scholarly journals How banks’ internal governance mechanisms influence risk reporting

2015 ◽  
Vol 12 (3) ◽  
pp. 55-72 ◽  
Author(s):  
Mohammad Jizi
Keyword(s):  
Risk Management ◽  
Financial Crisis ◽  
Governance Mechanisms ◽  
Internal Governance ◽  
Business Operations ◽  
Internal Governance Mechanisms ◽  
Corporate Governance Mechanisms ◽  
Recent Financial Crisis ◽  
Management Disclosures ◽  
The Impact

Banks were the center of the recent financial crisis that results in a sharp decline in security prices and banks’ market capitalization. The content of information in general, and risk information in particular, provided to capital markets was vital to reduce the uncertainly levels left in the markets and encourage trading. Examining the impact of the internal corporate governance mechanisms on the content of risk management disclosures using a sample of US national banks in the wake of the financial crisis shows that banks having larger board size and higher proportion of independent directors are more inclined toward disclosing wider content of risk management information. The results also suggest that CEO duality impacts positively on risk management disclosures content to provide signals toward CEO objectivity and judgment in running business operations aligned with shareholders’ interest.

scholarly journals Corporate governance in banks: Problems and remedies

2012 ◽  
Vol 3 (2) ◽  
pp. 47-67 ◽  
Author(s):  
Monika Marcinkowska
Keyword(s):  
Corporate Governance ◽  
Financial Crisis ◽  
Financial Sector ◽  
Governance Mechanisms ◽  
Corporate Governance Mechanisms ◽  
Main Factors ◽  
Recent Financial Crisis ◽  
Key Aspects

Weak and ineffective corporate governance mechanisms in banks are pointed out as the main factors contributing to the recent financial crisis. Deep changes in this area are necessary to reinforce the financial sector stability. The paper presents key aspects requiring reforms

Internal governance mechanisms and the performance of decentralized financial systems in Niger

2018 ◽  
Vol 45 (4) ◽  
pp. 629-643 ◽  
Author(s):  
Hamadou Boubacar
Keyword(s):  
Social Performance ◽  
Successful Outcome ◽  
Governance Mechanisms ◽  
Financial Systems ◽  
Board Size ◽  
Internal Governance ◽  
Content Type ◽  
Internal Governance Mechanisms ◽  
Key Skills ◽  
The Impact

Purpose The purpose of this paper is to study the effect of internal governance mechanisms on the financial and social performance of Niger’s decentralized financial systems (DFS). Design/methodology/approach This paper investigated the impact of the board size and the CEO/chairman duality on financial performance and sustainability, respectively, measured by the return on assets (ROA) and operational self-sufficiency on one side and social performance measured by the size of loans granted and the percentage of female borrowers on the other side. Findings The results show that board size positively and significantly affects the ROA. The author also concludes that the duality of decision and control functions promotes the financial viability of the DFS. Regarding the impact of internal governance on social performance, the author finds that board size positively and significantly affects loan size. Research limitations/implications This study focuses on Niger’s 13 largest DFSs. However, an analysis that also includes smaller firms may show different results. Practical implications A board size of between 5 and 15 members is recommended. This would help to incorporate key skills and the active involvement of all members. Originality/value This research highlights the importance of including internal governance mechanisms, underscores an interesting problem and answers questions raised in the existing literature by invalidating or confirming the results that have been obtained thus far. As the players in the microfinance sector recognize that sound governance is an important factor for a successful outcome in any microfinance institution objective, the paper helps shed some light on the situation of DFS in Niger.

scholarly journals Internal governance mechanisms, agency problems and family ownership: Evidence from Australia

2008 ◽  
Vol 6 (1-3) ◽  
pp. 385-397
Author(s):  
Lukas Setia-Atmaja
Keyword(s):  
Family Firms ◽  
Agency Problems ◽  
Family Ownership ◽  
Board Composition ◽  
Governance Mechanisms ◽  
Minority Shareholders ◽  
Internal Governance ◽  
Value Maximization ◽  
Internal Governance Mechanisms ◽  
Corporate Governance Mechanisms

This paper investigates whether family firms use dividends, board composition and debt to expropriate the wealth of minority shareholders or to mitigate agency problems. Utilising panel data on a sample of publicly traded firms in Australia over the period 2000-2005, this study provides evidence that family firms pay optimal and higher levels of dividends and debt compared with their non-family counterparts. The study also finds that family firms have significantly lower proportions of independent directors on the board, but this is consistent with the optimal (value maximization) use of board composition. These results provide evidence that family firms mitigate rather than exacerbate moral hazard problems between owners and minority shareholders in Australia. This study adds to the very limited research into the relationship between family ownership and corporate governance mechanisms in Australia.

The impact of the Tunisian Revolution and internal governance mechanisms on the extent of voluntary information disclosure

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sameh Mekaoui ◽  
Emna Brahem ◽  
Hanen Moalla
Keyword(s):  
Ownership Structure ◽  
Information Disclosure ◽  
Governance Mechanisms ◽  
Internal Governance ◽  
Content Type ◽  
Internal Governance Mechanisms ◽  
The Board Of Directors ◽  
The One ◽  
Tunisian Revolution ◽  
The Impact

Purpose This study aims to investigate, on the one hand, the impact of the Tunisian Revolution and internal governance mechanisms (especially, the ownership structure and the board of directors structure on the extent of voluntary information disclosure [VID]) and on the other hand, the moderating effect of the Tunisian Revolution on the relationship between the internal corporate governance mechanisms and the VID. Design/methodology/approach A content analysis of 362 annual reports is used for determining the level of VID. This study covers a 10-year period (2007-2016) which is divided into two sub-periods (before and after the Tunisian Revolution). The generalized least squares regression model was used to investigate the effect of the Tunisian Revolution, ownership structure and the board of directors structure on the VID. Findings The Tunisian companies disclose less voluntary information after the Tunisian Revolution because of a decrease in the disclosure of information related to results, intangible assets, non-financial information and management’s discussion and analysis. The authors’ findings highlight the importance of the moderating effect of the revolution. After the Tunisian Revolution, a positive relationship was found, on the one hand, between institutional ownership, board size and board independence, and the VID on the other hand. Besides, companies with dual structures and with a high level of foreign ownership are less reluctant to the VID. Moreover, different governance mechanisms are related to different types of information disclosed. These relationships were affected by the Tunisian Revolution. Practical implications This piece of research could be useful for managers, investors and different stakeholders. It can help managers in improving their VID and thus their companies’ transparency, mainly in developing countries and in times of crisis. Moreover, it could be helpful for investors and stakeholders for their decision-making, especially in crisis periods. Originality/value This study contributes to the literature by investigating the VID in a developing country and in times of crisis. It widens knowledge by analyzing the types of voluntary information disclosed. It is one of the few pieces of research investigating this issue. Moreover, it is the first research analyzing the consequences on the VID of the revolutions in the Arab countries that have experienced an Arab Spring Revolution.

scholarly journals The impact of internal governance mechanisms on financial and stock market performance of listed companies: Evidence from an emerging market

2020 ◽  
Vol 9 (4) ◽  
pp. 126-138
Author(s):  
Houcine Berbou ◽  
Oumaima Sadqi
Keyword(s):  
Corporate Governance ◽  
Stock Market ◽  
Emerging Market ◽  
Market Performance ◽  
Listed Companies ◽  
Governance Mechanisms ◽  
Internal Governance ◽  
Internal Governance Mechanisms ◽  
Stock Market Performance ◽  
The Impact

The aim of this paper is to empirically test the impact of internal governance mechanisms on the financial and stock market performance of Moroccan listed companies. Board of directors’ characteristics such as independence and transparency, concentration, and presence of employees in the ownership structure, as well as some cognitive aspects of governance, represent the basis for discussion. Secondary data of a sample of 44 listed companies in the Casablanca Stock Exchange was analyzed using multiple linear regression. The results of this empirical study revealed that the financial and stock market performance of the companies that are captured by the return on equity (ROE) and the market to book ratio (M to B) significantly correlate with the adoption of the hybrid corporate governance approach. The relevance of this study is to enrich researches that deal with corporate governance and its impact on business performance in the context of Moroccan listed companies.

Impact of corporate governance compliance and board attributes on operating liquidity in pre- and post-corporate governance reforms

2020 ◽  
Vol 20 (7) ◽  
pp. 1329-1347
Author(s):  
Javed Khan ◽  
Shafiq Ur Rehman
Keyword(s):  
Corporate Governance ◽  
Gender Diversity ◽  
Governance Mechanisms ◽  
Internal Governance ◽  
Content Type ◽  
Internal Governance Mechanisms ◽  
External Governance ◽  
The Impact ◽  
Corporate Governance Reforms ◽  
Governance Reforms

Purpose This study aims to investigate the impact of corporate governance compliance, governance reforms and board attributes on operating liquidity of Pakistani listed non-financial firms. The study further tests how these relationships vary in the pre- and post-corporate governance reforms. Design/methodology/approach Fixed-effect regression model is used on 10 years panel data from 2007 to 2016 for a sample of 170 firms listed on the Pakistan Stock Exchange. Two-stage least squares model is used for addressing the endogeneity problem. Findings The findings reveal that governance compliance and governance reforms negatively affect operating liquidity. Among the board attributes, board meetings, directors’ remuneration, board foreign diversity and board gender diversity are significantly related to operating liquidity. Further exploration indicates that internal governance mechanisms are less effective to safeguard shareholders from expropriation during weak external governance. This suggests that strong external governance is inevitable to the effectiveness of internal governance mechanisms. Overall, the study findings support the agency theory. Practical implications The findings provide valid recommendations to policymakers interested in safeguarding the investors to focus on macro-level governance for making the micro-level governance effective. Further, the results provide the executives with an insight to improve the compliance level with the code of corporate governance. Originality/value Unlike prior studies, this study examines the impact of corporate governance compliance and novel board attributes – directors’ attendance at board meetings, number of board committees, directors’ remuneration and board foreign diversity on operating liquidity. Further, the study subdivides its sample period into pre- and post-corporate governance reforms to examine how external governance influences internal governance effectiveness.

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