Politics and institution of corporate governance in Vietnamese state-owned enterprises

2020 ◽  
Vol 35 (5) ◽  
pp. 667-684
Author(s):  
Nguyen Cong Phuong ◽  
Tran Dinh Khoi Nguyen ◽  
Ha Phuoc Vu
Keyword(s):  
Corporate Governance ◽  
Political Ideology ◽  
Governance Structure ◽  
The State ◽  
The Political ◽  
Reform Process ◽  
State Control ◽  
Content Type ◽  
Communist Ideology ◽  
Political Interests

Purpose The paper aims to examine how the change in political ideology and institutions affects corporate governance (CG) of the state-owned enterprise (SOE) in Vietnam, as well as its consequences. Design/methodology/approach To link macro-level institutional change to micro level of the reform process of the Vietnamese SOE governance, we draw from the “Varieties of Capitalism” (VoC) framework adopt a triangulation approach for data collection. Findings The paper shows the CG of SOEs is a variant of capitalist CG. Changes in the function, state control and structure of governance in the Vietnamese SOEs have been shaped by the political ideology and institution. It also shows that the political and bureaucratic interferences of the state in SOEs are for political interests rather than for firms’ effectiveness. Research limitations/implications The political ideology has existed in major aspects of the governance structure of the SOEs as a part of the party’s effort to maintain its economic legitimacy and a government of “control and domination”. Practical implications The findings of this study can be seen as a reference for the Vietnamese Government and governments of other developing countries in making incremental improvements in existing institutions rather than choosing the “best” model of CG. Originality/value The paper contributes to the literature by applying the VoC framework to analyse the change in SOE governance in a transition country while preserving the communist ideology. It can deepen our understanding of the SOE governance in Vietnam and enrich comparative studies of CG in the transition countries.

THE STOCKHOLDER REVIEW COMMITTEE OF THE CHESAPEAKE AND OHIO CANAL COMPANY, 1828–1857: EVIDENCE OF CHANGES IN FINANCIAL REPORTING AND CORPORATE GOVERNANCE

2006 ◽  
Vol 33 (1) ◽  
pp. 125-143 ◽  
Author(s):  
Robert W. Russ ◽  
Gary J. Previts ◽  
Edward N. Coffman
Keyword(s):  
Corporate Governance ◽  
19Th Century ◽  
Financial Reporting ◽  
Financial Management ◽  
Governance Structure ◽  
The Political ◽  
Review Committee ◽  
Corporate Governance Structure ◽  
Corporate Form ◽  
The 19Th Century

Canal companies were among the first enterprises to be organized in the corporate form and to require large amounts of capital. This paper examines the stockholder review committee of a 19th century corporation, the Chesapeake and Ohio Canal Company (C&O), and discusses how the C&O used this corporate governance structure to monitor and improve financial management and operations. A major strength was the concern and dedication of the stockholders to the company, while a major weakness was the political control exerted by the State of Maryland. The paper provides an historical perspective on corporate governance in the 19th century. This research contributes to the literature by providing detailed workings and practices of a stockholder review committee. The paper documents corporate governance efforts in archival sources that provide an early example of accountability required in a corporate charter and the manner in which the stockholders carried out this responsibility.

Is internal and external mechanism of governance enriching the performance of the banking sector of Pakistan?

2017 ◽  
Vol 17 (4) ◽  
pp. 629-642 ◽  
Author(s):  
Sundas Sohail ◽  
Farhat Rasul ◽  
Ummara Fatima
Keyword(s):  
Corporate Governance ◽  
Banking Sector ◽  
Good Governance ◽  
Random Effect ◽  
Random Effect Model ◽  
General Meeting ◽  
Governance Structure ◽  
Board Structure ◽  
Content Type ◽  
The Impact

Purpose The purpose of this study is to explore how governance mechanisms (internal and external) enhance the performance of the return on asset (ROA), return on equity (ROE), earning per share (EPS) and dividend payout ratios (DP) of the banks of Pakistan. The study incorporates not only the internal factors of governance (board size, out-ratio, annual general meeting, managerial ownership, institutional ownership, block holder stock ownership and financial transparency) but also the external factors (legal infrastructure and protection of minority shareholders, and the market for corporate control). Design/methodology/approach The sample size of the study consists of 30 banks (public, private and specialized) listed at the Pakistan Stock Exchange (PSE) for the period 2008-2014. The panel data techniques (fixed or random effect model) have been used for the empirical analysis after verification by Hausman (1978) test. Findings The results revealed that not only do the internal mechanisms of governance enhance the performance of the banking sector of Pakistan but external governance also plays a substantial role in enriching the performance. The findings conclude that for a good governance structure, both internal and external mechanisms are equally important, to accelerate the performance of the banking sector. Research limitations/implications Internal and external mechanisms of corporate governance can also be checked by adding some more variables (ownership i.e. foreign, female and family as internal and auditor as external), but they are not added in this work due to data unavailability. Practical implications The study contributes to the literature and could be useful for the policy makers who need to force banks to mandate codes of governance through which they can create an efficient board structure and augment the performance. The investments from different forms of ownership can be accelerated if they follow the codes properly. Social implications The study facilitates the bankers in incorporating sound codes of corporate governance to enhance the performance of the banks. Originality/value This work is unique as no one has explored the impact of external mechanism of governance on the performance of the banking sector of Pakistan.

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

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

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

Corporate governance failure at Ricoh India: rebuilding lost trust

2018 ◽  
Vol 8 (4) ◽  
pp. 1-20
Author(s):  
Sonu Goyal ◽  
Sanjay Dhamija
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Multinational Corporations ◽  
Audit Committee ◽  
Governance Structure ◽  
Special Focus ◽  
Corporate Governance Structure ◽  
Content Type ◽  
External Auditors ◽  
The Board Of Directors

Subject area The case “Corporate Governance Failure at Ricoh India: Rebuilding Lost Trust” discusses the series of events post disclosure of falsification of the accounts and violation of accounting principles, leading to a loss of INR 11.23bn for the company, eroding over 75 per cent of its market cap (Financial Express, 2016). The case provides an opportunity for students to understand the key components of corporate governance structure and consequences of poor corporate governance. The case highlights the responsibility of the board of directors, audit committee and external auditors and discusses the changes required in the corporate governance structure necessary to ensure that such incidents do not take place. The case also delves into the classic dilemma of degree of control that needs to be exercised by the parent over its subsidiaries and freedom of independence given to the subsidiary board, which is a constant challenge all multinationals face. Such a dilemma often leads to the challenge of creating appropriate corporate governance structures for numerous subsidiaries. Study level/applicability The case is intended for MBA courses on corporate governance, business ethics and also for the strategic management courses in the context of multinational corporations. The case can be used to develop an understanding of the essential of corporate governance with special focus on the role of the board of directors, audit committee and external auditors. The case highlights the consequences and cost of poor corporate governance. The case can also be used for highlighting governance challenges in the parent subsidiary relationship for multinational corporations. The case can be used for executive training purposes on corporate governance and leadership with special focus on business ethics. Case overview This case presents the challenges faced by the newly appointed Chairman Noboru Akahane of Ricoh India. In July 2016, Ricoh India, the Indian arm of Japanese firm Ricoh, admitted that the company’s accounts had been falsified and accounting principles violated, leading to a loss of INR 11.23 bn for the financial year 2016. The minority shareholders were agitating against the board of directors of Ricoh India and were also holding the parent company responsible for not safeguarding their interest. Over a period of 18 months, Ricoh India had been in the eye of a storm that involved delayed reporting of financials, auditor red flags regarding accounting irregularities, a forensic audit, suspension of top officials and a police complaint lodged by Ricoh India against its own officials. Akahane needed to ensure continuity of Ricoh India’s business and also act quickly and decisively to manage the crisis and ensure that these incidents did not recur in the future. Expected learning outcomes The case provides an opportunity for students to understand the key components of corporate governance structure and consequences of poor corporate governance. More specifically, the case addresses the following objectives: provide an overview of corporate governance structure; highlight the role of board of directors, audit committee and external auditors; appreciate the rationale behind mandatory auditor rotation; appreciate the consequences of poor corporate structure; explore the interrelationship between sustainability reporting and transparency in financial disclosures of a corporation; understand management and governance of subsidiaries by multinational companies; and understand the response to a crisis situation. Supplementary materials Teaching notes are available for educators only. Please contact your library to gain login details or email [email protected] to request teaching notes. Subject code CSS 11: Strategy.

scholarly journals Political and financial background in board interlocking and earnings management in Brazil

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Cristian Baú Dal Magro ◽  
Roberto Carlos Klann
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Financial Reporting ◽  
Management Practices ◽  
Accounting Information ◽  
Real Earnings Management ◽  
The Political ◽  
Content Type ◽  
Quality Of Accounting Information

Purpose Although board interlocking underlying forces are largely hidden, the purpose of this paper is to provide managers, auditors, analysts, regulators and other stakeholders with sociological board interlocking information considering the different backgrounds of their members. Design/methodology/approach The research sample gathered 1,606 observations from 2010 to 2017. For data analysis, the direct and indirect board interlocking linkages, considering the different backgrounds of board members, established the centrality indicators. Subsequently, the authors used these indicators according to each measured background in the regression models. Findings The results indicate that the political background of board interlocking members is positively related to real earnings management practices, while the financial background has a mitigating effect on such practices. Research limitations/implications The findings suggest that individual skills and interests conveyed across the corporate social network have shaped corporate governance, with distinct impacts on the quality of accounting information. Practical implications The authors conclude that both backgrounds could have implications on agency conflicts, increasing (policy) or reducing (financial) information asymmetry between the company and its various stakeholders, which indicates that the authors must consider sociological and not just economic aspects within corporate governance. Social implications The sociological background of individuals is necessary for the congruence of monitoring mechanisms, and consequently, the quality of accounting information. Originality/value This study examines the influence of the political and financial background of board interlocking members on real earnings management practices in Brazilian publicly traded companies in the International Financial Reporting Standards post-adoption period.

The role of national culture in the impact of board gender diversity on firm performance: evidence from a multi-country study

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Navaz Naghavi ◽  
Saeed Pahlevan Sharif ◽  
Hafezali Bin Iqbal Hussain
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Generalized Method Of Moments ◽  
Gender Diversity ◽  
Governance Structure ◽  
Corporate Governance Structure ◽  
Data Set ◽  
Content Type ◽  
Board Gender Diversity ◽  
The Impact

PurposeThis study seeks to add more insights to the debate on “whether”, “how”, and “under which condition” women representation on the board contributes to firm performance. More specifically, the current study aims to investigate if the effect of board gender diversity on firm performance is dependent on macro factors of national cultures.Design/methodology/approachThe authors used the generalized method of moments regression and a data set consists of 2,550 company year observations over 10 years.FindingsThe results indicated that cultural variables interact with board diversity to influence firm performance. Having women on the board in countries with high power distance, individualist, masculine and low-uncertainty avoidance culture influences the firm performance negatively.Originality/valueThe findings indicate that the effects of corporate governance structure on firm performance depends on culture-specific factors, providing support for the argument that institutional norms that are governed by cultural norms affect the effectiveness of corporate governance structure.

Applications of business governance and the Unified BPM Cycle in public credit recovery activities

2019 ◽  
Vol 26 (1) ◽  
pp. 312-330
Author(s):  
Abimael Rondon Do Nascimento ◽  
Roquemar de Lima Baldam ◽  
Lourenço Costa ◽  
Thalmo de Paiva Coelho Junior
Keyword(s):  
Corporate Governance ◽  
Single Case ◽  
Governance Structure ◽  
Credit Recovery ◽  
Future Research ◽  
Corporate Governance Structure ◽  
Content Type ◽  
Public Credit ◽  
Operational Activities

Purpose The performance of the state machine has been the subject of research and innovative practices, which seek to explore its sources of knowledge and improve its internal processes. Business governance and business process management (BPM) occupy a prominent position in these studies. The purpose of this paper is to analyze the full implementation of the Unified BPM Cycle in operational activities to recover federal public credit, from the implementation of the corporate governance structure to the audit of the processes implemented. Design/methodology/approach The case was developed in a federal public advocacy body and used a predominantly qualitative multi-method approach. The phases were organized using the research project matrix, and the predominant research procedure was action research. The information was obtained through questionnaires, observation and focus groups. Findings A corporate governance structure was designed for the activities surveyed. Papers and responsibilities were defined. Processes were prioritized, improved and documented, and as a result of the implemented control, personal and organizational results gained greater visibility. Research limitations/implications Because this is a single case study, it would be advisable to apply the method used in similar organizations to enrich the analysis presented in this study and compare the results. Practical implications This paper contributes to the consolidation of the knowledge about the practical application of the researched subjects and foments the applied research to the public management. Originality/value This paper describes an empirical case study about the integrated application of activity governance and the Unified BPM Cycle in operational activities and studies all phases of implementation, providing a broader perspective of their impact on these activities. The road map used can serve as a reference for future research in the area of public credit recovery.

scholarly journals Board characteristics and earnings management in Sri Lanka

2019 ◽  
Vol 27 (1) ◽  
pp. 2-18
Author(s):  
Shanmugavel Rajeevan ◽  
Roshan Ajward
Keyword(s):  
Corporate Governance ◽  
Sri Lanka ◽  
Earnings Management ◽  
Management Practices ◽  
Stock Exchange ◽  
Governance Structure ◽  
Real Earnings Management ◽  
Content Type ◽  
Board Characteristics ◽  
Market Capitalisation

Purpose The purpose of this paper is to examine the association between designated corporate governance attributes and the degree of earnings management in selected quoted companies in Sri Lanka. Design/methodology/approach In total, 70 listed companies in Colombo Stock Exchange (CSE) were selected based on the highest market capitalisation for the period covering from 2015 to 2017 and representing beverage, food and tobacco, diversified, hotel and travel, manufacturing, oil palms and health care sectors, which accounted for 59.9 per cent of the total market capitalisation of CSE. Findings This study found a positive relationship between CEO-Chair duality and earnings management. Practical implications The insights may also provide investors, economic analysts and regulators with early caution indicators of potential problems in a corporation regarding corporate governance failures and aid stakeholders in assessing the effectiveness and efficiency of the board and corporate governance structure and earnings management methods. Originality/value This study extends the extant research on board characteristics and real earnings management by adopting prominent research design and modernised data. This study offers evidence on how selected audit and board committee’s characteristics influence real earnings management practices.

scholarly journals The impact of political reform on the stability of the state of Kuwait since 2010

2019 ◽  
Vol 2 (2) ◽  
pp. 101-114
Author(s):  
Enaam Abdullah Mohamed
Keyword(s):  
Political Stability ◽  
Political Reform ◽  
Arab Countries ◽  
The State ◽  
The Political ◽  
Political Rights ◽  
Content Type ◽  
The State Of Kuwait ◽  
Rentier States ◽  
The Arab Spring

Purpose The study aims to deal with three theoretical approaches to answer the research question: Does political reform in rentier States (Kuwait as a model) lead to political stability? The first approach: Following the steps of political reform in rentier States leads eventually to political stability. The second approach: Political stability in rentier States does not necessarily lead to political reform. The third approach: In rentier States, the decisive factor in interpreting the correlation between political reform and political stability requires explaining other intermediary factors. Design/methodology/approach David Easton’s input-output model: Easton defined the political system as the interactions related to the authoritarian allocation of values in society, that is, the distribution of resources by decisions adopted by individuals, and provided a framework for analysis of the political system in which it sees an integrated circuit of a dynamic nature that starts with inputs and outputs feedback, input and output. Inputs refer to the effects of the environment on the system. Outputs are the effects of the system on the environment, which are the decisions and policies taken by the system to meet the demands. Reverse feedback is the flow of information to the system about the results of its actions, the results of its decisions and policies. Generate new inputs in the form of a demand or support, and the system’s feedback feeds a kind of movement. Findings It can be said that the future of the rentier state is particularly dangerous in the Arab countries where the problem today is the sharp drop in oil prices, which requires the need to enter into the stage of major transformations and work to bring about fundamental changes and enter into radical constitutional, economic, political and social reforms before turning them from the state rent to countries that lack political stability. Research limitations/implications The aim of this research is to present a theoretical study of political reform. The study began to consolidate the concept of political reform, which was and still is the goal of many political and social reform leaders and movements, in addition to being a major topic in political theories. Reform can be carried out by violence and by peaceful change. In any case, reform remains a humanitarian need that cannot be ignored or avoided, because the alternative is worsening and deteriorating political and social conditions. Practical implications The Arab Spring revolutions set many challenges for the Arab countries. These countries had to start political reforms. The State of Kuwait was one of the most important rentier countries that, after the Arab Spring revolutions, was concerned with ensuring that individuals and groups exercised their political rights through political participation in decision-making. It guarantees the human existence of society and protects it through the law and its legislation, and grants rights and freedoms and does not oppose it. Social implications Political reforms lead to accommodating the demands of the opposition, increasing the political participation of citizens, activating the political role of women, activating the role of civil society and increasing political mobility. Originality/value The importance of the research paper is to emphasize the term rentier state and confirm the importance of reform in rentier countries and the paper asks whether the expansion of political rights, citizenship and participation will lead to stability or instability in these countries.

Choice of governance structure and earnings quality

2016 ◽  
Vol 29 (4) ◽  
pp. 372-390 ◽  
Author(s):  
Pamela Kent ◽  
Richard Anthony Kent ◽  
James Routledge ◽  
Jenny Stewart
Keyword(s):  
Cluster Analysis ◽  
Corporate Governance ◽  
Firm Size ◽  
Design Methodology ◽  
Best Practice ◽  
Earnings Quality ◽  
Governance Structure ◽  
Governance Mechanisms ◽  
Content Type

Purpose The purpose of this paper is to examine the effectiveness of voluntary governance mechanisms in Australia. Design/methodology/approach This study identifies similar choices of corporate governance by Australian firms and tests the effectiveness of the choices made based on the earnings quality of reported firms. Cluster analysis is conducted using governance best practice variables, firm size and an earnings quality variable. Findings This paper’s results support the voluntary governance approach for smaller firms, but suggest that mandatory governance requirements could be beneficial for larger firms. Evidence suggests that a benefit accrues for larger firms with the adoption of governance best practice. Cluster analysis indicates that larger firms tend to exhibit higher levels of adoption of governance best practice than smaller firms. Originality/value This paper adds to the literature by providing important information regarding the suitability of adoption of voluntary governance mechanisms in Australia.

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