Financially Qualified Audit Committee Member and Corporate Sustainability: Evidence from Emerging Economy

2018 ◽  
Author(s):  
Ashfaque Banbhan ◽  
Xinsheng Cheng ◽  
Nizam Ud Din
Keyword(s):  
Financial Performance ◽  
Audit Committee ◽  
Positive Relationship ◽  
Stock Exchange ◽  
Corporate Sustainability ◽  
Committee Member ◽  
Positive Relation ◽  
Accrual Quality ◽  
The Impact ◽  
The Relationship

This paper examines the relationship between financial qualification of the audit committee (AC) chairman on corporate sustainability (CS) in developing the economy of Pakistan, which has a weak corporate environment. In a sample of companies listed on Pakistan Stock exchange (PSX) during 2010-2014. Empirical results of 1020 firm-year observations indicate that the presence of financially qualified AC chairman has a positive relationship with firm’s accrual quality. The results found that accounting qualification of AC chairman has significant positive relation with CS performance. Furthermore, the study found that powerful CEO is also not able to influence CS in the presence of accounting qualified AC chairman, but this result is not present if AC chairman is non-accounting qualified. This study extends the literature on the impact of accounting qualification of AC members and CS and offers some significant understanding into efficient corporate practices to achieve sustainability goals. This study suggests the presence of accounting qualified member in AC which results in effective monitoring for the increased financial performance of the organization.

scholarly journals Empirical Analysis of Corporate Sustainability Performance: Linkage of Japanese Firms' Environmental and Economic Performance

2017 ◽  
Vol 3 (2) ◽  
Author(s):  
K. Gnanaweera ◽  
N. Kunori
Keyword(s):  
Financial Performance ◽  
Observational Data ◽  
Firm Size ◽  
Environmental Performance ◽  
Stock Exchange ◽  
Corporate Sustainability ◽  
Japanese Firms ◽  
Tokyo Stock Exchange ◽  
The Impact ◽  
The Relationship

The linkage between Corporate Environmental Performance (CEP) and Corporate Financial Performance (CFP) has been a long-standing debate since all previous efforts achieved inconsistent results. The current study therefore attempts to present the relationship between corporations’ environmental and financial performance to explore the notion of Corporate Social Responsibility (CSR) in a developed nation. This case derives empirical observational data from corporate sustainability reports and integrated annual reports of Japanese firms. The sample is comprised of observational data of a total of 85 Japanese corporations from 2008 to 2014. The selected firms are listed on the Tokyo Stock Exchange in the first section of the market division and are categorized under various industrial sectors. The effort of the current study has revealed that corporate environmental measurements have different effects on financial performance. The evidence was less strong in evaluating the impact level of all variables except firm size (total assets). Three hypotheses (H1, H2, and H3) were developed for further evaluation of the effect of financial indicators on environmental performance. H1 was accepted since environmental performance has a significant impact on firm size. However, the rejected H2 and H3 state that environmental performance has no significant impact on financial leverage and profitability, due to the weak relationship or insignificant outcome, i.e. in the profitability measurement, only Return on Sales (ROS) showed positive correlation between particular CEP variables, but the coefficient of determination (R2 value) does not support the ROS contribution for every model in the study. The other two profitability ratios (return on assets and return on equity) have less contribution. Both the relationship between environmental performance and financial performance according to R2 values and the relationship between CEP and CFP are broad spectrums that yet to be explored.KeywordsCorporate, Environmental, Financial, Sustainability, Tokyo Stock Exchange

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

2016 ◽  
Vol 6 (2) ◽  
pp. 401 ◽  
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.

scholarly journals Pengaruh Intellectual Capital dan Corporate Governance Terhadap Kinerja Bank di Indonesia

2019 ◽  
Vol 2 (1) ◽  
pp. 57
Author(s):  
Jadzil Baihaqi
Keyword(s):  
Corporate Governance ◽  
Intellectual Capital ◽  
Boards Of Directors ◽  
Audit Committee ◽  
Stock Exchange ◽  
Governance Mechanism ◽  
Moderation Effect ◽  
Corporate Governance Mechanism ◽  
The Impact ◽  
The Relationship

This study examines the impact of intellectual capital and corporate governance mechanism on banks’ performance both directly and also moderated effect. We used banks that were listed in the Indonesia Stock Exchange. The bank’s performance was measured by risk-based bank rating while intellectual capital was measured by the coefficient of VAICTM (Pulic, 1998). The corporate governance mechanism was measured based on the size of boards of directors, the composition of independent director, CEO remuneration, managerial ownership, the effectiveness of audit committee and ownership concentration. The result of the study shows that banks’ performance was positively influenced by intellectual capital. However, corporate governance mechanism did not influence the banks’ performance, while the moderation effect of corporate governance mechanism on the relationship between intellectual capital and banks’ performance was not confirmed.

scholarly journals Impacto dos Investimentos em Tecnologia sobre a Rentabilidade do Setor Bancário Brasileiro

2021 ◽  
Vol 13 (1) ◽  
pp. 94-111
Author(s):  
Lucas Silva Barreto ◽  
Vinicius Silva Pereira ◽  
Antonio Sergio Torres Penedo
Keyword(s):  
Financial Performance ◽  
Positive Relationship ◽  
Return On Assets ◽  
Expected Return ◽  
It Investments ◽  
Publicly Traded Companies ◽  
And Performance ◽  
Impact Of Technology ◽  
The Impact ◽  
The Relationship

Purpose: To analyze the relationship between investments in technology and the profitability of the five largest Brazilian banks between 2009 and 2018.Theoretical framework: Through correlation analysis and panel data regression, the impact of technology investment on Return on Assets (ROA) was specifically assessed.Design/methodology/approach: Despite the growth in investment in banking technology, the level of disclosure by publicly traded companies in Brazil is still limited, with few details disclosed in corporate reports about the amounts invested, of the types investments made, the expected return and the returns already obtained with previous investments. This disclosure is influenced by factors such as company size and profitability.Findings: In the present study, a positive relationship was identified between investment in T.I and Return on Assets (ROA) of the banks analyzed and, therefore, the presence of a profitability paradox was not found.Originality/value:  There was a positive relationship between investment in IT and performance. There was a significant positive correlation at 5% between IT investments and financial performance, given by the relationship between profit before depreciation and total sales. The regression analysis found that an increase in IT investments raised the company's financial performance (Beta = 0.204 and p 0.1). The increase in the share of IT investments in operating expenses increased the Return on Assets by 0.039 percentage points.Research, Practical Social implications: Gain knowledge in the management of banking organizations in order to guide in the decision-making about technological investments that should be made.

scholarly journals The Impact of Board Diversity, CEO Characteristics, and Board Committees on Financial Performance in the Case of Romanian Companies

2021 ◽  
Vol 15 (1) ◽  
pp. 7
Author(s):  
Bogdan Aurelian Mihail ◽  
Dalina Dumitrescu ◽  
Carmen Daniela Micu ◽  
Adriana Lobda
Keyword(s):  
Financial Performance ◽  
Audit Committee ◽  
Stock Exchange ◽  
Board Members ◽  
Board Diversity ◽  
Board Committees ◽  
Positive Effects ◽  
Governance Practices ◽  
The Impact ◽  
Ceo Characteristics

This paper examines the impact of board diversity, CEO characteristics, and board committees on the financial performance of the companies listed on the Bucharest Stock Exchange (BSE). In order to test the influence of these characteristics, detailed data on more than 70 firms are collected by hand, for the 2016–2020 period, and comprehensive regression models are estimated. The findings show that there are positive effects of board diversity especially with regard to the independent board members. In terms of the board committees, the audit committee is found to have a favourable influence. The regression coefficients imply that a 10% increase in the share of independent board members would be associated with a 0.93% increase in ROE. Based on these findings, it can be argued that improving the corporate governance practices of the companies listed on the BSE would increase the performance and the value of these firms.

scholarly journals The impact of the board of directors on the financial performance of Tunisian companies

2012 ◽  
Vol 8 (3) ◽  
pp. 6-21
Author(s):  
Zied Bouaziz ◽  
Mohamed Wajdi Triki
Keyword(s):  
Financial Performance ◽  
Board Of Directors ◽  
Audit Committee ◽  
Stock Exchange ◽  
Gender Diversity ◽  
Linear Regression Models ◽  
The Board Of Directors ◽  
Internal Mechanism ◽  
And Control ◽  
The Impact

The Board of Directors plays a key role as a internal mechanism of corporate governance. Indeed, its effectiveness is dependent on the presence of several factors, the most important are related to characteristics that relate primarily to the independence of its members, board size, the cumulative functions of decision and control, the degree of independence of the audit committee and the gender diversity of the board. To test the validity of our hypothesis, which states the existence of a certain deterministic between the board’s characteristics and financial performance measured by three different ratios, namely ROA, ROE and Tobin’s Q, we have developed three linear regression models. Our empirical validation was conducted on a sample of 26 companies listed on the Tunisian stock exchange Tunis (Tunis Stock Exchange) over a period that spans four years (2007-2010). The estimated models show satisfactory results showing the importance of the impact of board characteristics on financial performance of Tunisian companies.

scholarly journals The Impact of Debt Capacity on Firm’s Growth: (A Case Study of Selected Firms from Pharmaceutical Industry in Pakistan)

2021 ◽  
Vol 2 (1) ◽  
pp. 15-23
Author(s):  
IHTESHAM KHAN ◽  
SYED WAQAR AHMAD SHAH ◽  
ASAD KHAN
Keyword(s):  
Pharmaceutical Industry ◽  
Positive Relationship ◽  
Stock Exchange ◽  
Secondary Data ◽  
Significant Positive Relationship ◽  
Negative Effect ◽  
Debt Capacity ◽  
The Impact ◽  
The Relationship

The ultimate goal of all activities within organizations is to achieve higher growth and finding new sources for mounting firm capital. This study aims to investigate debt capacity as the source of firm capital and its impact on firm’s growth. The objectives of this research to shows the relationship between market to book ratio and debt to asset ratio. Multiple liner regression is used between Growth and book leverage. By selected pharmaceutical sector that has been listed at Karachi stock exchange in Pakistan. In this research 8 companies are selected that are listed at Karachi Stock Exchange during the period of 2005-2014. In this paper secondary data is used. The result reveals a significant positive relationship between the debt to asset ratio and market to book ratio and debt to asset ratio. It displays that there is no negative effect of debt capacity on firm’s growth.

scholarly journals PERAN DEWAN WANITA PADA PENGUNGKAPAN ANTI PENYUAPAN DAN KINERJA KEUANGAN DI PERUSAHAAN SEKTOR PERTAMBANGAN DI BEI

2021 ◽  
Vol 8 (1) ◽  
pp. 45
Author(s):  
Yani Zulvina
Keyword(s):  
Regression Analysis ◽  
Financial Performance ◽  
Quantitative Research ◽  
Stock Exchange ◽  
Corporate Sustainability ◽  
Mining Sector ◽  
Analysis Techniques ◽  
Observation Units ◽  
The Relationship

<p><em>This study aimed to examine the effect of Anti-Bribery Disclosure on Financial Performance and</em><em> also</em><em> to examine the role of the Women </em><em>Board</em><em> on Anti-Bribery Disclosure and Financial Performance where the Women</em><em> Board</em><em> </em><em>i</em><em>s a moderating variable. This research </em><em>was</em><em> a quantitative research using 101 observation units from Mining Sector Companies listed on the Indonesia Stock Exchange during 2017-2019. This study use</em><em>d </em><em>regression analysis techniques that </em><em>were</em><em> processed using the STATA </em><em>version 14 </em><em>application. The results showed that the Anti-Bribery Disclosure had no significant effect on financial performance as measured by ROA. The results also show</em><em>ed</em><em> that the Women</em><em> Board </em><em>does not significantly moderate the relationship between Anti-Bribery Disclosure and Financial Performance. This research contributes to an increase in the assessment of company management that focuses on the gender of the company board and its role in achieving integrity and transparency of corporate activities in order to improve corporate sustainability.</em><em></em></p>

scholarly journals Corporate entrepreneurship and financial performance: The role of management

2002 ◽  
Vol 33 (4) ◽  
pp. 21-27 ◽  
Author(s):  
C. J. Goosen ◽  
T. J. De Coning ◽  
E. V.D.M. Smit
Keyword(s):  
Financial Performance ◽  
Positive Relationship ◽  
Stock Exchange ◽  
Corporate Entrepreneurship ◽  
Industrial Sector ◽  
Key Factors ◽  
Financial Outcomes ◽  
Johannesburg Stock Exchange ◽  
The Impact

It is hypothesised that a positive relationship exists between the financial performance of an organisation and the level of intrapreneurship within the organisation with causation running from entrepreneurship to financial outcomes. Using a three-factor key intrapreneurship model developed by Goosen, De Coning and Smit (2002) and financial outcomes from a sample of companies listed in the industrial sector of the Johannesburg Stock Exchange, this proposition is put to the test. The results support the hypothesis that the key factors innovativeness, proactiveness and management’s internal influence all significantly contribute to financial performance if regarded individually, but that the last factor dominates the first two external factors when used simultaneously. The conclusion underscores the importance of the impact of leadership on financial outcomes.

Empirical Analysis of Dependence on Capital Structure with Respect to Its Impact on the Financial Performance of Domestic Non Financial Listed Stock Exchange Companies Operating in the Public Sector of Pakistan

2016 ◽  
Vol 3 (2) ◽  
pp. 58-76
Author(s):  
Syed Jawad Hussain Shahzad ◽  
Memoona Kanwal
Keyword(s):  
Capital Structure ◽  
Financial Performance ◽  
Stock Exchange ◽  
Random Effect ◽  
Random Effect Model ◽  
Research Work ◽  
Debt Financing ◽  
The Impact ◽  
The Relationship

This research work is based on the relationship that exists between the capital structure and performance of different sector's firms currently operating in the Pakistan. Capital structure decisions can be considered as the most important financial performance and risk management tools which are available to the companies' management. Capital structure can also play an important role in performance assessment, in performance management and in effective handling of ownership claims. The extensive use and heavy dependence on debt has exposed many companies to potential risk of declined performance and also to the risk of insolvency. This study analyzes the relationship between various capital structure indicators and dependence of financial performance of companies on these indicators using a broad sample covering 202 non-financial firms listed on Karachi Stock Exchange (KSE) over the period of 1999-2012. The sample firms are divided into five sectors i.e. Textile, Chemical, Cement, Food and Fuel & Energy. Financial performance of firms is quantified by Return on Assets (ROE), Return on Equity (ROE), Price-Earnings ratio (PE) and Tobin's Q (TQ). The relationship between financial performance measures and capital structure measures i.e. total debt, short term debt and long term debt is estimated using GLS fixed and random effect model. Sector wise comparison shows that majority of the sectors have similar capital structure. The impact of capital structure on the financial performance is also similar across sectors with few variations. Overall the relationship is found to be negative among capital structure and firm performance measured by ROA, ROE and PE except TQ which is positively related to Long Term Debt to total Assets (LTDA). The result of industry wise comparison contributes significantly to the existing stream of knowledge. The results indicate that lower reliance on the debt financing improves the performance of the firm whereas dependence and exposure of debt financing reduce performance. The research can be useful for the management of companies in different sectors that want to improve their performance.

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