Exploring the relation between corporate reporting and corporate governance effectiveness

2017 ◽  
Vol 15 (3) ◽  
pp. 347-366 ◽  
Author(s):  
Maali Kachouri ◽  
Anis Jarboui
Keyword(s):  
Corporate Governance ◽  
Equation System ◽  
Business Community ◽  
Content Type ◽  
Information Transparency ◽  
Corporate Reporting ◽  
Simultaneous Equation System ◽  
Governance Effectiveness ◽  
Governance Practices

Purpose The purpose of this paper is to investigate the relationship between corporate governance effectiveness and information transparency. Hence, this paper seeks to extend prior information transparency research. Design/methodology/approach This study uses a sample of 28 non-financial listed Tunisian companies and covers an eight-year period from 2006 to 2013. To test the hypotheses of this research, a simultaneous equation system model was applied. Findings The results obtained show that, for the Tunisians companies, corporate governance practices have a significant positive effect on information transparency. The current study also provides evidence that pertinent information can improve corporate governance index. Research limitations/implications The findings may be of interest to the academic researchers, practitioners and regulators who are interested in discovering the quality of corporate governance practices in Tunisian context. Practical implications The findings of this study can help Tunisian regulators in creating corporate governance disclosure requirements. The findings also provide the African business community insights concerning the quality of corporate governance and of corporate reporting. Social implications This research helps also to inform regulators about the benefits of disclosure more information to investors and to the firm. For instance, how the information can be a source of transparency and stability in the firms what and favors the social environment of the firms. Originality/value This paper extends the existing literature by examining the causal relationship between corporate governance and information transparency.

The impact of corporate governance on earnings quality: evidence from Peru

2019 ◽  
Vol 9 (4) ◽  
pp. 527-541
Author(s):  
Mauricio Melgarejo
Keyword(s):  
Corporate Governance ◽  
Earnings Quality ◽  
Accounting Information ◽  
Content Type ◽  
Good Corporate Governance ◽  
Self Selection ◽  
Quality Of Accounting Information ◽  
Governance Practices ◽  
The Impact

Purpose The purpose of this paper is to explore whether firms with good corporate governance practices in countries with high levels of political and economic uncertainty, such as Peru, present a higher quality of accounting information. Design/methodology/approach This study uses a multivariate regression analysis to investigate the impact of good corporate governance practices on the quality of accounting information for the firms listed in the Lima Stock Exchange (LSE). Findings Firms included in the Good Corporate Governance Index, in the LSE, present more value relevant, more persistent and more conservative accounting reports. These results hold after controlling for a self-selection bias. Originality/value It is the first paper to explore the impact of good corporate practices on earnings quality in Peru. Also, this study uses a two-state regression methodology to control for the self-selection bias in the sample.

Auditing Corporate Governance Statements in Greece – the role of internal auditors

2018 ◽  
Vol 18 (5) ◽  
pp. 1007-1020 ◽  
Author(s):  
Andreas Koutoupis ◽  
Michail Pazarskis ◽  
George Drogalas
Keyword(s):  
Corporate Governance ◽  
Best Practices ◽  
Internal Control ◽  
Internal Audit ◽  
Content Type ◽  
Internal Auditors ◽  
Governance Practices ◽  
Laws And Regulations

PurposeThe purpose of this paper is to examine the role of internal audit with respect to Auditing Corporate Governance Statements based on a practical approach. Moreover, it examines the application of internal control best practices in the Athens publicly listed firms based on a series of related statements.Design/methodology/approachThe authors conducted all large and medium capitalization publicly listed companies via a research questionnaire which forms a basis of a descriptive research analysis. The methodology is based on the best worldwide acceptable practices as represented by the Committee of Sponsoring Organizations internal control – integrated framework, as well as the relevant laws and regulations and best practices with respect to Corporate Governance Statements.FindingsThe research concludes that internal auditors limit their role in verifying compliance with the relevant laws and regulations rather than adopt a consulting role toward the improvement of the content and quality of Corporate Governance Statements information. Also, it contributes to the corporate governance research by verifying that the effectiveness of internal controls contributes to sound corporate governance practices.Practical implicationsInternal auditors depending on the organization they serve may adopt different roles regarding Corporate Governance Statements preparation, review and audit such as consultative which may add value to the quality of Corporate Governance Statements.Originality/valueIt is the first research regarding quality characteristics of the Corporate Governance Statements and the role of internal audit in Greece, and it provides the basis for further research among European Union countries.

scholarly journals The management audit as a tool to foster corporate governance: an inquiry in Switzerland

2015 ◽  
Vol 30 (8/9) ◽  
pp. 785-811 ◽  
Author(s):  
Nathalie Brender ◽  
Bledi Yzeiraj ◽  
Emmanuel Fragniere
Keyword(s):  
Corporate Governance ◽  
Boards Of Directors ◽  
Internal Audit ◽  
Ethnographic Study ◽  
Business Community ◽  
Content Type ◽  
International Financial Crises ◽  
Good Corporate Governance ◽  
Governance Practices ◽  
Management Audits

Purpose – This paper aims to investigate management auditing, a thorough examination of an organization and the management in place, through an empirical research to gather data about how management audits are perceived and implemented among Geneva’s (Switzerland) business community. The board of directors is in charge of a corporation’s overall supervision. The internal auditing function works under the aegis of the board to ensure that the directors will properly execute their responsibilities as defined by corporate governance rules. Management auditing could thus be used to improve corporation performance. However, management audits are not commonly used or referred to as a tool to address corporate governance. Findings enable the authors to both explain why management audits are not commonly used or referred to as a tool to address corporate governance and generate related research hypotheses. Design/methodology/approach – In this paper, the authors rely on an ethnographic study aimed at exploring perceptions of management audits in service companies from the Geneva region. This study is based on transcripts from 85 semi-directed interviews, conducted over a three-year period, of professionals with managerial and auditing backgrounds. The economic context during these three years was consistently characterized by the Swiss and international financial crises, ensuring that the findings remain comparable over this time period. Findings – This paper identified three main factors that influence the integration of management audits into corporate practices: the degree of acceptance of the tools and requirements of management audits, the national culture and values embodied in the practice and the degree of corporate governance maturity. This paper presents the findings in the form of hypotheses that can be tested on any adoption of good corporate governance practices – not on management audits alone. Research limitations/implications – Notwithstanding the limitations due to its nature and extent, this study’s main limitation is its lack of validation of the hypotheses. In further research, the authors intend to use a quantitative survey to validate the research hypotheses and make statistical inferences. Originality/value – This paper contributes to the literature because it is, to the authors’ knowledge, the first study to empirically examine the significant link between management audits and corporate governance. The findings could be interesting for an international audience because they indicate possible action points that boards of directors can leverage to carry out management audits. The findings also bridge a gap between the literature on management audits and the expanding role of the internal audit function. This study also examines the way companies – in the Swiss context – understand, perceive and may be ready to apply management audits as a good corporate governance practice.

Do compositions of board and audit committee improve financial disclosures?

2017 ◽  
Vol 25 (2) ◽  
pp. 251-269 ◽  
Author(s):  
Arunima Haldar ◽  
Mehul Raithatha
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Emerging Market ◽  
Financial Disclosure ◽  
Board Structure ◽  
Content Type ◽  
Governance Practices ◽  
Financial Disclosures ◽  
The Impact

Purpose This paper aims to examine the impact of corporate governance practices on the level of financial disclosures made by the Indian firms. This assumes importance in the context of the role of financial disclosures in addressing the agency problem. Design/methodology/approach Financial disclosure score is computed by considering disclosures provided by the generally accepted accounting principles and is the dependent variable. The independent variable – corporate governance score – is an index comprising internal governance mechanisms. The authors empirically examine the impact of corporate governance practices on financial disclosure using multiple regression model for 200 large listed Indian firms. Findings The study suggests that quality of governance practices significantly improves financial disclosure practices of the firm. Particularly, the composition of the audit committee is effective in improving disclosures. Practical implications The finding has implications for policy makers and practitioners. It will help investors, lenders, and other stakeholders to assess firms’ financial disclosure quality. In addition, the findings, suggest the influence of governance practices on disclosure, might help in the formulation of appropriate policies about board structure and audit function. It is also a call to investors to emphasize on governance quality of the investing firms. Originality/value The study builds a case for an urgent intervention for improving the existing governance standards to advance the quality of financial disclosure in an emerging market context.

The Links between the Companies Market Price Quality and that of its Management and Business Quality: A System Panel Data Approach

GIS Business ◽  
2016 ◽  
Vol 11 (6) ◽  
pp. 28-38
Author(s):  
Dinis Daniel Santos ◽  
Elias Soukiazis
Keyword(s):  
Panel Data ◽  
Business Performance ◽  
Market Price ◽  
Equation System ◽  
Simultaneous Equation ◽  
System Equation ◽  
Simultaneous Equation System ◽  
Management Quality ◽  
The Relationship

This work uses a simultaneous equation system approach to analyze the relationship between the management and business quality of companies and their market price quality. Using panel data we found that both the management and the business quality of companies positively influence the market price quality of the studied American companies. Additionally, variables like the actual position of the company price quality compared to the industry average, being on the top or the bottom, or the beta value of a company, also influence the market price quality of the respective company. It is shown that the system equation approach is the most appropriate to explain the linkages between price, business, and management quality providing consistent estimates. Also, using ratings to express the three core variables in the system is the most adequate way to define the quality characteristics in terms of price, management, and business performance of the companies considered in this study.

Do disclosure and transparency affect bank’s financial performance?

2019 ◽  
Vol 19 (6) ◽  
pp. 1344-1361
Author(s):  
Isaiah Oino
Keyword(s):  
Risk Management ◽  
Corporate Governance ◽  
Financial Performance ◽  
Financial Institutions ◽  
Content Type ◽  
Loan Portfolios ◽  
Cent Level ◽  
Transparency And Disclosure ◽  
The Impact

Purpose The purpose of this paper is to examine the impact of transparency and disclosure on the financial performance of financial institutions. The emphasis is on assessing transparency and disclosure; auditing and compliance; risk management as indicators of corporate governance; and understanding how these parameters affect bank profitability, liquidity and the quality of loan portfolios. Design/methodology/approach A sample of 20 financial institutions was selected, with ten respondents from each, yielding a total sample size of 200. Principal component analysis (PCA), with inbuilt ability to check for composite reliability, was used to obtain composite indices for the corporate governance indicators as well as the indicators of financial performance, based on a set of questions framed for each institution. Findings The analysis demonstrates that greater disclosure and transparency, improved auditing and compliance and better risk management positively affect the financial performance of financial institutions. In terms of significance, the results show that as the level of disclosure and transparency in managerial affairs increases, the performance of financial institutions – as measured in terms of the quality of loan portfolios, liquidity and profitability – increases by 0.3046, with the effect being statistically significant at the 1 per cent level. Furthermore, as the level of auditing and the degree of compliance with banking regulations increases, the financial performance of banks improves by 0.3309. Research limitations/implications This paper did not consider time series because corporate governance does not change periodically. Practical implications This paper demonstrates the importance of disclosure and transparency in managerial affairs because the performance of financial institutions, as measured in terms of loan portfolios, liquidity and profitability, increases by 0.4 when transparency and disclosure improve, with this effect being statistically significant at the 1 per cent level. Originality/value The use of primary data in assessing the impact of corporate governance on financial performance, instead of secondary data, is the primary novelty of this study. Moreover, PCA is used to assess the weight of the various parameters.

The drivers of corporate governance disclosure: the case of Nifty 500 Index

2018 ◽  
Vol 60 (2) ◽  
pp. 681-700 ◽  
Author(s):  
Androniki Katarachia ◽  
Electra Pitoska ◽  
Grigoris Giannarakis ◽  
Elpida Poutoglidou
Keyword(s):  
Corporate Governance ◽  
Financial Leverage ◽  
Policy Makers ◽  
Content Type ◽  
Explanatory Variables ◽  
Size Number ◽  
Governance Practices ◽  
Board Director ◽  
First Time ◽  
Governance Disclosure

Purpose Based on agency theory, the purpose of this paper is to investigate the determinants on the dissemination level of corporate governance disclosure (CGD). Design/methodology/approach The sample of the study incorporates listed companies in Nifty 500 Index for the period 2009-2014. The Governance Disclosure Score calculated by Bloomberg is used as a proxy for the dissemination level of corporate governance information. In total, eight explanatory variables are uses, namely, board’s size, number of board meetings, CEO duality, presence of women on the board, company’s size, financial performance, Tobin’s Q ratio and financial leverage. Findings The results of study suggest a need for improvement in CGDs by Indian companies, as they fail to comply the majority of the proposed disclosure items. Furthermore, it is revealed that the number of board director, the value of company, the financial leverage and the presence of women affect negatively the dissemination level of corporate governance information. While, the size of company is the only determinant that positively affects the extent of CGD. Practical implications The results are valuable because they reveal the attributes that determines which companies needs less or extra monitoring by shareholders and investors regarding the applied corporate governance practices. In addition, the study can be valuable to policy makers responsible for the regulation of company’s accountability in relation to corporate governance practices. Originality/value The study extents previous studies by incorporating for the first time Bloomberg’s rating approach regarding the dissemination level of CGD in Indian context.

CEO behavior and sustainability performance: the moderating role of corporate governance

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Amel Kouaib ◽  
Asma Bouzouitina ◽  
Anis Jarboui
Keyword(s):  
Corporate Governance ◽  
Real Estate ◽  
Corporate Sustainability ◽  
Least Square ◽  
Content Type ◽  
Sustainability Performance ◽  
Corporate Sustainability Performance ◽  
Good Corporate Governance ◽  
Governance Practices ◽  
The Impact

PurposeThis paper explores how the tension between a firm's CEO overconfidence feature and externally observable hubris attribute may determine the level of corporate sustainability performance. This work also contemplates the impact of the moderator “corporate governance practices.”Design/methodology/approachThis study uses a sample of 658 firm-year-observations using a sample of European real estate firms indexed on Stoxx Europe 600 Index from 2006 to 2019. To test the developed hypotheses, feasible generalized least square (FGLS) regression is applied.FindingsFindings suggest that a good corporate governance score strengthens the positive effect of the psychological bias (CEO overconfidence) on corporate sustainability performance while it fails to attenuate the negative effect of the cognitive bias (CEO hubris).Research limitations/implicationsThe research provides an overview of the impact of CEO personality traits on the corporate sustainability performance level in the European real estate sup-sector. As corporate governance can have a major impact to control these traits, the authors recommend European real estate companies to improve their corporate governance practices.Originality/valueThis study contributes to the existent literature this gap with two empirical novelties: (1) providing a novel insight into sustainability involvement using a sample of European real estate sup-sector and (2) investigating the moderating effect on the link between CEO psychological and cognitive biases and sustainability performance. This study provides empirical evidence that entrenchment problems arising from CEO hubris would not be mitigated by a good corporate governance practice.

Dynamic endogeneity and corporate governance-performance relationship

2017 ◽  
Vol 44 (5) ◽  
pp. 727-744
Author(s):  
Sujani Thrikawala ◽  
Stuart Locke ◽  
Krishna Reddy
Keyword(s):  
Corporate Governance ◽  
National Level ◽  
Estimation Method ◽  
Estimation Methods ◽  
Governance System ◽  
Past Performance ◽  
Gmm Estimation ◽  
Content Type ◽  
Dynamic Framework

Purpose The purpose of this paper is to examine the relationship between corporate governance (CG) and microfinance institution (MFI) performance, using a dynamic panel generalised method of moments (GMM) estimator to mitigate the serious issues with endogeneity. Design/methodology/approach Inconsistent findings and a general lack of empirical results for the microfinance industry leave an unclear message regarding the impacts of CG on MFI performance, especially in emerging economies. The authors use GMM estimation techniques to examine whether CG has an influence on MFI performance. Findings This study confirms that the MFIs’ contemporaneous performance and CG characteristics are statistically significantly positively linked with their past performance. This study finds statistically significant governance effects on MFI performance, including the presence of international directors and/or donor representatives on the board, client representatives on the board, percentage of non-executive directors and the quality of the national governance system. Practical implications These findings provide some insights for policy-makers and practitioners to develop suitable policies and guidelines to streamline MFIs’ operations in emerging countries. Moreover, national and international investors and donors may use these finding as a benchmark for their investment and funding decisions. Originality/value This paper is the first to estimate the CG and performance relationship of MFIs in a dynamic framework by applying the GMM estimation method. This approach improves upon traditional estimation methods by controlling the likely sources of endogeneity. Further, this paper examines whether quality of national-level governance characteristics is related to performance measures of profitability and outreach of MFIs.

The effectiveness of e-corporate governance: an exploratory study of internet voting at shareholders’ annual meetings in France

2020 ◽  
Vol 20 (4) ◽  
pp. 673-702
Author(s):  
Sonia Abdennadher ◽  
Walid Cheffi
Keyword(s):  
Corporate Governance ◽  
Practical Implementation ◽  
Business Law ◽  
Content Type ◽  
Internet Voting ◽  
Documentary Analysis ◽  
Governance Effectiveness ◽  
Voting System ◽  
The Relationship

Purpose E-corporate governance or the use of technologies and information systems (ISs) in corporate governance, is still a subject that is too seldom addressed in business research. This paper is at the intersection between two fields of research (corporate governance and the management of ISs), which are interdependent in ways that are still unexplored. The paper analyzes the implications of internet voting (IV) at shareholders’ annual meetings (SAM) for the corporate governance of listed companies in France, in particular for the relationship between executives and shareholders. Most of the studies that have dealt with IV at SAM have focused on techno-legal issues and were often conducted by business law researchers. The purpose of this paper is to investigate the implications of the new voting system through the prism of corporate governance. Design/methodology/approach The authors proceeded by triangulation of methods. This qualitative study is based on observations, interviews and documentary analysis. It assessed the IV implications for both the issuing companies and the shareholders. Findings The new voting system brings undeniable competitive advantage to the issuing company and facilitates shareholders’ activism, yet it has serious risks both for the corporations and for certain categories of the shareholder. Interestingly, the authors propose an original and field-grounded typology that distinguishes the risks and benefits associated with IV in relation to executives’ attitudes. Social implications The paper shows that the resolving of identified deficiencies with IV development could contribute to the alignment of companies’ interests with those of shareholders. Moreover, the study calls for policymakers to appoint an official body to regulate the practical implementation of the new system and to prevent its dissemination being held hostage to the executives’ willingness. Originality/value An original aspect of this research lies in the effective operationalization of the constructs of corporate governance effectiveness with a view to examining corporate governance as a set of technologically mediated practices. Moreover, this study emphasizes the key role of the construct of “executives’ willingness” in facilitating/impeding IV diffusion. This underlies their attempts to reverse the corporate governance relationship.

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