Impact of Corporate Governance on the Cash Holding of the Firms: An Empirical Study of Indian Manufacturing Sector

GIS Business ◽  
2017 ◽  
Vol 12 (4) ◽  
pp. 47-52
Author(s):  
Karam Pal Narwal ◽  
Sonia Jindal
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Manufacturing Sector ◽  
Control Variable ◽  
Cash Holding ◽  
Executive Directors ◽  
Control Effect ◽  
Board Size ◽  
Indian Manufacturing Sector ◽  
The Impact

The paper empirically examines the impact of corporate governance on the cash holding of the firms. The components of corporate governance are measured by board size, board meeting, audit committee members, directors remuneration and non executive directors and the cash holding is measured with the log of average cash and size is taken as control variable for the control effect on the dependent variables. Moreover, correlation and panel regression model were employed to examine the relationship between the corporate governance and cash holding. Empirical data was collected from 96 firms over the period of 2004-05 to 2013-14. The results show that directors remuneration and the number of audit committee members positively influence the cash holding and the board size also positively influences the cash holding whereas, the non executive directors and the board meetings do not play any role in enhancing the cash holding.

scholarly journals Impact of Corporate Governance on Financial Performance: Karachi Stock Exchange, Pakistan

2016 ◽  
Vol 6 (2) ◽  
pp. 401 ◽  
Author(s):  
Aon Waqas Awan ◽  
Javed Ahmed Jamali
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Audit Committee ◽  
Stock Exchange ◽  
Profit Margin ◽  
Audit Committees ◽  
Board Size ◽  
Good Decision ◽  
Return On Equity ◽  
The Impact

The aim of the research is to understand the impact of corporate governance on financial performance of listed companies on Karachi Stock Exchange Pakistan. Data was collected from forty two companies from different sectors like, insurance, banking, investment banking, and sugar industries. Study includes variables like profit margin & return on equity as a dependent (profitability) and board size, audit committee, annual general meetings & chief executive office (corporate governance). Using Pooled OLS, the result of the study proved those board size and audit committees have positive relationship with Profit margin and Return on Equity, if any independent variable changes it also stimulus the positively changing impact on Return on Equity (ROE) and Audit Committee (AC). This research offers imminent guidelines to the policy and decision makers in any type of firms to take good decision to set their firms hierarchy system.

scholarly journals The impact of the supervisory board on bond ratings of non-financial companies

2020 ◽  
Vol 17 (1) ◽  
pp. 15-23
Author(s):  
Zainal Abidin Sahabuddin ◽  
Bram Hadianto
Keyword(s):  
Audit Committee ◽  
Control Variable ◽  
Supervisory Board ◽  
Bond Market ◽  
Probit Regression ◽  
Board Size ◽  
Bond Ratings ◽  
Bond Rating ◽  
High Bond ◽  
The Impact

Issuing bonds is one of the alternative ways for non-financial companies to get money from the public besides borrowing money from banks. Compared with getting money banks, obtaining money from the bond market is slightly economical because the companies are not essential to borne the intermediation cost anymore. As a consequence, the companies in the bond market will get the assessment from the appointed agency. Furthermore, the rating of bonds will determine their reputation. Mentioning the literature review, the bond ratings are affected by the features of the supervisory board: size, independence, and audit committee. Therefore, this research intends to attain two goals. Firstly, it aims to prove and analyze the impact of the supervisory board size and independence, as well as the audit committee size on the company’s possibility to get a high bond rating with profitability as the control variable. Secondly, it intends to know the accuracy rate of grouping the company bond ratings through the classification matrix.The population originates from the non-financial companies. The total samples are determined by the Slovin formula with a boundary of the fault of 10%. Based on this formula, the total samples are 36 companies. Furthermore, they are randomly grabbed from the population. The ordered probit regression model and the classification matrix are utilized to analyze the data. Based on the data analysis, this research finds out that the supervisory board size and independence, the audit committee size, and profitability positively affect the bond ratings. It means that the number of the commissioner board and the members of the audit committee have to be added until achieving the maximum level to monitor the performance of the directors so that the company can reach a high bond rating. To sum up, board governance is effective in improving the company’s bond rating.

scholarly journals Corporate Governance and Financial Performance of Money Deposit Banks in Nigeria

2021 ◽  
Vol 7 (1) ◽  
pp. 75-98
Author(s):  
Bilqis Bolanle Amole ◽  
Ik Muo ◽  
Kamaldeen A. Lawal
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Board Of Directors ◽  
Audit Committee ◽  
Negative Impact ◽  
Secondary Data ◽  
Least Square ◽  
Executive Directors ◽  
Study Results ◽  
The Impact

Purpose. The main cause of distress in the majority of Nigerian banks is poor corporate governance in the country. Corporate governance (CG) is a contemporary subject attracting the consideration of the corporate world, practitioners, consultants, academia and society at large. As a result, this study explores the financial performance (FP) of money deposit banks (MDBs) in Nigeria as a result of corporate governance put in. It went on to investigate the impact of board size and composition, as well as the audit committee, on bank financial performance. Methodology. A descriptive design method was adopted, while secondary data in the form of yearly financial reports of banks selected for the study were obtained and relevant documents via electronic search of databases. Descriptive statistics were used in analyzing the data and an econometric model of panel least square (PLS) regression test was employed for the study. Findings and Implication. The findings affirmed that the correlation between size of board of directors and bank performance was significant, however negative. The results of the study show that the board of directors (BOD) composition significantly influences the FP of MDBs. The study results further reveal that the correlation between size of the audit committee (AC) and FP of MDBs is significant and also a negative one. As a result, based on the empirical findings of the study, it is concluded that CG has a statistically significant influence on the FP of Nigeria’s listed money deposit banks. Mechanisms such as the large size and composition of the board as well as the size of the audit committee encourage a negative impact on the FP. In line with the foregoing, the study recommended that an effort be made to improve CG, in the sense that the number of directors on board should be kept to a desirable level, and that the ratio of executive directors to non-executive directors, as well as the size of the audit committee, is kept at an optimal level.

scholarly journals The Impact Of Corporate Governance on The Financial Performance in Malaysia

2021 ◽  
Vol 5 (1) ◽  
pp. 41-58
Author(s):  
NURFATANAH ABDULLAH
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Firm Size ◽  
Audit Committee ◽  
Committee Meeting ◽  
Board Size ◽  
Firm Financial Performance ◽  
Normality Test ◽  
Lm Test ◽  
The Impact

The aim of this study is to investigate the relationship between corporate governance and firm financial performance in Malaysia. This study is mainly focusing on four sections of corporate governance which are board independent, board size, the frequency of audit committee meeting and firm size. The population of this study is Top 30 firms in Malaysia that are public listed in Bursa Malaysia while for the period, this study focusses on year 2016 to 2019 which is 4 years. This study uses Return on Assets (ROA) to measure the firm effectiveness and efficiency. As for statistical analysis, this study uses E-View to run all the test such as Breusch-Godfrey Serial Correlation LM Test, Hausman Test, Ordinary Least Squared (OLS) method, Autocorrelation, Multicollinearity and Normality Test. According to the results of the analysis, board independent has positive insignificant relationship with firm performances while board size and firm performances have negative and insignificant relationship. As for the frequency of audit committee meeting and firm size, the results display that both variables have negatively significant relationship with the performances of the firm. Apart from that this study use two theory which are Prospect Theory and Agency Theory.

scholarly journals The Nexus Between Corporate Governance and Firm Performance During COVID-19 Pandemic in Sri Lanka

2021 ◽  
Vol 3 (1) ◽  
pp. 81-88
Author(s):  
M. Farwis ◽  
M.M Siyam ◽  
MCA. Nazar ◽  
MACF. Aroosiya
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Sri Lanka ◽  
Audit Committee ◽  
Gender Diversity ◽  
Corporate Management ◽  
Unique Contribution ◽  
Quantitative Methodology ◽  
Board Size ◽  
The Impact

The COVID-19 has redefined the world operation. Specially COVID-19 pandemic shows a higher impact on the business field. Accordingly, this study aims to find the impact of corporate governance on firm performance during the Covid-19 pandemic in Sri Lanka. The quantitative methodology deployed and secondary data was collected from 27 companies listed in Colombo Stock Exchange (CSE) for 209 and 2020. The results depicted that pandemic has affected the Corporate Governance (CG) measures unfavorably. Further, board size and qualification of director’s show a positive association between firm performance meantime, NED proportion, Gender diversity, Board meeting, Audit committee size and Audit committee meeting show a negative association between firm performance. It clearly reveals that COVID-19 severely impact the corporate governance attributes and firm performance. The corporate management, regulators, and investors must consider the board’s board size and qualification to recover the corporate sector in any crisis. This study provides a unique contribution to the literature of COVID-19 and firm performance in emerging economies. 

scholarly journals The Impact of Corporate Governance on Banks Profitability in Nigeria

2021 ◽  
Vol 5 (1) ◽  
pp. 18-28
Author(s):  
Foluso Ololade Oluwole
Keyword(s):  
Corporate Governance ◽  
Significant Relationship ◽  
Commercial Banks ◽  
Regulatory Authority ◽  
Audit Committee ◽  
Secondary Data ◽  
Board Size ◽  
Independent Variables ◽  
Earnings Per Share ◽  
The Impact

The major concern of regulatory authority overtime is on the need to enhance sound practices among banks through the improvement of corporate governance; therefore this research examined the effect of corporate governance on commercial banks profitability in Nigeria. The study covered the period of 2009 to 2018 and secondary data were obtained from the audited financial statement of the selected banks which are Guarantee Trust Bank Nigeria PLC, Zenith Bank PLC and First Bank of Nigeria PLC. Fixed effect regression technique was used to examine the effect of Audit Committee Size (ACS), Board Size (BS), Audit Committee Number of Meeting (ACNM) and Board Number of Meeting (BNM) on earnings per share (EPS) of the selected banks. The independent variables results showed a positive and significant relationship on Earnings per share of the banks with coefficient and probability(prob.) value of the variables as follows: audit committee size(0.6241;0.0109), board size(0.4349;0.007) and board number of meeting(0.0356) had positive and significant effect on earnings per share of the banks respectively. However, negative and significant relationship was established between audit committee number of meeting and earnings per share with a coefficient and probability value of -1.0781 and 0.0001 respectively. With the F-Stat. of 2.84 and a prob. of 0.025, all the null hypotheses were rejected and the alternative hypotheses accepted, indicating that all the independent variables significantly affect the dependent variable. The study concluded that corporate governance enhances commercial banks performance in Nigeria. It therefore recommended that attention should be paid to the audit committee size, board size and board number of meetings since an increase in them leads to increase in the earnings per share while the audit committee number of meetings should be reduced as it affects the earnings per share negatively. The regulatory authority should formulate strong policy frameworks that would ensure that commercial banks constantly comply with corporate governance standard set by the authority.

scholarly journals The impact of corporate governance elements on environmental reporting : the case of public listed companies in Malaysia

2014 ◽  
Vol 11 (1) ◽  
pp. 75
Author(s):  
Mohd Rashdan Sallehuddin
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Listed Companies ◽  
Annual Reports ◽  
Executive Directors ◽  
Government Ownership ◽  
Environmental Reporting ◽  
Female Director ◽  
The Impact ◽  
The Relationship

The paper aims to examine the impact of the relationship between the elements of corporate governance and environmental reporting of public listed companies in Malaysia. This study adopts a cross sectional analysis by examining the 2010 annual reports of 254 public listed companies and using content analysis as the method to measure the extent of environmental reporting and compared with various corporate governance measures. Regression analysis was used to examine the relationship between Corporate Environmental Reporting (CER) and independent variables of Corporate Governance (CG) namely independent non-executive directors, audit committee composition, female director, duality, managerial and government ownership. Analysis found a significant relationship between the extents of environmental reporting with government ownership. In contrast, the extent of CER is insignificant with relation of independent non-executive directors, audit committee composition, female director, duality and managerial ownership. The results could be useful to provide evidence to regulatory bodies to look further and to identify the elements of corporate governance that will enhance the CER.

scholarly journals Pengaruh atribut tata kelola dan karakteristik perusahaan terhadap kebijakan dividen pada perusahaan di BEI

2021 ◽  
Vol 17 (3) ◽  
pp. 196-215
Author(s):  
Serly Serly ◽  
Mery Susanti
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Dividend Policy ◽  
Stock Exchange ◽  
Independent Director ◽  
Women Directors ◽  
Firm Characteristics ◽  
Board Meeting ◽  
Board Size ◽  
The Impact

The dividend was a kind of return from portfolio investment. Firms in making dividend payment decisions are influenced by several motives. The main topic of the research was to determine the impact of corporate governance and firm characteristics on the decision of dividend policy. In here, corporate governance was focused on board characteristics consisting of board size, independent director, board meeting frequency, woman director, and audit committee size. While the firm characteristics were measured by size, profitability (ROA), and leverage. The research used companies data collected from Indonesia Stock Exchange. Companies data must available from the period 2015-2019 and resulted in 2.175 sample data. The research used the panel regression method. The result of the research proved that board size and profitability (ROA) significantly positively influenced the dividend policy. Board meeting frequency showed a positive effect on dividend per share, but no effect on dividend per asset. Otherwise, women directors and leverage reflected a significant negative effect with dividend per assets, but an insignificant effect on dividend per share. On the other hand, firm size, independent director, and audit committee size did not have any significant impact on dividend policy decisions.

scholarly journals PENGARUH EARNINGS MANAGEMENT TERHADAP FUTURE PROFITABILITY TERKAIT DENGAN OWNERSHIP STRUCTURE, FIRM SIZE DAN CORPORATE GOVERNANCE PRACTICES

Media Ekonomi ◽  
2017 ◽  
Vol 20 (2) ◽  
pp. 55
Author(s):  
Ikhsan Yudha Asmara ◽  
Felizia Arni Rudiawarni
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Ownership Structure ◽  
Audit Committee ◽  
Audit Quality ◽  
Stock Exchange ◽  
Manufacturing Sector ◽  
The Future ◽  
Governance Practices ◽  
The Impact

This study aims to determine how the effect of earnings management on future profitability business entity engaged in the manufacturing sector listed on the Indonesia Stock Exchange, and how the effects of the ownership structure, company size, and the practice of corporate governance (proxied by the audit quality, independent board member and audit committee) regarding the impact of earnings management on the future profitability of manufacturing sector enterprises listed on the Stock Exchange. This study used a sample of manufacturing sector companies listed on the Indonesia Stock Exchange in the period 2008-2010. The samples used in this study were 262 observations. The sampling method used was probability sampling - judgment / purposive sampling. Independent variables used in this study are earnings management (proxied by the CFO, NDAC, and DAC), ownership structure (proxied by DFAM and INST), firmsize, and corporate governance practices (proxied by the AUDIT, BOD, and AUDCOM). The dependent variable in this study is the future profitability proxied by the variable "and CFOT earnt + 1 + 1. The results of this study were (1) earnings management proved to have a significant impact on the future profitability of manufacturing sector enterprises. The influence that appears different depending on the proxy used; (2) The ownership structure did not have an influence on the behavior of earnings management related to future profitability of manufacturing sector enterprises; (3) firmsize not affect earnings management behaviors related to future profitability of manufacturing sector enterprises; overall corporate governance practices are not effective in influencing the behavior of earnings management related to the future profitability of manufacturing sector enterprises. Keywords  :   future profitability, earnings management, ownership structure, corporate governance practice

scholarly journals Voluntary audit committee characteristics in financially distressed and healthy firms: a study of the efficacy of the ASX corporate governance council recommendations

2014 ◽  
Vol 12 (1) ◽  
pp. 308-321 ◽  
Author(s):  
Seema Miglani
Keyword(s):  
Corporate Governance ◽  
Financial Distress ◽  
Audit Committee ◽  
Audit Committees ◽  
Executive Directors ◽  
Financial Expert ◽  
Financially Distressed ◽  
The Impact

The aim of this paper is to address the impact of certain audit committee characteristics identified by the ASX Corporate Governance Council on improving the effectiveness of corporate audit committees on the likelihood of financial distress. Using a sample of 155 listed Australian firms, this paper finds support for the argument that the adoption of some, but not all, recommendations concerning the formation of an audit committee is beneficial for firms, which in this paper is reflected in a reduced likelihood of financial distress. In particular, the presence of a financial expert and solely non-executive directors on audit committee are associated with lower financial distress likelihood. By contrast, chairperson duality is significantly positively related to the probability of financial distress

Sign in / Sign up

Export Citation Format

Share Document