EXPRESS: The Governance of Learning: Carrots, Sticks, and Stones in Acquisition Capability Development

2021 ◽  
pp. 147612702110278
Author(s):  
Mario Schijven ◽  
Kalin Kolev ◽  
John Haleblian
Keyword(s):  
Corporate Governance ◽  
Organizational Learning ◽  
Cognitive Effort ◽  
Capability Development ◽  
Governance Mechanisms ◽  
Short Term ◽  
Effective Learning ◽  
Corporate Governance Mechanisms ◽  
Using Data ◽  
Considerable Support

A growing literature shows that deliberate, cognitive effort is necessary for learning to occur in the context of complex strategic activities. However, given increasing pressure for short-term results, it remains unclear what motivates management to actually invest such effort in learning, which benefits performance primarily in the longer term. To help fill this gap in our understanding of the motivational mechanisms behind organizational learning, we theorize whether and how corporate governance mechanisms push management toward more effective learning from its firm’s acquisition experience. Using data on U.S. firms’ acquisitions from 1996 through 2012, we find considerable support for our arguments.

scholarly journals Corporate governance and efficiency in the Electricity Sector using Data Envelopment Analysis: a study in the brazilian stock market

2011 ◽  
pp. 161-189
Author(s):  
Fernanda Maciel Peixoto ◽  
Roberto do Nascimento Ferreira ◽  
Ana Lúcia Miranda Lopes ◽  
André Francisco Alcântara Fagundes
Keyword(s):  
Corporate Governance ◽  
Data Envelopment Analysis ◽  
Cash Flow ◽  
Electricity Sector ◽  
Data Envelopment ◽  
Governance Mechanisms ◽  
Minority Shareholders ◽  
Corporate Governance Mechanisms ◽  
Business Efficiency ◽  
Using Data

Different Corporate Governance mechanisms have been suggested to minimize agency problems between managers and shareholders, and between controlling and minority shareholders. The aim of this study is to analyze the corporate governance mechanisms result in greater efficiency for Brazilian stock companies in the electricity sector, in 2007-2009. The hypothesis to be verified is that the lower the voting concentration   and the dependence of the council, and the greater the cash flow concentration, the greater the performance of the company will be. The analyzed sample involved thirty-three companies, fourteen being classified into one of the levels of CG (Level 1, Level 2 or New Market) and the remainder being members of the traditional market. To measure the efficiency of the companies, the non-parametric DEA (Data Envelopment Analysis) method was used, and to relate the efficiency with the governance variables, we adopted regression analysis of panel data. The results demonstrated that the use of CG mechanisms positively influences business efficiency, but not in the expected magnitude. It was found that the cash flow concentration is positively related to the efficiency of firms, supporting the governance literature. For future work, the use of other input and output variables is suggested.

scholarly journals The CEO Horizon Problem and Managerial Slack in China

2018 ◽  
Vol 14 (2) ◽  
pp. 343-376 ◽  
Author(s):  
Junxiong Fang ◽  
Lerong He ◽  
Martin J. Conyon
Keyword(s):  
Corporate Governance ◽  
Governance Mechanisms ◽  
Publicly Traded ◽  
Horizon Problem ◽  
Ceo Tenure ◽  
Corporate Governance Mechanisms ◽  
Perverse Incentives ◽  
Equity Ownership ◽  
Publicly Traded Firms ◽  
Using Data

ABSTRACTThis study investigates how CEO behavior and incentives change during the CEO's final years in office, known as the horizon problem. We examine how the horizon problem alters managerial slack, a measure of operational inefficiency and managerial value diversion. Using data on Chinese publicly traded firms between 2003 and 2011, we find that managerial slack increases in the last two years of CEO tenure compared to earlier years. We also show that the increase in managerial slack in CEO final years in office is smaller in privately controlled firms than in state-owned enterprises, smaller in firms with CEO equity ownership and more independent boards compared to those without. We conclude that higher quality corporate governance mechanisms ameliorate the perverse incentives associated with the CEO horizon problem, and reduce CEOs’ tendency to increase managerial slack during their final years in office.

scholarly journals Is corporate governance of private equity targets more effective for risk mitigation?

2021 ◽  
Author(s):  
Vladimiro Marini ◽  
Massimo Caratelli ◽  
Gian Paolo Stella ◽  
Ilaria Barbaraci
Keyword(s):  
Corporate Governance ◽  
Agency Theory ◽  
Financial Distress ◽  
Private Equity ◽  
Risk Mitigation ◽  
Governance Mechanisms ◽  
Active Monitoring ◽  
Industry Expert ◽  
Corporate Governance Mechanisms

AbstractPrivate equity is a source of finance and a governance device characterised by active monitoring through sponsors that intervene in targets’ corporate governance. As sponsors are skilled and motivated acquirors, we investigated whether corporate governance mechanisms mitigate leveraged targets’ risk of financial distress differently compared to non-acquired companies through the lenses of agency theory and resource-based theories. We found that targets and non-acquired companies are not significantly different in terms of corporate governance features, but sponsors are skilled enough to choose corporate governance members to mitigate risk more, especially when boards are smaller, have busier industry expert directors, and mandate execution to more managers. These results can be useful to targets, targets’ investors and lenders, and policymakers.

IMPLEMENTATION OF THE VIRTUAL-NETWORK PARADIGM OF CORPORATE GOVERNANCE AT THE ENTERPRISES OF THE FUEL AND ENERGY COMPLEX

2021 ◽  
Vol 4 (8) ◽  
pp. 58-62
Author(s):  
Kamila Zagidullina ◽  
Keyword(s):  
Corporate Governance ◽  
Economic Development ◽  
Functional Approach ◽  
Process Approach ◽  
Virtual Network ◽  
Governance Mechanisms ◽  
Theoretical Substantiation ◽  
Energy Complex ◽  
Corporate Governance Mechanisms ◽  
Market Transformation

The relevance is increasing due to the need for a theoretical substantiation of the directions and mechanism of further market transformation of the fuel and energy complex, taking into account the dependence of the processes and results of its economic development on the effectiveness of corporate governance mechanisms. Key words:economics, fuel and energy complex, corporate governance, functional approach, process approach, virtual-network paradigm, mechanism

scholarly journals Corporate governance and conglomerate diversification strategy – evidence from Vietnam

2018 ◽  
Vol 13 (6) ◽  
pp. 1578-1596 ◽  
Author(s):  
Thi Xuan Trang Nguyen
Keyword(s):  
Corporate Governance ◽  
Stock Exchange ◽  
Board Composition ◽  
Governance Mechanisms ◽  
Content Type ◽  
Unrelated Diversification ◽  
Corporate Governance Mechanisms ◽  
Control Devices ◽  
Interest Alignment ◽  
The Relationship

Purpose The purpose of this paper is to examine the impact of internal corporate governance mechanisms, including interest alignment and control devices, on the unrelated diversification level in Vietnam. Additionally, the moderation of free cash flow (FCF) on these relationships is also tested. Design/methodology/approach The study is based on a balanced panel data set of 70 listed companies in both stock markets, Ho Chi Minh Stock Exchange and Hanoi Stock Exchange, in Vietnam for the years 2007–2014, which gives 560 observations in total. Findings The results show that if executive ownership for CEOs is increased, then the extent of diversification is likely to be reduced. However, the link between unrelated diversification level and executive stock option, another interest alignment device, cannot be confirmed. Among three control devices (level of blockholder ownership, board composition and separation of CEO and chairman positions), the study finds a positive connection between diversification and blockholder ownership, and statistically insignificant relations between the conglomerate diversification level and board composition, or CEO duality. Additionally, this study discovers a negative link between diversification and state ownership, although there is no evidence to support the change to the effect of each internal corporate governance mechanism on the diversification level of a firm between high and low FCF. Practical implications The research can be a useful reference not only for investors and managers but also for policy makers in Vietnam. This study explores the relationship among corporate governance, diversification and firm value in Vietnam, where the topics related to effectiveness of corporate governance mechanisms to public companies has been increasingly attractive to researchers since the default of Vietnam Shipbuilding Industry Group (Vinashin) happened in 2010 and the Circular No. 121/2012/TT-BTC on 26 July 2012 of the Vietnamese Ministry of Finance was issued with regulations on corporate governance applicable to listed firms in this country. Originality/value This research, first, enriches current literature on the relationship between corporate governance and firm diversification. It can be considered as a contribution to the related topic with an example of Vietnam, a developing country in Asia. Second, the research continues to prove non-unification in results showing the relationship between corporate governance and conglomerate diversification among different nations. Third, it provides a potential input for future research works on the moderation of FCF to the effects of corporate governance on diversification.

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.

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