Corporate Governance, International Diversification and Organizational Performance: A Study on Malaysian Property Industry

Currently, the housing sector is one of the Malaysian government’s main concerns as it is continuously facing various problems. This sector is endlessly struggling with enormous difficulties that have caused negative implications to the industry’s performance. Since a well governed corporate governance is said to be associated with better company performance, a number of corporate governance mechanisms are being employed in this study so as to test on their impact on the firms’ performance. Independence of board of directors (BOD) and audit committee (AC) members, non-duality and frequency of board meetings held per annum are among the CG mechanisms tested in relation to the firms’ performance, Tobin’s Q. The three-year period (2013-2015) data is taken from the annual reports and Thomson Reuters Data stream for all the companies in the property industry in Bursa Malaysia. Number of board meetings, CEO/Chairman non-duality, Independence of BOD members. These empirical evidences from this study would enhance the importance of incorporating corporate governance mechanisms and international diversification in relation to organizational performance for property industry.

The association between disclosure of forward-looking information and corporate governance mechanisms

Managerial Auditing Journal ◽

10.1108/maj-01-2014-0986 ◽

2014 ◽

Vol 29 (7) ◽

pp. 578-595 ◽

Cited By ~ 21

Author(s):

Basil Al-Najjar ◽

Suzan Abed

Keyword(s):

Corporate Governance ◽

Audit Committee ◽

Annual Reports ◽

Governance Mechanisms ◽

Cross Sectional ◽

Content Type ◽

Computerized Content Analysis ◽

Forward Looking

Purpose – This paper aims to witness the importance of corporate governance mechanisms and investigates the relationship between the quality of disclosure of forward-looking information in the narrative sections of annual reports and the governance mechanisms for non-financial UK companies. Design/methodology/approach – Computerized content analysis using QSR NVivo 8 is used to measure the extent of forward-looking information in the narratives of the annual reports for 238 companies listed in the London Stock Exchange. Cross-sectional regression analysis is used to examine the impact of the corporate governance mechanisms on forward-looking information. Findings – The results show that board size and the independence of the audit committee are associated with the level of voluntary disclosure of forward-looking information. Research limitations/implication – One limitation of this study is that in controls for the effect of the financial crisis period, by selecting a representative year for a five-year period, 2006. The authors argument in using this year is based on the fact that the main variables of interest do not vary significantly with time, the cross-sectional analysis of the selected period will provide a fair view of the last five year-period. Practical implications – The authors report the importance of some governance practices in the UK, such as the role of the board members as well as the importance of audit committee independence. Originality/value – This paper contributes to the literature by using computerized content analysis to examine the relation between corporate governance mechanism and disclosure quality of forward-looking information using sample of companies before financial crisis period. The authors also examine governance mechanisms that are under-researched in the field of forward-looking disclosure.

Ownership structure and audit committee effectiveness: evidence from top GCC capitalized firms

International Journal of Islamic and Middle Eastern Finance and Management ◽

10.1108/imefm-03-2018-0102 ◽

2019 ◽

Vol 12 (3) ◽

pp. 407-425 ◽

Cited By ~ 1

Author(s):

Mahfoudh Abdulkarem Al-Musali ◽

Mohammed Helmi Qeshta ◽

Mohamed Ali Al-Attafi ◽

Abood Mohammad Al-Ebel

Keyword(s):

Corporate Governance ◽

Audit Committee ◽

Ordinary Least Squares ◽

Annual Reports ◽

Least Squares Regression ◽

Governance Mechanisms ◽

Content Type ◽

The Relationship ◽

Ownership Types

PurposeThe purpose of this study is to report on the level of audit committee (AC) effectiveness on the top capitalized firms in GCC countries and to empirically investigate the hypothesized influence of ownership types on the level of AC effectiveness.Design/methodology/approachThe empirical data were drawn from annual reports of 119 top listed firms in Gulf Co-operation Council (GCC) nations at the end of 2011. Ordinary least squares regression analysis was constructed to examine the relationships between ownership types and the level of AC effectiveness.FindingsThe findings revealed that family, government and institutional ownership, in addition to board independence, all have significant positive association with AC effectiveness, and they serve as a complement to AC effectiveness.Research limitations/implicationsThe findings of the study are important for policy makers and regulators as they could use them to understand the relationship between different corporate governance mechanisms and formulating best strategies that would help them to improve and adopt an optimal governance system constituted from interacting governance mechanisms.Originality/valueThis study is one of few that have examined the interaction between different corporate governance mechanisms. It provides insights about the relationship between AC effectiveness and other governance mechanisms in the GCC context.

Voluntary Corporate Governance Disclosure (VCGR) Versi Investor dan Determinan VCGR di Indonesia

Jurnal Reviu Akuntansi dan Keuangan ◽

10.22219/jrak.v2i2.1076 ◽

2012 ◽

Vol 2 (2) ◽

Author(s):

Anyta, Siti Mutmainah

Keyword(s):

Corporate Governance ◽

Audit Committee ◽

Stock Exchange ◽

Public Access ◽

Annual Reports ◽

Control Mechanisms ◽

Governance Mechanisms ◽

Public Companies ◽

Governance Disclosure

The purposes of this research are (1) to know the importance level of voluntary corporate governance disclosure (VCGD) in investor version and (2) to know the factual VCGD which is done by public companies in Indonesia and (3) to test determinants of VCGD existence in annual reports of public companies in Indonesia. The determinant of VCGD is a set of corporate governance mechanisms i.e. ownership structure and control mechanisms of the organ of the company, including (1) the concentration of ownership, (2) institutional ownership, (3) the percentage of tradable shares, (4) the proportion of independent commissioners, and (5) the independence of the audit committee. To know the rate of VCGD’s importance, the questionaires was distributed to investors by email. The mean score was used to indicate the importance level of each VCGD’s item in investors version. Based on this result then the relative disclosure index was calculated. A total of 74 annual reports of companies which was chosen by purposive sampling method. To test the determinants of level of VCGD, regression analysis was used. The results show that: (1)The capability and integrity of board of director and public access of companies’ information are the two most important items based on investor ’s opinions; (2) As a whole, public companies in Indonesia have higher level of VCGD then China’s which has shown by Yuen, et al. (2009); (3) The percentage of tradable shares (public ownership) is the only independent variable that has a positive and significant, while the other independent variables show no significant effect. This study provides empirical evidence for policy makers and regulators of Indonesia to improve the corporate governance mechanisms and transparency of public companies. These findings also contribute to improving the understanding of disclosure behavior among companies listed in Indonesia Stock Exchange (BEI).

Corporate Governance and Corporate Social Responsibility Society Disclosure: The Application of Legitimacy Theory

International Journal of Business and Society ◽

10.33736/ijbs.3281.2020 ◽

2020 ◽

Vol 21 (2) ◽

pp. 660-678

Author(s):

Joanne Shaza Janang ◽

Corina Joseph ◽

Roshima Said

Keyword(s):

Corporate Governance ◽

Corporate Social Responsibility ◽

Social Responsibility ◽

Audit Committee ◽

Annual Reports ◽

Global Reporting Initiative ◽

Legitimacy Theory ◽

Governance Mechanisms ◽

Corporate Social

It is important for companies to adhere to society’s values by engaging in corporate social responsibility activities to remain legitimate, which in turn, translated into disclosures in annual reports. Corporate governance mechanisms have been used as explanatory factors in determining the level of disclosures. This paper aims to determine the influence of corporate governance mechanisms on the society disclosure in Malaysian companies’ annual reports using the legitimacy theory. The level of society disclosure is examined against the Modified Society Disclosure Index (MoSDI), which was developed based on the society indicatorof Global Reporting Initiative Version 4.0, preliminary observation on the 2016 NACRA winners’ annual reports and past literature. The analysis involved 234 top Malaysian companies’ annual reports from 2014 to 2016. The results found that audit committee, independent directors, and size are significantly associated withthe level of society disclosure. By complying with good corporate governance practice, awareness can be raised and preventive measures can be taken in addressing society’s issues through proper society disclosure.The legitimacy gap can be reduced via the society disclosure.

PENGARUH CORPORATE GOVERNANCE (CG) TERHADAP KUALITAS LABA DENGAN MANAJEMEN LABA SEBAGAI VARIABEL INTERVENING PADA PERUSAHAAN MANUFAKTUR YANG TERDAFTAR DI BEI PERIODE 2015-2017

Jurnal Muara Ilmu Ekonomi dan Bisnis ◽

10.24912/jmieb.v3i2.2909 ◽

2019 ◽

Vol 3 (2) ◽

pp. 267

Author(s):

Alvin Pranata Nanang ◽

Hendang Tanusdjaja

Keyword(s):

Corporate Governance ◽

Earnings Management ◽

Audit Committee ◽

Earnings Quality ◽

Institutional Ownership ◽

Annual Reports ◽

Managerial Ownership ◽

Manufacturing Companies ◽

Governance Mechanisms ◽

Penelitian ini dilakukan untuk menguji bagaimana pengaruh mekanisme tata kelola perusahaan (corporate governance) dalam hal ini yaitu: kepemilikan institusional, kepemilikan manajerial, komite audit, dan dewan komisaris independen terhadap kualitas laba dengan manajemen laba sebagai variabel intervening. Data yang digunakan dalam penelitian ini ialah data sekunder yang diperoleh melalui laporan keuangan dan laporan tahunan dari masing-masing perusahaan. Laporan keuangan dan laporan tahunan tersebut diperoleh melalui www.idx.co.id. Analisis data dalam penelitian ini yaitu analisis jalur dengan SEM dengan menggunakan SMARTPLS 3. Populasi dalam penelitian ini ialah seluruh perusahaan manufaktur yang terdaftar di BEI pada periode 2015-2017, dengan total sampel sebesar 28 perusahaan. Hasil penelitian ini membuktikan bahwa mekanisme corporate governance dalam hal ini yaitu: kepemilikan institusional, kepemilikan manajerial, komite audit, dan dewan komisaris independen tidak memiliki pengaruh signifikan baik terhadap manajemen laba maupun kualitas laba. Manajemen laba berpengaruh signifikan terhadap kualitas laba. Mekanisme corporate governance dalam penelitian ini menunjukkan bahwa hanya kepemilikan institusional dan dewan komisaris independen yang memiliki pengaruh signifikan terhadap kualitas laba dengan manajemen laba sebagai variabel intervening, sedangkan kepemilikan manajerial dan komite audit tidak berpengaruh signifikan terhadap kualitas laba dengan manajemen laba sebagai variabel intervening. This study was conducted to examine how the influence of corporate governance mechanisms in this case, namely: institutional ownership, managerial ownership, audit committee, and independent board of commissioners on earnings quality with earnings management as an intervening variable. The data used in this study are secondary data obtained through financial reports and annual reports from each company. The financial statements and annual reports are obtained through www.idx.co.id. Analysis of the data in this study is path analysis with SEM using SMARTPLS 3. The population in this study are all manufacturing companies listed on the Indonesia Stock Exchange in the period 2015-2017, with a total sample of 28 companies. The results of this study prove that corporate governance mechanisms in this case are: institutional ownership, managerial ownership, audit committee, and the independent board of commissioners do not have a significant effect both on earnings management and earnings quality. Earnings management has a significant effect on earnings quality. The corporate governance mechanism in this study shows that only institutional ownership and independent board of commissioners have a significant influence on earnings quality with earnings management as an intervening variable, while managerial ownership and audit committees do not significantly influence earnings quality with earnings management as an intervening variable.

Corporate governance and risk disclosure quality: Tunisian evidence

Journal of Accounting in Emerging Economies ◽

10.1108/jaee-01-2019-0005 ◽

2019 ◽

Vol 9 (4) ◽

pp. 567-602 ◽

Cited By ~ 4

Author(s):

Issal Haj Salem ◽

Salma Damak Ayadi ◽

Khaled Hussainey

Keyword(s):

Corporate Governance ◽

Audit Committee ◽

Annual Reports ◽

Risk Disclosure ◽

Disclosure Quality ◽

Governance Mechanisms ◽

Content Type ◽

The Impact

Purpose The purpose of this paper is to investigate the potential influence of corporate governance mechanisms on risk disclosure quality in Tunisia. Design/methodology/approach The authors examine 152 annual reports of Tunisian non-financial-listed firms during 2008–2013, and use the manual content analysis method to measure the risk disclosure quality. Findings The authors find that the quality of risk disclosure in Tunisian companies is relatively low, and also find that the quality of risk disclosure is positively associated with institutional ownership, board independence, the presence of women on the board, the presence of family members on the board and the independence of audit committee. Managerial ownership has a negative effect on risk disclosure quality. Finally, the authors find that the revolution decreases the influence of concentration ownership, government ownership, family ownership and audit committee size on risk disclosure quality. Originality/value Using a comprehensive set of corporate governance mechanisms and a new measure for risk disclosure quality in Tunisia, the authors provide the first empirical evidence on the impact of corporate governance mechanisms on risk disclosure quality in a developing country. The study has theoretical and practical implications for both developed and developing countries.

Voluntary disclosure and corporate governance: empirical evidence from Kuwait

International Journal of Law and Management ◽

10.1108/ijlma-10-2015-0052 ◽

2017 ◽

Vol 59 (2) ◽

pp. 217-236 ◽

Cited By ~ 15

Author(s):

Mishari M. Alfraih ◽

Abdullah M. Almutawa

Keyword(s):

Corporate Governance ◽

Voluntary Disclosure ◽

Audit Committee ◽

Panel Data Analysis ◽

Annual Reports ◽

Government Ownership ◽

Governance Mechanisms ◽

Content Type ◽

Listed Firms ◽

Purpose The purpose of this paper is to assess and analyse the level of voluntary disclosure practices in the annual reports of Kuwait Stock Exchange (KSE) listed firms and explore the association between corporate governance mechanisms and voluntary disclosure practices. Design/methodology/approach Panel data analysis was undertaken over a period from 2005-2008 with an aim to examine the influence of corporate governance mechanisms on voluntary disclosures made by 52 listed firms in their four years of annual reports. An unweighted voluntary disclosure index has been used for hand-collecting data from annual reports. Findings The findings show that the mean voluntary disclosure level over the four years is 23 per cent. Four out of eight corporate governance mechanisms examined found to be significantly associated with the level of voluntary disclosure, three negatively, one positively. Cross directorship, board size and role duality are negatively related to voluntary disclosure, while government ownership is positively related to voluntary disclosure. In contrast, the proportion of non-executive directors, family members on the board, the presence of an audit committee and the presence of the ruling family on the board have an insignificant influencer on voluntary disclosure practices. Practical implications The study provides an assessment of KSE-listed firm voluntary disclosure practices and its determents and highlights that that corporate governance attributes affect the voluntary disclosure practices of KSE-listed firms. Originality/value The findings of this study contribute to the arguments concerning the role of corporate governance mechanisms in improving the level of disclosure and information transparency.

Does audit committee substitute or complement other corporate governance mechanisms

Managerial Auditing Journal ◽

10.1108/maj-08-2016-1423 ◽

2017 ◽

Vol 32 (7) ◽

pp. 658-681 ◽

Cited By ~ 7

Author(s):

Yousef Hassan ◽

Rafiq Hijazi ◽

Kamal Naser

Keyword(s):

Corporate Governance ◽

Ownership Structure ◽

Audit Committee ◽

Negative Relationship ◽

Governance Mechanisms ◽

Governance System ◽

African Countries ◽

Content Type ◽

Board Characteristics ◽

Purpose The purpose of this paper is to examine the relation between audit committee (AC) and a set of other corporate governance mechanisms in one of the emerging economies, United Arab of Emirates (UAE). In particular, the current study examines whether an effective AC can serve as a substitute or as a complement mechanism to board characteristics and ownership structure of Emirati listed non-financial companies. Design/methodology/approach Using substitution and complementary theories, a panel data from 48 nonfinancial companies listed on the UAE Stock Exchanges [Abu Dhabi Stock Exchange and Dubai Financial Market] during the period between 2011 and 2013 were used in the current study. A composite measure of four proxies has been used to measure the AC effectiveness, namely, AC size, independence, financial expertise and diligence. To test the hypotheses formulated for the study, a logistic regression model was used to identify the influence of a set of board characteristics and ownership structure variables on the effectiveness of the AC after controlling for firm size, auditor type, industry type and profitability. Findings While AC effectiveness appeared to be positively associated with board size and board independence, it is negatively associated with CEO duality. This points to a complementary governance relation. On the other hand, the negative relationship between AC effectiveness and each of institutional and government ownership suggests substitutive relations. Research limitations/implications The main shortcoming of the current study is that it examines the influence of a certain set of corporate governance factors on the effectiveness of AC. Other corporate governance mechanisms may, however, contribute to the effectiveness of AC. The findings of the study can be used by companies’ managements and regulators in the UAE to improve the corporate governance system. Originality/value To the best of researchers’ knowledge, this study provides the first evidence about the interaction among multiple governance mechanisms required by the code of corporate governance issued by the UAE Ministry of Economy in 2009. The current paper is expected to add to the limited AC literature in Middle East and North African countries in general and Arab World in particular.

Pengaruh Ukuran Perusahaan Dan Corporate Governance Terhadap Manajemen Laba Di Industri Perbankan Indonesia

Jurnal Ilmiah Akuntansi Kesatuan ◽

10.37641/jiakes.v9i1.487 ◽

2021 ◽

Vol 9 (1) ◽

pp. 111-120

Author(s):

Karina Karina ◽

Sutarti Sutarti

Keyword(s):

Corporate Governance ◽

Earnings Management ◽

Audit Committee ◽

Banking Sector ◽

Audit Quality ◽

Stock Exchange ◽

Governance Mechanisms ◽

Audit Firm ◽

Size Firm

The purpose of this research is to provide empirical evidence of the affect of ownership concetration, firms size, and corporate governance mechanisms on earnings management. Ownership concetration was measure by the biggest stock of individual or organization, firms size was measure by natural logaritma of net assets, and corporate governance mechanisms were measure by three variabels (composition of board of commisioner, audit quality were measure by industry specialize audit firm, and composition of audit committee). Earnings management was measure by discretionary accruals use Modified Jones Method. The population of this research is 41 companies in the banking sector which were listed in Indonesian Stock Exchange (IDX). The research data were collected from banking companies financial statement for the period of 2016 to 2018. Based on purposive sampling method. The reseacrh hypotesis were tested using multiple regression analysis. The results of this research show that firm size, firm of commissioner and proportion of commissioner have significant relationships with earnings management. Next, variables composition of board of commissioner, ownership concetration and specialize audit firm have no significant relationship with earnings management. Keywords: ownership concetration, firms size, corporate governance, earnings management

Are Corporate Governance Mechanisms, Corporate Strategy, and Corporate Financial Characteristics Related to Earnings Management?

Summer - GATR Journal of Finance and Banking Review ◽

10.35609/jfbr.2020.5.2(2) ◽

2020 ◽

Vol 5 (2) ◽

pp. 48-57

Author(s):

Clarissa Tonay ◽

Paulina Sutrisno

Keyword(s):

Corporate Governance ◽

Earnings Management ◽

Cash Flow ◽

Audit Committee ◽

Corporate Strategy ◽

Governance Mechanisms ◽

Operating Cash Flow ◽

Financial Characteristics ◽

Company Growth

Objective – This study aims to examine the effect of corporate governance and several factors of corporate financial characteristics on earnings management. Corporate governance mechanisms such as an independent board, board size, and audit committee size are expected to be able to limit the ability of management to carry out earnings management. Meanwhile, a company's financial characteristics such as corporate strategy, company age, operating cash flow, company growth, profitability, company size and leverage are predicted to affect earnings management. Methodology/Technique – Many previous studies have involved the examination of corporate governance mechanisms and corporate financial characteristics of earnings management however, the results of those studies give rise to inconsistencies. Hence, this study seeks to re-examine the existence of corporate governance mechanisms and corporate financial characteristics of earnings management. The sample in this research is non-financial companies listed on the Indonesian Stock Exchange between 2016 and 2018. Findings – This data in this study is analysed using statistical methods such as multiple regression linear. The results of this study indicate that one mechanism of corporate governance, the size of the audit committee, has a positive effect on earnings management, while the financial characteristics of companies such as company size and operating cash flow negatively affect earnings management. Novelty – Other corporate financial characteristics such as corporate strategy, company age, operating cash flow, and profitability have a positive effect on earnings management. Meanwhile, the other variables such as board size, leverage, and company growth do not have an influence on earnings management. Type of Paper: Empirical. JEL Classification: G3, G34, G39. Keywords: Earnings Management; Corporate Strategy; Audit Committee Size; Company Age; Operating Cash Flows. Reference to this paper should be made as follows: Tonay, C; Sutrisno, P. 2020. Are Corporate Governance Mechanisms, Corporate Strategy, and Corporate Financial Characteristics Related to Earnings Management? J. Fin. Bank. Review, 5 (2): 48 – 57 https://doi.org/10.35609/jfbr.2020.5.2(2)