scholarly journals WHAT FACTORS PREVENT INDEPENDENT DIRECTORS FROM PROTECTING INTERESTS OF SHAREHOLDERS IN CASES OF CONFLICT OF INTEREST?

2020 ◽  
Vol 5 (3) ◽  
pp. 257-268
Author(s):  
Murad JAFARLI
Keyword(s):  
Conflict Of Interest ◽  
Independent Directors ◽  
Board Members ◽  
Agency Conflicts ◽  
Outside Directors ◽  
Publicly Traded ◽  
Senior Managers ◽  
Publicly Traded Companies ◽  
Top Executives ◽  
Personal Interests

One way to mitigate agency conflicts between shareholders and managers in publicly traded companies with dispersed ownership is supplementation of independent outside directors to the board, who can monitor the top executives and prevent them from malfeasances. However, in conflict of interest situations, independent board members are not always enabled to oppose senior managers, particularly CEOs, who put their personal interests above those of shareholders. In such cases, the efforts of independent directors to monitor managers will be unsuccessful, which, in turn, may result in the latter receiving unjustified personal benefits at the expense of shareholders. Active participation of independent directors in resolving situations where interests of these groups do not align ensures the mitigation of tension and the proper functioning of the company. Thus, the establishment of cases where independent outsiders cannot fulfill their basic duties of shielding shareholders appears to be rather a significant issue.

scholarly journals What characteristics of board of directors affect Indonesian bank performance?

2018 ◽  
Vol 6 (1) ◽  
pp. 48
Author(s):  
Stevanus Pangestu ◽  
Christiana Fara Dharmastuti
Keyword(s):  
Board Of Directors ◽  
Fixed Effects ◽  
Organizational Outcomes ◽  
Independent Directors ◽  
Board Members ◽  
Fixed Effects Model ◽  
Upper Echelon ◽  
Top Executives ◽  
Upper Echelon Theory ◽  
Foreign Directors

The sustainability of a firm is determined by the effectiveness of its board of directors. Hambrick and Mason’s Upper Echelon theory states that management characteristics could predict organizational outcomes. This study examines the effects of the characteristics of board of directors on the performance of publicly-traded banks in Indonesia. The measures of board characteristics are educational attainment, presence of independent directors, employment of foreign directors, compensation of directors, and age of directors. Our 58 firm-year observations from 2014-2015 were analyzed using fixed effects model. We find evidence that bank profitability is (i) positively affected by doctorate education of board members and (ii) negatively affected by remuneration of top executives. Based on our findings, we would suggest corporations to: comply with governmental regulations regarding the employment of independent directors, align the interest between principals and agents to eliminate agency problem, and accommodate board members with scholarships designated for academic development.

scholarly journals Corporate governance mechanisms for publicly-traded companies

2008 ◽  
Vol 5 (4) ◽  
pp. 309-314 ◽  
Author(s):  
Sean M. Hennessey
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Best Interests ◽  
Minimal Cost ◽  
Publicly Traded ◽  
Senior Managers ◽  
Compensation Plans ◽  
Publicly Traded Companies ◽  
Corporate Governance Mechanisms ◽  
The Board Of Directors

The resolution of conflicts between shareholders and managers, at minimal cost, is the goal of corporate governance. This paper discusses four mechanisms, two internal, two external, that attempt to ensure managers act in the best interests of shareholders: 1) the board of directors, 2) management compensation plans, 3) the market, and 4) takeovers. Theoretically, these four forms of corporate governance should ensure management maximizes shareholder value. But, agency costs are real for shareholders. In practice each the mechanisms may be severely limited in their ability to protect shareholders. The best protection is an independent, credible board of directors. Without good boards, shareholders are left to the mercy of the agents. In such cases, it is very difficult, and expensive, to discipline the senior managers of a publicly-traded company

scholarly journals Disharmony of Regional Head Couples (Study of Local Leadership in Central Branch 2005-2019 Period)

2021 ◽  
Vol 1 (7) ◽  
pp. 641-646
Author(s):  
Mirendy Wahyu Ferary
Keyword(s):  
Conflict Of Interest ◽  
Qualitative Method ◽  
Conflict Theory ◽  
Primary Data ◽  
Board Members ◽  
Local Leadership ◽  
Conflict Model ◽  
The Government ◽  
Personal Interests

This study provides an overview of the disharmony of the regional head pairs starting from the administrative formation of Central Bangka Regency to its third period. This study applies the conflict theory proposed by Ralf Dahrendorf who explains that the conflict of interest of each elite can be categorized as a struggle of position by the group that owns the authority position. The disharmony of the regional head pairs of Central Bangka is included in the authoritative conflict model that causes the occurrence of latent conflict between both of them to compete for position structure. This study used a descriptive qualitative method with the primary data obtained from the interview results with the informants including related officials, board members, civil servants, and the regional head pairs. The results of this study portray that the obtained data provide an overview regarding the conflict potential that results in the limited access for the vice-regents to perform government duties that have been regulated by law. Therefore, public and personal interests can no longer be distinguished since both interests are related to the matter of competition or race for the local election. In other words, the regents have another underlying interest to limit the vice-regents’ access to perform the government duties. Meanwhile, the last period has a different case regarding the authority role of the vice-regent to run the government since the regent concentrates individually more on his duties.

scholarly journals Board Composition, Corporate Performance, and the Cadbury Committee Recommendation

2007 ◽  
Vol 42 (3) ◽  
pp. 535-564 ◽  
Author(s):  
Jay Dahya ◽  
John J. McConnell
Keyword(s):  
Stock Prices ◽  
Corporate Performance ◽  
Peer Group ◽  
Operating Performance ◽  
Board Composition ◽  
Outside Directors ◽  
Publicly Traded ◽  
Publicly Traded Companies ◽  
The World

AbstractDuring the 1990s and beyond, countries around the world witnessed calls and/or mandates for more outside directors on publicly traded companies' boards even though extant studies find no significant correlation between outside directors and corporate performance. We examine the connection between changes in board composition and corporate performance in the U.K. over the interval 1989–1996, a period that surrounds publication of the Cadbury Report, which calls for at least three outside directors for publicly traded corporations. We find that companies that add directors to conform with this standard exhibit a significant improvement in operating performance both in absolute terms and relative to various peer group benchmarks. We also find a statistically significant increase in stock prices around announcements that outside directors were added in conformance with this recommendation. We do not endorse mandated board structures, but the evidence appears to be that such a mandate is associated with an improvement in performance in U.K. companies.

Boards of directors in Russian publicly traded companies: the gender aspect

2018 ◽  
pp. 142-155 ◽  
Author(s):  
T. A. Garanina ◽  
A. A. Muravyev
Keyword(s):  
Boards Of Directors ◽  
Company Performance ◽  
Corporate Boards ◽  
Publicly Traded ◽  
Publicly Traded Companies ◽  
Representation Of Women ◽  
Female Directors ◽  
Female Director ◽  
Gender Aspect ◽  
Longitudinal Dataset

This article studies the gender composition of corporate boards of Russian companies, including its relation to company performance. The analysis is based on a unique longitudinal dataset of virtually all Russian companies whose shares were traded on the stock market in 1998-2014. It shows a relatively small representation of women, just 12% of all the seats, while about 40% of the companies did not have any female director. At the same time, both the share of companies that appoint female directors and the share of female directors on boards show a clear upward trend. The econometric analysis suggests a positive link between the presence of female directors on boards and company performance, especially when firms appoint several, rather than one, female directors.

HUBUNGAN BOARD DAN KOMITE AUDIT TERHADAP MANAJEMEN LABA

2010 ◽  
Author(s):  
Fivi Anggraini
Keyword(s):  
Corporate Governance ◽  
Moral Hazard ◽  
Earnings Management ◽  
Conflict Of Interest ◽  
Significant Relationship ◽  
Stock Exchange ◽  
Earning Management ◽  
Independent Directors ◽  
Relationship Of ◽  
The Relationship

Earnings management is the moral hazard problem of manager that adses because of the conflict of interest between the manager as agent and the stakeholder and the owner as principal. The behavior of earnings management will immediately influence the reported earning. The aims of this research at examining the relationship of board and audit committe to earnings management. The samples of this research is all of companies member Corporate Governance Perception Index (CGPI) in the years of 2003-2006 which were listed in Jakarta Stock Exchange. The results of this study show that (1) the proportion of independent directors on the board had not significant relationship to earning management, (2) competence of independent directors on the board had not significant relationship to earning management, (3) the size of board had significant relationship to earning management, (4) the proportion of independent directors on the audit committe had not significant relationship to earning management, and (5) competence of members of the audit committe had significant relationship to earning management.

The Market Value and Reputational Effects from Lost Confidential Information

2015 ◽  
Vol 5 (4) ◽  
Author(s):  
Joseph K. Tanimura ◽  
Eric W. Wehrly
Keyword(s):  
Information Security ◽  
Market Value ◽  
Direct Costs ◽  
Publicly Traded ◽  
Confidential Information ◽  
Publicly Traded Companies ◽  
Security Breaches ◽  
Customer Information ◽  
Employee Information

According to many business publications, firms that experience information security breaches suffer substantial reputational penalties. This paper examines incidents in which confidential information, for a firms customers or employees, is stolen from or lost by publicly traded companies. Firms that experience such breaches suffer statistically significant losses in the market value of their equity. On the whole, the data indicate that these losses are of similar magnitudes to the direct costs. Thus, direct costs, and not reputational penalties, are the primary deterrents to information security breaches. Contrary to many published assertions, on average, firms that lose customer information do not suffer reputational penalties. However, when firms lose employee information, we find significant reputational penalties.

Higher Vocational Education in China in Response to the Changing Needs of the Labour Market beyond 2000

1996 ◽  
Vol 10 (4) ◽  
pp. 261-263 ◽  
Author(s):  
Eleanor Cheung
Keyword(s):  
Economic Growth ◽  
Vocational Education ◽  
Educational Institutions ◽  
Open Door ◽  
Higher Vocational Education ◽  
Senior Managers ◽  
Republic Of China ◽  
Top Executives ◽  
Management Personnel ◽  
Education In China

The People's Republic of China (PRC) announced its ‘Open Door’ in 1980. Foreign investors have started up their enterprises in China largely with the help of imported expertise — top executives, management personnel, and even technicians in these companies are, with the exception of a few senior managers assigned by Chinese partners, very predominantly expatriates. In addition, educational institutions in the PRC have long been criticized for their failure to provide expertise for economic growth. Reforms in higher vocational education are needed in order for China to cope with her economic growth beyond 2000.

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