scholarly journals The determinants of forward-looking disclosure: A corporate governance perspective

2013 ◽  
Vol 10 (2) ◽  
pp. 8-19 ◽  
Author(s):  
Khaled Aljifri ◽  
Khaled Hussainey ◽  
Peter Oyelere
Keyword(s):  
Corporate Governance ◽  
Institutional Investors ◽  
Information Disclosure ◽  
Negative Impact ◽  
Securities Market ◽  
Governance Mechanisms ◽  
Active Monitoring ◽  
Corporate Governance Mechanisms ◽  
Positive Effect ◽  
Forward Looking

The main objective of this study is to explore empirically the corporate governance mechanisms in UAE that may affect the extent to which forward-looking information is disclosed. This study utilizes a sample of firms that are listed in either the Dubai Financial Market or the Abu Dubai Securities Market. It uses the accounting and market data available for 2007-2009. This study concludes that three of the corporate governance mechanisms [i.e., institutional investors; ownership (> 10%); debt ratio] have a negative impact on the level forward-looking information disclosure; whereas the governmental investors and ownership (5-10%) are found to have a positive effect on the level of forward-looking information disclosure. These results raise questions about the validity of the "active monitoring hypothesis", which states that the presence of institutional investors should increase the level of disclosure, and also about the agency argument which assumes that debt is a good mechanism to discipline management

scholarly journals Is corporate governance of private equity targets more effective for risk mitigation?

2021 ◽  
Author(s):  
Vladimiro Marini ◽  
Massimo Caratelli ◽  
Gian Paolo Stella ◽  
Ilaria Barbaraci
Keyword(s):  
Corporate Governance ◽  
Agency Theory ◽  
Financial Distress ◽  
Private Equity ◽  
Risk Mitigation ◽  
Governance Mechanisms ◽  
Active Monitoring ◽  
Industry Expert ◽  
Corporate Governance Mechanisms

AbstractPrivate equity is a source of finance and a governance device characterised by active monitoring through sponsors that intervene in targets’ corporate governance. As sponsors are skilled and motivated acquirors, we investigated whether corporate governance mechanisms mitigate leveraged targets’ risk of financial distress differently compared to non-acquired companies through the lenses of agency theory and resource-based theories. We found that targets and non-acquired companies are not significantly different in terms of corporate governance features, but sponsors are skilled enough to choose corporate governance members to mitigate risk more, especially when boards are smaller, have busier industry expert directors, and mandate execution to more managers. These results can be useful to targets, targets’ investors and lenders, and policymakers.

scholarly journals The relationship between corporate governance and financial performance of small corporations in Australia

2014 ◽  
Vol 9 (2) ◽  
Author(s):  
Yongqiang Li ◽  
Anona Armstrong ◽  
Andrew Clarke
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Structural Equation ◽  
Small Firms ◽  
Negative Impact ◽  
Governance Mechanisms ◽  
Latent Constructs ◽  
Equation Modelling ◽  
Corporate Governance Mechanisms ◽  
The Relationship

This paper examines a widely explored but yet to be confirmed relationship between two latent constructs - corporate governance and financial performance of small corporations in Australia. Prior studies have either focused on larger organisations or isolated corporate governance mechanisms in small firms. However, few have examined how corporate governance mechanisms, as a bundle, relate to small corporations. This study fills this gap by empirically analysing the aforementioned relationship using Structural Equation Modelling (SEM). Based on 387 responses from small corporations, the results show that corporate governance bundles measured by the extant literature, has a negative impact on the financial performance of small corporations. The result calls for a stakeholder approach to the governance needs of small corporations.

The association between disclosure of forward-looking information and corporate governance mechanisms

2014 ◽  
Vol 29 (7) ◽  
pp. 578-595 ◽  
Author(s):  
Basil Al-Najjar ◽  
Suzan Abed
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Annual Reports ◽  
Governance Mechanisms ◽  
Cross Sectional ◽  
Content Type ◽  
Corporate Governance Mechanisms ◽  
Computerized Content Analysis ◽  
Forward Looking

Purpose – This paper aims to witness the importance of corporate governance mechanisms and investigates the relationship between the quality of disclosure of forward-looking information in the narrative sections of annual reports and the governance mechanisms for non-financial UK companies. Design/methodology/approach – Computerized content analysis using QSR NVivo 8 is used to measure the extent of forward-looking information in the narratives of the annual reports for 238 companies listed in the London Stock Exchange. Cross-sectional regression analysis is used to examine the impact of the corporate governance mechanisms on forward-looking information. Findings – The results show that board size and the independence of the audit committee are associated with the level of voluntary disclosure of forward-looking information. Research limitations/implication – One limitation of this study is that in controls for the effect of the financial crisis period, by selecting a representative year for a five-year period, 2006. The authors argument in using this year is based on the fact that the main variables of interest do not vary significantly with time, the cross-sectional analysis of the selected period will provide a fair view of the last five year-period. Practical implications – The authors report the importance of some governance practices in the UK, such as the role of the board members as well as the importance of audit committee independence. Originality/value – This paper contributes to the literature by using computerized content analysis to examine the relation between corporate governance mechanism and disclosure quality of forward-looking information using sample of companies before financial crisis period. The authors also examine governance mechanisms that are under-researched in the field of forward-looking disclosure.

scholarly journals The financial impacts of board mechanisms on performance: The case of listed Moroccan banks

2021 ◽  
Vol 3 (2) ◽  
pp. 93-113
Author(s):  
Issam El Idrissi ◽  
◽  
Youssef Alami ◽  
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Fixed Effects ◽  
Audit Committee ◽  
Negative Impact ◽  
Governance Mechanisms ◽  
Return On Equity ◽  
Corporate Governance Mechanisms ◽  
Governance Practices ◽  
The Impact

Abstract Purpose: The present study examines the impact of corporate governance mechanisms on listed Moroccan banks' financial performance. Research methodology: This study investigates the relationship between listed banks' governance mechanisms and financial performance in the CSE for six years between 2014-2019. This study employs three performance measures, return on assets, return on equity, and Tobin's Q, to determine bank performance. This research uses the GMM EGLS approach to analyze data. In the first phase of this empirical research, we did use OLS, Fixed Effects, and Radom Effects regressions to show their inefficiency. Results: Our results portray that most board mechanisms have a negative impact on financial performance. In comparison, the audit committee and nomination & remuneration committee have a positive effect on financial performance. Limitations: Many qualitative and quantitative factors could influence financial performance and not only the used variables in this paper. Contribution: This research shows that the dynamic connection between corporate governance and financial performance is robust in the Moroccan banking context. Also, our study has important implications for establishing good corporate governance practices in emerging economies.

scholarly journals The Role of Islamic Corporate Governance and Risk Toward Islamic Banking Performance: Evidence from Indonesia

2021 ◽  
Vol 22 (3) ◽  
pp. Layouting
Author(s):  
Emile Satia Darma ◽  
Akhsyim Afandi
Keyword(s):  
Corporate Governance ◽  
Supervisory Board ◽  
Islamic Banks ◽  
Governance Mechanisms ◽  
Business Units ◽  
Corporate Governance Mechanisms ◽  
Negative Effect ◽  
Conventional Banks ◽  
Positive Effect

Research aims: This study aims to analyze the role of Islamic corporate governance mechanisms on the performance of Islamic banks. Besides, it also analyzes the effect of risk profiles, especially those that are directly related to bank financing, on the performance of Islamic Banks.Design/Methodology/Approach: Sharia banks that become the objects are Sharia Commercial Banks (SCB) and Sharia Business Units of Conventional Banks (SBU). This study uses data from 20 sharia banks (11 SCB and 9 SBU). The analytical tool used in this study is panel data regression.Research findings: The results show that the meeting frequency of the Board of Commissioners, Sharia Supervisory Board (SSB), Financing to Deposits Ratio (FDR), and bank size have a significant positive effect on the performance of Islamic banks. Non-Performing Financing (NPF) has a significant negative effect on the performance of Islamic banks.Theoretical contribution/Originality: This study utilized Stakeholders theory, Maqoshid Sharia concept, and corporate governance to investigate the role of Islamic corporate governance mechanisms and risk management on sharia Banks performance.Practitioner/Policy implication: The implication of this study is that SSB activities had a direct and robust influence on Islamic Banks, which have relatively larger assets. Hence, the task of the Sharia Supervisory Board should not be limited to only monitoring the conformity of transactions with sharia but also providing input so that banks can increase their profits in line with sharia.Research limitation/Implication: The limitation in this study is the number of corporate governance variables that was limited.

scholarly journals Governmental Ownership of Voluntary Sustainability Information Disclosure in an Emerging Economy: Evidence from Vietnam

2020 ◽  
Vol 12 (16) ◽  
pp. 6686
Author(s):  
Hang Thi Thuy Pham ◽  
Sung-Chang Jung ◽  
Su-Yol Lee
Keyword(s):  
Corporate Governance ◽  
Information Disclosure ◽  
Social Information ◽  
Sustainability Reporting ◽  
Emerging Economy ◽  
Government Ownership ◽  
Institutional Perspective ◽  
Corporate Governance Mechanisms ◽  
Sustainability Disclosure ◽  
Positive Effect

Emerging economies have increasingly paid attention to sustainability issues in the business circle. However, few studies have explored what facilitates sustainability information disclosure. This study examines how corporate governance mechanisms, particularly government ownership, affect sustainability disclosure in an emerging economy—Vietnam. By combining related research streams, including stakeholder theory, institutional perspective, and principal–agent theory, we present a hypothesis on the effect of corporate governance on sustainability reporting. The logistic regression analysis and analysis of variance on 2678 Vietnamese sample firm-years from 2010 through 2016 indicate that government ownership is negatively associated with voluntary environmental and social information disclosure. Additionally, they demonstrate that ownership concentration tends to lower non-financial information disclosure, while individual largest shareholder has a positive effect. These findings provide managers and policymakers with theoretical and practical implications to encourage firms in emerging Asian economies such as Vietnam to adopt sustainability activities and disclose social information.

6. Corporate governance

2020 ◽  
pp. 107-126
Author(s):  
Lee Roach
Keyword(s):  
Corporate Governance ◽  
Institutional Investors ◽  
Executive Directors ◽  
Governance Mechanisms ◽  
Governance System ◽  
Essential Information ◽  
Corporate Governance Mechanisms ◽  
Corporate Governance System ◽  
The Uk ◽  
Comply Or Explain

Each Concentrate revision guide is packed with essential information, key cases, revision tips, exam Q&As, and more. Concentrates show you what to expect in a law exam, what examiners are looking for, and how to achieve extra marks. This chapter discusses the UK corporate governance system and some of the key corporate governance topics. It begins by looking at what corporate governance is and how the UK’s corporate governance system has evolved. The chapter then discusses the effectiveness of the ‘comply or explain’ approach. It also discusses a number of key corporate governance mechanisms, namely institutional investors, non-executive directors, and directors’ remuneration.

Corporate Governance and Optimal Transparency

2014 ◽  
pp. 358-370
Author(s):  
Tom Berglund
Keyword(s):  
Corporate Governance ◽  
Information Disclosure ◽  
Shareholder Value ◽  
Point Of View ◽  
Governance Mechanisms ◽  
Long Run ◽  
Corporate Governance Mechanisms

This chapter explores the link between corporate governance and transparency. It begins by discussing definitions of corporate governance and transparency and goes on to review the literature on their relationship, covering also research on information disclosure. It then introduces a stylized model for the interrelationship between corporate governance and transparency. In key position is the board which is assumed to safeguard maximization of the long-run value of the firm’s equity in shareholders’ interests. Transparency is analyzed from shareholders’ point of view. The chapter highlights why increased transparency may reduce shareholder value and thus to a varying degree will be substituted with corporate governance mechanisms.

Association Between Earnings Management and Corporate Governance Mechanisms: A Study Based on Select Firms in India

2020 ◽  
pp. 097215091988554
Author(s):  
Rajashri Chatterjee ◽  
Debdas Rakshit
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Audit Committee ◽  
Negative Impact ◽  
Positive Impact ◽  
Governance Mechanisms ◽  
Robust Model ◽  
Big 4 ◽  
Corporate Governance Mechanisms ◽  
Strong Negative Association

This article initially attempts to search for a robust model for the estimation of discretionary accruals (proxy for earnings management) of select manufacturing firms in India. The two models from extant literature considered to search for a better model are the modified Jones model put forth by Dechow, Sloan, and Sweeney (1995 , The Accounting Review, 70, 193–225) and the Kasznik (1999 , Journal of Accounting Research, 37, 57–81) model. Subsequently the study aims at appraising the linkage between various corporate governance mechanisms and earnings management using panel data regression and employing Fisher’s probability test. The study reveals strong negative association of earnings management with the percentage of independent directors on the board and with diligence of the board members. However, it fails to accept the conjecture that percentage of promoters on the board has a positive impact on earnings management. The assumption that audit committee size has a negative impact on earnings management could not be established too. Furthermore, the study fails to draw any concrete relationship between earnings management and other governance mechanisms considered, such as board size, frequency of board meetings, CEO duality, audit committee independence, frequency of audit committee meetings and auditing by Big-4 auditors.

7. Corporate governance

2016 ◽  
Author(s):  
Lee Roach
Keyword(s):  
Corporate Governance ◽  
Institutional Investors ◽  
Executive Directors ◽  
Governance Mechanisms ◽  
Governance System ◽  
Essential Information ◽  
Corporate Governance Mechanisms ◽  
Corporate Governance System ◽  
The Uk ◽  
Comply Or Explain

EachConcentraterevision guide is packed with essential information, key cases, revision tips, exam Q&As, and more.Concentratesshow you what to expect in a law exam, what examiners are looking for, and how to achieve extra marks. This chapter discusses corporate governance in the UK, beginning with a discussion of the development of the UK’s corporate governance system. The chapter then discusses the effectiveness of the ‘comply or explain’ approach. It then discusses a number of key corporate governance mechanisms, namely institutional investors, non-executive directors, and directors’ remuneration.

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