scholarly journals A contemporary approach for mitigating agency conflicts: A conceptual review

2015 ◽  
Vol 13 (1) ◽  
pp. 633-641
Author(s):  
Farzan Yahya ◽  
Zahiruddin Ghazali
Keyword(s):  
Corporate Governance ◽  
Market Share ◽  
Ownership Structure ◽  
Risk Taking ◽  
Ceo Compensation ◽  
Recent Literature ◽  
Empirical Studies ◽  
Agency Conflicts ◽  
The World ◽  
Contemporary Approach

Excessive CEO compensation can be justified in any way as it can raise severe agency conflicts in a firm. Cases of excessive CEO compensation have observed all over the world, therefore, this paper propose significant solution to mitigate agency conflicts. This paper surveys the recent literature of CEO compensation and its determinants. Along with previous conventional determinants, this study proposed a new determinant, i.e. market share, which is omitted by prior studies and should be statistically validated with CEO compensation. Moreover, this study proposed plausible moderators, namely, corporate governance (ownership structure and board characteristics), dividend policy and risk taking. This study has provided enough evidences and room for research, which will benefit researchers in term of future empirical studies on different markets in the world.

scholarly journals Ownership structure and performance: A comparison of different corporate governance systems

2005 ◽  
Vol 2 (4) ◽  
pp. 76-85 ◽  
Author(s):  
Alberto de Miguel Hidalgo ◽  
Julio Pindado ◽  
Chabela de la Torre
Keyword(s):  
Corporate Governance ◽  
Ownership Structure ◽  
Ownership Concentration ◽  
Institutional Factors ◽  
Insider Ownership ◽  
Market For Corporate Control ◽  
Governance Systems ◽  
The World ◽  
And Performance ◽  
The Relationship

This paper analyses how the main institutional factors characterizing corporate governance systems around the world affect the relationship between ownership structure and firm performance. Our analysis gives rise to the following remarks. First, ownership concentration and insider ownership levels are determined by several institutional features such as investor protection, development of capital markets, activity of the market for corporate control, and effectiveness of boards. Second, the relationship between ownership concentration and performance is not directly affected by these institutional factors. Third, there is, however, a direct influence of corporate governance characteristics on the relationship between insider ownership and performance.

scholarly journals Gender Diversity in the Boardroom and It's Impacts: Is the Example of Norway a Way Forward?

2015 ◽  
Vol 20 (1) ◽  
pp. 25 ◽  
Author(s):  
Beate Sjafjell
Keyword(s):  
Corporate Governance ◽  
Gender Equality ◽  
Empirical Studies ◽  
Gender Diversity ◽  
Corporate Boards ◽  
Planetary Boundaries ◽  
The World ◽  
Sustainable Value ◽  
Mandatory Rules ◽  
High Level

Norway is one of the most egalitarian countries in the world, with a high level of gender equality and a high percentage of women at work. Nevertheless, mandatory rules appeared necessary to bring about changes in the composition of corporate boards. This article describes the coup that made Norway the first country in the world to mandate gender diversity on corporate boards and outlines Norway’s innovative legislative approach to this issue. The significance of gender diversity to corporate governance is discussed, drawing on empirical studies of the effect of diversity on the performance of companies. The article also discusses the potentially broader impact of gender diversity in the boardroom, including the pressing question of whether gender diversity in the boardroom can help companies create sustainable value within the planetary boundaries.

scholarly journals Compliance with the German Corporate Governance Code: Can the heterogeneous implementation be explained?

2019 ◽  
Vol 2019 (101 (157)) ◽  
pp. 167-200
Author(s):  
Karsten Eisenschmidt ◽  
Ute Vanini
Keyword(s):  
Corporate Governance ◽  
Peer Group ◽  
Empirical Studies ◽  
Influence Factors ◽  
Family Influence ◽  
Institutional Setting ◽  
Future Research ◽  
Agency Conflicts ◽  
Corporate Governance Code ◽  
Code Compliance

Starting with the Cadbury code in 1992, various national and international Corporate Governance (CG) codes have been issued all over the world. So far, empirical studies have revealed mixed results concerning the effects and outcomes of code implementation and thus supported the hypothesis of a ‘one system does not fit all’ approach in CG. Therefore, this paper empirically analyses influence factors on compliance with the German Corporate Governance Code for a large sample of 306 listed firms in 2015. We chose German companies because of the specific institutional settings in Germany, e.g., the strong influence of founder families on a firm’s management or the relevance of debt financing. It is assumed that the country-specific institutional setting limits the transferability of results of US and UK studies. Thus, we used the German setting to derive relevant influence factors on Code compliance. In addition, we applied a more sophisticated measure of Code implementation than previous studies. Overall, we find a significant positive effect of ownership dispersion and firm size on Code compliance, whereas the other influence factors, e.g., family influence or the supervisory board’s size, reveal the right direction of impact but not the required level of statistically significance. In contrast to institutional theory, we find a negative although statistically insignificant impact of the strength of foreign investors’ influence on Code compliance. Overall, our results indicate that the institutional setting is not decisive for Code compliance. Instead, we assume that the main rationale for Code compliance is not the reduction of agency conflicts but the alignment with peer group practices as indicated by the variable company size. Future research should investigate the peer effects on the level of Code compliance in detail.

Does corporate governance matter in determining CEO compensation in the publicly listed companies in New Zealand? An empirical investigation

2015 ◽  
Vol 41 (3) ◽  
pp. 301-327 ◽  
Author(s):  
Krishna Reddy ◽  
Sazali Abidin ◽  
Linjuan You
Keyword(s):  
Corporate Governance ◽  
New Zealand ◽  
Ownership Structure ◽  
Ceo Compensation ◽  
Listed Companies ◽  
Board Structure ◽  
Company Performance ◽  
Content Type ◽  
The Usa ◽  
The Uk

Purpose – The purpose of this paper is to investigate the relationship between Chief Executive Officers’ (CEOs) compensation and corporate governance practices of publicly listed companies in New Zealand for the period 2005-2010. Design/methodology/approach – Prior literature argues that corporate governance systems and structures are heterogeneous, that is, corporate governance mechanisms that are important tend to be specific to a country and its institutional structures. The two corporate governance mechanisms most important for monitoring CEO compensation are ownership structure and board structure. The authors use a generalised least squares regression estimation technique to examine the effect ownership structure and board structure has on CEO compensation, and examine whether ownership structure, board structure, CEO and director compensation have an effect on company performance. Findings – After controlling for size, performance, industry and year effects, the authors report that internal features rather than external features of corporate governance practices influence CEO compensation. Companies that have their CEO on the board pay them more than those who do not sit on the board, suggesting CEOs on boards have power to influence board decisions and therefore boards become less effective in monitoring CEO compensation in the New Zealand context. Companies that pay their directors more tend to reward their CEOs more as well, thus supporting the managerial entrenchment hypothesis. Research limitations/implications – The results confirm the findings reported in prior studies that institutional investors are ineffective in monitoring managerial decisions and their focus is on decisions that benefit them on a short-term basis. Practical implications – The findings indicate that although the proportion of independent directors on boards does not significantly influence CEO compensation, it does indicate that outside directors are passive and are no more effective than insiders when it comes to the oversight and supervision of CEO compensation. Originality/value – Being a small and open financial market with many small- and medium-sized listed companies, New Zealand differs from large economies such as the UK and the USA in the sense that CEOs in New Zealand tend to be closely connected to each other. As such, the relationship between pay-performance for New Zealand is found to be different from those reported for the UK and the USA. In New Zealand, the proportion of institutional and/or block shareholders is positively associated with CEO compensation and negatively associated with company performance, suggesting that it is not an effective mechanism for monitoring CEO compensation.

scholarly journals Local walkability index: assessing built environment influence on walking

2019 ◽  
Vol 46 (46) ◽  
pp. 7-21 ◽  
Author(s):  
Marzieh Reisi ◽  
Mozhgan Ahmadi Nadoushan ◽  
Lu Aye
Keyword(s):  
Built Environment ◽  
Recent Literature ◽  
Empirical Studies ◽  
Specific Area ◽  
Research Topic ◽  
Sustainable Transport ◽  
Transport Mode ◽  
Walkability Index ◽  
The World ◽  
Pedestrian Infrastructure

AbstractWalking is a more sustainable transport mode, and governments around the world are trying to deliver highly walkable areas to their people. Due to its importance, walkability has been a research topic in recent years. Vast empirical studies have reported evidence related to the influence of built environment on walking as a major physical activity. Considering the recent literature, this study developed a framework to quantify walkability by applying a set of indicators related to built environment. The indicators were normalised, weighted and integrated into an overall walkability index. The research was conducted on Chaharbagh Street, which is a major and ancient street in the Isfahan metropolitan area, Iran. The proposed framework would be helpful in investigations of whether a specific area is an appropriate option for a car-free plan based on its built environment features. The outcome of the study could be applied to understand issues related to pedestrian infrastructure and to propose corrective actions.

scholarly journals Corporate governance, ownership and sustainability

2016 ◽  
Vol 13 (2) ◽  
pp. 606-612 ◽  
Author(s):  
Daniela M. Salvioni ◽  
Francesca Gennari
Keyword(s):  
Corporate Governance ◽  
Ownership Structure ◽  
Performance Indicators ◽  
Corporate Boards ◽  
Bottom Line ◽  
The Sustainable Development ◽  
Fair Disclosure ◽  
Governance Systems ◽  
The World ◽  
Common Goals

The main finding of this article is that sustainability and the broader concept of social responsibility imply a change in the spirit of governance, which promotes the so-called ’de facto convergence’ between the different corporate governance systems existing all over the world. Substantial corporate governance convergence suggests that different countries may have different companies’ ownership structure, rules and institutions but the corporate boards may still be able to perform common goals, with attention to similar key performance indicators, such as ensuring fair disclosure or accountability. Companies that perform better with regard to the triple bottom line can increase shareholder value contributing, at the same time, to the sustainable development of the societies in which they operate.

scholarly journals Impact of the Corporate Governance and the Ownership Structure on the Firm’s Financial Performance and its Risk Taking Behavior

2017 ◽  
Vol 3 (1) ◽  
pp. 1
Author(s):  
Abid Ali Shah ◽  
Muhammad Aamir ◽  
Irum Saba ◽  
Zeeshan Mahmood
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Ownership Structure ◽  
Risk Taking ◽  
Negative Relationship ◽  
Two Dimensions ◽  
Ownership Concentration ◽  
Adaptation Level ◽  
Stock Market Returns ◽  
Risk Taking Behavior

Purpose: In the developing country like Pakistan the agency problem may have different dimensions as it may not only be among the ownership and the management but also regarding the expropriation of the corporate profits by the largest shareholder at the cost of the many small shareholders. This paper examines the relationship between the Ownership Structure with its two dimensions i.e. Ownership Type and Concentration with the Corporate Governance adaptation level by the firms and its Financial Performance and Risk Taking Behavior judged by the Stock Market Returns. Methodology: The analysis was conducted in three sections using Panel Data Estimation using the data from 2006 to 2010 for 40 listed KSE firms. Findings: The results indicates that the improvement in the Corporate Practices increase the firm’s financial performance and reduction in the level of risk during undertaking of the riskier ventures. The Corporate Governance also has negative relationship with the Ownership Concentration proving the fact that the increase in the level of the ownership concentration results in the reduction of the level of good practices by the firms. Practical Implications: These results also provided a view of the Corporate Structure of the Pakistani firms and prove the fact that the Ownership Concentrated in single largest owner results in the reduction of Corporate Governance level and the Financial Performance of the firms and also results in the increase in the level of the risk undertaken by the firms.

scholarly journals Controlling shareholders, performance and risk taking of Tunisian listed firms

2009 ◽  
Vol 7 (1) ◽  
pp. 222-231
Author(s):  
Taher Hamza
Keyword(s):  
Corporate Governance ◽  
Internal Control ◽  
Ownership Structure ◽  
Risk Taking ◽  
Descriptive Analysis ◽  
Controlling Shareholders ◽  
Listed Firms ◽  
Size Number ◽  
Significant Difference ◽  
The Impact

We investigate the effects of ownership structure, as an internal control mechanism of agency problem, on corporate governance. We focused specially on the impact of the size, number and type of blockholders on the performance and the risk-taking of the Tunisian listed companies during the period 2001-2004. The descriptive analysis highlights, absence of ownership-control discrepancy, high ownership concentration, low management stock-ownership and the presence of two or three large blockholders with significant difference of the block share size between the first and the other controlling shareholders. The main result of our study indicates that the presence of controlling shareholders affect performance and risk-taking and play an important role in corporate governance. However, we assume that the control contest of the leading shareholder is not conclusive but indicate a form of coalition and agreement effect to share private benefits.

scholarly journals Corporate governance and theories of executive pay

2003 ◽  
Vol 1 (2) ◽  
pp. 94-105 ◽  
Author(s):  
Kuntara Pukthuanthong ◽  
Eli Talmor ◽  
James S. Wallace
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Ownership Structure ◽  
Ceo Compensation ◽  
Pay For Performance ◽  
Task Complexity ◽  
Stock Ownership ◽  
Executive Pay ◽  
The U.S ◽  
And Task

This study performs an in-depth look at the corporate governance, voting and ownership structure of the companies selected using a relatively homogenous data of the U.S. financial sector. Variables that proxy for managerial strategic discretion and task complexity are found to best explain CEO compensation. Corporate governance, including board characteristics and ownership structure, is the second leading determinant of pay variation, while firm performance and CEO specific characteristics seem to play the least role. In accord with studies on managerial stock ownership and Tobin’s Q, the pay-for-performance relation appears to be curvilinear in CEO stock ownership

Corruption, debt financing and corporate ownership

2015 ◽  
Vol 42 (3) ◽  
pp. 433-461 ◽  
Author(s):  
Tesfaye T. Lemma
Keyword(s):  
Corporate Governance ◽  
Ownership Structure ◽  
Empirical Studies ◽  
Generalized Method Of Moments ◽  
Empirical Support ◽  
Debt Financing ◽  
Least Square ◽  
African Countries ◽  
Content Type ◽  
Listed Firms

Purpose – The purpose of this paper is to examine the influence of perceived corruption on debt financing and ownership structure decisions of firms within the context of ten African countries. Design/methodology/approach – The paper analyses 15-year (1996-2010) data pertaining to 556 non-financial firms drawn from ten African countries using models that link firm financing, ownership structure, and perceived corruption. It uses robust procedures including system-generalized method of moments, general least square, and Logistic (LOGIT) regression. Findings – The study finds evidence that perceived corruption is important in shaping debt financing and ownership structure decisions of firms in Africa. Particularly, it finds that: first, higher levels of perceived corruption lead to firms using higher levels of short-term leverage, lower levels of long-term leverage and debts with shorter maturities and second, firms in countries with higher levels of perceived corruption respond to weaknesses in the law enforcement institutions through higher ownership concentration and controlling block shareholding. Research limitations/implications – As in most empirical studies, this study focused on listed firms. Nonetheless, future studies that focus on non-listed firms could add additional insights to the extant literature. Practical implications – The study provides empirical support for the argument that perceived corruption in a country distorts corporate governance. The policy implication of the findings is that governments, by taking steps that curb corruption, could enhance corporate governance by inducing firms into optimal debt financing and ownership structure decisions. Originality/value – The study focuses on firms in African countries for which studies such as this are non-existent.

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