scholarly journals Role of No-Voting shareholder activism in corporate governance in a developing Arab country

2019 ◽  
Vol 17 (1) ◽  
pp. 289-296
Author(s):  
Ali Mohamed Albakoush ◽  
Zuaini Ishak
Keyword(s):  
Corporate Governance ◽  
Regression Analysis ◽  
Boards Of Directors ◽  
Linear Regression Analysis ◽  
Shareholder Activism ◽  
Listed Companies ◽  
Ordinary Least Squares ◽  
Agency Cost ◽  
Least Squares Regression ◽  
Governance Practices

Because of agency conflict in firms with dispersed ownership, governance mechanisms to mitigate this agency cost, such as shareholders’ active monitoring of the firm’s management, have been developed. However, shareholder activism is contextual; therefore, the characteristics of shareholder activism in corporate governance practices in Libyan listed companies we explored. The data were collected from the 42 non-financial and 22 financial companies listed in the Libyan stock market during 2007–2016. Data envelopment analysis was done to generate an efficiency score based on corporate governance and shareholder activism. Linear regression analysis was used to determine whether a relationship exists between the efficiency of corporate governance and shareholder activism. All the companies were characterized by joint private-government ownership. The companies had an average corporate governance index of 2.24. Implementation of the Libyan good corporate governance practices is anticipated to give a score ≥ 2.95.Vote “No” shareholder activism targeting the boards of directors and their committees was the predominant form of shareholder activism (average number of annual events = 3.08) compared to shareholder proposal (average annual events = 1.67) and shareholder negotiation with management (average annual events = 1.6). Shareholder activism was more frequent in companies with low than with average governance scores compared to those with above-average governance scores. Moreover, the scores of shareholder activism were inversely related to corporate governance scores (r = –0.766, p < 0.01). Ordinary least-squares regression analysis revealed that a decrease in corporate governance score of one unit was associated with a 57% increase in shareholder activism (B = –0.57, F = 30.64, p < 0.01).Our study findings indicate that poor corporate governance practices do influence the frequency of shareholder activism in Libyan listed companies. Vote “No” activism is the most frequently used form of shareholder activism. The less frequent use of shareholder proposals and negotiation with management is probably related to legal and sociocultural factors.

The relationship between ownership structure, capital structure and corporate governance practices

2014 ◽  
Vol 10 (4) ◽  
pp. 511-536 ◽  
Author(s):  
Krishna Reddy ◽  
Stuart Locke
Keyword(s):  
Corporate Governance ◽  
New Zealand ◽  
Capital Structure ◽  
Ownership Structure ◽  
Agency Costs ◽  
Ordinary Least Squares ◽  
Agency Cost ◽  
Least Squares Regression ◽  
Content Type ◽  
Governance Practices

Purpose – The purpose of this paper is to investigate the nature of corporate governance practised by co-operatives and mutual societies in New Zealand and whether there is any relationship between co-operatives’ ownership structure, capital structure and agency costs. The study also explores whether the capital structure and the ownership structure changed during the period 2005-2011. Design/methodology/approach – Panel data for the period 2005-2011 are analysed using ordinary least squares regression and the Tobit model regression. The authors have used operating expense to sales, asset utilisation and ROA as the dependent variables. Findings – The findings indicate that an increase in independent directors, board member experience and size (measured by total annual sales) reduces agency costs in co-operatives and mutuals in New Zealand. Also, borrowing from members rather than banks reduces agency cost and increases profitability in co-operatives and mutuals. Research limitations/implications – Caution should be exercised when generalising the findings of the study as it is restricted to New Zealand environment and the sample size used is relatively small. Practical implications – This study offers insights for policy makers internationally who are interested in adopting similar corporate governance practices in their own countries. Within New Zealand, the corporate governance debate associated with co-operatives and mutual societies will be better informed as a direct consequence of this research. Originality/value – This is the first study that extends the research undertaken by Ang et al. (2000) and Singh and Davidson (2003) to the cooperative and mutual business model in New Zealand.

scholarly journals The Board Composition as an Explanatory Factor of the Capital Structure of Mexican Listed Companies

2018 ◽  
Vol 1 (1) ◽  
pp. 78-84
Author(s):  
Martha Luisa Puente Esparza ◽  
Guadalupe Del Carmen Briano-Turrent ◽  
Luis Ángel García-Estrada
Keyword(s):  
Corporate Governance ◽  
Regression Analysis ◽  
Latin American ◽  
Stock Exchange ◽  
Linear Regression Analysis ◽  
Listed Companies ◽  
Industrial Sector ◽  
Four Dimensions ◽  
Industrial Sectors ◽  
Female Presence

Objective – The objective of this study is to analyze the influence of the composition of the BD on the leverage level in companies listed on the Mexican Stock Exchange (MSE) in the materials and industrial sectors during the 2009-2013 period. Particularly, we study four dimensions of the board: size, independence, female presence and the COB-CEO duality.Design/methodology – This study focused on the materials and industrial comprising about 50% of all listed companies on the Mexican Stock Exchange. The sample consists of 48 companies and 207 year-observations corresponding to the 2009-2013 period. Using a multiple regression analysis. This study is a pioneer in analyzing these variables in Mexico, since previous literature has focused on developed and Anglo-Saxon countries.Results – The results show that size and independence of the board affect the leverage level. In addition, certain business characteristics such as the industrial sector, the company’s age, profitability and size influence the leverage level in Mexican listed companies. The results provide practical evidence for those responsible for issuing policies and principles of corporate governance as well as for the companies under analysis.Research limitations – There are several limitations in this study. In the first place, only two sectors of the companies listed in Mexico during the 2009-2013 period were analyzed. On the other hand, linear regression analysis was used, which does not solve the problems of causality between variables, however we did not count with enough observations. However, despite the limitations mentioned, the results are interesting in the case of Mexico. In addition, this study can be extended in the future for other sectors and extend the period of analysis, as well as include other Latin American countries to carry out comparative studies.Keywords Board of Directors, Leverage, Corporate Governance, Mexico

Institutional antecedents of principle-based corporate governance practices

2014 ◽  
Vol 10 (1) ◽  
pp. 49-82 ◽  
Author(s):  
Krishna Reddy ◽  
Umesh Sharma
Keyword(s):  
Corporate Governance ◽  
Capital Market ◽  
Stock Exchange ◽  
Listed Companies ◽  
Ordinary Least Squares ◽  
Positive Influence ◽  
Tobin’S Q ◽  
Tobin's Q ◽  
Content Type ◽  
Governance Practices

Purpose – This study aims to investigate the nature and extent of compliance to the principle-based corporate governance initiatives by the listed companies in the South Pacific Stock Exchange (SPSE) in Fiji. Three important questions are addressed: whether listed companies in Fiji have complied with the principle-based governance practices? Did compliance with principle-based recommendations lead to an improvement in the listed company's financial performance and legitimacy? How the institutional factors have contributed towards corporate governance practices in Fiji? Design/methodology/approach – Panel data for the SPSE companies over the period 2008-2011 are analysed using ordinary least squares (OLS) regression. Tobin's Q and return on assets (ROA) metrics are used as dependent variables. Findings – The findings indicate that listed companies have adopted the Capital Market Development Authority's (CMDA) recommendations by establishing subcommittees for audit and remuneration, having non-executive/independent directors on the board and separate chair and CEO positions in order to gain legitimacy from stakeholders. Results support the view that the CMDA recommendations of board sub-committees (audit and remuneration) have had positive influence on company performance measured by Tobin's Q. The findings of this study give support to the principle-based corporate governance practices adopted in Fiji to gain legitimacy. Originality/value – The study adds to the governance literature by focusing on the principle-based governance practices in a small remote island country, Fiji which has relatively small economy, capital market and company size. Finally, the study adds to institutional theory by showing how companies' corporate governance choices are affected by the severity of agency conflicts and the way corporate governance is regulated.

Audit committee characteristics and the moderating effect of Malaysian code of corporate governance on IPO liquidity

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Amal Mohammed Al-Masawa ◽  
Rasidah Mohd-Rashid ◽  
Hamdan Amer Al-Jaifi ◽  
Shaker Dahan Al-Duais
Keyword(s):  
Corporate Governance ◽  
Initial Public Offerings ◽  
Audit Committee ◽  
Ordinary Least Squares ◽  
Moderating Effect ◽  
Least Squares Regression ◽  
Content Type ◽  
Code Of Corporate Governance ◽  
The Impact ◽  
The Relationship

Purpose This study aims to investigate the link between audit committee characteristics and the liquidity of initial public offerings (IPOs) in Malaysia, which is an emerging economy in Southeast Asia. Another purpose of this study is to examine the moderating effect of the revised Malaysian code of corporate governance (MCCG) on the link between audit committee characteristics and IPO liquidity. Design/methodology/approach The final sample consists of 304 Malaysian IPOs listed in 2002–2017. This study uses ordinary least squares regression method to analyse the data. To confirm this study’s findings, a hierarchical or four-stage regression analysis is used to compare the t-values of the main and moderate regression models. Findings The findings show that audit committee characteristics (size and director independence) have a positive and significant relationship with IPO liquidity. Also, the revised MCCG positively moderates the relationship between audit committee characteristics and IPO liquidity. Research limitations/implications This study’s findings indicate that companies with higher audit committee independence have a more effective monitoring mechanism that mitigates information asymmetry, thus reducing adverse selection issues during share trading. Practical implications Policymakers could use the results of this study in developing policies for IPO liquidity improvements. Additionally, the findings are useful for traders and investors in their investment decision-making. For companies, the findings highlight the crucial role of the audit committee as part of the control system that monitors corporate governance. Originality/value To the authors’ knowledge, this work is a pioneering study in the context of a developing country, specifically Malaysia that investigates the impact of audit committee characteristics on IPO liquidity. Previously, the link between corporate governance and IPO liquidity had not been investigated in Malaysia. This study also contributes to the IPO literature by providing empirical evidence regarding the moderating effect of the revised MCCG on the relationship between audit committee characteristics and IPO liquidity.

scholarly journals Implementing the board of directors’ mechanism – An empirical study of the listed firms in Libya

2018 ◽  
Vol 14 (1) ◽  
pp. 22-33 ◽  
Author(s):  
Jill Atkins ◽  
Mohamed Zakari ◽  
Ismail Elshahoubi
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Boards Of Directors ◽  
Listed Companies ◽  
Board Members ◽  
Corporate Boards ◽  
Listed Firms ◽  
Stakeholder Groups ◽  
The Board Of Directors ◽  
Executive Managers

This paper aims to investigate the extent to which board of directors’ mechanism is implemented in Libyan listed companies. This includes a consideration of composition, duties and responsibilities of the board directors. This study employed a questionnaire survey to collect required data from four key stakeholder groups: Boards of Directors (BD), Executive Managers (EM), Regulators and External Auditors (RE) and Other Stakeholders (OS). The results of this study provided evidence that Libyan listed companies generally comply with the Libyan Corporate Governance Code (LCGC) requirements regarding the board composition: the findings assert that most boards have between three and eleven members, the majority of whom are non-executives and at least two or one-third of whom (whichever is greater) are independent. Moreover, the results indicate that general assemblies in Libyan listed companies are practically committed to the LCGC’s requirements regarding the appointment of board members and their length of tenure. The findings provide evidence that boards in Libyan listed companies are carrying out their duties and responsibilities in accordance with internal regulations and laws, as well as the stipulations of the LCGC (2007). Furthermore, the stakeholder groups were broadly satisfied that board members are devoting sufficient time and effort to discharge these duties and responsibilities properly. This study helps to enrich our understanding and knowledge of the current practice of corporate boards as a significant mechanism of corporate governance (CG) by being the first to address the board of directors’ mechanism in Libyan listed companies.

The determinants of internet risk disclosure: empirical study of Egyptian listed companies

2017 ◽  
Vol 32 (8) ◽  
pp. 746-767 ◽  
Author(s):  
Ali Khalil ◽  
Mona Maghraby
Keyword(s):  
Listed Companies ◽  
Ordinary Least Squares ◽  
Risk Information ◽  
The Internet ◽  
Least Squares Regression ◽  
Risk Disclosure ◽  
Content Type ◽  
Reporting Practices ◽  
Board Characteristics ◽  
The Impact

Purpose The purpose of this paper is to contribute to the existing disclosure literature by examining the determinants of corporate risk disclosure (CRD) in the internet reporting for a sample of Egyptian listed companies on the Egyptian Stock Exchange (EGX). Design/methodology/approach This study depends on a sample of 76 Egyptian companies included in the EGX 100 in the period 2012-2014. The study applies a content analysis and uses a sentence-based method to measure CRD in the internet reporting. Ordinary least-squares regression analysis is used to examine the impact of firm and board characteristics on CRD in the internet reporting. Findings The empirical analysis shows that large Egyptian companies tend to disclose more risk information in their internet reporting. Moreover, the results indicate that there is a significant positive association between sector type and CRD in the internet reporting. The results show non-significant association between CRD and other firm characteristics (cross listing and level of risk). Finally, there are no significant associations between CRD and board characteristics variables (board size, board composition and CEO duality). Research limitations/implications The study’s findings have practical implications. It aids in informing policy makers considering implementing new economic reform programs about the properties of Egyptian companies that disclose risk information in their internet reporting. It provides insights on CRD in Egyptian companies for standards setters and professional authorities to improve risk reporting practices to help stakeholders in making good decisions. Originality/value This study is one of the first studies to examine the determinants of CRD in the internet reporting for a sample of Egyptian companies.

scholarly journals ICD corporate communication and its determinants: evidence from Italian listed companies’ websites

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Giuseppe Nicolò ◽  
Natalia Aversano ◽  
Giuseppe Sannino ◽  
Paolo Tartaglia Polcini
Keyword(s):  
Intellectual Capital ◽  
Information Needs ◽  
Listed Companies ◽  
Ordinary Least Squares ◽  
Positive Influence ◽  
Annual Reports ◽  
Narrative Form ◽  
Least Squares Regression ◽  
Content Type ◽  
Corporate Resources

Purpose This study aims to analyse the extent and type of online intellectual capital (IC) disclosure provided by a sample of 117 Italian listed companies. The study also seeks to identify possible determinants of the extent and type of intellectual capital disclosure (ICD) practiced by Italian listed companies via the Web. Design/methodology/approach A content analysis is conducted to investigate the extent and type of online ICD provided through websites by a sample of 117 Italian listed companies. Two multivariate ordinary least squares regression models are applied to estimate the associations proposed in the research hypotheses. Findings The results show that Italian listed companies are exploiting the potential of websites to satisfy the information needs of investors and other stakeholders in relation to strategic IC-based corporate resources, with a particular focus on external capital. For the most part, ICD is conveyed in narrative form. Moreover, while the size and board independence positively affect both the extent and type of ICD, profitability exerts a positive influence only on the extent of online ICD. Originality/value Unlike previous ICD studies, which focussed on annual reports, this study explores an emerging and innovative tool to convey ICD, namely, the website. In today’s world, websites are considered to be the most expedient and effective tools for sharing and transmitting information, including IC; they are a vehicle that can shift the IC focus from the organisation to the wider ecosystem.

scholarly journals The impact of AAOIFI governance disclosure on Islamic banks performance

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Tawida Elgattani ◽  
Khaled Hussainey
Keyword(s):  
Corporate Governance ◽  
Regression Model ◽  
Financial Institution ◽  
Ordinary Least Squares ◽  
Annual Reports ◽  
Islamic Banks ◽  
Least Squares Regression ◽  
Content Type ◽  
The Impact ◽  
Governance Disclosure

Purpose This study aims to investigate the impact of the accounting and auditing organisation for Islamic financial institution (AAOIFI) governance disclosure on the performance of Islamic banks (IBs). Design/methodology/approach The ordinary least squares regression model was used to test the impact of AAOIFI governance disclosure on the performance of 126 IBs from 8 countries that mandatorily adopt the AAOIFI standards for three years (2013–2015). In this regression model, return on asset (ROA) and return on equity (ROE) are the dependent variables, while AAOIFI governance disclosure is the independent variable. Corporate governance mechanisms, firm characteristics, year dummy and country dummy are used as control variables. Findings This paper found an insignificant relationship between AAOIFI governance disclosure and IBs performance. Research limitations/implications This study highlighted the implication that the current research may help IBs and encourage them to disclose more information in annual reports, especially those related to AAOIFI governance standards because following good corporate governance leads to good financial performance. The major limitation of the paper is that it is only focussed on two measurements of bank performance – ROA and ROE; it would be good to use other firm performance measures, such as profit margin. Originality/value This study provides new empirical evidence on the impact of AAOIFI governance disclosure on IBs performance.

13. Corporate governance

2018 ◽  
Author(s):  
Derek French
Keyword(s):  
Corporate Governance ◽  
Shareholder Activism ◽  
Listed Companies ◽  
Corporate Governance Code ◽  
The Uk ◽  
Legal Controls ◽  
And Control ◽  
Do So

This chapter surveys corporate governance. It identifies the key problem of the separation of ownership and control in companies that are not owner-managed. Shareholders are seen as the owners of the company but directors manage the company and can do so for their own benefit rather than the shareholders’. There is a list of the numerous legal controls on directors, which are studied in other chapters. There is discussion of two ways of looking at directors, either as stewards who must account for their actions to the owners or as entrepreneurs whose wealth-creating work deserves reward. The UK Corporate Governance Code, which applies to premium listed companies, is discussed, as is shareholder activism.

A theoretical and econometric evaluation of corporate governance and capital structure in JSE-listed companies

2019 ◽  
Vol 19 (5) ◽  
pp. 1063-1081 ◽  
Author(s):  
Navitha Singh Sewpersadh
Keyword(s):  
Corporate Governance ◽  
Capital Structure ◽  
Audit Committee ◽  
Firm Growth ◽  
Listed Companies ◽  
Annual Reports ◽  
Ceo Duality ◽  
Content Type ◽  
Governance Practices ◽  
Director Ownership

PurposeA vital resource for attracting investments and boosting economic growth is compliance with corporate-governance practices. To achieve firm growth, businesses often rely on leverage as a source of finance, which has tax-saving benefits but could attract financial distress costs. In this context, this study aims to examine the relationship between corporate governance and the use of debt financing in Johannesburg Stock Exchange (JSE)-listed companies.Design/methodology/approachThis study used a six-year period to examine 713 annual reports in an unbalanced panel of 130 JSE-listed companies from 2011 to 2016. The empirical econometric methodology used was the two-step difference generalised method of moments estimation model, which is robust in controlling endogeneity and potential bi-directional causality between leverage and corporate governance.FindingsThis study illustrated that corporate governance practices and firm-specific variables such as profitability, firm size and firm age have a significant influence on the capital structure decisions of JSE-listed firms. This study found support for four out of the six hypotheses. CEO duality and director ownership are positively correlated with leverage, whereas audit committee independence and board size are negatively correlated with leverage. This study also found contraventions of board independence, audit committee independence and CEO duality. The technology sector was the least compliant, with only 40 per cent of their boards being independent. The consumer-services sector had the maximum presence of CEO duality (7 per cent). The industrial sector had the highest average director ownership (18 per cent). The heath-care sector had 28 per cent of their audit committees in contravention of the independence rule.Practical implicationsA useful analysis of the theoretical frameworks used by academic writers are provided. This study revealed the governance practices contravened by the relevant sectors, as well as the associations between corporate governance and leverage.Originality/valueThe study contributes to the literature on capital structure and corporate governance by an emerging economy such as South Africa (SA) which has not been explored. This study’s results have key implications for policy-makers, practitioners, investors and regulatory authorities. This study informs these constituencies about a set of governance attributes that are catalysts and/or inhibitors of leverage.

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