scholarly journals How to evaluate the quality of remuneration policy? Evidence from the Polish banking sector

2020 ◽  
Vol 70 (3) ◽  
pp. 423-447
Author(s):  
Agnieszka Słomka-Gołębiowska ◽  
Piotr Urbanek
Keyword(s):  
Corporate Governance ◽  
Banking Sector ◽  
Institutional Perspective ◽  
Top Executives ◽  
Executive Remuneration ◽  
Remuneration Policy ◽  
Governance Practices ◽  
Foreign Corporations ◽  
Public Banks

AbstractIn our paper we use an institutional perspective to define the concept of the quality of remuneration policy. Traditional perspective focuses on pay-per-performance relationship between top executives' remuneration and companies' performance. This study is based on the assumption that the acquisition of normatively defined compensation practices and structures is more important for the successful organization than the practices which enhance efficiency defined on the basis of input (compensation) – output (company's performance) relationship. We examine the relationship between the quality of executive remuneration policy and corporate governance standards in banks with a controlling blockholder. Based on the sample of a hand-collected data on corporate governance characteristics, executive remuneration, and financial results of all public banks in Poland from 2005 to 2015, we find that the effective implementation of sound corporate governance practices should be rooted in the form of obligatory normative acts. Consistent with other studies we find a positive and statistically significant relationship between the corporate governance measures and the quality of remuneration policy. In particular, our study shows the significant role of two institutional factors positively determining the efficiency of incentive contracts: remuneration committees and institutional ownership. We also find that the banks controlled by foreign corporations, especially the US–UK–Ireland financial institutions, have a significantly more effective compensation policy than the banks controlled by domestic investors.

Corporate Governance Practices and Non-performing Loans of Banking Sector of Bangladesh: A Panel Data Analysis

2019 ◽  
Vol 9 (2) ◽  
pp. 12
Author(s):  
Asia Khatun ◽  
Ratan Ghosh
Keyword(s):  
Corporate Governance ◽  
Commercial Banks ◽  
Banking Sector ◽  
Good Governance ◽  
Panel Data Analysis ◽  
Random Effect ◽  
Developed Countries ◽  
Governance Practices ◽  
Code Of Corporate Governance

This paper tries to inspect the association and relationship between corporate governance determinants and level of non-performing loan (NPL) of listed commercial banks in Bangladesh. Recently Banks are facing a problem of default loan. This default loan or NPL may reduce the loan giving capacity of the Banks and it may decrease the economic growth of a country. Moreover, there is less research to find out the implication of good governance on the level of NPL in banking sector of Bangladesh than that of developed countries. Here, data from thirty listed commercial banks for the year 2008-2017 (10 years) are taken to explore the rapport between the corporate governance variables and NPL. Random Effect GLS regression method is used to analyze the data. Findings told that commercial banks follow the code of corporate governance on a comply basis however their relationship with NPL is positively significant within the taken determinants of corporate governance. It is expected that, banks with good quality management may ensure the quality of loan and it will reduce the level of NPL.

scholarly journals Executive Remuneration Policy at Banks in Poland After the Financial Crisis - Evolution or Revolution?

2014 ◽  
Vol 17 (2) ◽  
pp. 25-44 ◽  
Author(s):  
Agnieszka Słomka-Gołębiowska ◽  
Piotr Urbanek
Keyword(s):  
Financial Crisis ◽  
Banking Sector ◽  
Executive Pay ◽  
Legal Rules ◽  
Good Corporate Governance ◽  
Executive Remuneration ◽  
Remuneration Policy ◽  
Recent Financial Crisis ◽  
Public Banks ◽  
The Stability

The executive remuneration policy of financial institutions has been indicated as one of the key factors that led to the recent financial crisis. As a consequence a number of legislative initiatives and best practices have been imposed,aimed at strengthening existing and creating new standards of good corporate governance at banks. The purpose of this article is to assess the effectiveness of Poland’s new regulations concerning banks' executive pay, which were introduced in the aftermath of the recent financial crisis. The research results indicate that the new legal rules have not been fully enforced. Public banks in Poland are not fulfilling the reporting obligations imposed by law and international principles. Given the crucial importance of executive remuneration policy in the financial sector to the stability of the banking sector, the inability to evaluate the progress made in the adjustment of executive remuneration practices to the new regulations may be perceived as one of the important risk factors that has not been effectively eliminated or even reduced in Poland yet.

DHFL Meltdown: The Corporate Governance Lapses

2021 ◽  
pp. 097282012199882
Author(s):  
Daitri Tiwary ◽  
Arunaditya Sahay
Keyword(s):  
Corporate Governance ◽  
Banking Sector ◽  
Housing Finance ◽  
Shadow Banking ◽  
Share Prices ◽  
A Value ◽  
Governance Practices ◽  
The Board Of Directors ◽  
Company Sector ◽  
Financial Company

India’s non-banking financial institutions (NBFIs), broadly constituting the less-regulated shadow banking sector, have been plagued with scams, triggering a domino effect in the Indian money market. Major corporate governance issues were highlighted in NBFIs with the unfurling of the ILF&S fraud; it virtually created a sub-prime crisis. In such a scenario, where the shadow banking sector was subject to change in regulations to ensure vigilance, corporate governance lapses had again led to the meltdown of Kapil Wadhawan led Dewan Housing Finance Limited (DHFL). Registering a net profit growth of 25% in the third quarter of financial year 2017, DHFL was one of India’s leading housing finance companies with a value of whopping ₹1.01 trillion as its asset under management (AUM). The company had nose-dived from its coveted position, suffering a loss of ₹22.23 million for the last quarter of the financial year 2018–2019. The company’s credit ratings of commercial papers and non-convertible debentures were downgraded; non-payment of interests led to enforcement of resolution plan, with the board of directors acceding to nationalized banks. The company’s reputation had crashed with its share prices, amidst allegations of lookout notice issued for its promoters for siphoning funds through shell companies. The case describes the oversights and negligence of DHFL in terms of corporate governance practices in the context of the NBFC (non-banking financial company) sector. The jury is out to evaluate whether Wadhawan had followed the rules of corporate governance in letter and spirit, or the tightening noose of regulations and market sentiments around the ‘shadow banking’ sector of India spelt doom for DHFL.

scholarly journals Quality of financial reporting under IFRS and corporate governance influence: Evidence from the Greek banking sector during crisis

2019 ◽  
Vol 8 (4) ◽  
pp. 8-20
Author(s):  
Panagiotis Ballas ◽  
Alexandros Garefalakis ◽  
Christos Lemonakis ◽  
Vassiliki Balla
Keyword(s):  
Economic Growth ◽  
Corporate Governance ◽  
Financial Reporting ◽  
Financial Stability ◽  
Global Financial Crisis ◽  
Debt Crisis ◽  
Financial System ◽  
Positive Contribution ◽  
Governance Practices

The financial system consists, without doubt, one of the most important determinants of the world national economies, which undergoes numerous changes and challenges with major impact on the economic growth prospects of a country. A healthy financial system is the steam engine of the economy, a major source for economic growth through which capitals are attracted for investments; hence, it is regarded as a trustee of financial stability. Given the difference in structure and function of the financial sector in various countries, we investigate the extent to which the implementation of International Financial Reporting Standards (IFRS) accompanied by Corporate Governance practices affected the quality of financial and narrative reporting offered within published statements of Greek banks for the period from 2008 to 2011. The originality of the work lies at the fact that it focuses on Greek financial institutions for a period that incorporates both the burst of global financial crisis and the beginning of the Greek sovereign debt crisis making inferences on quality of reporting as a result of IFRS and Corporate Governance practices adoption. Our analysis revealed the positive contribution of both of the above categories of variables to the accuracy and quality of the information offered to stakeholders.

scholarly journals Corporate governance practices in the banking sector of Bangladesh: do they really matter?

2017 ◽  
Vol 12 (1) ◽  
pp. 27-35 ◽  
Author(s):  
Samiul Parvez Ahmed ◽  
Rahatul Zannat ◽  
Sarwar Uddin Ahmed
Keyword(s):  
Corporate Governance ◽  
Commercial Banks ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Stock Exchange ◽  
Financial Sector ◽  
Jel Classification ◽  
Data Availability ◽  
Time Period ◽  
Governance Practices

A well governed institution is expected to use its resources optimally and, thus, perform more efficiently and contribute positively to economic development of a nation. However, often, it can be seen that poor management of the stakeholders leads to less than optimal strategic directions for an institution. Due to recent global financial crisis and rising issues of the Bangladeshi banking sector, corporate governance is one of the factors that have gained considerable attention. Recent drive of the governance issues of the banking sector of Bangladesh is expected to bring positive change in the financial sector and, hence, it is crucial to assess whether complying with governance codes leads to desired outcome or not. Specifically, the main purpose of this study is to examine the relationship between performances of commercial banks with corporate governance factor along with some internal and macroeconomic variables. Thus, the listed commercial banks in the Dhaka Stock Exchange (DSE) of Bangladesh were considered for the study. Subsequently, considering data availability of the time period (2011-2014), 29 listed commercial banks in the DSE have been considered and, hence, Ordinary Least Squared (OLS) regression models were used through Eviews 8.0 for analyzing the data. Though the study shows a positive relation between corporate governance and performances of banks, the statistical insignificance of the relation raises concern regarding various issues of corporate governance in the financial sector of Bangladesh. Keywords: corporate governance, financial institutions, performances of commercial banks. JEL Classification: G21, G30, G38, G39, O16

scholarly journals Large pension funds and the corporate governance practices of Brazilian companies

2012 ◽  
Vol 9 (2) ◽  
pp. 76-84 ◽  
Author(s):  
Rodrigo Miguel de Oliveira ◽  
Ricardo Pereira Câmara Leal ◽  
Vinicio de Souza Almeida
Keyword(s):  
Corporate Governance ◽  
Institutional Investors ◽  
Pension Funds ◽  
Brazilian Government ◽  
Good Corporate Governance ◽  
Political Views ◽  
Governance Practices ◽  
Corporate Governance Quality ◽  
The Impact

We do not find any consistent evidence that the presence of the largest Brazilian pension funds as relevant shareholders is associated to higher corporate governance scores by public Brazilian companies. Even though companies with institutional investors as relevant shareholders presented a higher average corporate governance score than other companies, they were also larger and had greater past profitability than other companies, which are common attributes of firms with better corporate governance according to the literature. The impact of Brazilian institutional investors on the corporate governance quality of their investees is either negligible or cannot be captured by the proxies we employed. Finally, we note that these two pension funds may represent the policy and political views of the incumbent Brazilian government and that the actions of their board appointees may or not reflect what is understood as good corporate governance practices.

Exploring the relation between corporate reporting and corporate governance effectiveness

2017 ◽  
Vol 15 (3) ◽  
pp. 347-366 ◽  
Author(s):  
Maali Kachouri ◽  
Anis Jarboui
Keyword(s):  
Corporate Governance ◽  
Equation System ◽  
Business Community ◽  
Content Type ◽  
Information Transparency ◽  
Corporate Reporting ◽  
Simultaneous Equation System ◽  
Governance Effectiveness ◽  
Governance Practices

Purpose The purpose of this paper is to investigate the relationship between corporate governance effectiveness and information transparency. Hence, this paper seeks to extend prior information transparency research. Design/methodology/approach This study uses a sample of 28 non-financial listed Tunisian companies and covers an eight-year period from 2006 to 2013. To test the hypotheses of this research, a simultaneous equation system model was applied. Findings The results obtained show that, for the Tunisians companies, corporate governance practices have a significant positive effect on information transparency. The current study also provides evidence that pertinent information can improve corporate governance index. Research limitations/implications The findings may be of interest to the academic researchers, practitioners and regulators who are interested in discovering the quality of corporate governance practices in Tunisian context. Practical implications The findings of this study can help Tunisian regulators in creating corporate governance disclosure requirements. The findings also provide the African business community insights concerning the quality of corporate governance and of corporate reporting. Social implications This research helps also to inform regulators about the benefits of disclosure more information to investors and to the firm. For instance, how the information can be a source of transparency and stability in the firms what and favors the social environment of the firms. Originality/value This paper extends the existing literature by examining the causal relationship between corporate governance and information transparency.

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