scholarly journals The Wealth Effects Of Managerial Turnover: Implications For The Spanish Corporate Governance System

2011 ◽  
Vol 1 (10) ◽  
Author(s):  
Carlos Fernandez Mendez
Keyword(s):  
Corporate Governance ◽  
Negative Relationship ◽  
Wealth Effects ◽  
Governance System ◽  
Managerial Turnover ◽  
Study Results ◽  
Managerial Succession ◽  
Corporate Governance System ◽  
Institutional Shareholders ◽  
Positive Effect

Managerial succession decisions constitute crucial events for the company, as they can generate important organizational changes that affect the shareholders wealth, and at the same time, entail important conflicts of interests between the managers and the shareholders. Our study of the market reactions to managerial turnover announcements in the Spanish market, reveal that these decisions have a positive effect on the shareholders wealth. These wealth effects are especially intense in the case of outsider successions and when the company preturnover performance has been poor. These findings suggest that managerial turnover is a restructuring decision that is most welcome under conditions of low performance. These results are reinforced by the existence of a negative relationship between the turnover wealth effects and the firm's preturnover performance. Our results also have implications regarding the effectiveness of the Spanish corporate governance system, suggesting that the Board's outsiders and the institutional shareholders play a major monitoring role in the managerial succession processes. The Board outsiders and the institutional shareholders influence the succession process protecting the shareholders interests against particular professional interests of the managers. We have also found evidences of the existence of entrenchment effects linked to managerial stock ownership. Finally, consistently with our event study results, we have found evidences of a positive effect of outside succession on the market's reaction to managerial turnover, in the case of a poor presuccession performance context. We have obtained no evidence about any effect from outside succession in good performing companies or inside succession in any company independently of its previous performance.

scholarly journals Effect of Earnings Management on Firm Value with Corporate Governance as a Moderating Variable

2021 ◽  
Vol 9 (2) ◽  
pp. 262-268
Author(s):  
Jevri Afrizal ◽  
Rindu Rika Gamayuni ◽  
Usep Syaipudin
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Firm Value ◽  
Management Practices ◽  
Governance System ◽  
Corporate Governance System ◽  
And Performance ◽  
Conceptual Study ◽  
Positive Effect

This study aims to provide a conceptual study of the effect of earnings management on firm value by including corporate governance. as a moderating variable. This paper is a conceptual paper that discusses issues related to earnings management on firm value and the role of corporate governance in minimizing earnings management practices so as to increase firm value. Previous theoretical studies have shown that earnings management is effectively controlled by the corporate governance system and performance. In addition, the results of previous studies found empirical evidence that there is a positive relationship between earnings management and firm value. From the theoretical discussion and previous research, it is concluded that earnings management practices have a positive effect on firm value as moderated by corporate governance.

scholarly journals Employee Ownership And Corporate Governance: Evidence From The French Market

2014 ◽  
Vol 30 (5) ◽  
pp. 1353
Author(s):  
Tarek Ben Noamene
Keyword(s):  
Corporate Governance ◽  
Value Creation ◽  
Performance Indicators ◽  
Negative Relationship ◽  
Employee Ownership ◽  
Board Of Trustees ◽  
Second Step ◽  
Governance System ◽  
Board Of Director ◽  
Corporate Governance System

<p>This paper's objective is to study the issue of employee ownership in the context of corporate governance. We show first that the literature is controversial on the role that employees-shareholders may play in the corporate governance system and consequently in value creation. In a second step, we empirically analyse the performance of a sample of companies from the index SBF 250. Our results show a negative relationship between the presence of employee shareholders in the control bodies (board of director or board of trustees) and financial performance indicators.</p>

scholarly journals Does Earnings Management Amplify The Association Between Corporate Governance And Firm Performance?: Evidence From Korea

2011 ◽  
Vol 10 (2) ◽  
Author(s):  
Sun-A Kang ◽  
Yong-Shik Kim
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Earnings Management ◽  
Stock Exchange ◽  
Causal Link ◽  
Governance System ◽  
Real Activity ◽  
Study Results ◽  
Corporate Governance System ◽  
And Performance

This paper aims to examine whether earnings management strengthens the causal links between corporate governance and firm performance. It examines the association between corporate governance and real activity-based earnings management and extends it to firm performance. This study involves 1,104 listings on the Korean Stock Exchange and finds that real activity-based earnings management decreases if firms have a well-established governance system, and such earnings management could strengthen the causal link between corporate governance and firm performance as measured by Tobin’s Q. Our study results are the first empirical evidences that real activity-based earnings management is effectively controlled by a corporate governance system and that it has links between corporate governance and performance. This provides the importance of corporate governance which could effectively constrain real activity-based earnings management, such that eventually influences the firm’s performance. In particular, it provides useful insights into corporate structures in which ownership is highly concentrated. Our findings are of great importance for Korea, in which the predominant business structure for large enterprises is that of the chaebol (equivalent to the Japanese keiretsu), which consists of conglomerates of many smaller companies and in which the structure of corporate governance is that of owner control.

ANALYSIS OF THE CORPORATE GOVERNANCE SYSTEM OF PJSC “LUKOIL”

2021 ◽  
Vol 2 (4) ◽  
pp. 198-205
Author(s):  
Vladimir Vladimirovich Filatov ◽  
Marina Vladimirovna Buzulutskaya ◽  
Alexander Vladimirovich Olimpiev ◽  
Sergey Alexandrovich Tikhachev
Keyword(s):  
Corporate Governance ◽  
Governance System ◽  
Corporate Governance System

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.

Current state of corporate governance: global business and cultural analysis

2016 ◽  
Vol 39 (11) ◽  
pp. 1431-1446 ◽  
Author(s):  
Namporn Thanetsunthorn ◽  
Rattaphon Wuthisatian
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
National Culture ◽  
Future Research ◽  
Governance System ◽  
Cultural Characteristics ◽  
Policy Makers ◽  
Content Type ◽  
Current State ◽  
Corporate Governance System

Purpose The purpose of this study is to explore the current state of corporate governance in various aspects of business settings and to empirically examine the impact of national culture on corporate governance performance, with a view of supporting business corporations in further enhancing the effectiveness of their corporate governance system. Design/methodology/approach A pooled sample of 9,003 companies drawn from 50 countries across ten different regions is collected. A variety of statistical methods, including the paired sample t-test, the ordinary least squares regression and the Pearson product-moment correlation coefficient are implemented to analyze the current state of corporate governance. To empirically investigate the causal relationship between national culture and corporate governance, the multivariate regression analysis is also applied. Findings This study proposes a broad set of the empirical findings regarding the current state of corporate governance. Despite being accepted as a prerequisite building block for sustainable corporate social responsibility (CSR), corporate governance is still receiving far less attention among business corporations. The governance framework is widely adopted by business corporations, yet the intensity of implementing corporate governance is significantly different across regions. The variation of the intensity observed across regions can be explained by the national cultural characteristics that are all likely to impact the degree to which corporations act in corporate governance manners. Corporate governance performance is strongly related to three other aspects of socially responsible corporate performance – community, employee and environment. Research limitations/implications This study provides both the motivation and a starting point for further investigation in the milieu of corporate governance. It would be interesting for future research to further explore the extent to which corporate governance has a positive indirect impact on a firm’s financial performance. There is potential to provide a more comprehensive analysis of the interaction effect of national culture and geographic region on corporate governance performance of the corporations embedded in that region through a statistical interaction method. In addition, it may be interesting to integrate corporate financial performance (CFP) into the analysis to identify a specific type/practice of the corporate governance that could provide the highest return on the investment. Last, another interesting avenue for future research would be to explore the ethical mechanisms that have been institutionalized to promote corporate governance practices. Practical implications The present study is beneficial to both business corporations and policy makers. In essence, the study can potentially draw managers’ attention to applying modified corporate governance strategies according to their national culture. Furthermore, the study can alter business corporations to promote a strong corporate governance regime in chorus to CSR strategies so as to promote CSR development, which ultimately results in higher levels of competitiveness and CFP. In addition, policy makers who are responsible for inward foreign investment can use the findings of this study to evaluate the investors’ potential governance adoption. Originality/value The findings of this study are useful in encouraging the business corporations to further strengthen their corporate governance system. This study helps to fill the theoretical void regarding the cultural impact on corporate governance by exploring a broad set of national cultural characteristics under which good corporate governance is more or less likely to occur.

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