scholarly journals Corporate Governance, Cash holdings and Value of a Firm: Evidence from Australian Firms

2012 ◽  
Vol 4 (12) ◽  
pp. 606-614 ◽  
Author(s):  
Subba Reddy Yarram
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Significant Influence ◽  
Stock Exchange ◽  
Cash Holdings ◽  
Board Independence ◽  
Board Structure ◽  
Average Return ◽  
Actual Return ◽  
Corporate Cash Holdings

The present study analyses influence of board structure and cash holdings on the value of Australian firms for the period 2004 to 2010. Australian Stock Exchange (ASX) adopted the Principles of Good Corporate Governance Guidelines in 2003 and Australian firms have started adopting these principles starting 2004. Similarly the reporting framework of Australian firms is harmonized with the rest of the world with adoption of Australian International Financial Reporting Standards (AIFRS) starting in 2004. Corporate cash holdings despite their significance have not been considered extensively in prior literature outside the US. Cash holdings may have significant influence on the value of the firm as too much excess cash may lead to misuse of these funds by entrenched managers. Corporate governance has a role to play in maintaining appropriate cash holdings and their use. The present has two objectives: it considers the influence of corporate cash holdings on the value of Australian firms; and it examines the role of board structure on the relationship between cash holdings and value of the firm. The present study considers all non-financial firms that are part of the All Ordinaries Index (AOI). The present study constructs Fama French 25 portfolio and estimate the excess return as the difference between actual return and the average return of the relevant FF portfolio. OLS analyses show that board independence has no significant impact on the value of the firm though cash holdings have significant influence. Analysing using panel data methods however unearth the significant influence of board independence on the value of Australian firms.

Cash Holdings and Corporate Governance

2022 ◽  
pp. 395-416
Author(s):  
Elif Akben-Selcuk ◽  
Pinar Sener
Keyword(s):  
Corporate Governance ◽  
Cash Flow ◽  
Linear Relation ◽  
Cash Holdings ◽  
Family Ownership ◽  
Board Structure ◽  
Factors Affecting ◽  
Cash Reserves ◽  
Nonfinancial Firms ◽  
Corporate Cash Holdings

This chapter investigates the empirical factors affecting corporate cash holdings with special emphasis on corporate governance variables for a sample of Turkish-listed nonfinancial firms over the period 2006 to 2010. The findings reveal a significant non-linear relation between family ownership and cash holdings. In addition, while board structure does not significantly affect the level of cash holdings, tunneling increases cash reserves of firms. Furthermore, the results indicate that cash flow, leverage, other liquid assets that can be used as cash substitutes, the degree of tangibility of assets, and firm size are important in determining cash holdings among Turkish companies.

scholarly journals The impact of corporate governance on firm performance in Egyptian listed companies

2013 ◽  
Vol 11 (1) ◽  
pp. 691-705 ◽  
Author(s):  
Ehab K. A. Mohamed ◽  
Mohamed A. Basuony ◽  
Ahmed A. Badawi
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Ownership Structure ◽  
Stock Exchange ◽  
Listed Companies ◽  
Board Independence ◽  
Board Structure ◽  
Cross Sectional ◽  
Book Value ◽  
The Impact

This paper examines the impact of corporate governance on firm performance using cross sectional data from non-financial companies listed in the Egyptian Stock Exchange. The 88 non-financial companies on EGX100 index of listed companies on the Egyptian Stock Market are studied to examine the relationship between ownership structure, board structure, audit function, control variables and firm performance by using OLS regression analysis. The results show that ownership structure has no significant effect on firm performance. The only board structure variable that has an effect on firm market performance is board independence. Firm book value performance is affected by both board independence and CEO duality. Firm size and leverage have varying effects on both market and book value performance of firms

scholarly journals Non-compliance with Australian stock exchange recommendations on board independence

2011 ◽  
Vol 7 (3) ◽  
pp. 21-37
Author(s):  
Patricia O’Keefe
Keyword(s):  
Corporate Governance ◽  
Agency Theory ◽  
Stock Exchange ◽  
Ownership Concentration ◽  
Board Independence ◽  
Managerial Ownership ◽  
Board Structure ◽  
Mitigating Factors

An agency theory perspective is adopted to explain the high levels of non-compliance with recommendations concerning board structure of the Australian Stock Exchange’s (ASX) Corporate Governance Principles and Recommendations. The study compares groups of compliers and non-compliers drawn from members of the ASX All Ordinaries Index. The results indicate that, in the presence of mitigating factors such as less complexity, higher levels of managerial ownership of equity and higher ownership concentration, entities are less likely to comply with the recommendations on board independence. The results suggest that the compliance decision might be influenced by mitigating factors that reduce the need for board independence.

scholarly journals The influence of board members with foreign experience on the timely delivery of financial reports

2021 ◽  
Author(s):  
Dorota Dobija ◽  
Karolina Puławska
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Fixed Effects ◽  
Stock Exchange ◽  
Reporting Quality ◽  
Policy Formulation ◽  
Board Members ◽  
Board Structure ◽  
Financial Reports ◽  
Foreign Experience

AbstractThis study examines the effect of the presence of foreign experts on a company’s board on the important characteristic of high-quality financial reporting: timeliness. We focus on experts with foreign experience (EFEs) who are board members, in the context of a dual board model. The sample is drawn from the population of Polish nonfinancial firms listed on the Warsaw Stock Exchange during 2010–2015. For analysis, we use the generalised method of moments with fixed effects. After controlling for corporate governance and firm characteristics, we find that the presence of EFEs shortens the time necessary to deliver financial reports. Our findings enrich the knowledge on the monitoring role of EFEs in corporate governance, especially in the context of the insider model of corporate governance and a dual board structure. The findings have significant implications for policy formulation and provide evidence that the presence of EFEs on supervisory boards may lead to increased timeliness of financial reporting, thus increasing financial reporting quality.

scholarly journals The Analysis Effect of Leverage, Asymmetric Information and Corporate Governance to Firm Value in Manufacture Companies Listed in Indonesia Stock Exchange

2019 ◽  
Vol 2 (1) ◽  
pp. 89-96
Author(s):  
Lisa Tyas Octaviana ◽  
Sri Hasnawati ◽  
Ernie Hendrawaty
Keyword(s):  
Corporate Governance ◽  
Asymmetric Information ◽  
Firm Value ◽  
Stock Exchange ◽  
Cash Holdings ◽  
Board Independence ◽  
Manufacturing Companies ◽  
Financial Report ◽  
Company Value ◽  
The Right

Company value or Firm value is a certain condition that has been achieved by the company as an illustration of public trust and shareholders towards the company after going through an activity process for several years, since the company was first established until now. This study aims to determine the effect that occurs between Leverage, Asymmetric Information, and Corporate Governance on the Firm Value through Cash Holdings as a mediating variable. The data used in this study are published financial report from 33 manufacturing companies in the Consumer Goods Industry Sector listed on the Indonesia Stock Exchange from 2011 - 2017. The conclusion of this study is that cash holdings are only able to mediate the influence of corporate governance with a proxy proportion of the board independence on firm value. Directly cash holding and corporate governance with a proxy proportion of the number of independent commissionersalso influence the firm value while leverage, asymmetric information and corporate governance with a proxy percentage of the number of share ownership by managerial do not directly affect the firm value of the company. So as to increase the value of the company, companies should determine the proportion of the right amount of board independence so it can create good corporate governance that can increase value of the company.

scholarly journals Corporate Governance, Family Ownership and Firm Value: Indonesia Evidence

2020 ◽  
Vol 76 ◽  
pp. 01027
Author(s):  
Mariana Ing Malelak ◽  
Christina Soehono ◽  
Christine Eunike
Keyword(s):  
Corporate Governance ◽  
Significant Influence ◽  
Ownership Structure ◽  
Firm Value ◽  
Stock Exchange ◽  
Panel Data Analysis ◽  
Family Ownership ◽  
Managerial Ownership ◽  
Board Structure ◽  
Financial Firms

The research objective to assess the influence of corporate governance and family ownership on firm value non-financial firms listed in Indonesia. The board and ownership structure were representing corporate governance characteristics. The board structure consists of commissioners, directors and independent commissioners, while the structure of ownership consists of institutional, public and managerial ownership. This research used data non-financial firms listed in Indonesia Stock Exchange period 2008 to 2018. Using purposive sampling as technique’s to filter the samples and panel data analysis method. The results of research state that corporate governance (board and ownership structure) and family ownership simultaneously have a significant influence on firm value. Partially, independent commissioners, board of directors, public and institutional ownership have a significant influence on firm value. Meanwhile the board of commissioners, managerial and family ownership have no significant influence on firm value.

Cash Holdings and Corporate Governance

2020 ◽  
pp. 133-161
Author(s):  
Elif Akben-Selcuk ◽  
Pinar Sener
Keyword(s):  
Corporate Governance ◽  
Cash Flow ◽  
Linear Relation ◽  
Cash Holdings ◽  
Family Ownership ◽  
Board Structure ◽  
Factors Affecting ◽  
Cash Reserves ◽  
Nonfinancial Firms ◽  
Corporate Cash Holdings

This chapter investigates the empirical factors affecting corporate cash holdings with special emphasis on corporate governance variables for a sample of Turkish-listed nonfinancial firms over the period 2006 to 2010. The findings reveal a significant non-linear relation between family ownership and cash holdings. In addition, while board structure does not significantly affect the level of cash holdings, tunneling increases cash reserves of firms. Furthermore, the results indicate that cash flow, leverage, other liquid assets that can be used as cash substitutes, the degree of tangibility of assets, and firm size are important in determining cash holdings among Turkish companies.

scholarly journals The Impact of Board Independence, Gender Diversity and Nationality Diversity on Firm Performance

2021 ◽  
Vol 16 (1) ◽  
pp. 323-346
Author(s):  
Aftab Mohd Idris ◽  
◽  
Ousama A. A. ◽  
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Financial Market ◽  
Stock Exchange ◽  
Gender Diversity ◽  
Listed Companies ◽  
Board Independence ◽  
Board Structure ◽  
The Impact ◽  
Nationality Diversity

This study aimed to examine the relationship between board structure and firm performance measured by return on equity (ROE) and return on asset (ROA). 42 firms listed on the Qatar Stock Exchange (QSE) in 2018 were examined, using regression analysis. The study found that gender diversity (i.e., female directors on the board) had a positive significant relationship with firm performance in both measures, i.e., ROE and ROA. In addition, only board meeting and non-executive directors had significant relationships with firm performance measured by ROA. The findings of the study have some practical implications for some stakeholders, such as listed companies in Qatar and the Qatar Financial Market Authority. The Qatari listed companies will be able to understand the impact of board structure and the complementary benefits that may affect firm performance and thus strengthen the function of their boards. The Qatar Financial Market Authority will be able to understand the current practices of the corporate governance (CG) code; its strengths and weakness. Hence, it will be able to improve the code in order to overcome the weaknesses and strengthen good practices. Keywords: corporate governance, board independence, gender diversity, nationality diversity, firm performance

Tradeoffs in Corporate Governance: Evidence From Board Structures and Charter Provisions

2011 ◽  
Vol 01 (04) ◽  
pp. 667-705 ◽  
Author(s):  
Stuart L. Gillan ◽  
Jay C. Hartzell ◽  
Laura T. Starks
Keyword(s):  
Corporate Governance ◽  
Corporate Control ◽  
Board Independence ◽  
Governance Structures ◽  
Board Structure ◽  
System Of Equations ◽  
Costs And Benefits ◽  
Market For Corporate Control ◽  
Monitoring Mechanism ◽  
Three Stage Least Squares

We provide arguments and present evidence that corporate governance structures are composed of interrelated mechanisms, which are in turn endogenous responses to the costs and benefits firms face when they choose those mechanisms. Examining board structures and the use of corporate charter provisions in a sample of more than 2,300 firms over a four-year period, we find that firms cluster in their use of governance mechanisms. In particular, the set of charter provisions that firms use, as measured by the Gompers et al. (2003) G Index, is associated with board structure, with the laws of the state in which the firm is incorporated, and with firm and industry characteristics. We also find that some governance structures appear to serve as substitutes. Specifically, firms that have powerful boards (as measured by board independence) also have the greatest number of charter provisions, suggesting that the market for corporate control is less effective as a monitoring mechanism for these firms. In contrast, firms that have less powerful boards tend to have few charter provisions, suggesting that the market for corporate control plays a greater monitoring role at such firms. To address potential endogeneity issues, we employ three-stage least squares analysis to estimate these relationships within a system of equations. Our results from this analysis are consistent with the hypothesis that powerful boards serve as a substitute for the market for corporate control. Finally, our findings suggest that causality runs from the board to the choice of charter provisions, but not vice versa.

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