Corporate Governance and Risk Disclosure in Emerging Countries

The study examines the influence of corporate governance attributes on the corporate risk disclosure in the emerging countries. Board size, non-executive directors, independent directors, board diversity and CEO-duality are the important board of director’s composition that is considered as corporate governance variables for this study. The study focuses on South Africa and Nigeria as these countries are among major players in the African emerging market. The sample comprises 42 financial and non-financial firms listed in Nigerian Stock Exchange and Johannesburg Stock Exchange. The data was drawn from 192 annual reports for the year 2014–2018. The analytical tools employed are manual content analysis and regression. The empirical results show that operational risk disclosure outweighs environmental and strategic risk disclosure. Meanwhile, past information, non-monetary and good news are considered less relevant, however dominatefuture, monetary and bad news which are more valuable to diverse stakeholders. Moreover, in considering the important factors that impact on the risk confession, that board size, independent director and diversity have greater influence in driving the risk disclosure upward. Nevertheless, non-executive director and CEO-Duality are statistically insignificant in determining the movement of risk information to divulge. The persistence of contemporary corporate risk practice jampacked with irrelevant information might promote greater agency cost. The implication for the current practice might increase investors’ uncertainty which in turn would raise the company cost of capital. This issue could be addressed by regulating risk disclosure in emerging countries instead of allowing corporate managers to report risk related information at their discretion. Corporate manager are also encourage to appreciate all the potential risk disclosure drivers in the African emerging countries.

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CORPORATE RISK DISCLOSURE: THE EFFECT OF CORPORATE GOVERNANCE

JOURNAL OF APPLIED MANAGERIAL ACCOUNTING ◽

10.30871/jama.v5i1.2794 ◽

2021 ◽

Vol 5 (1) ◽

pp. 101-113

Author(s):

Arisona Ahmad ◽

Muhammad Muhammad ◽

Dwi Narullia

Keyword(s):

Risk Management ◽

Corporate Governance ◽

Stock Exchange ◽

Company Size ◽

Business Risk ◽

Risk Disclosure ◽

Initial Hypothesis ◽

Corporate Risk ◽

Corporate Business

ABSTRACT This research investigates the role of corporate governance on the disclosure of corporate business risk management with leverage and company size as control variables. Research data were taken from a company that classified as LQ 45 on the Indonesian stock exchange from 2015 to 2018. This research finds that disclosure of business risk management as a sign that management has managed the company with the good attitude increases along with increased corporate governance activities. Leverage and company size also affect company policies regarding the disclosure of corporate business risks. Overall, the results of this study are consistent with the assumption that corporate governance affects company policies regarding business risk disclosure. However, in contrast to the initial hypothesis, the composition of the board commissioners reduces the risk management disclosure activity in the company. This is because the board of commissioners considers that business risk disclosure can increase costs and reduce its competitive advantage so that investors will respond negatively. Apart from these variables, this study contributes to agency theory, where the findings of this study indicate the confirmation of the application of theory in the context of this study. ABSTRAK Penelitian ini menyelidiki peran tata kelola perusahaan terhadap pengungkapan manajemen risiko bisnis perusahaan dengan leverage dan size perusahaan sebagai variable control. Data penelitian meliputi perusahaan yang tergolong LQ 45 di bursa efek Indonesia dari tahun 2015 hingga 2018. Penelitian ini menemukan bahwa pengungkapan manajemen risiko bisnis sebagai tanda bahwa manajemen telah berperilaku baik dalam mengelola perusahaan meningkat seiring dengan peningkatan aktivitas tata Kelola perusahaan. Leverage dan ukuran perusahaan juga mempengaruhi kebijakan perusahaan mengenai pengungkapan risiko bisnis perusahaan. Secara keseluruhan, hasil penelitian ini konsisten dengan dugaan bahwa tata kelola perusahaan mempengaruhi kebijakan perusahaan mengenai pengungkapan risiko bisnis. Namun, berbeda dengan hipotesis awal komposisi dewan komisaris menurunkan aktivitas pengungkapan manajemen risiko diperusahaan. Hal ini dikarenakan dewan komisaris menimbang bahwa pengungkapan risiko bisnis dapat meningkatkan biaya serta menurunkan keunggulan kompetitif perusahaan sehingga akan direspon negatif oleh investor. Selain variabel tersebut, penelitian ini berkontribusi pada teori agensi dimana temuan yang ada menunjukkan konfirmasi dari penerapan teori di dalam konteks penelitian.

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Corporate Governance and Organisational Performance: Analysis of Nigeria Stock Exchange Listed Companies

International Journal of Finance & Banking Studies (2147-4486) ◽

10.20525/ijfbs.v6i4.777 ◽

2018 ◽

Vol 6 (4) ◽

pp. 12

Author(s):

Olajide Solomon Fadun

Keyword(s):

Corporate Governance ◽

Stock Exchange ◽

Listed Companies ◽

Board Size ◽

Ceo Duality ◽

Positive Correlation ◽

Performance Variables ◽

Ceo Tenure ◽

Governance Practices ◽

And Performance

Corporate governance is relevant in both developed and emerging economies. The study investigated the impact of corporate governance on organisational performance, using thirty (30) randomly selected listed companies in the Nigeria Stock Exchange (NSE) in the year 2016. The study focused on three corporate governance variables (i.e., Board Size, Board Independence, CEO Duality/Tenure); and two performance variables - i.e., Returns on Asset (ROA) and Returns on Equity (ROE). The study does not cover the market measure performance variable of Tobin’s Q. The study is an empirical research, with analytical research design. Secondary data, extracted from published annual reports of selected quoted companies and NSE website, is used for the study. The findings revealed a positive correlation between board size, independence directors, and performance variables; but, showed a negative correlation between CEO tenure and performance variables. The result showed that number of directors was not positively related to performance in selected quoted companies in terms of ROA; but, it revealed a positive correlation between board size and performance in terms of ROE. It also showed that the correlation between CEO tenure and performance variables was negative on the two performance variables (ROA and ROE). Regarding relationship between CEO Duality and performance variables (ROA and ROE), the result showed that CEO Duality has a positive correlation with ROA; but had a negative relationship with ROE. Generally, the study revealed that adoption of sound corporate governance practices by listed companies can improve their performance. Companies can benefit from this improved corporate governance practices by way of increased investment from investors and reduced capital cost. Shareholders confidence would be enhanced with attendant improvement in shareholders wealth. The nation’s economy would also benefit from sound corporate governance practices by way of improved GDP.

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Institutional investors’ response to improved corporate governance: Evidence from the brazilian capital market

Contaduría y Administración ◽

10.22201/fca.24488410e.2018.1869 ◽

2018 ◽

Vol 64 (4) ◽

pp. 135

Author(s):

Eduardo Schiehll ◽

Melissa Gerhard ◽

Clea Beatriz Macagnan

Keyword(s):

Corporate Governance ◽

Capital Market ◽

Institutional Investors ◽

Stock Exchange ◽

Emerging Market ◽

Agency Cost ◽

Data Set ◽

Listed Firms ◽

Internal Governance Mechanisms ◽

Governance Quality

This study examines whether normative pressures from stock market regulators to improve the governance quality of Brazilian listed firms influence the participation and activism of institutional investors. More specifically, we investigate the association between institutional investor’s ownership and firm’s voluntary adhesion to the São Paulo Stock Exchange (B3) differentiated levels of corporate governance quality. Empirical testing is performed on a ten-year (2002–2011) panel data set from a sample of 439 firms listed on the B3. Our findings suggest that firms in differentiated corporate governance levels, that is, with better level of transparency and commitment to monitoring, are more attractive to institutional investors. We interpret this result as evidence supporting the shareholder activism movement, attributed by several scholars to institutional shareholders. Our study contributes to the governance literature on the firm’s response to normative pressures and the ability of internal governance mechanisms to signal lower agency cost to capital market. Our evidence also contributes to the ongoing discussion about the role and influence of institutional investors in the functioning of capital markets, and more specific in emerging market like Brazil.

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An empirical study: characteristics of business entities and corporate governance on risk disclosure practices

Verslas teorija ir praktika ◽

10.3846/btp.2019.04 ◽

2019 ◽

Vol 20 ◽

pp. 25-49

Author(s):

Arfan Amrin

Keyword(s):

Corporate Governance ◽

Audit Committee ◽

Stock Exchange ◽

Risk Disclosure ◽

External Auditors ◽

Risk Monitoring ◽

Business Entities ◽

Corporate Risk ◽

The Impact

This paper investigates the association between the characteristics of business entities, corporate governance, and practices of risk disclosure. Notably, the objective of this paper is to examine the impact of the characteristics of business entities and corporate governance on risk disclosure in non-financial companies. The samples used in this study included 312 non-financial companies registered on the Indonesia Stock Exchange. The hypothesis testing in this paper using regression analysis. The results of this paper indicate that the size of the audit committee (SAC), the availability of risk monitoring or risk management committees (RMC) and the quality of external auditors (AUD) are significantly associated with corporate risk disclosure practices (CRD). These empirical results show that the presence of risk monitoring committee, the quality of external auditors, and the size of the audit committee are the main factors determining the extent of risk disclosure, especially for non-financial companies listed on the Indonesia Stock Exchange. This paper also shows that the age of business entities has a negative impact on corporate risk disclosure practices.

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The influence of corporate governance characteristics on profitability of Indian firms: An empirical investigation of firms listed on Bombay Stock Exchange

Investment Management and Financial Innovations ◽

10.21511/imfi.18(1).2021.10 ◽

2021 ◽

Vol 18 (1) ◽

pp. 114-125

Author(s):

Eissa A. Al-Homaidi ◽

Ebrahim Mohammed Al-Matari ◽

Mosab I. Tabash ◽

Amgad S.D. Khaled ◽

Nabil Ahmed M. Senan

Keyword(s):

Corporate Governance ◽

Significant Relationship ◽

Audit Committee ◽

Size Structure ◽

Stock Exchange ◽

Emerging Market ◽

Board Composition ◽

Board Size ◽

Listed Firms ◽

Earnings Per Share

This article aims to empirically examine corporate governance features and their association with Indian listed companies’ profitability. Thirty-three listed firms are selected from the top 100 companies in India. Corporate governance is defined by two parts: board of directors (size, structure, diligence) and audit committee (size, structure, diligence). In contrast, the profitability of Indian listed firms is calculated by two indicators: return on assets (ROA) and earnings per share (EPS). The outcomes concerning ROA reveal that board diligence, size of audit committee, audit committee composition, diligence of audit committee, and size of a company has a significant relationship with ROA. In contrast, board size and board composition have an insignificant association with ROA. Concerning earnings per share (EPS) model, the results show that size of audit committee, audit committee composition, diligence of audit committee, and firm size have a significant relationship with EPS. In contrast, board size, board composition, and board diligence have an insignificant association with EPS. The results may be of benefit to those scholarly researchers, practitioners, and governors who are interested in exploring the quality of corporate governance practices in an emerging market such as India and its effect on firms’ profitability.

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Pengaruh corporate governance, profitability, dan foreign ownership terhadap dividend policy pada perusahaan manufaktur yang terdaftar di bursa efek indonesia Periode 2014-2016

Jurnal Akuntansi ◽

10.24912/ja.v22i2.353 ◽

2018 ◽

Vol 22 (2) ◽

pp. 279

Author(s):

Nurainun Bangun ◽

Yuniarwati Yuniarwati ◽

Linda Santioso

Keyword(s):

Corporate Governance ◽

Data Processing ◽

Dividend Policy ◽

Stock Exchange ◽

Foreign Ownership ◽

Board Independence ◽

Board Size ◽

Ceo Duality ◽

Purposive Sampling ◽

Software Program

The purpose of this research is to analyze the effect of corporate governance, profitability, and foreign ownership on dividend policy. This research uses manufacturing company listed in Indonesia Stock Exchange for the period 2014-2016 as the population. Using purposive sampling, 95 data are selected as samples. Data processing in this research uses software program IBM SPSS version 23. The result shows that board size have a significant effect on dividend policy. Board independence do not have a significant effect on dividend policy. CEO duality do not have a significant effect on dividend policy. Profitability have a significant effect on dividend policy. Foreign ownership have a significant effect on dividend policy.

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UJI EMPIRIS HUBUNGAN ANTARA TATA KELOLA PERUSAHAAN DAN PENGUNGKAPAN RISIKO

AkMen JURNAL ILMIAH ◽

10.37476/akmen.v16i4.792 ◽

2019 ◽

Vol 16 (4) ◽

pp. 465-473

Author(s):

Arfan Amrin ◽

Abid Ramadhan

Keyword(s):

Corporate Governance ◽

Audit Committee ◽

Stock Exchange ◽

Linear Regression Analysis ◽

Risk Disclosure ◽

Purposive Sampling ◽

External Auditors ◽

Risk Monitoring ◽

Corporate Risk

The purpose of this study is to test the relationship between corporate governance and corporate risk disclosure. The corporate governance in this study was proscribed with the frequency of audit committee meetings, the existence of risk monitoring committees, and the quality of external auditors. The population in this study is all non-financial company listed on the Indonesia stock Exchange in 2017. Purposive sampling used in this study with a total sample of 352 nonfinancial companies that comply predetermined criterias. The data analysis method used is a double linear regression analysis. The corporate governance variable in the study model is only able to describe 11.30% of risk disclosure variables. The empirical results in this study show that all corporate governance variables include the frequency of audit committee meetings, the existence of risk monitoring committees, and the quality of external auditors are significantly related to corporate risk disclosure Penelitian ini bertujuan untuk menguji hubungan antara tata kelola perusahaan dan pengungkapan risiko perusahaan. Tata kelola perusahaan dalam penelitian ini diproksikan dengan frekuensi pertemuan komite audit, keberadaan komite pemantau risiko, dan kualitas auditor eksternal. Populasi dalam penelitian ini adalah perusahaan nonkeuangan yang terdaftar di Bursa Efek Indonesia tahun 2017. Purposive sampling digunakan dengan total sampel sebanyak 352 perusahaan nonkeuangan memenuhi kriteria-kriteria yang telah ditetapkan. Metode analisis data yang digunakan adalah analisis regresi linier berganda. Variabel tata kelola perusahaan dalam model penelitian ini hanya mampu menjelaskan sebesar 11,30% variabel pengungkapan risiko. Hasil empiris dalam penelitian ini menunjukkan bahwa semua variabel tata kelola perusahaan meliputi frekuensi pertemuan komite audit, keberadaan komite pemantau risiko, dan kualitas auditor eksternal berhubungan signifikan dengan pengungkapan risiko perusahaan.

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Impact of corporate governance on financial performance of sugar sector firms listed in Pakistan stock exchange

10.34091/ajss.12.2.10 ◽

2019 ◽

Vol 12 (2) ◽

Author(s):

Muhammad Wasim Jan Khan ◽

Usman Saeed

Keyword(s):

Developing Countries ◽

Corporate Governance ◽

Financial Performance ◽

Firm Size ◽

Stock Exchange ◽

Balance Sheet ◽

Board Size ◽

Return On Equity ◽

Firm Financial Performance ◽

Relationship Of

Corporate governance is considered as environment of trust, set of processes, policies and laws affecting the way corporations are administrated and directed. The previous literature in context of the corporate governance relationship with firm financial performance shows controversial findings; similarly literature shows lack of studies in context of developing countries as Pakistan. Therefore, this research explores the relationship of the corporate governance and the firm financial performance in context of developing country as Pakistan. The data has been collected from the sugar sector listed in KSE (Pakistan Stock Exchange), 20 corporations are selected as sample from sugar sector on basis of outstanding shares. Corporate governance taken as independent variable and measured as CEO biformity (CB), board size (BS), firm age (FA), firm size (FS). Financial performance of firms taken as dependent variable and measured as return on asset (ROA), return on equity (ROE), net profit margin (NPM). Data is collected for period of 2000-2013 from reports of the sugar companies listed in KSE (Pakistan Stock Exchange) issued annually and analysis of balance sheet given by State Bank of Pakistan (SBP). Result shows that CEO biformity significantly affecting firm financial performance. Board size (BS) shows partially significant impact on firm financial performance. Firms age (FA) show partially significant impact on firm financial performance. Firm size (FS) shows partially significant impact on firm financial performance. Therefore, conclusion has been drawn based on the results of analysis that this study adds new knowledge to the existing body of knowledge of corporate governance impact on firm financial performance and in context of developing countries as Pakistan. Keywords: Corporate governance, firm financial performance, sugar sector, Pakistan.

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Impact of Corporate Governance on Financial Performance: Karachi Stock Exchange, Pakistan

Business and Economic Research ◽

10.5296/ber.v6i2.9772 ◽

2016 ◽

Vol 6 (2) ◽

pp. 401 ◽

Cited By ~ 1

Author(s):

Aon Waqas Awan ◽

Javed Ahmed Jamali

Keyword(s):

Corporate Governance ◽

Financial Performance ◽

Audit Committee ◽

Stock Exchange ◽

Profit Margin ◽

Audit Committees ◽

Board Size ◽

Good Decision ◽

Return On Equity ◽

The Impact

The aim of the research is to understand the impact of corporate governance on financial performance of listed companies on Karachi Stock Exchange Pakistan. Data was collected from forty two companies from different sectors like, insurance, banking, investment banking, and sugar industries. Study includes variables like profit margin & return on equity as a dependent (profitability) and board size, audit committee, annual general meetings & chief executive office (corporate governance). Using Pooled OLS, the result of the study proved those board size and audit committees have positive relationship with Profit margin and Return on Equity, if any independent variable changes it also stimulus the positively changing impact on Return on Equity (ROE) and Audit Committee (AC). This research offers imminent guidelines to the policy and decision makers in any type of firms to take good decision to set their firms hierarchy system.

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MODEL BISNIS DAN PENGUNGKAPAN RISIKO PERUSAHAAN

Fokus Ekonomi : Jurnal Ilmiah Ekonomi ◽

10.34152/fe.15.2.320-334 ◽

2020 ◽

Vol 15 (2) ◽

pp. 320-334

Author(s):

Totok Dewayanto

Keyword(s):

Business Model ◽

Sampling Method ◽

Stock Exchange ◽

Control Variable ◽

Total Sample ◽

Hypotheses Testing ◽

Manufacturing Companies ◽

Risk Disclosure ◽

Corporate Risk ◽

Positive Effect

The aim of this study is to examine business model on disclosure of corporate risk. This study uses Size as a control variable. The population in this study consists of manufacturing companies in Indonesia Stock Exchange for the period 2015 - 2017. Sample determined with purposive sampling method. Total sample of this research is 180 companies. This study used multiple regression analysis for hypotheses testing. The results of this study show that business model has positive effect and significant on corporate risk disclosure.

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