Institutional Reforms and the Effects of Family Control on Corporate Governance

2015 ◽  
Vol 29 (2) ◽  
pp. 174-188 ◽  
Author(s):  
Yung-Chih Lien ◽  
Chia-Chen Teng ◽  
Shaomin Li
Keyword(s):  
Corporate Governance ◽  
Ownership Structure ◽  
Institutional Environment ◽  
Governance System ◽  
Negative Effects ◽  
Institutional Reforms ◽  
Family Control ◽  
Family Governance ◽  
Pyramidal Ownership ◽  
Firm Governance

According to the institution-based view of corporate governance, firm-governance efficiency is influenced by the institutional environment in which the firm operates. In this study, we examine how firms under a family-governance system adapted to institutional reforms over time. The results of the analysis indicate that institutional reforms reduce firm dependence on family governance and eliminate the negative effects on performance exerted by a controlling family’s pyramidal ownership structure. We also find that institutional reforms foster external corporate governance by domestic institutional investors. In conclusion, our study shows that institutional reforms alter the essence of family firm governance.

Does audit committee substitute or complement other corporate governance mechanisms

2017 ◽  
Vol 32 (7) ◽  
pp. 658-681 ◽  
Author(s):  
Yousef Hassan ◽  
Rafiq Hijazi ◽  
Kamal Naser
Keyword(s):  
Corporate Governance ◽  
Ownership Structure ◽  
Audit Committee ◽  
Negative Relationship ◽  
Governance Mechanisms ◽  
Governance System ◽  
African Countries ◽  
Content Type ◽  
Board Characteristics ◽  
Corporate Governance Mechanisms

Purpose The purpose of this paper is to examine the relation between audit committee (AC) and a set of other corporate governance mechanisms in one of the emerging economies, United Arab of Emirates (UAE). In particular, the current study examines whether an effective AC can serve as a substitute or as a complement mechanism to board characteristics and ownership structure of Emirati listed non-financial companies. Design/methodology/approach Using substitution and complementary theories, a panel data from 48 nonfinancial companies listed on the UAE Stock Exchanges [Abu Dhabi Stock Exchange and Dubai Financial Market] during the period between 2011 and 2013 were used in the current study. A composite measure of four proxies has been used to measure the AC effectiveness, namely, AC size, independence, financial expertise and diligence. To test the hypotheses formulated for the study, a logistic regression model was used to identify the influence of a set of board characteristics and ownership structure variables on the effectiveness of the AC after controlling for firm size, auditor type, industry type and profitability. Findings While AC effectiveness appeared to be positively associated with board size and board independence, it is negatively associated with CEO duality. This points to a complementary governance relation. On the other hand, the negative relationship between AC effectiveness and each of institutional and government ownership suggests substitutive relations. Research limitations/implications The main shortcoming of the current study is that it examines the influence of a certain set of corporate governance factors on the effectiveness of AC. Other corporate governance mechanisms may, however, contribute to the effectiveness of AC. The findings of the study can be used by companies’ managements and regulators in the UAE to improve the corporate governance system. Originality/value To the best of researchers’ knowledge, this study provides the first evidence about the interaction among multiple governance mechanisms required by the code of corporate governance issued by the UAE Ministry of Economy in 2009. The current paper is expected to add to the limited AC literature in Middle East and North African countries in general and Arab World in particular.

scholarly journals Examining the Link Between Religion and Corporate Governance: Insights From Nigeria

2018 ◽  
Vol 59 (5) ◽  
pp. 956-994 ◽  
Author(s):  
Franklin Nakpodia ◽  
Philip J. Shrives ◽  
M. Karim Sorour
Keyword(s):  
Corporate Governance ◽  
Content Analysis ◽  
Institutional Environment ◽  
Qualitative Content Analysis ◽  
Business Environment ◽  
Research Approach ◽  
Governance System ◽  
Good Corporate Governance ◽  
Corporate Governance System

This article examines whether the degree of religiosity in an institutional environment can stimulate the emergence of a robust corporate governance system. This study utilizes the Nigerian business environment as its context and embraces a qualitative interpretivist research approach. This approach permitted the engagement of a qualitative content analysis (QCA) methodology to generate insights from interviewees. Findings from the study indicate that despite the high religiosity among Nigerians, religion has not stimulated the desired corporate governance system in Nigeria. The primary explanation for this outcome is the presence of rational ordering over religious preferences thus highlighting the fact that religion, as presently understood and practiced by stakeholders, is inconsistent with the principles underpinning good corporate governance.

scholarly journals Institutional reforms and development of corporate governance and banking system in China

2017 ◽  
Vol 9 (2) ◽  
pp. 352 ◽  
Author(s):  
Vijayakumaran Ratnam ◽  
Sunitha Vijayakumaran
Keyword(s):  
Corporate Governance ◽  
Banking Sector ◽  
Banking System ◽  
Governance Structure ◽  
Chinese Government ◽  
Governance System ◽  
Corporate Sector ◽  
Institutional Reforms ◽  
Corporate Governance System ◽  
Management Responsibility

The objective of this paper is to review China’ instructional reforms and evaluate its effectiveness based on available empirical evidences with special reference to Chinese corporate governance system and financial system. As part of the wider economic reform initiated in the late 1970s, in the 1980s, the Chinese government adopted various measures aimed at reforming state owned enterprises (SOEs). These mainly include managerial autonomy, a management responsibility system, corporatization and partial privatization of former SOEs. In addition, the Chinese government took various steps to enhance the efficiency of the banking sector. The analysis shows that China’s efforts to improve the corporate sector through its own unique gradual and piecemeal approach has been successful in terms of introducing a formal governance structure for the corporate sector, liberalizing its financial sector, improving governance of state owned banks, and most importantly, developing the private sector as the back bone of the economy.

scholarly journals Corporate Governance in the Digital Economy

2021 ◽  
pp. 158-169
Author(s):  
I. O. Zharinov
Keyword(s):  
Corporate Governance ◽  
Virtual Environment ◽  
Business Processes ◽  
Institutional Environment ◽  
Business Systems ◽  
Governance System ◽  
Digital Twins ◽  
Information Components ◽  
Corporate Business ◽  
Business Relations

The task of organizing corporate governance of groups of business systems that carry out industrial activities in the Industry 4.0 paradigm and are focused on a single market segment is considered. The subjects of governance are defined as residents of corporate business relations (stakeholders) who provide management or action the business as an investor, owner, lender, etc. The objects of governance are defined as business systems and their groups (business complexes, State corporations) formed as a result of institutional and infrastructural transformations in the primary and aggregated parts of industry. The  innovative component (subject), corresponding to the globalization of economic and digitalization of business processes, introduced an information system into the management channel that performs modeling and evaluating the effectiveness of corporate business relations in a virtual environment using digital twins of governance objects. Digital twins are the information components of a virtual corporation deployed on a platform of a decentralized ecosystem. The criterion for the quality of governance is the effectiveness of the corporation, formed in a balanced space of parameters relevant to financial and production indicators. The technology is described and the scheme of the corporate governance system is presented, which complementarily combines the action of business management systems and artificial intelligence (scheduler) of the virtual environment on the groups. It is proposed to extend the mechanisms of corporate governance to the business relations of the parties regulated in the digital institutional environment by electronic procedures.

scholarly journals Global institutions and local filtering: Introducing independent directors to Taiwanese corporate boards

2018 ◽  
Vol 33 (3) ◽  
pp. 292-314 ◽  
Author(s):  
Chi-Nien Chung ◽  
Young-Choon Kim
Keyword(s):  
Corporate Governance ◽  
Independent Directors ◽  
Corporate Boards ◽  
Family Control ◽  
Public Firms ◽  
Global Institutions ◽  
Family Governance ◽  
Geographic Context ◽  
Governance Model ◽  
Corporate Governance Practice

Drawing on the idea of selective interaction between organizations and environments, the authors examine how organizations change their traditional practices when they are exposed to new institutional environments. In the context of corporate governance change in response to financial market globalization, they argue that global institutional influence is moderated by local corporate control contexts that function as filtering mechanisms. The authors empirically analyse the adoption of a new corporate governance practice, i.e., the initial introduction of independent directors, in Taiwanese public firms, where family governance has been a dominant governance model. The findings suggest that while firms exposed to US capital markets are more likely to adopt independent directors, this facilitating effect weakens when the firms are under strong family control and is amplified when they are unbound from local frameworks through the key leader’s education or their geographic context.

scholarly journals Corporate Governance and Firm Performance: Empirical Evidence from India

2016 ◽  
Vol 1 (2) ◽  
pp. 48-65 ◽  
Author(s):  
Surya Bahadur G.C.
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Panel Data ◽  
Financial Performance ◽  
Ownership Structure ◽  
Independence Number ◽  
Negative Relationship ◽  
Governance System ◽  
Board Committees ◽  
Governance Practices

The paper attempts to analyze inter-linkages between corporate governance, ownership structure, capital structure and firm performance in India. The study employs a panel data of all CNX Nifty companies from 2008 to 2012. Using LSDV panel data models and 2SLS model the study reveals that that good corporate governance practices adopted by companies is positively related with financial performance. Board independence, number of board committees, and director remuneration are found to have positive relationship while larger board size, ownership by promoters and financial leverage have negative relationship with performance. There is existence of bi-directional relationship between corporate governance and financial performance. Companies with sound financial performance are more likely to conform to corporate governance norms and standards and implement sound corporate governance system. In addition, the findings reveal that corporate governance practices adopted by the listed firms depend on their ownership structure. Ownership concentration is found to effect corporate governance negatively.Journal of Business and Management Research, Vol. 1 (2), 2016, pp. 48-65. 

scholarly journals CORPORATE GROWTH, AGE AND OWNERSHIP STRUCTURE: EMPIRICAL EVIDENCE IN SPANISH FIRMS / KOMPANIJOS DYDIS, AMŽIUS IR NUOSAVYBĖS STRUKTŪRA: EMPIRINIS TYRIMAS ISPANIJOS ĮMONĖSE

2011 ◽  
Vol 12 (1) ◽  
pp. 164-196 ◽  
Author(s):  
Justo de Jorge Moreno ◽  
Leopoldo Laborda Castillo
Keyword(s):  
Corporate Governance ◽  
Ownership Structure ◽  
Firm Growth ◽  
Relative Size ◽  
Entrepreneurial Activity ◽  
Economic Activities ◽  
Governance System ◽  
Spanish Economy ◽  
Established Firms ◽  
Productivity And Competitiveness

The objective of this work is to analyse firm mobility among the different sectors of the Spanish economy according to a statistical classification of economic activities at the 1-digit level. Some of the stylised facts that we find are: an inverse relation between firm growth and age; an increase in new entrants’ average relative size in terms of sales compared to established firms among the different industries and cohorts; the importance of the firm's initial size in entrepreneurial activity; the favourable impact of the economy on firm growth; and a positive relation between non-concentration in the ownership structure and greater mobility. In this context, an efficient corporate governance system may prove as a significant policy tool for the investment and growth prospective of the Spanish economy. The regulatory framework of the Spaniard capital market has been coordinate with the EU standards. The challenge is now mostly for the firms to adopt the appropriate corporate governance structures, in order to achieve real convergence, in terms of productivity and competitiveness, with other developed economies. Santrauka Pateikiami empirinio tyrimo, atlikto Ispanijos kompanijose, rezultatai. Tirti buvo pasirinktos skirtingiems pramones sektoriams (pagal ekonomikos veiklu klasifikatoriu) priklausanèios imones. Tyrimo metu nustatyta, kad egzistuoja sryšis tarp imones dydžio ir amžiaus, kad itakos turi ir skirtingi pramones sektoriai, kuriuose veikia imone, nustatytas sryšis tarp imones dydžio bei ekonominio aktyvumo, imones nuosavybes ir augimo. Atsižvelgiant i tai, siuloma veiksminga verslo valdymo sistema, kuri gali buti priimta kaip viena svarbiausiu politikos priemoniu pritraukiant investicijas ir didinant Ispanijos ekonomikos augim. Pasiulytosios veiksmingos verslo valdymo sistemos priemones pades imonems didinti produktyvum ir stiprinti konkurencini pranašum, palyginti su kitomis ekonomiškai stipriomis valstybemis.

scholarly journals OWNERSHIP STRUCTURE OF FAMILY BUSINESS GROUPS

2020 ◽  
Vol 9 (2) ◽  
pp. 240-253
Author(s):  
Wlamir Xavier ◽  
Silvio Parodi Camilo ◽  
Rosilene Marcon ◽  
Frederick Greene
Keyword(s):  
Family Business ◽  
Ownership Structure ◽  
Institutional Environment ◽  
Business Groups ◽  
Organizational Structures ◽  
Institutional Reforms ◽  
Private Companies ◽  
Family Business Groups ◽  
Trade Perspective ◽  
The Relationship

This study seeks to analyze the relationship between the ownership structure of Family Business Groups and the institutional environment. Family Business Groups prevail in emerging countries as diverse organizational structures that aggregate various companies under the control of a family or a reduced number of people. This economically relevant structure is responsible for a significant share of countries' Gross Domestic Product and frequently congregates the largest private companies in their respective countries. Institutional reforms have been implemented in emerging economies in order to support the integration of other nations from a trade perspective. This paper contributes to the literature by developing propositions on the effect of institutional reforms on the ownership structure of Family Business Groups.

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