Corporate governance and financial performance of listed banks: evidence form emerging market

2017 ◽  
Vol 8 (1) ◽  
pp. 29
Author(s):  
Kingsley Opoku Appiah ◽  
Dadson Awunyo Vitor ◽  
Stephen Awuah Nyarko
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Emerging Market

The effects of corporate governance on financial performance and financial distress: evidence from Egypt

2015 ◽  
Vol 15 (5) ◽  
pp. 641-662 ◽  
Author(s):  
Tamer Mohamed Shahwan
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Financial Performance ◽  
Financial Distress ◽  
Emerging Market ◽  
Negative Relationship ◽  
Positive Association ◽  
Time Frame ◽  
Content Type

Purpose – This paper aims to empirically examine the quality of corporate governance (CG) practices in Egyptian-listed companies and their impact on firm performance and financial distress in the context of an emerging market such as that of Egypt. Design/methodology/approach – To assess the level of CG practices at a given firm, the current study constructs a corporate governance index (CGI) which consists of four dimensions: disclosure and transparency, composition of the board of directors, shareholders’ rights and investor relations and ownership and control structure. Based on a sample of 86 non-financial firms listed on the Egyptian Exchange, the effects of CG on performance and financial distress are assessed. Tobin’s Q is used to assess corporate performance. At the same time, the Altman Z-score is used as a financial distress indicator, as it measures financial distress inversely. The bigger the Z-score, the smaller the risk of financial distress. Findings – The overall score of the CGI, on average, suggests that the quality of CG practices within Egyptian-listed firms is relatively low. The results do not support the positive association between CG practices and financial performance. In addition, there is an insignificant negative relationship between CG practices and the likelihood of financial distress. The current study also provides evidence that firm-specific characteristics could be useful as a first-pass screen in determining firm performance and the likelihood of financial distress. Research limitations/implications – The sample size and time frame of our analysis are relatively small; some caution would be needed before generalizing the results to the entire population. Practical implications – The findings may be of interest to those academic researchers, practitioners and regulators who are interested in discovering the quality of CG practices in a developing market such as that of Egypt and its impact on financial performance and financial distress. Originality/value – This paper extends the existing literature, in the Egyptian context in particular, by examining firm performance and the risk of financial distress in relation to the level of CG mechanisms adopted.

scholarly journals Corporate governance and financial performance of listed companies: A case of an emerging market

2021 ◽  
Vol 5 (3) ◽  
pp. 8-17
Author(s):  
Emmanuel Selase Asamoah ◽  
Albert Puni
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Performance Indicator ◽  
Stock Exchange ◽  
Emerging Market ◽  
Target Population ◽  
Governance Structure ◽  
Tobin’S Q ◽  
Tobin's Q ◽  
A Performance

Corporate financial performance (CFP) is a key benefit that comes with the adoption and implementation of a good corporate governance structure in organizations. The objective of this paper is to analyze the effect of the six (6) broad corporate governance structures (board composition, board committees, separation of CEO/chairman, size of board, number of board meetings held, and shareholder concentration) on CFP measured by ROA, ROE, EPS, and Tobin’s Q among Ghanaian companies. The target population for the study was the companies that were listed on the Ghana Stock Exchange (GSE) for the period 2015–2020 and purposive sampling methods were deployed in the sample selection. The study found that using ROA as a performance indicator, corporate governance variables affected CFP by 18.95% whilst it influenced ROE by 29.71%. Additionally, corporate governance mechanisms impacted EPS by 52.53% when it was used as a performance indicator and 18.01% when Tobin’s Q was the performance index. The paper concludes that companies that implement the corporate governance guidelines on best practices stand a better chance of enhancing CFP especially with performance targets that integrate shareholder value maximization.

scholarly journals Board Structure and Firm Performance:Evidence from Emerging Market

2020 ◽  
Vol 8 (5) ◽  
pp. 2305-2311
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Financial Performance ◽  
Corporate Performance ◽  
Emerging Market ◽  
Small Sample ◽  
Independent Director ◽  
Board Structure ◽  
Board Size ◽  
Firm Financial Performance

This paper fulfils the purpose by studying the effect of corporate board structure i.e., board size and independent director on firm financial performance for selected focused and diversified Indian companies. This study analyses the corporate governance structure of 76 Indian companies (60 focused and 16 diversified companies) listed on the BSE-Sensex for ten years from the year 2007-2016 using panel data analysis. The empirical findings showed a positive relationship of board size with firm performance and significant negative association of independent director with the corporate performance of focused Indian firms, while in the diversified Indian firm, board size found to be positively related to financial performance and independent director found to be negatively related to corporate performance. The result has shown that board structure has seemed to be significant in listed focused firm with firm performance while board structure of diversified firm seems to be insignificant with firm performance, it might be because of small sample size and dynamics of an emerging economy in India which is different from the developed economies of the world. This study implied that in emerging or developing economy like India, lower independent director usually boost company value, and adequate board size will significantly impact on firm performance both in case of focused and diversified firms. This research paper contribute and fill existing gap in literature on corporate governance by examining and establishing relation between firm performance and board structure with focused and diversified Indian firms.

scholarly journals Does investing in sound corporate governance pay? A South African study

2017 ◽  
Vol 48 (2) ◽  
pp. 33-43 ◽  
Author(s):  
N. Mans-Kemp ◽  
P. D. Erasmus ◽  
S. Viviers
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
South African ◽  
Performance Measures ◽  
Factor Model ◽  
Emerging Market ◽  
Abnormal Returns ◽  
Annual Reports ◽  
Complex Nature ◽  
Governance Practices

Despite increased recognition of the importance of sound corporate governance practices in emerging markets, previous researchers reported inconclusive evidence on the association between corporate governance and financial performance. Authors that predominantly focused on board-related variables might, however, have failed to reflect the complex nature of corporate governance. The financial performance measures employed in the majority of previous studies also ignored the potential risk-reducing benefits that sound corporate governance could hold for emerging market firms. The purpose of this article was thus to investigate the relationship between a comprehensive measure of corporate governance and the risk-adjusted performance of selected South African companies. A unique corporate governance database was compiled by conducting content analysis on the considered companies’ annual reports over the period 2002 to 2010. Aspects related to nine corporate governance categories were taken into account. In addition to the accounting and market-based performance measures that were employed in previous studies, South African companies’ risk-adjusted performance was also taken into account. The capital asset pricing model and the Fama-French three-factor model were employed to estimate risk-adjusted abnormal returns for four corporate governance-sorted portfolios. Both estimations revealed that the portfolio comprising of companies with the highest corporate governance scores managed to significantly outperform the market.

A cross-firm analysis of corporate governance compliance and performance in Indonesia

2020 ◽  
Vol 35 (5) ◽  
pp. 621-643
Author(s):  
Miranda Tanjung
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Audit Quality ◽  
Emerging Market ◽  
Generalized Method Of Moments ◽  
Empirical Literature ◽  
Positive Contribution ◽  
Content Type ◽  
Governance Index ◽  
Governance Practices

Purpose The study aims to construct a cross-firm corporate governance index to predict firm performance. The index consists of 15 governance elements from a large sample of the Indonesian firms covering the period from 2003 to 2013. Design/methodology/approach This study presents robust results as the findings are tested by applying the generalized method of moments (GMM) estimator to eliminate endogeneity problems and unobservable heterogeneity posed by the relationship between performance and firm-level governance practices. Findings The results indicate that the corporate governance index is associated with enhanced corporate financial performance. Likewise, the findings reported under the pooled ordinary least squares and GMM also indicate corporate governance sub-indexes (elements), which have significant effects on performance: whistleblower mechanism, audit quality, board of director size and blockholders. Research limitations/implications In the emerging market context, this study supports the notion that active and self-regulated governance practices are appreciated by the market and, in the end, can have a positive impact on financial performance. The analysis adds to the empirical literature by providing insights into how governance provisions are being actively implemented in the micro level. With regard to weak governance practices, this study is consistent with previous studies, according to which, firms have the opportunity to use corporate governance as a way of differentiating themselves from other players in countries with poorly regulated investor protection and institutional settings. Originality/value This study makes a positive contribution, as it looks at the impact of Indonesia’s corporate governance compliance on the basis of a set of 15 unique governance provisions, including the findings of the positive influence of corporate governance in family business.

scholarly journals Corporate ethical reporting and financial performance: Evidence from the emerging market.

2017 ◽  
Vol 7 (4) ◽  
pp. 14-22
Author(s):  
Uwalomwa Uwuigbe ◽  
Jinadu Olugbenga ◽  
Olubukola Ranti Uwuigbe ◽  
Daramola Sunday Peters ◽  
Adegbola Otekunrin
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Ethical Issues ◽  
Emerging Market ◽  
Pearson Correlation ◽  
Least Square ◽  
Annual Reports ◽  
Listed Firms ◽  
The Impact ◽  
The Relationship

This paper examines the degree of comprehensiveness of ethical reporting in annual reports of listed firms in Nigeria. It also looks at the relationship between the extent of corporate ethical reporting and financial performance of the listed firms. In addition, it examines the impact of corporate governance on the financial performance of the listed firms. The study utilises the corporate annual reports for the period 2010-2014 as our main source of secondary data, while the content analysis technique is used to elicit data from the corporate annual report. In testing the research hypotheses, the study adopts the use of descriptive statistics, Pearson correlation and panel least square regression method to analyse the degree of comprehensiveness and the relationship between corporate ethical reporting and financial performance of the listed firms. Findings from the study show that there is lack of comprehensiveness of corporate ethical reporting in the selected industries. In addition, the study observed that a significant relationship exists between corporate ethical reporting and financial performance. Also, the study observed that the relationship between corporate governance and financial performance is not significant. The study recommends the need for a stand-alone report for corporate ethical issues in annual reports of companies in Nigeria.

Sign in / Sign up

Export Citation Format

Share Document