value – This is the first study to examine disclosure compliance in a major developing country pre and post amendments to mandatory corporate governance requirements. Prior evidence indicates a low level of disclosure in India but our results demonstrate an improvement in line with our theoretical predictions that suggests, India is converging towards an Anglo-Saxon model of corporate governance.

scholarly journals The impact of AAOIFI governance disclosure on Islamic banks performance

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Tawida Elgattani ◽  
Khaled Hussainey
Keyword(s):  
Corporate Governance ◽  
Regression Model ◽  
Financial Institution ◽  
Ordinary Least Squares ◽  
Annual Reports ◽  
Islamic Banks ◽  
Least Squares Regression ◽  
Content Type ◽  
The Impact ◽  
Governance Disclosure

Purpose This study aims to investigate the impact of the accounting and auditing organisation for Islamic financial institution (AAOIFI) governance disclosure on the performance of Islamic banks (IBs). Design/methodology/approach The ordinary least squares regression model was used to test the impact of AAOIFI governance disclosure on the performance of 126 IBs from 8 countries that mandatorily adopt the AAOIFI standards for three years (2013–2015). In this regression model, return on asset (ROA) and return on equity (ROE) are the dependent variables, while AAOIFI governance disclosure is the independent variable. Corporate governance mechanisms, firm characteristics, year dummy and country dummy are used as control variables. Findings This paper found an insignificant relationship between AAOIFI governance disclosure and IBs performance. Research limitations/implications This study highlighted the implication that the current research may help IBs and encourage them to disclose more information in annual reports, especially those related to AAOIFI governance standards because following good corporate governance leads to good financial performance. The major limitation of the paper is that it is only focussed on two measurements of bank performance – ROA and ROE; it would be good to use other firm performance measures, such as profit margin. Originality/value This study provides new empirical evidence on the impact of AAOIFI governance disclosure on IBs performance.

Corporate governance and compliance with AAOIFI governance standards by Islamic banks

2020 ◽  
Vol 13 (5) ◽  
pp. 891-918
Author(s):  
Yosra Mnif ◽  
Marwa Tahari
Keyword(s):  
Corporate Governance ◽  
Financial Institutions ◽  
Audit Committee ◽  
Annual Reports ◽  
Islamic Banks ◽  
Content Type ◽  
Disclosure Requirements ◽  
Financial Expertise ◽  
Islamic Financial Institutions ◽  
Research Stage

Purpose This study aims to examine the effect of the main corporate governance characteristics on compliance with accounting and auditing organisation for Islamic financial institutions’ (AAOIFI) governance standards’ (GSs) disclosure requirements by Islamic banks (IB) that adopt AAOIFIs’ standards in Bahrain, Qatar, Jordan, Oman, Syria, Sudan, Palestine and Yemen. Design/methodology/approach The sample consists of 486 bank-year observations from 2009 to 2017. Findings The findings reveal that compliance with AAOIFIs’ GSs’ disclosure requirements is positively influenced by the audit committee (AC) independence, AC’s accounting and financial expertise and industry expertise, auditor industry specialisation, IB’s size and IB’s listing status. On the other hand, it is negatively influenced by the ownership concentration. Research limitations/implications This study has only examined compliance with AAOIFI’s GSs’ disclosure requirements and has focussed on one major sector of the Islamic financial institutions (which is IB). Practical implications The findings are useful for various groups of preparers and users of IBs’ annual reports such as academics and researchers, accountants, management of IBs and some organisations. Originality/value While the study of the AAOIFIs’ standards has grown contemporary with considerable contributions from scholars, however, the majority of these studies are descriptive in nature. Indeed, the existing literature that has explored the determinants of compliance with AAOIFI’s standards is in the early research stage. To the best of the knowledge, there is a paucity of empirical research testing this issue.

Voluntary corporate governance disclosure and bank performance: evidence from an emerging market

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Haitham Nobanee ◽  
Nejla Ould Daoud Ellili
Keyword(s):  
Corporate Governance ◽  
Voluntary Disclosure ◽  
Dynamic Panel Data ◽  
Annual Reports ◽  
Bank Performance ◽  
Islamic Banks ◽  
Dynamic Panel ◽  
Content Type ◽  
Governance Disclosure ◽  
Conventional And Islamic Banks

Purpose This study aims to explore the extent of voluntary corporate governance disclosure in the annual reports of banks in the UAE, operating in an emerging economy in the Gulf Cooperation Council region. It also examines the effect of this non-financial disclosure on bank performance by differentiating conventional and Islamic banks. Design/methodology/approach This study applies content analysis to explore the extent of voluntary corporate governance disclosure using data collected from the annual reports of all the banks traded on the UAE financial markets from 2003 through 2020. It further examines the potential effect of voluntary disclosure on bank performance using dynamic panel data regressions. Findings The results indicate a low level of voluntary corporate governance disclosure in the annual reports for most disclosure indices. However, conventional and Islamic banks do not differ significantly. Additionally, the results of the robust dynamic panel data from the two-step generalized method of moments system estimation confirm that voluntary corporate governance disclosure does not affect bank performance significantly. Practical implications The findings of this study would benefit the central bank and lawmakers in the UAE in developing a framework for appropriate voluntary disclosure and enhancing the corporate governance framework to improve the quality of annual reports. Originality/value This study contributes to the literature on the extent of corporate governance disclosure, as well as its association with bank performance in an emerging economy by differentiating between conventional and Islamic banks.

Diversity ASX corporate governance recommendations: a step towards change?

2017 ◽  
Vol 8 (3) ◽  
pp. 335-357 ◽  
Author(s):  
Sonia Shimeld ◽  
Belinda Williams ◽  
Justin Shimeld
Keyword(s):  
Corporate Governance ◽  
Cultural Change ◽  
Listed Company ◽  
Gender Diversity ◽  
Business Case ◽  
Annual Reports ◽  
Gender Inequity ◽  
Content Type ◽  
Disclosure Requirements ◽  
Before And After

Purpose The business case argument was used to underpin the inclusion of diversity disclosures within the Australian Securities Exchange (ASX) Corporate Governance Principles and Recommendations (2010). By adding a requirement for diversity disclosure, an increase in focus on diversity would be expected because of a heightened level of accountability. Whether this change in the Recommendations affected any change in the boardroom is questionable though. The purpose of this paper is to explore the effectiveness of these disclosure requirements. Design/methodology/approach The authors draw on data obtained from a random sample of 120 ASX-listed company annual reports across two time periods: 2009 and 2012 (before and after the change in the Recommendations). Findings Although findings indicate that there has been some change, especially in the more visible companies (ASX200), many of the changes appear to be largely superficial with a continued focus on the business case perspective. Social implications While the disclosure recommendations have the potential to be a driver in addressing gender inequity, the findings of this paper indicate that without deep change at the organisational level, requiring listed companies to disclose on gender diversity may have little impact, with the focus remaining on the business case and business as normal. Originality/value This paper contributes to the literature on gender diversity in the boardroom and the effect of disclosure. The empirical findings contribute to an understanding of the diversity Recommendations within the ASX Corporate Governance Principles and Recommendations, but in doing so, it calls for deeper organisational cultural change if real change is to take effect.

The Impact of Corporate Governance Variables on Earnings Management in India

2017 ◽  
Vol 10 (02) ◽  
Author(s):  
Raghuveer Kaur ◽  
Ashu Khanna
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Empirical Studies ◽  
Business Environment ◽  
Annual Reports ◽  
Governance Reform ◽  
Indian Context ◽  
The Impact ◽  
The Relationship ◽  
Clause 49

The dawn of 21st century has marked the plunge of numerous colossal enterprises across the continent that not only quivered the business environment of economies but also shackled the investor confidence. This phenomenon which has been the reason for these losses is termed as Earnings management. A series of amendments paving way for stringent law to ensure better transparency and accountability have been put into practice to restrain earnings management. In India, in the year 2006 major corporate governance reform was introduced by making revised Clause 49 of listing mandatory. The Clause has a set of mandatory and non-mandatory guidelines. The present work has been taken to explore the relationship between the non-mandatory corporate governance variables as per revised Clause 49 (2006) variables and discretionary accrual a proxy of earnings management in Indian context. The study period is 2007-2014 and a sample of 209 BSE listed companies has been taken. These corporate governance variables are handpicked from the annual reports of 209 companies. In total 1463 annual reports are scanned for the purpose of extracting variables of this study. The study revealed that non-mandatory variables such as remuneration committee and independent directors along with control variables such as firm size are significant in reducing the instances of earnings management. The study fills the literature gap as empirical studies examining the relationship between earnings management and corporate governance in the Indian context are limited.

scholarly journals A Study of Institutional Change: Corporate Governance Reform in Britain

2002 ◽  
Vol 16 (2) ◽  
pp. 33-47
Author(s):  
Tae-Soo Ha
Keyword(s):  
Corporate Governance ◽  
Self Regulation ◽  
Governance Reform ◽  
Anglo Saxon ◽  
Finance Industry ◽  
Governance Model ◽  
Institutional Structures ◽  
Corporate Governance Reform ◽  
Industry Relationship ◽  
Corporate Governance Model

This article analyzes corporate governance reform in Britain from the viewpoint of historical institutionalism. There have been three stages of reforms since the early-1970s: pure self-regulation, semi-statutory self-regulation and statutory regualtion. Despite these changes, however, there appeared institutional persistence, the maintenance of the Anglo-Saxon Corporate Governance Model. Although there had been several movements that had intended to introduce the Germany-originated Rhine Model to Britain, they all failed. This phenomenon resulted from three institutional structures: the Outside Initiative Policy Agenda-Setting Model, finance-dominating finance-industry relationship and the relatively strong and autonomous status of the British economy within the world economy.

Do audit committee structure increases influence the level of voluntary corporate governance disclosures?

2018 ◽  
Vol 36 (5) ◽  
pp. 544-561 ◽  
Author(s):  
Shabana Talpur ◽  
Mohd Lizam ◽  
Shafie Mohammad Zabri
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Listed Companies ◽  
Annual Reports ◽  
Sufficient Information ◽  
Content Type ◽  
Property Companies ◽  
Insight Into ◽  
Governance Disclosure

Purpose The purpose of this paper is to provide an insight into the voluntary corporate governance disclosure and AC practices among Malaysian property listed companies. Along with that, the influence of AC characteristics on voluntary corporate governance disclosure was also examined. Design/methodology/approach The study used the content analysis of annual reports to extract voluntary corporate governance disclosures and audit committee (AC) practices. The relationship between voluntary corporate governance disclosures and AC characteristics was examined by using the panel data regression analysis. Findings Based on the results of the study, it can be concluded that all three variables: AC size, AC independence and AC meetings are the factors that influence the level of voluntary corporate governance disclosure among sampled companies. Practical implications This study provides an overview of voluntary corporate governance disclosures practices, which have shown an increasing trend of information disclosed by Malaysian listed property companies. Additionally, the AC structure was also found satisfactory with highly independent and higher number of meetings as required by Malaysian Code of Corporate Governance and Bursa Malaysia requirement. Social implications By filling the gap identified in this study, investors’ confidence will boost as they will have sufficient information about the Malaysian listed property companies – resulting in strengthening competitiveness and growth by attracting local and foreign investments in the country. The influence of AC attributes over the quality of disclosure among Malaysian listed properties companies is identified, and regulators introduce more explicit rules for AC mechanism for improving the disclosure quality. The increase in the quality of information provided in the annual reports will lead toward highly efficient and transparent stock market. Originality/value This study has provided an insight into corporate governance of listed companies in Malaysia, which will contribute to the extended literature. Along with that, it will also provide an overview of corporate governance structure among Malaysian listed companies to the policy makers.

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.

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