scholarly journals An investigation of corporate governance from a new perspective: Examining the financial performance of companies and the impact of executive turnover

2016 ◽  
Vol 12 (1) ◽  
pp. 53-69 ◽  
Author(s):  
Tariq Tawfeeq Yousif Alabdullah ◽  
Sofri Yahya ◽  
Mohamed Ibrahim Nor ◽  
Firas Qassim Majeed
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Cross Sectional Study ◽  
Fiscal Year ◽  
Executive Turnover ◽  
Financial Leverage ◽  
Board Size ◽  
Cross Sectional ◽  
New Variables ◽  
The Impact

The aim of this paper is to investigate the mechanisms of corporate governance in companies and to delineate their effect from the perspective of two variables: the financial performance of firms; and an examination of executive turnover. An analysis on theoretical grounds of these two variables is made with respect to non-financial companies specifically in the context of the country of Jordan. Also in the context of this study, a company represents a firm. A sample comprising 109 companies from the non-financial sector for the fiscal year 2011 was selected and analyzed. A cross sectional study tested all hypotheses of the study and used statistical software, SPSS 20, to analyze the data. The study has examined the structure of the board of directors and its effects on the financial performance (financial leverage) of the non-financial Jordanian companies. Evidence suggests that the corporate governance mechanisms such as increasing the board size has a positive effect on reducing the level of financial leverage, thus leading to enhanced levels of financial performance. On the other hand, board independence and the structure of non CEO-duality have no effect on a company’s financial performance. In addition, the findings revealed that executive turnover has been found to significantly moderate the relationship between some of the factors and that is the board size and financial leverage. Given the diversity of trends utilized to measure the financial performance of companies in the area of corporate governance and the associated performance relationship, empirical research has continued to undergo new financial performance indicators to prevent manipulation and to obtain a realistic picture of the financial performance of companies. Hence, this is the first study that internationally chooses financial leverage to represent the financial performance of companies in their relationship with corporate governance. Crucially, it is globally the first study to choose executive turnover as a moderating variable on such a relationship. Thus, choosing these two new variables uniquely contributes to the literature of both corporate governance and firm performance from the perspective of developed and developing countries. This is considered to extend and add new insights to prior research in this discipline. The study therefore provides empirical evidence to policy-makers, stakeholders, academia and other interested parties in the Middle East; specifically in Jordan.

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 Corporate Governance And Its Effect On Firm Performance In An Emerging Economy

2022 ◽  
Vol 2 (3) ◽  
pp. 281-291
Author(s):  
Langa Esmael KAREM ◽  
Hawkar Anwer HAMAD ◽  
Hakar Abubakir BAYZ ◽  
Naji Afrasyaw FATAH ◽  
Diary Jalal ALI ◽  
...  
Keyword(s):  
Financial Performance ◽  
Business Processes ◽  
Board Members ◽  
Board Composition ◽  
Return On Assets ◽  
Board Size ◽  
Cross Sectional ◽  
The Impact ◽  
The Relationship ◽  
Board Ownership

Having a board of directors is very important to ensure the smooth running of business processes and have an impact on the company's financial performance. This study to determine the impact of board characteristics namely board size, board ownership and board composition on the financial performance of organizations as measured by Return on Assets. The study employed a descriptive-explanatory research design based on a cross-sectional approach. Correlation and regression analyses were conducted to determine the depth and extent of the relationship between the variables. The study revealed a positive and significant association between the board size and financial performance on an average of 9 board members. Board composition revealed that having more external directors had no effect on the financial performance, it neither increased it nor decreased it, leading to the rejection of the hypothesis. On the other hand, board ownership was found to be beneficial in terms of having directors as owners of the business, corroborating the Stakeholder Theory. The studies showed that there was still a need to select board members with caution striking a balance between the number of directors as well as their composition to ensure that the organization reaps maximum benefits from the board.

scholarly journals DOES CORPORATE GOVERNANCE PREDICT FIRM PROFITABILITY? AN EMPIRICAL STUDY IN OMAN

2020 ◽  
Vol 28 (1) ◽  
pp. 161-177
Author(s):  
Essia Ahmed ◽  
Tariq Alabdullah ◽  
Mohammed Thottoli ◽  
Eny Maryanti
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Design Methodology ◽  
Annual Reports ◽  
Fiscal Year ◽  
Cross Sectional ◽  
Financial Firms ◽  
Firm Profitability ◽  
The Impact ◽  
Practical Implications

ABSTRACT Purpose — This research aims to test whether corporate governance (CG) predicts firm profitability in a sample of firms listed in the financial mark in Oman. Design/methodology/approach — This research analyses cross-sectional data across 50 non-financial firms. This study used annual reports for the fiscal year 2018 to analyze the impact of CG on firm profitability. This work tested its hypotheses and analyzing them via the Partial Least Squares (PLS). Findings — The result of this research indicates that a positive link between all the predictors is found: board size, ownership, gender, and audit committee, and firm profitability (financial performance). Practical Implications — Originality/value — This research is the first of its kind via examining the link between this set of predictors of (CG) and firm performance in the Omani context. The present study provides empirical evidence for the researchers, policymakers, and other stakeholders.

scholarly journals Corporate Governance and Financial Performance of Nepalese Commercial Banks

2020 ◽  
Vol 13 (1) ◽  
pp. 40-50
Author(s):  
Mohan Prasad Sapkota
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Commercial Banks ◽  
Negative Impact ◽  
Ownership Concentration ◽  
Positive Contribution ◽  
Board Meeting ◽  
Board Size ◽  
Leverage Ratio ◽  
The Impact

This paper focuses on determining the relationship between corporate governance and financial performance of Nepalese commercial banks as well as examining the impact of corporate governance on banks performance. The sample consists of 9 commercial banks for the 10 year period of 2008/09 to 2017/18. Corporate governance is considered as leverage ratio, board meeting, board size and ownership concentration had mixed results on banks performance measured by ROE. Evidence indicates that debt ratio, net interest margin and total assets have significant positive contribution on banks performance. Board meeting and liquidity have negative impact on banks performance. However, board size and ownership concentration have no significant contribution to the firm performance.

scholarly journals The Impact Of Corporate Governance on The Financial Performance in Malaysia

2021 ◽  
Vol 5 (1) ◽  
pp. 41-58
Author(s):  
NURFATANAH ABDULLAH
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Firm Size ◽  
Audit Committee ◽  
Committee Meeting ◽  
Board Size ◽  
Firm Financial Performance ◽  
Normality Test ◽  
Lm Test ◽  
The Impact

The aim of this study is to investigate the relationship between corporate governance and firm financial performance in Malaysia. This study is mainly focusing on four sections of corporate governance which are board independent, board size, the frequency of audit committee meeting and firm size. The population of this study is Top 30 firms in Malaysia that are public listed in Bursa Malaysia while for the period, this study focusses on year 2016 to 2019 which is 4 years. This study uses Return on Assets (ROA) to measure the firm effectiveness and efficiency. As for statistical analysis, this study uses E-View to run all the test such as Breusch-Godfrey Serial Correlation LM Test, Hausman Test, Ordinary Least Squared (OLS) method, Autocorrelation, Multicollinearity and Normality Test. According to the results of the analysis, board independent has positive insignificant relationship with firm performances while board size and firm performances have negative and insignificant relationship. As for the frequency of audit committee meeting and firm size, the results display that both variables have negatively significant relationship with the performances of the firm. Apart from that this study use two theory which are Prospect Theory and Agency Theory.

scholarly journals PERAN CORPORATE GOVERNANCE PADA HUBUNGAN DEFAULT RISK DENGAN EARNING RESPONSE

2019 ◽  
Vol 8 (2) ◽  
Author(s):  
Hermanto Hermanto ◽  
Ni Ketut Surasni ◽  
Firmansyah Firmansyah
Keyword(s):  
Corporate Governance ◽  
Default Risk ◽  
Negative Impact ◽  
Stock Exchange ◽  
Cross Sectional Study ◽  
Cross Sectional ◽  
Response Coefficient ◽  
Growth Opportunity ◽  
Reported Earnings ◽  
The Impact

Company default risk will determine investor reaction on the increase of company earning. If financial statements contain information, then financial markets will react as a result of reported earnings. The primary focus of this study aims at analyzing the impact of default risk on earning response coefficient as well as the influence of corporate governance toward the connection between default risk and earning response coefficient. In addition, this study examines the influence of size and growth opportunity toward the earning response coefficient. This is a cross sectional study, analyzing year 2017 sample data. The research sample consists of 49 companies taken purposively from the list of companies in Indonesia Stock Exchange. Results of this study prove that default risk has a negative impact on earning response coefficient and that corporate governance can reduce the negative impact of default risk on earning response coefficient. This study also finds evidence that growth opportunity positively influences earning response coefficient.  Keywords: corporate governance; default risk; earning response coefficient; growth opportunity

scholarly journals Corporate Governance dan Pengaruhnya terhadap Kinerja Keuangan Perusahaan

2019 ◽  
Vol 4 (2) ◽  
pp. 183-199
Author(s):  
Emilia Gie
Keyword(s):  
Corporate Governance ◽  
Regression Analysis ◽  
Financial Performance ◽  
Multiple Regression Analysis ◽  
Sampling Method ◽  
Ownership Concentration ◽  
Managerial Ownership ◽  
Board Size ◽  
Agency Conflict ◽  
The Impact

Application of corporate governance in the company is a way to handle the agency conflict that impact to company’s financial performance The objective of this research is to analyses the impact of managerial ownership, board size, ownership concentration and debt toward fi nancial performance that measured by ROE. The population of this research is the manufacturer companies which listed at Bursa Efek Indonesia (BEI) over the fi ve years periods on 2009 until 2013. This research used purposive sampling method. The sample of this reseach consist of 90 companies that met the criteria. This study uses multiple regression analysis to see the contribution of each variable in influence financial performance of company. The results showed that: (1) managerial ownership is not signifi cant to eff ect fi nancial performance of company, (2) board size is not signifi cant to eff ect fi nancial performance of company, (3) ownership concentration is signifi cant to eff ect fi nancial performance of company, (4) debt is significant to effect financial performance of company

scholarly journals Pengaruh Corporate Governance Terhadap Inefisiensi Investasi Dengan Free Cash Flow Sebagai Pemoderasi

Wahana ◽  
2021 ◽  
Vol 24 (1) ◽  
pp. 79-99
Author(s):  
Djaja Perdana ◽  
Hasan Subagyo
Keyword(s):  
Corporate Governance ◽  
Cash Flow ◽  
Negative Impact ◽  
Free Cash Flow ◽  
Least Square ◽  
Fiscal Year ◽  
Board Size ◽  
Public Companies ◽  
Governance Practices ◽  
The Impact

The level of corporate investment inefficiency is closely related to the effectiveness of corporate governance practices implemented by the largest shareholders and board of directors. This paper discusses empirical research that investigates the impact of the largest shareholders and board size on investment inefficiency with free cash flow as a moderating variable. This study uses a sample of 152 public companies registered in Indonesia’s capital market for the fiscal year ended on December 31, 2014 to 2018. This study uses a multiple regression method with the Ordinary Least Square (OLS) approach. This study find that the largest shareholders and board size are significantly negative impact on investment inefficiency, but the free cash flow doesn’t moderate the influence of board size on investment inefficiency.

scholarly journals CORPORATE BOARD SIZE AND FINANCIAL PERFORMANCE OF PRIVATE LIMITED COMPANIES IN UGANDA

2020 ◽  
Vol 5 (1) ◽  
pp. 1
Author(s):  
John Rwakihembo ◽  
Nixon Kamukama ◽  
Fredrick Kijjambu Nsambu
Keyword(s):  
Financial Performance ◽  
Boards Of Directors ◽  
Pearson Correlation ◽  
Cross Sectional Study ◽  
Corporate Board ◽  
Board Size ◽  
Cross Sectional ◽  
Private Companies ◽  
Leadership Structure ◽  
Regression Techniques

The purpose-The paper seeks to compare the corporate board size and the financial performance of private companies in Uganda.Methodology-The paper adopted a positivist paradigm besides a cross-sectional study design. Researchers gathered quantitative data from 394 companies in Western and Central Uganda. An open questionnaire was administered to board members and executives from companies. Pearson correlation and standard regression techniques were used for data analysis.Findings-A significant positive relationship between the performance of the firm and the board size among private companies was established from the findings.Unique Contribution to Practice and Policy-This study will provide a precise and direct understanding of the relationship between board size and performance.The practical implications-The study recommends that private companies should recruit large boards of directors due to their diversified skills and connections that increase firm value.Research limitations-The study falls short of examining the influence of other characteristics of the board, such as composition, and leadership structure, on financial performance but solely concentrates on the board size. Besides, it was cross-sectional and generalized all private companies without considering industry-specific factors that could have changed the results.Originality/value-This is the first study that focuses on exploring the comparison between the corporate board size and the financial performance of private companies in Uganda.

scholarly journals Does Corporate Social Responsibility Affect the Financial Performance of the Manufacturing Sector? Evidence from an Emerging Economy

2019 ◽  
Vol 11 (4) ◽  
pp. 1182 ◽  
Author(s):  
Jacob Cherian ◽  
Muhammad Umar ◽  
Phung Thu ◽  
Thao Nguyen-Trang ◽  
Muhammad Sial ◽  
...  
Keyword(s):  
Corporate Governance ◽  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Return On Assets ◽  
Board Size ◽  
Independent Variables ◽  
Corporate Social ◽  
The Impact ◽  
The Relationship

The present study analyzed the impact of corporate social responsibility (CSR) reporting on the financial performance of Indian companies. It used secondary data from 50 manufacturing companies over the period of fiscal years 2011 to 2017. The results suggested that there exists a significant relationship between the performance of Indian companies and their CSR. The CSR not only improves the firm’s social value and reputation but also improves profitability and performance. According to the results, return on assets is significantly determined by corporate governance, customers, products, number of employees, and board size. The customer has a negative impact on return on assets (ROA). The relationship between return on equity and independent variables is the same as the relationship between ROA and independent variables. Corporate governance and product positively impact ROE, but the relationship between customers, number of employees, and board size are negative. Corporate governance and product positively impact return on capital employed (ROCE), but the relationship between customer and the number of employees is negative. Education has positive impact on profit after tax (PAT) and profit before tax (PBT), but the PAT relationship between environments is negative. Corporate governance and product positively impact PBT. In general, we concluded that in India, socially responsible corporations perform better and vice versa.

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