scholarly journals A Skeptical View of Financialized Corporate Governance

2017 ◽  
Vol 31 (3) ◽  
pp. 131-150 ◽  
Author(s):  
Anat R. Admati
Keyword(s):  
Corporate Governance ◽  
Stock Prices ◽  
Boards Of Directors ◽  
Managerial Compensation ◽  
Return On Equity ◽  
Rating Agencies ◽  
Effective Governance ◽  
Corporate Scandals ◽  
Private And Public ◽  
History Of

Managerial compensation typically relies on financial yardsticks, such as profits, stock prices, and return on equity, to achieve alignment between the interests of managers and shareholders. But financialized governance may not actually work well for most shareholders, and even when it does, significant tradeoffs and inefficiencies can arise from the conflict between maximizing financialized measures and society's broader interests. Effective governance requires that those in control are accountable for actions they take. However, those who control and benefit most from corporations' success are often able to avoid accountability. The history of corporate governance includes a parade of scandals and crises that have caused significant harm. After each, most key individuals tend to minimize their own culpability. Common claims from executives, boards of directors, auditors, rating agencies, politicians, and regulators include “we just didn't know,” “we couldn't have predicted,” or “it was just a few bad apples.” Economists, as well, may react to corporate scandals and crises with their own version of “we just didn't know,” as their models had ruled out certain possibilities. Effective governance of institutions in the private and public sectors should make it much more difficult for individuals in these institutions to get away with claiming that harm was out of their control when in reality they had encouraged or enabled harmful misconduct, and ought to have taken action to prevent it.

scholarly journals Corporate governance paradigms of hazardous industries: Enduring challenges of Britain’s civil nuclear industry

2021 ◽  
Vol 46 (2) ◽  
pp. 156-167
Author(s):  
B.C. Pemberton ◽  
W. Ng
Keyword(s):  
Decision Making ◽  
Corporate Governance ◽  
Stakeholder Engagement ◽  
Critical Issue ◽  
Nuclear Industry ◽  
Environmental Damage ◽  
Effective Governance ◽  
Management Processes ◽  
History Of ◽  
Core Requirements

This article discusses risk management processes in Britain’s civil nuclear industry from a corporate governance perspective. As an example of a hazardous industry that can inflict catastrophic environmental damage and fatalities, effective governance of Britain’s nuclear industry is a critical issue. Yet the industry’s history of corporate governance suggests that processes of corporate governance have regularly failed to meet core requirements of its stakeholders. A core requirement is for governance designs that recognize the interests of public owner–stakeholders. In meeting this requirement, the article offers a framework for a relationship-driven form of corporate governance that enables meaningful stakeholder engagement in decision-making.

scholarly journals JAPANESE CORPORATE GOVERNANCE REFORM : WHAT IS REQUIRED FOR EFFECTIVE FUNCTIONING OF OUTSIDE DIRECTORS ?

2019 ◽  
Vol 8 (1) ◽  
pp. 11
Author(s):  
Masaru Suzuki
Keyword(s):  
Corporate Governance ◽  
Boards Of Directors ◽  
Lessons Learned ◽  
Gradual Change ◽  
Governance Reform ◽  
Outside Directors ◽  
Governance System ◽  
Corporate Scandals ◽  
Management Board ◽  
Corporate Governance Reform

<p>The topic of outside directors’ functions has been attracting significant attention for many years now, especially in the discussions about corporate governance reform in Japan. Over the last two decades, most listed Japanese companies have voluntarily introduced outside directors into their boardrooms, in line with the gradual change in an overall corporate governance system toward a monitoring board model moving away from the more traditional management board model. It appears the recent trend is for companies to add outside directors to their boards of directors to increase corporate values.<strong> </strong>In the midst of transforming the management board model into the monitoring board model, closely reexamining the functions of outside directors is necessary. What can be concluded from the lessons learned from recent corporate scandals and the discussions concerning the functions of outside directors is: (1) outside directors should be truly independent from the company’s management; and (2) outside directors need access to the company’s corporate information in order to prevent corporate scandals and to provide appropriate advice to the company’s management. <strong> </strong>This paper aims at considering how to make outside directors more effective and their roles more substantial, based on the history of corporate governance reform in Japan.</p>

scholarly journals MEKANISME GOOD CORPORATE GOVERNANCE, LEVERAGE DAN KINERJA KEUANGAN PERUSAHAAN

2018 ◽  
Vol 9 (1) ◽  
Author(s):  
Evi Oktavia
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Boards Of Directors ◽  
Audit Committee ◽  
Stock Exchange ◽  
Secondary Data ◽  
Governance Mechanism ◽  
Financial Industry ◽  
Return On Equity ◽  
Firm Financial Performance

The purpose of this research is to explain an empirical evidence about the effect of GoodCorporate Governance (GCG) mechanism and leverage on financial performance, and definewhich of the most important variables having powerful impact on the firm financial performance.Good Corporate Governance mechanism measured by using board gender, board of directors,board of commissioner, audit committee, and institutional ownership variables. Leveragemeasured by using Debt to Equity Ratio (DER) variable, while financial performance measuredby using Return on Equity (ROE) variable. This research is using secondary data, such as thefinancial report, idx statistic report, and other related information of financial industry listed inIndonesia Stock Exchange for the period of 2011 to 2015. The sample used in this research were23 companies which selected by using purposive sampling method. In this study, panel dataregression methods have been conducted to explain the effect of GCG and leverage on the firmfinancial performance.The results show that board gender has a positive and significant effect on the firmfinancial performance. Meanwhile, boards of directors, board of commissioner, audit committeeand leverage haveno significant effect on the firm financial performance. Moreover, institutionalownership has a positive effect and no significant on the firm financial performance.

Board Structure and Firm Performance: Evidence from Australia

2004 ◽  
Vol 10 (1) ◽  
pp. 14-24 ◽  
Author(s):  
Ingrid Bonn
Keyword(s):  
United States ◽  
Corporate Governance ◽  
Firm Performance ◽  
Boards Of Directors ◽  
Board Structure ◽  
Return On Equity ◽  
Book Value ◽  
Business Context ◽  
European Business ◽  
Female Director

ABSTRACTThe influence of corporate governance on firm performance has been discussed for a number of years, but mainly in a United States and European business context. This article investigates the composition of boards of directors in large Australian firms and analyses whether board structure has an impact on performance, as measured by return on equity and market-to-book value ratio. The results showed that outsider ratio and female director ratio were positively associated with firm performance, whereas board size and directors' age had no influence on firm performance.

Board Structure and Firm Performance: Evidence from Australia

2004 ◽  
Vol 10 (1) ◽  
pp. 14-24 ◽  
Author(s):  
Ingrid Bonn
Keyword(s):  
United States ◽  
Corporate Governance ◽  
Firm Performance ◽  
Boards Of Directors ◽  
Board Structure ◽  
Return On Equity ◽  
Book Value ◽  
Business Context ◽  
European Business ◽  
Female Director

ABSTRACTThe influence of corporate governance on firm performance has been discussed for a number of years, but mainly in a United States and European business context. This article investigates the composition of boards of directors in large Australian firms and analyses whether board structure has an impact on performance, as measured by return on equity and market-to-book value ratio. The results showed that outsider ratio and female director ratio were positively associated with firm performance, whereas board size and directors' age had no influence on firm performance.

Caste Primacy of Auditor Choice and Independence

2020 ◽  
Vol 55 (04) ◽  
pp. 2050017 ◽  
Author(s):  
Ajit Dayanandan ◽  
Han Donker ◽  
John Nofsinger ◽  
Rashmi Prasad
Keyword(s):  
Corporate Governance ◽  
Social Network ◽  
Public Sector ◽  
Boards Of Directors ◽  
Caste System ◽  
Corporate Boards ◽  
Quota System ◽  
Auditor Choice ◽  
The Public ◽  
History Of

We examine the caste affiliation of the auditor selected by the corporate boards of directors of Indian firms. The history of the caste system in India is one of discrimination and inequity. The constitutionally mandated quota system in the public sector has shown improvements, but has not trickled into private sector leadership. We find that nearly 96% of Indian corporate boards are dominated by a single caste. The auditing firms are also dominated by the forward castes. Lastly, we find that when boards are dominated by one caste, they select an auditing firm that is also affiliated with that same caste. We examine the board and auditor relationship because they both play an important monitoring role in corporate governance. However, auditor effectiveness can be undermined when there is a lack of independence between them and the firm. The existence of a strong shared social network like caste affiliation compromises that independence.

scholarly journals Modernising corporate objective debate towards a hybrid model

2020 ◽  
Vol 62 (3) ◽  
pp. 361-390
Author(s):  
Jingchen Zhao
Keyword(s):  
Corporate Governance ◽  
Hybrid Model ◽  
Boards Of Directors ◽  
Learning From Experience ◽  
Corporate Scandals ◽  
Active Involvement ◽  
Governance Model ◽  
Corporate Objective ◽  
Governance Practices ◽  
Corporate Governance Model

In the light of the increasing significance and vivid dynamism of corporate governance practices, a vast amount of literature has been dedicated to the development of modes of corporate governance. This subject deals with the rights and responsibilities of boards of directors, their shareholders and stakeholders, and the balancing of their individual interests with the economic goals of the organisation as well as the interests of society as a whole. A fundamental topic lies at the heart of corporate governance regimes: whose interests should corporations be serving? This article rethinks the shareholder and stakeholder theory debate, treating it as a contemporary topic worth reconsidering in the context of the current climate of corporate scandals and financial crisis. Learning from experience, the article offers some guidance on how to establish an efficient corporate governance model by adopting hybrid model principles for higher investor confidence, bettercorporation shape, more active involvement from shareholders and stakeholders and more considerations of the views and interests of stakeholder groups. Thus, this paper provides some thoughts on corporate objectives in the convergent corporate governance model in order to formulate a hybrid model mechanism and provide some guidance for directors in the carrying out of their function.

scholarly journals Corporate governance standards in cross-border investing: lessons learned from Chinese companies listed in the United States

2014 ◽  
Vol 11 (3) ◽  
pp. 429-437 ◽  
Author(s):  
Hugh Grove ◽  
Maclyn Clouse
Keyword(s):  
United States ◽  
Corporate Governance ◽  
Initial Public Offerings ◽  
Stock Prices ◽  
Boards Of Directors ◽  
Stock Price ◽  
The United States ◽  
Lessons Learned ◽  
Public Offerings ◽  
Chinese Company

This paper will examine five Chinese company stocks that have been listed on United States exchanges with either initial public offerings (IPOs) or reverse mergers, often called reverse take-overs (RTOs). Their shares were initially well received in the market, especially as China’s economy continued to grow at rates much higher than the rest of the world’s countries, with increasing stock prices creating significant gains for their investors. However, in spite of these firms’ apparent compliance to the U. S. regulations, there is now evidence of fraud, poor auditing, and a lack of corporate governance and control. The resultant stock price declines have led to billions of dollars of losses for investors, and some of these Chinese firms have subsequently been delisted by U. S. stock exchanges. In this paper, we will show that had auditors, boards of directors, and financial analysts been more diligent and responsible, these problems could have been identified earlier than they were. Perhaps some of the investors’ losses could have been prevented

Corporate Governance and Performance of Organizations

2018 ◽  
Vol 9 (5) ◽  
pp. 439-446
Author(s):  
Hamid Ait lemqeddem ◽  
◽  
Mounya Tomas ◽  
Keyword(s):  
Corporate Governance ◽  
Agency Theory ◽  
Theoretical Foundation ◽  
Quantitative Approach ◽  
Governance Practices ◽  
Deductive Method ◽  
Private And Public ◽  
Is Theory ◽  
And Performance ◽  
Do So

There is renewed interest in the need to focus on corporate governance in an environment where it is a performance imperative for all small and large organizations, private and public, beginner or established.The purpose of this study is to demonstrate the place of corporate governance practices in organizations to ensure that the board, officers, and directors take action to protect shareholder interests and all stakeholders. It is important to focus on the effect of these practices on improving performance and competitiveness. To do so, we opted for the hypothetico-deductive method with a quantitative approach. Our theoretical foundation is theory is agency theory.

Board Effectiveness: An Evaluation based on Corporate Governance Score

Think India ◽  
2015 ◽  
Vol 18 (1) ◽  
pp. 16-23
Author(s):  
Hitesh Shukla ◽  
Nailesh Limbasiya
Keyword(s):  
Corporate Governance ◽  
Good Governance ◽  
Sustainable Growth ◽  
Governance Mechanism ◽  
Minority Shareholders ◽  
Effective Governance ◽  
Performance Orientation ◽  
Corporate Governance Mechanism ◽  
And Performance ◽  
Ethical Governance

Growth, progress, and prosperity of any country depend highly on the corporate governance mechanism of that country. Good governance of a country helps it to sustainable growth and consistency in progress. The good governance should contribute towards the improvement in transparency, ethics, morality, and disclosure. The principles of good governance stand on honesty, trust, integrity, openness, and performance orientation. Our honorable Prime Minister Narendra bhai Modi had given the three E for good governance during his speech on Independence Day i.e. Effective Governance, Electronic Governance, and Ethical Governance. The fundamental concern of corporate governance mechanism is to ensure the protection of minority shareholders/owners of specific firms. Mechanism of a corporate governance specifies the relations among the shareholders, board of directors, and managers. The present paper is an attempt to evaluate the effectiveness of the board by calculating the corporate governance score. The mandatory and non-mandatory guidelines have been considered while assigning points to specific parameters of the corporate governance.

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