scholarly journals Board of directors, capital structure, investment decisions and firm-performance: An empirical study of Nordic firms

2020 ◽  
Vol 17 (4, Special Issue) ◽  
pp. 377-390
Author(s):  
Shab Hundal ◽  
Anne Eskola
Keyword(s):  
Principal Component Analysis ◽  
Corporate Governance ◽  
Firm Performance ◽  
Capital Structure ◽  
Corporate Finance ◽  
Board Of Directors ◽  
Boards Of Directors ◽  
Investment Decisions ◽  
Principal Component ◽  
The Impact

Firms’ financing, boards of directors’ characteristics, investments, and firm-performance (financial and non-financial) occupy a pivotal place in corporate finance and corporate governance literature. The current study explores if causalities between the abovementioned four distinct albeit inter-related phenomena follow any pattern. The data comprising of 1240 firm-years belonging to Finland, Norway, Sweden, and Denmark for the period of 2003 to 2018 have been analyzed by applying multivariate linear regression and principal component analysis. The findings show that the impact of boards of directors’ characteristics is stronger on capital structure, however, weaker on investments and financial performance. The major contribution of the article is creating a set orderly and sequential causalities between financing, boards of directors’ characteristics, investments, and firm-performance.

New Directions in Corporate Governance and Finance: Implications for Business Ethics Research

2010 ◽  
Vol 20 (4) ◽  
pp. 673-694 ◽  
Author(s):  
Lori Verstegen Ryan ◽  
Ann K. Buchholtz ◽  
Robert W. Kolb
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Business Ethics ◽  
Boards Of Directors ◽  
Financial Regulation ◽  
Academic Fields ◽  
Board Processes ◽  
Ethics Research ◽  
New Directions ◽  
The Impact

ABSTRACT:Corporate governance and finance are dynamic academic fields that offer myriad opportunities for business ethics analysis. Within the corporate governance triad in recent years, shareholders have increased their power over boards of directors and executives through both regulation and movements to change corporate by-laws. The impact of board characteristics on firm performance has proven elusive, leading to questions concerning board processes and individual director beliefs and behaviors. At the same time, CEOs have lost considerable power, leaving many struggling to regain their control and maintain their compensation levels, while others adopt a stewardship approach to their posts. In the field of finance, the recent financial debacle has led to a reexamination of financial regulation and of the fundamental nature and purpose of the industry. All of these issues provide business ethicists fodder for investigation and analysis.

scholarly journals A Thematic Review on Composition of Board of Directors (BOD) and Its Impact on Performance

NCC Journal ◽  
2018 ◽  
Vol 3 (1) ◽  
pp. 65-70
Author(s):  
Dipti Dhungel
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Board Of Directors ◽  
Boards Of Directors ◽  
Corporate Boards ◽  
Corporate Governance Mechanisms ◽  
Thematic Review ◽  
And Performance ◽  
Main Component ◽  
The Relationship

This thematic paper has been prepared to find out how the composition of Board of Directors makes impact on performance of firms. To find this impact, the articles published in international journals have been reviewed. In addition to this detailed study of the legislator, the provision regarding composition of BOD in Nepal was made as stated in BAFIA and Company Act. The Board of Directorsis the elected members among the shareholders who could best represent the interest of each and every member. Corporate boards are one of the, if not the most important, internal corporate governance mechanisms that monitor and advise management in fulfilling the mandate to protect shareholder interests.There is still much debate as to the relationship between firm performance and boards of directors, which are arguably the main component of corporate governance.The thematic review concludes that the relationship between BOD and performance was not found on the basis of existing literature reviewed. Thus, the study opened the ground for the researcher to test this empirically.NCC JournalVol. 3, No. 1, 2018, Page: 65-70

Does shareholder-oriented corporate governance reduce firm risk? Evidence from listed European companies

2018 ◽  
Vol 19 (2) ◽  
pp. 295-311 ◽  
Author(s):  
Leopold Djoutsa Wamba ◽  
Eric Braune ◽  
Lubica Hikkerova
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Good Governance ◽  
Systematic Risk ◽  
Principal Component ◽  
Firm Risk ◽  
Content Type ◽  
Synthetic Index ◽  
The Board Of Directors ◽  
The Impact

Purpose The purpose of this paper is to explore the impact of the mechanisms of corporate governance on the volatility of companies’ financial profitability. Design/methodology/approach For the period 2002-2014, the authors evaluate the relations linking various indices involved in corporate governance with the systematic risk supported by these companies for a sample of 355 firms domiciled in Europe. To empirically test these relationships, the authors calculated a synthetic index of corporate governance quality (QGI) based on the 53 items of assessment of the companies’ governance proposed by the database ASSET4. Following the method used by Boncori et al. (2016), the authors first reduced the number of dimensions of corporate governance by performing a principal component analysis of the sample, which resulted in the following five components: management’s shareholder commitment, shareholder rights, characteristics of the board of directors, transparency of the financial information and independence of the audit. Findings The results of the tests indicate that the synthetic index of governance that the authors have built is only significant at the 10 percent threshold. The impact of this variable on the systematic risk of the company is of the order of one-tenth of a point. The decomposition of this index into five variables shows that management’s commitment to shareholders and the effectiveness of the board of directors in carrying out its supervisory tasks are likely to reduce, but again to a limited extent, the risk borne by the company. Research limitations/implications This observation guides the future work in introducing variables that reflect the social responsibilities of the companies in the sample in order to distinguish the effects of social responsibility from those of purely shareholder-oriented governance on systematic risk. Practical implications This paper demonstrates the interest of good governance on the risk of firms and identifies certain characteristics upon which to act. Originality/value Although the relations between corporate governance mechanisms and profitability expectations have been the subject of numerous studies, few authors have examined the influence of governorship on the volatility of this profitability, particularly in Europe. To the best of the authors’ knowledge, the rare work on this topic relates to only a limited number of countries.

scholarly journals Corporate governance in emerging markets and its impact on finance performance

2014 ◽  
Vol 12 (1) ◽  
pp. 625-632 ◽  
Author(s):  
Edmundo Lizarzaburu Bolaños ◽  
Luis Berggrun ◽  
Kurt Johnny Burneo Farfan
Keyword(s):  
Corporate Governance ◽  
Emerging Markets ◽  
Capital Structure ◽  
Board Of Directors ◽  
Insider Trading ◽  
Equity Capital ◽  
Cost Of Equity Capital ◽  
Cost Of Equity ◽  
Multiple Issues ◽  
The Impact

This paper reviews the theoretical framework of Corporate Governance and multiple issues in which it is evaluated such as agency costs, asymmetric information, insider trading, manipulation of earnings, Board of Directors, etc. Finally, it is reviewed the impact of Corporate Governance over cost of equity, capital structure and financial performance

The Impact of Capital Structure on Firm Performance of Vietnamese Non-financial Listed Companies Based on Agency Cost Theory

2019 ◽  
Vol 35 (2) ◽  
Author(s):  
Thao Tran Thi Phuong ◽  
Anh Thuy Nguyen
Keyword(s):  
Firm Performance ◽  
Capital Structure ◽  
Corporate Finance ◽  
Financial Economics ◽  
Cost Of Capital ◽  
Agency Cost ◽  
American Economic Review ◽  
Banking And Finance ◽  
The Cost ◽  
The Impact

This paper investigates the impact of capital structure on firm performance using a sample of 3,122 observations of 446 non-financial listed companies on the Vietnam stock market during 2011-2017. Using firm performance measures, namely ROE and Tobin Q, we examined if higher leveraged firms are more efficient or less in their performance. We employed the fixed effect model to prove that there is an inverse U-shaped relationship between leverage and ROE, and then we can find a preferred capital structure for Vietnam non-financial firms. To deal with endogeneity problem of the leverage variable, we employ two stage least squares (2SLS) regression with instrument variable estimators, which helps us strengthen the above results. Keywords Capital structure, firm performance, leverage, efficiency, instrument variable estimator, agency cost theory References [1] J. Abor, The effect of capital structure on profitability: an empirical analysis of listed firms in Ghana, Journal of Risk Finance. 6 (2005) 438-447.[2] M. Baker, J. Wurgler, The Determinants of Capital Structure: Capital Market-Oriented versus Bank-Oriented Institutions, Journal of Financial and Quantitative Analysis. 43 (2002) 59-92.[3] A.N. Berger, E. Bonaccorsi di Patti, Capital structure and firm performance: A new approach to testing agency theory and an application to the banking industry, Journal of Banking and Finance. 30 (2006) 1065-1102.[4] J. Berk, P. DeMarzo, J. Harford, Fundamentals of Corporate Finance, second edition, Prentice Hall, 2012.[5] A.A. Berle, G.C. Means, The Modern Corporation and Private Property, New York: The Macmillan Company, 1932.[6] V. Dawar, Agency theory, capital structure and firm performance: Some Indian evidence. Managerial Finance. 40(12) (2014) Số trang.[7] T.H.V. Duong, A study of the factors affecting the capital structure of the companies listed on Vietnam stock market, Doctoral thesis - National Economics University, 2014.[8] S.J. Grossman, O.D. Hart, Corporate financial structure and managerial incentives, In M. J.J., The economics of information and uncertainy, University of Chicago Press, 1982.[9] M. Jensen, Agency cost of free cash flow, corporate finance and takeovers, American Economic Review Papers and Proceedings. 76 (1986) 323-329.[10] J.C. Jensen, W.H. Meckling, Theory of the firm: managerial behavior, agency costs and ownership structure. Journal of Financial Economics. 3 (1976) 305-360.[11] A. Kraus, R.H. Litzenberger, A State-Preference Model of Optimal Financial Leverage, Journal of Finance. Tập (1973) 911-922.[12] D. Margaritis, M. Psillaki, Capital structure and firm efficiency, Journal of Business Finance and Accounting. 34 (2007) 1447-1469.[13] D. Margaritis, M. Psillaki, Capital structure, equity ownership and firm performance, Journal of Banking and Finance. 34 (2010) 621-632.[14] F. Modigliani, M. Miller, The cost of capital, corporation finance, and the theory of investment, American Economic Review. 48 (1958) 655-669.[15] F. Modigliani, M. Miller, Corporate income taxes and the cost of capital: A correction, American economic Review. Tập (1963) 433-443.[16] S.C. Myer, Determinants of corporate borrowing, Journal of Financial Economics. Tập (1977) 147-175.[17] S.C. Myers, N.S. Majluf, Corporate Financing and Investment Decisions When firms have information that investors do not have, Journal of financial economics. 13 (1984) 187-221.[18] B. Seetanah, K. Seetah, K. Appadu, K. Padachi, Capital structure and firm performance: evidence from an emerging economy, The Business and Management Review. 4 (2014) 185-196.[19] S. Titman, R. Wessels, The determinants of capital structure choice. Journal of Finance. 43(1) (1988) 1-19.[20] L. Weill, Leverage and Corporate Performance: Does Institutional Environment matter? Small Business Economics. 30 (2008) 251-265.[21] J. Williams, Perquisites, risk and capital structure, Journal of Finance. 42 (1987) 29-49.[22] R. Zeitun, M.M. Haq, Debt maturity, financial crisis and corporate performance in GCC countries: a dynamic-GMM approach, Afro-Asian J. Finance and Accounting. 5 (2015) 231-247.

Board of Directors Leadership and Structure: Control and Performance Implications

1993 ◽  
Vol 17 (3) ◽  
pp. 65-81 ◽  
Author(s):  
Catherine M. Daily ◽  
Dan R. Dalton
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Board Of Directors ◽  
Boards Of Directors ◽  
Large Scale ◽  
Governance Structures ◽  
Structure Control ◽  
And Performance

Research examining the association of corporate governance structures and firm performance has relied almost exclusively on the large-scale firm. This may, however, be a limited forum for questions of this sort. Officers and boards of directors for the large-scale firm may lack the discretion—or the wherewithal—to effect changes In policy or outcomes. It Is In the smaller firm that such performance/governance linkages may be more easily observed. This study, then, focuses on a number of corporate governance structures and their relationships to firm performance for the smaller corporation. Ironically, the very organizations that the literature suggests might benefit most from independent governance structures are those that rely on them least.

scholarly journals Capital Structure Modelling and Analysis of its Impact on Business Performance

2017 ◽  
Vol 8 (2) ◽  
pp. 19-36 ◽  
Author(s):  
Jarmila Horváthová ◽  
Martina Mokrišová
Keyword(s):  
Principal Component Analysis ◽  
Regression Analysis ◽  
Capital Structure ◽  
Public Interest ◽  
Business Performance ◽  
Principal Component ◽  
Structure Model ◽  
Independent Variables ◽  
The Impact ◽  
The Capital Structure

The aim of the paper was to investigate the impact of company's capital structure on its performance. To achieve the goal, the data of Slovak businesses were used. An input analysis of the capital structure of the selected sector was carried out in order to generalize and elaborate conclusions aimed at the capital structure of the businesses analysed. Selected indicators of capital structure were calculated to analyse the relationships between these indicators and business performance. The results of the correlation analysis were complemented by examining the impact of selected independent variables on business performance applying regression analysis and Principal Component Analysis. Based on the findings, capital structure model was formulated to quantify the impact of changes in capital structure on business performance. The contribution of the paper is the identification of capital structure indicators that affect business performance as well as the construction of capital structure model. The article as well as the research, which is the basis for paper elaboration, is the result of professional public interest focused on finding whether the capital structure is the determinant of business performance.

scholarly journals ANALISIS PENGARUH GOOD COORPORATE GOVERNANCE TERHADAP KINERJA PERUSAHAAN YANG DIMEDIASI STRUKTUR MODAL PADA PERUSAHAAN PERTAMBANGAN YANG LISTED DI BEI 2009-2012

2015 ◽  
Vol 15 (1) ◽  
pp. 59
Author(s):  
Achmad Kautsar ◽  
Trias Madanika Kusumaningrum
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Capital Structure ◽  
Structure Data ◽  
Secondary Data ◽  
Sampling Technique ◽  
Model Data ◽  
Mining Sector ◽  
Good Corporate Governance ◽  
The Impact

ABSTRACTThe main objective of the study is to analyze the impact of theseGood Corporate Governance on Firm Performance, whichcan mediate with Capital Structure. Data is used secondary data that Published on Mining Sector in Indonesian Stock Exchangefrom 2009-2012. This analisys used Secondary Regression and Sobel Test. Sampling technique used here is purposive sampling,and from the 31 listed companies, only 8 companies that can be sampled. The first result of this study is Good CorporateGovernance have not significant on Firm Performance; second result of this study is Good Corporate Governance have notsignificant on Capital Structure; third result of this study is Capital Structure have significant on Firm Performance. The lastresult, Capital Structure isn’t proved to be a mediating variable of Good Corporate Governance to Firm Performance.ABSTRAKSITujuan utama dari penelitian ini adalah menganalisa dampak dari Good Corporate Governance terhadap kinerja perusahaan yangdimediasi dengan struktur model. Data sekunder yang digunakan adalah data publikasi dari Bursa Efek Indonesia di sektor pertambangan di Indonesia pada periode 2009-2012. Analisis yang digunakan adalah regresi sekunder dan Sobel Test. Teknik penyampelan yang digunakan adalah penyampelan purposive. Dari 38 perusahaan yang listing, hanya delapan perusahaan yang dapat dijadikan sampel. Hasil penelitian ini menunjukkan bahwa pertama Good Corporate Governance tidak berpengaruh secara signifikan terhadap kinerja perusahaan; kedua Good Corporate Governance juga tidak berpengaruh secara signifikan terhadap struktur modal; ketiga struktur modal tidak berpengaruh secara signifikan terhadap kinerja perusahaan; terakhir struktur modaltidak memediasi variabel Good Corporate Governance terhadap kinerja perusahaan.

The Impact of Shariah Governance and Corporate Governance on the Risk Management Practices: Evidence from Local and Foreign Islamic Banks in Malaysia

2018 ◽  
Vol 15 (2) ◽  
pp. 1-20
Author(s):  
Sabri Embi ◽  
Zurina Shafii
Keyword(s):  
Risk Management ◽  
Corporate Governance ◽  
Management Practices ◽  
Principal Component ◽  
T Test ◽  
The Body ◽  
Primary Data ◽  
Islamic Banks ◽  
Shariah Governance ◽  
The Impact

The purpose of this study is to examine the impact of Shariah governance and corporate governance (CG) on the risk management practices (RMPs) of local Islamic banks and foreign Islamic banks operating in Malaysia. The Shariah governance comprises the Shariah review (SR) and Shariah audit (SA) variables. The study also evaluates the level of RMPs, CG, SR, and SA between these two type of banks. With the aid of SPSS version 20, the items for RMPs, CG, SR, and SA were subjected to principal component analysis (PCA). From the PCA, one component or factor was extracted each for the CG, SR, and RMPs while another two factors were extracted for the SA. Primary data was collected using a self-administered survey questionnaire. The questionnaire covers four aspects ; CG, SR, SA, and RMPs. The data received from the 300 usable questionnaires were subjected to correlation and regression analyses as well as an independent t-test. The result of correlation analysis shows that all the four variables have large positive correlations with each other indicating a strong and significant relationship between them. From the regression analysis undertaken, CG, SR, and SA together explained 52.3 percent of the RMPs and CG emerged as the most influential variable that impacts the RMPs. The independent t-test carried out shows that there were significant differences in the CG and SA between the local and foreign Islamic banks. However, there were no significant differences between the two types of the bank in relation to SR and RMPs. The study has contributed to the body of knowledge and is beneficial to academicians, industry players, regulators, and other stakeholders.

Bookkeeper-Controller-CFO: The Rise of the Chief Financial and Chief Accounting Officer

2019 ◽  
Vol 46 (2) ◽  
pp. 1-8 ◽  
Author(s):  
Michael Doron ◽  
C. Richard Baker ◽  
Kiren Dosanjh Zucker
Keyword(s):  
Corporate Governance ◽  
Corporate Finance ◽  
20Th Century ◽  
Financial Reporting ◽  
Legal Liability ◽  
Senior Management ◽  
Chief Financial Officers ◽  
Management Positions ◽  
The Impact

ABSTRACT This paper traces the evolution of the chief accounting and chief financial officers from minor figures in corporate governance for most of the 20th century to senior management positions by the late 1970s. The paper begins with the testimony before Congress of Arthur Tucker during the debates over the legislation that would become the 1933 Securities Act. Tucker's testimony resulted in the controller or chief accounting officer being included among those persons specifically listed as potentially liable for fraudulent statements or omissions under Section 11 of the Act. The impact of Tucker's efforts, the evolution of the legal liability of financial and accounting officers over the next several decades, the increasing complexity of corporate finance and financial reporting that led to the establishment of the CFO as a position second only to the CEO, and the place of the accounting officer among senior management, are analyzed in the subsequent sections.

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