The Impact of Corporate Governance on Firm Performance: A Case Study of Property, Real Estate and Building Construction’s Listed Firm in the Indonesian Stock Exchange

Corporate governance is the system of rules, practices and method by that business corporations are directed and controlled. The aim of this research is to examine the impact of the corporate governance on the financial performance of the enlisted cement industry on the Pakistan Stock Exchange from the year 2013-17. This research is a â€œquantitative researchâ€ which focuses on numbers and results based on empirical analysis of actual data and logic. Ten out of seventeen cement firms listed at PSX from the period 2013-17 are selected as sample of the study. Data was collected from documents and records. Descriptive statistics, Pearsonâ€™s correlation and multiple regressions were used for data analysis. The results showed that there is no significant relationship between leverage and firm performance, the board structure has no significant relationship with firm performance, and firm size has an insignificant relationship with firm performance. The results however suggested that ownership structure has significant relationship with firm performance. The future investors in cement industry of Pakistan must consider above factors before investments. This study helps shareholders and management in decision making about the effect of ownership structure on firm performance and how these can change ownership structure. This study helps students to gain knowledge and understanding about good corporate governance and its impact on firm performance. It will also help them to go through the annual reports of companies and to analyse the financial statements so that they could learn how to analyse the performance of the firm in terms of ROE. Moreover, the study would also be a direction for future researchers and students to further add value to the subject of corporate governance and firm performance.

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CORPORATE GOVERNANCE UNDER MULTI- THEORETICAL PERSPECTIVE

IBT Journal of Business Studies ◽

10.46745/ilma.jbs.2016.12.02.05 ◽

2016 ◽

Vol 12 (2) ◽

Author(s):

Muhammad Hassan ◽

Keyword(s):

Corporate Governance ◽

Firm Performance ◽

Stock Exchange ◽

Structural Characteristics ◽

Theoretical Perspective ◽

Empirical Literature ◽

Data Set ◽

Structural Variables ◽

Using Data ◽

The Impact

This study examines the impact of corporate governance reforms (SECP code in Pakistan) on board structural characteristics, board roles and firm performance. It uses an exclusive balanced panel data set of 200 companies listed on Karachi Stock Exchange. The study contributes to a sparse empirical literature on boards using data from Pakistan via multi-theoretic perspective to prove that if the boards’ monitoring and resource provision roles are strengthened through board restructuring, the financial performance of the organization will be strengthened. The main findings of the study indicate that the mediated relationship between board structural variables and firm performance is stronger. The study concludes that overall companies adopted a box-ticking approach for reporting corporate governance.

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The Effect of IAS-24 Disclosures on Governance Mechanisms and Ownership Structures in Pakistan

Lahore Journal of Business ◽

10.35536/ljb.2016.v5.i1.a2 ◽

2016 ◽

Vol 5 (1) ◽

pp. 15-36

Author(s):

Abdul Rafay Abdul Rafay ◽

Ramla Sadiq ◽

Mobeen Ajmal

Keyword(s):

Corporate Governance ◽

Firm Performance ◽

Financial Reporting ◽

Negative Impact ◽

Positive Impact ◽

Stock Exchange ◽

Institutional Ownership ◽

Governance Mechanisms ◽

Ownership Structures ◽

The Impact

IAS-24 of the International Financial Reporting Standards focuses on the concept and disclosures of related party transactions (RPTs) for a reporting entity. This study examines the interrelationship between RPTs (as disclosed under IAS-24), agency theory, ownership structures and firm performance. Our sample includes nonfinancial companies indexed by the KSE-100 of the Pakistan Stock Exchange during 2006–15. To run the regression models, we determine the regression assumptions, normality, heteroskedasticity, autocorrelation and multicollinearity. We investigate the impact of different RPTs, including cash inflows and outflows, whereas other studies generally look at the impact of RPTs on firm performance in totality. The empirical analysis suggests that institutional ownership has a positive, significant impact on firm performance. Related party purchases have a significant, negative impact on performance, resulting in the expropriation of institutional ownership. RPTs that generate revenues have a significant, positive impact on performance, such that institutional ownership has a propping-up effect with respect to the related parties. In practice, institutional ownership leads to strong corporate governance and contributes to firm performance. While other studies find family ownership responsible for the expropriation effect, we argue that institutional ownership has a propping-up and expropriation effect on related parties. Our study also suggests that certain ownership structures lead to weaker corporate governance mechanisms, resulting in greater agency problems. This, in turn, badly affects company performance and leads to the exploitation of minority shareholders.

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Evaluating the Impact of Corporate Governance on Firm Performance Using Board Index

10.20944/preprints201608.0096.v1 ◽

2016 ◽

Author(s):

Basil Okoth ◽

Metin Coşkun

Keyword(s):

Corporate Governance ◽

Firm Performance ◽

Positive Relationship ◽

Stock Exchange ◽

Negative Relationship ◽

Vital Role ◽

Outside Directors ◽

General Business ◽

The Impact

In 2013, the CMA at the İstanbul Stock Exchange increased the weight assigned to the Board of Directors component of its Corporate Governance Index to 35% from the previous 25%. Interpreting this as a recognition of the increasing vital role of the board, this study seeks to enhance the work of Abdıoğlu and Kılıç (2015) by putting more focus on the role of women in the boards and the effect of the busy chairman as well as the presence of outside directors on the effectivity of the Board. (The general business structure is associated with family owned groups and holdings which results into a network of intertwined board membership and cases of multiple directorship where, one board chairman can hold the same position or any directorship in as many as ten firmshence the busy chairman). I employ a different method of evaluating performance (EVA) together with the accounting measures of ROE and ROA (as opposed to the overused Tobin’s Q), which I regress against the Board Index to be created. The focus is on firms on the BIST 100 index (excluding financial) between 2009 and 2013. The results reveal that the BINDEX has a significant and positive relationship with firm performance as measured by EVA. A second model reveals no relationship between the BINDEX and firm ROA, similar to the results of Kiliç and Abdioğlu (2015). ROA however has a positive relationship with the proportion of female directors in the board, as earlier reported by LückerathRovers (2013). Another model using ROE as the proxy for performance registers a significant negative relationship with the index. The contradiction obtained in the results from these three models underscore the importance choosing the right methods when estimating the performance of a firm.

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Corporate Governance, Intellectual Capital and Firm Performance

Research in Applied Economics ◽

10.5296/rae.v8i1.8675 ◽

2016 ◽

Vol 8 (1) ◽

pp. 17 ◽

Cited By ~ 5

Author(s):

Abdul Basyith

Keyword(s):

Corporate Governance ◽

Firm Performance ◽

Intellectual Capital ◽

Stock Exchange ◽

Developed Countries ◽

Panel Method ◽

Current Evidence ◽

Listed Firms ◽

Good Corporate Governance ◽

The Impact

This paper investigates the impact of corporate governance and intellectual capital on firm performance in Indonesian-listed firms. Using a balanced-panel of 120 Indonesian-listed firms, this study employs a balanced panel method, using non linier IV 2SLS and non linier IV-GMM. All variables, apart from commissioners, directors, education and capital employed efficiency exhibit a non significant impact on Tobins’Q, while all variables are statistically non significant for ROA. The findings are less conclusive than that of previous studies in developed countries. This study provides recent evidence for the corporate governance and intellectual capital in affecting firm peformance of listed-firms in Indonesian Stock Exchange. Though most listed-firms in Indonesia is owned by group or family, the appointment should be strictly complied to the regulations set, as current evidence indicates that independent commissioners and directors have no impact on firm performance, hence an awareness of good corporate governance conduct should be massively disseminated.

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

Corporate Ownership and Control ◽

10.22495/cocv11i1c7art6 ◽

2013 ◽

Vol 11 (1) ◽

pp. 691-705 ◽

Cited By ~ 8

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

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Real Earnings Management, Firm Performance, and Corporate Governance Mechanism

Conference Series ◽

10.34306/conferenceseries.v3i2.576 ◽

2021 ◽

Vol 3 (2) ◽

pp. 39-49

Author(s):

Maria Stefani Osesoga ◽

Rosita Suryaningsih ◽

Febryanti Simon

Keyword(s):

Corporate Governance ◽

Firm Performance ◽

Earnings Management ◽

Cash Flow ◽

Stock Exchange ◽

Real Earnings Management ◽

Governance Mechanism ◽

Discretionary Accrual ◽

Corporate Governance Mechanism ◽

The Impact

The purpose of this study is to analyze the impact of real earnings management on firm performance and the impact of corporate governance as an intervening variable in the relationship between real earnings management and firm performance. The object are companies include in Corporate Governance Perception Index during 2015-2019 and listed in Indonesia Stock Exchange (IDX) and analyzed by using path analysis method. Real earnings management has a significant effect on the firm performance. Furthermore, with corporate governance mechanism within the company, real earnings management significantly affect firm performance. This research is meaningful, but has limitations. The result cannot be generalizing because the sample only companies that listed in CGPI and IDX period 2015-2019. The research implication are as follows: top level management should be cautious about credit policy, cash flow from operation, discretionary expenditures, and production. Earnings management is one of variable that the most prevalent in recent studies but the proxy for earnings management in the recent studies used discretionary accrual. In this research, real earnings management is used to indicate earnings management which measured by abnormal cash flow from operation. Thus, it may provide some contribution to the literature.

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Corporate Governance Mechanism and Firm Performance as Determinants of CEO Compensation: A Panel Data Analysis of Pakistani Listed Companies

Journal of Global Economy ◽

10.1956/jge.v8i4.262 ◽

2013 ◽

Vol 8 (4) ◽

pp. 307-314

Author(s):

Zahid Irshad Younas ◽

Bilal Mehmood ◽

Asal Ilyas ◽

Haseeb Asif Bajwa

Keyword(s):

Corporate Governance ◽

Firm Performance ◽

Panel Data ◽

Fixed Effects ◽

Ceo Compensation ◽

Stock Exchange ◽

Panel Data Analysis ◽

Governance Mechanism ◽

Board Size ◽

The Impact

The purpose of this study is to investigate the impact of corporate governance, firm performance on CEO compensation. More specific, firm performance, board size and audit expenditure are linked with CEO compensation. Using panel data for 151 Pakistani firms listed on Karachi Stock Exchange (KSE), fixed effects regression has been performed. The results indicate firm performance is negatively associated with CEO compensation, which hold managerial power theory. While, board size and audit expenditure showed a positive relationship with CEO compensation, which reflects the presence of human capital theory. The results of study are in line with the prior studies done on CEO compensation.

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Environmental Uncertainty and Firm Performance: The Moderating Role of Corporate Governance

Jurnal Akuntansi ◽

10.24912/ja.v24i2.690 ◽

2020 ◽

Vol 24 (2) ◽

pp. 187

Author(s):

Reyry Aprisma, Erina Sudaryati

Keyword(s):

Corporate Governance ◽

Firm Performance ◽

Stock Exchange ◽

Environmental Uncertainty ◽

Sampling Techniques ◽

Manufacturing Companies ◽

Negative Effect ◽

The Impact ◽

Moderating Role

This research aimed to examine the effect of environmental uncertainty on firm performance. This research added corporate governance as a moderating variable. The research samples were manufacturing companies listed on the Indonesia Stock Exchange for the period 2014-2018 which were selected using purposive sampling techniques. The samples analyzed were 442 company data. The result showed that environmental uncertainty has a negative effect on firm performance. The result indicated environmental uncertainty causes operating expenses to increase so that the firm performance decreases. In addition, the results showed that corporate governance reduced the effect of environmental uncertainty on firm performance. The result indicated corporate governance is able to reduce the impact of environmental uncertainty so that firm performance increases.

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