When Financial Institutions Are Large Shareholders: The Role of Macro Corporate Governance Environments

2006 ◽  
Vol 61 (6) ◽  
pp. 2975-3007 ◽  
Author(s):  
DONGHUI LI ◽  
FARIBORZ MOSHIRIAN ◽  
PETER KIEN PHAM ◽  
JASON ZEIN
Keyword(s):  
Corporate Governance ◽  
Financial Institutions ◽  
Large Shareholders

Corporate Governance: Principles and Objectives

1998 ◽  
Vol 2 (2) ◽  
pp. 18-22
Author(s):  
N. Vittal
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Financial Institutions ◽  
Code Of Conduct ◽  
Ethical Values ◽  
Good Corporate Governance ◽  
The Board Of Directors ◽  
Fundamental Value ◽  
The Government

Corporate Governance provides the fundamental value framework for the culture of an organisation which ensures efficient functioning of enterprises on sound ethical values and principles. Corporate governance has become a necessity, especially since 1991, when India made a U-turn in its economic policy and the revised policy of the government was aimed at attracting funds from foreign financial institutions. The primary resonsibiity of good corporate governance is that of the Board of Directors. For better corporate governance the boards should perform the role of monitoring the functioning of an organisation, without at the same time reducing the effectiveness of the management by interfering with their day-to-day matters. One of the impediments in the way of good corporate governance is corruption. The three factors within any system which generate corruption are: scarcity, lack of transparency and delay. If these three problems are tackled effectively, corruption can be checked to a great extent. As far as public sector undertakings are concerned, the “Code of Conduct and Ethics” should facilitate the redesigning of the PSEs.

scholarly journals Corporate governance and performance of financial institution

2019 ◽  
Vol 16 (1-1) ◽  
pp. 203-216 ◽  
Author(s):  
Juliet Wakaisuka-Isingoma
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Financial Institutions ◽  
Ownership Structure ◽  
Information Disclosure ◽  
Positive Relationship ◽  
Developing Economies ◽  
Cross Sectional ◽  
Financial Transparency

The role of banking and insurance as an animated component of any economy has been widely recognized in the evolution of literature (Shrutikeerti & Amlan, 2017). The financial liberalization efforts taken by various developing economies had the central bearing on their financial institutions (Shrutikeerti & Amlan, 2016). The development of insurance and banking sectors play an important role in stimulating financial development and consequently the growth of the economy. Enhancing firm performance predicted through ownership structure, information disclosure, financial transparency and board profile safeguards reputation, yields effective risk management systems and yet helps firms achieve their business objectives. The study employed a sample of 103 financial institutions and adopted a descriptive cross-sectional survey design with a Pearson correlation coefficient. Reliability, validity and exploratory factor analysis with principal components and Cronbach’s alpha as well as hierarchical regression was reasonable for analysis but also directed using the Partial Least Square (PLS) modelling which was helpful in attesting the measurement and structural models appropriate for the performance of financial institutions. Reveal a statistically significant and positive relationship between corporate governance and firm performance. PLS modelling assented the structural and measurement models and recognized that corporate governance is statistically significant and predict firm performance through its different constructs of information disclosure, financial transparency, and ownership structure and board profile. Equally, firm performance demonstrated that management efficiency, earnings quality, asset quality, capital adequacy and liquidity were key dimensions. The study was cross-sectional and a longitudinal study is necessary to understand the dynamics of corporate governance and firm performance over a period of time. The results extend the understanding of the role of corporate governance in promoting firm performance in financial institutions. Additionally, the results add evidence to the growing body of research focusing on interdisciplinary aspects as well as the relationship between corporate governance and firm performance. Overall, there is a significant positive relationship between corporate governance and firm performance.

scholarly journals Editorial: An empirical contribution to corporate governance issues

2020 ◽  
Vol 17 (3) ◽  
pp. 4-6
Author(s):  
Áron Perényi ◽  
Simone Terzani
Keyword(s):  
Corporate Governance ◽  
Empirical Evidence ◽  
Financial Institutions ◽  
Business Management ◽  
Corporate Ownership ◽  
And Control ◽  
Empirical Contribution

The new issue of Corporate Ownership and Control journal is composed by 15 articles focussing on a variety of topics in the field. Five papers present empirical evidence from banks and financial institutions, three focus on firm finances, four on governance and responsibility and a further three on the role of technology in terms of contextualising various business management activities.

scholarly journals Corporate governance on financial performance of insurance industry

2015 ◽  
Vol 13 (1) ◽  
pp. 1201-1209 ◽  
Author(s):  
Gardachew Worku Fekadu
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Financial Institutions ◽  
Insurance Industry ◽  
Insurance Companies ◽  
Regulatory Body ◽  
Discretionary Power ◽  
Insignificant Effect ◽  
The Impact

The role of corporate governance in financial institutions differs from that of non- financial institutions for the discretionary power of the board of directors would be limited especially in regulated financial systems where financial institutions are obliged to function through legislative and prescriptive procedures, policies, rules and regulations. This study, therefore, was aimed at examining the impact of corporate governance on the performance of closely regulated Ethiopian insurance Industry. The study employed explanatory research design with an econometric panel data of 10 Insurance companies that covers the period 2007 to 2014. Board size, board independence and board diversity have negative and insignificant effect on the performance of insurance companies while size and independence of audit committee and frequency of board meetings have positive but insignificant effect on the performance of insurance companies in Ethiopia. Thus it could be concluded that all corporate governance mechanisms have insignificant effect on the performance of insurance companies measured by return on asset. This vividly affirms that the role of board of directors in closely regulated financial sector is dismal and insignificant for they have limited discretionary power to exercise as board of directors. Thus it would be recommendable if the regulatory body could relax its prescriptive and stringent policies and devolve its power to board of directors without endangering the viability of insurance companies.

scholarly journals Corporate Governance Practices In Selected Indian Financial Institutions

2012 ◽  
Vol 5 ◽  
Author(s):  
Suman Kalyan Chaudhury ◽  
Sanjay Kanti Das ◽  
Devi Prasad Mishra
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Financial Institutions ◽  
Financial Reporting ◽  
Vital Role ◽  
Key Factors ◽  
Additional Information ◽  
Governance Practices ◽  
Increasing Demand

It has been realized that Corporate Governance is vital for better management of any organization. Financial reporting and disclosure of any information are the key factors of corporate governance. Financial Institutions are no exceptions and there has been increasing demand for transparency in functioning of these Institutions in view of several scams.In this paper a modest effort is made to discuss the reporting pattern of India’s twelve financial institutions namely SBI, IDBI, SIDBI, IFCI, NABARD, PNB, UBI, BOB, BOI, KMB, NHB and HDFC. Top Six commercial banks namely (SBI, BOB, PNB, KMB UBI & BOI), six developments banks viz. SIDBI, IFCI, HFDC, IDBI, NHB, and NABARD  are selected under study .The rationale for selection of these institutes is that being incorporated organizations, they should have same Corporate Governance standards. In view of transparency in functioning, the role of different Committees has a vital role to play. Six parameters have been chosen for comparison of various corporate governance practices in all these twelve financial institutions namely, Company’s philosophy on Corporate Governance, Formation of Board of Directors, Composition of Board of Directors, Particulars of Director’s, Organizational Committees, and Additional Information supplied in CG report or in the Annual report. 

scholarly journals The Role of Financial Institutions in the Corporate Governance of Listed Chinese Companies*

2009 ◽  
Vol 20 (4) ◽  
pp. 562-580 ◽  
Author(s):  
Rongli Yuan ◽  
Jason Zezhong Xiao ◽  
Nikolaos Milonas ◽  
Joe Hong Zou
Keyword(s):  
Corporate Governance ◽  
Financial Institutions ◽  
Chinese Companies

Ownership concentration, ownership composition and the performance of the Kuwaiti listed non-financial firms

2015 ◽  
Vol 25 (1) ◽  
pp. 108-132 ◽  
Author(s):  
Mejbel Al-Saidi ◽  
Bader Al-Shammari
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Arab Countries ◽  
Ownership Concentration ◽  
Content Type ◽  
Financial Firms ◽  
Large Shareholders ◽  
Ownership Composition ◽  
The Relationship

Purpose – This paper aims to investigate the relationship between ownership structure (ownership concentration and ownership composition) and firm performance in Kuwaiti non-financial firms. To this end, it examines the relationship between firm performance and ownership concentration to determine whether the impact of this relationship is conditional on the nature of the large shareholders. Design/methodology/approach – First, the relationship between ownership concentration and firm performance was tested using ordinary least squares regressions on 618 observations (103 listed firms) from 2005 to 2010; next, the ownership compositions were classified as institutional, government and individuals (families) and their impact on firm performance examined. Findings – The overall concentration ownership by large shareholders showed no impact on firm performance. However, when the type of shareholders was introduced, only the government and individuals (families) ownership categories influenced firm performance. Therefore, certain types of shareholders are better at monitoring, and not all concentration by large shareholders is beneficial to Kuwaiti firms. Research limitations/implications – This study examined only one important aspect of the corporate governance mechanisms, namely, ownership concentration. Thus, further study may include other mechanisms such as board variables, role of debt and shareholders rights in examining the firm performance. This study is limited to the Kuwaiti environment, and thus, next step can be very useful in case of comparing ownership concentration in the Gulf Cooperation Council (Kuwait, Bahrain, Qatar, Oman, United Arab Emirates and Saudi Arabia) or across different Arab countries. Practical implications – The results of this study have important implications for the regulators in Kuwait in their efforts to increase the efficiency of the rapidly developing capital markets and in protecting investors and keeping confidence in the economy. They may mandate a corporate governance code to protect minority shareholders. Investors may use the findings to understand Kuwaiti companies. Such findings may assist them to diversify their investment portfolios. Originality/value – This paper extends literature review by investigating the role of large shareholders in the context of a developing country that is characterized by high level of ownership concentration and weak legal protection for investors as well as the absence of code that organized the corporate governance practices.

scholarly journals Legal Obstacles in Shari’ah Corporate Governance of Islamic Financial Institutions in Malaysia

2011 ◽  
Vol 24 (2) ◽  
pp. 179-182 ◽  
Author(s):  
Aishath Muneeza Aishath Muneeza
Keyword(s):  
Corporate Governance ◽  
Financial Institutions ◽  
Significant Role ◽  
Asia Pacific ◽  
Business Research ◽  
Research Conference ◽  
Islamic Financial Institutions ◽  
King Abdulaziz University ◽  
The Law

This paper was sent to be published in the Journal of King Abdulaziz University for Islamic Economics. Also, it was presented in different title( ) in the Asia-Pacific Business Research Conference in Malysia, February 2011. The researchers highlighted the significant role of the Shari’ah corporate governance in the effectiveness and stability of Islamic financial Institutions in Malaysia. They outline the roles of corporate governance (in both conventional and Islamic corporations) through which it can be directed, administered and controlled. However, they argue that Shari’ah corporate governance has different perspective and methodology. The Shari’ah corporate governance primary is based on the tenets of Islam as the primary law and then on other positive laws, such as laws regulating the interest of the directors and the stakeholders. They described the structure of shari’ah corporate governance in Malaysia in order to emphasize and underscore some legal obstacles in the Shari’ah corporate governance and suggest some practical solutions to reform absence in the law.

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