scholarly journals The Effect of Corporate Governance on Financial Performance in Non-Financial LQ-45 Firms Listed on the Indonesian Stock Exchange from 2012 to 2017

2019 ◽  
Vol 4 (1) ◽  
pp. 21-27
Author(s):  
Erika Jimena Arilyn ◽  
Beny Beny ◽  
Emir Kharismar
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Firm Size ◽  
Stock Exchange ◽  
Panel Data Analysis ◽  
Jel Classification ◽  
Annual Reports ◽  
Board Independence ◽  
Financial Leverage ◽  
Board Size

Objective - This research is conducted in order to determine what factors in corporate governance affect the financial performance of a firm. Methodology/Technique - Financial performance, as the dependent variable, is measured by Return on Asset (ROA), while the independent variables (corporate governance) are measured using Board Independence, Board Size, Dividend, Firm Size, and Financial Leverage. The sampling method used in this research is purposive sampling. The requirements for the sample of this research are the non – financial firms included in LQ-45 from 2012 to 2017 that publish annual reports that are available to the public. The research method used in this paper is a quantitative method. Panel data analysis technique and E-views tools were also used. Findings - The results indicate that firm size and percentage of board independence has no effect on financial performance, while board size, dividends, and financial leverage all effect financial performance. Novelty - The study adds to the literature of corporate government and firm performance in emerging countries. Type of Paper Empirical Keywords: Board Independence; Board Size; Dividends; Firm Size; Financial Leverage; Financial Performance. JEL Classification: M40, M48, M49. DOI: https://doi.org/10.35609/afr.2019.4.1(4)

Impact of corporate governance on financial performance of sugar sector firms listed in Pakistan stock exchange

2019 ◽  
Vol 12 (2) ◽  
Author(s):  
Muhammad Wasim Jan Khan ◽  
Usman Saeed
Keyword(s):  
Developing Countries ◽  
Corporate Governance ◽  
Financial Performance ◽  
Firm Size ◽  
Stock Exchange ◽  
Balance Sheet ◽  
Board Size ◽  
Return On Equity ◽  
Firm Financial Performance ◽  
Relationship Of

Corporate governance is considered as environment of trust, set of processes, policies and laws affecting the way corporations are administrated and directed. The previous literature in context of the corporate governance relationship with firm financial performance shows controversial findings; similarly literature shows lack of studies in context of developing countries as Pakistan. Therefore, this research explores the relationship of the corporate governance and the firm financial performance in context of developing country as Pakistan. The data has been collected from the sugar sector listed in KSE (Pakistan Stock Exchange), 20 corporations are selected as sample from sugar sector on basis of outstanding shares. Corporate governance taken as independent variable and measured as CEO biformity (CB), board size (BS), firm age (FA), firm size (FS). Financial performance of firms taken as dependent variable and measured as return on asset (ROA), return on equity (ROE), net profit margin (NPM). Data is collected for period of 2000-2013 from reports of the sugar companies listed in KSE (Pakistan Stock Exchange) issued annually and analysis of balance sheet given by State Bank of Pakistan (SBP). Result shows that CEO biformity significantly affecting firm financial performance. Board size (BS) shows partially significant impact on firm financial performance. Firms age (FA) show partially significant impact on firm financial performance. Firm size (FS) shows partially significant impact on firm financial performance. Therefore, conclusion has been drawn based on the results of analysis that this study adds new knowledge to the existing body of knowledge of corporate governance impact on firm financial performance and in context of developing countries as Pakistan. Keywords: Corporate governance, firm financial performance, sugar sector, Pakistan.

scholarly journals TATA KELOLA DAN KINERJA KEUANGAN BADAN USAHA MILIK NEGARA (BUMN) GO PUBLIC PERIODE 2014-2018

2021 ◽  
Vol 10 (1) ◽  
pp. 82-101
Author(s):  
Andika Dwi Pradito ◽  
Axel Giovanni ◽  
Devi Wahyu Utami
Keyword(s):  
Corporate Governance ◽  
Linear Regression ◽  
Financial Performance ◽  
Empirical Evidence ◽  
Audit Committee ◽  
Stock Exchange ◽  
Analytical Tool ◽  
Board Independence ◽  
Government Ownership ◽  
Board Size

Abstrak: Tata Kelola Dan Kinerja Keuangan Badan Usaha Milik Negara (BUMN) Go Public Periode 2014-2018. Penelitian ini bertujuan untuk memberikan bukti empiris mengenai pengaruh tata kelola perusahaan terhadap kinerja keuangan Badan Usaha Milik Negara (BUMN) yang terdaftar di Bursa Efek Indonesia (BEI) selama periode 2014-2018. Sampel penelitian yang memenuhi kriteria berjumlah 12 Badan Usaha Milik Negara (BUMN). Alat analisis yang digunakan adalah regresi linear. Hasil penelitian memberikan bukti mengenai urgensi komite audit dalam tata kelola perusahaan. Penelitian ini juga menunjukan bahwa board size, board independence serta kepemilikan pemerintah tidak memiliki peran dalam menjelaskan variabilitas kinerja keuangan Badan Usaha Milik Negara (BUMN).Kata kunci: Badan Usaha Milik Negara (BUMN), kinerja keuangan, tata kelola perusahaanAbstract: Governance and Financial Performance of State-Owned Enterprises (SOEs) Go Public Period 2014-2018. This study aims to provide empirical evidence regarding the effect of corporate governance on the financial performance of State-Owned Enterprises (SOEs) listed on the Indonesia Stock Exchange (IDX) during the 2014-2018 period. Research samples that met the criteria totaled 12 State-Owned Enterprises (BUMN). The analytical tool used is linear regression. The results of the study provide evidence of the urgency of the audit committee in corporate governance. This study also shows that board size, board independence, and government ownership do not have a role in explaining the variability in the financial performance of SOEs.Keywords: corporate governance, financial performance, state-owned enterprises (SOEs)

scholarly journals The Value of Board Diversity in the Relationship of Corporate Governance and Investment Decisions of Pakistani Firms

2020 ◽  
Vol 6 (4) ◽  
pp. 146 ◽  
Author(s):  
Nauman Iqbal Mirza ◽  
Qaisar Ali Malik ◽  
Ch Kamran Mahmood
Keyword(s):  
Corporate Governance ◽  
Positive Impact ◽  
Stock Exchange ◽  
Panel Data Analysis ◽  
Investment Decisions ◽  
Board Independence ◽  
Board Size ◽  
Board Diversity ◽  
The Impact ◽  
The Relationship

Inspired by the studies on the impact of diversity among decision-making groups, this study was carried out to examine whether the diversity of the members of the board of directors, encompassing gender, nationality, education, and experience, moderates the relationship between the corporate governance and investment decisions of listed companies of the Pakistan Stock Exchange. Furthermore, the determinants of investment decisions in the context of Pakistani firms’ are also explored. Panel data analysis techniques are used to gauge the cause and effect relationship among the variables. We find short-term liquidity and profitability are the determinants of Pakistani firms’ investment decisions, both having adverse relationships. Moreover, we explore board independence, and chief executive officer (CEO) duality has a significant positive impact on investment decisions. We further find that experience diversity strongly moderates the relationship between board independence and board size with investment decisions in the opposite direction. Education diversity moderates the relation of board size and investment decisions in the same direction. Foreign directors’ presence on the board also significantly moderates the relationship between board independence and investment decisions. The results of this empirical study confirm that board diversity moderates the relationship between corporate governance and investment decisions.

scholarly journals The Impact of Corporate Governance on Dividend Decisions: Evidence from Non-Financial Sector of Pakistan

2021 ◽  
Vol 10 (1) ◽  
pp. 285-295
Author(s):  
IHTESHAM KHAN ◽  
MUHAMMAD SHAHID ◽  
SHAH RAZA KHAN
Keyword(s):  
Corporate Governance ◽  
Financial Institution ◽  
Stock Exchange ◽  
Annual Reports ◽  
Board Independence ◽  
Board Size ◽  
Financial Firms ◽  
Size Firm ◽  
The Impact ◽  
Individual Ownership

This study sought to ascertain the impact of corporate governance on dividend decisions of non-financial firms listed on Pakistan stock exchange (PSX). Panel data was collected from 2011to 2016. Data was collected from Non financial firms annual reports and State Bank of Pakistan (SBP) data base. The STATA software was used to analyze the data. The study investigates the association of firm’s performance and corporate governance. Specifically, this study investigate dividend decision (dividend per share(DPS)), corporate governance (board independence ,board size, size of firm, leverage, profitability, Insider ownership, individual ownership, and institutional ownership). A total of 42 non-financial firms are used to determine this relationship. The results show a positive significant relation between the Profitability, individual ownership with DPS. This study also found a negative and significant relationship between insiders ownership, financial institution ownership with DPS. It has also been found that Board independence, board size, firm size and leverage have negative and insignificant relationship with dividend per share (DPS). Keywords: Corporate Governance, Dividend Decisions, Dividend Policy.

scholarly journals The Indian Corporate Board Efficiency and its Impact on Financial Performance

2021 ◽  
Vol 12 (5) ◽  
pp. 1891-1894
Author(s):  
Mohd Sarim
Keyword(s):  
Financial Performance ◽  
Firm Size ◽  
Stock Exchange ◽  
Composite Index ◽  
Strong Relationship ◽  
Annual Reports ◽  
Board Composition ◽  
Board Independence ◽  
Corporate Board ◽  
Indian Economy

The objective of the study is to explore the board characteristics and its impact on the financial performance of Indian companies. The sample comprises of top 100 companies listed on the Bombay Stock Exchange for the financial year 2018-2019. The data required for the analysis was collected from the annual reports of the companies available at their respective websites and from the Prowess database of the Centre for Monitoring of Indian Economy. The paper constructed sub-indices for the board as board composition index, board independence index and board disclosure index. Combining all sub-indices, we formed the Board Composite Index. Further, the data was analysed to draw meaningful conclusions. Firm size is used as a controlling variable. The results show that there is a strong relationship between board indicators and return on asset.

scholarly journals The effect of corporate governance and financial leverage on efficiency of Pakistan textile sector

2021 ◽  
Vol 12 (1) ◽  
pp. 201-218
Author(s):  
Seema Chandani ◽  
Nawaz Ahmed
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Stock Exchange ◽  
Control Variable ◽  
Annual Reports ◽  
Regression Result ◽  
Financial Leverage ◽  
Board Size ◽  
Return On Equity ◽  
Textile Sector

This research observes the effect of corporate governance and financial leverage on the efficiency of listed companies in Pakistan. The variables return on assets and return on equity are chosen as the firm’s efficiency of the textile sector for this research. Measures of corporate governance used are board size, director’s remuneration, and Audit committee members, whereas financial leverage is used as a control variable. The data of corporate governance, financial leverage, and efficiency variable are composed of annual reports of the top ten listed textile companies from Karachi stock exchange. The research consists of the period from 2012 to 2017. Panel data is used to examine four hypotheses and to test the significance of corporate governance and financial leverage on a firm's performance the OLS regression models are applied. The finding of this study revealed that board size, audit committee, director's remuneration is positively correlated with a firm's performance ROA and ROE, and conversely, financial leverage is negatively correlated with a firm's performance. Overall regression result of this study discovered that the audit committee members and financial leverage are statistically insignificant, whereas board size and director’s remuneration are statistically positive significant. This concludes that there is no significant association between corporate governance and firm’s performance as well as financial leverage with the firm's performance. The sample size of this study was small and this research is limited to the textile sector of Pakistan. Future researchers may have included more determinants of corporate governance such as women on board, board meeting, family ownership structure, etc.

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.

Corporate Governance Mechanism on Financial Performance (Evidence from the Indonesia’s Listed State-owned Enterprises)

2021 ◽  
Vol 1 (1) ◽  
pp. 24-34
Author(s):  
Anak Agung Kompiyang Ratih Maldini ◽  
Pananda Pasaribu ◽  
Christian Haposan Pangaribuan
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Positive Impact ◽  
Stock Exchange ◽  
Governance Structure ◽  
Board Independence ◽  
Governance Mechanism ◽  
Good Corporate Governance ◽  
Corporate Governance Mechanism ◽  
The Impact

Objective – This study aims to find the impact of privatization, which proxied by good corporate governance toward the financial performance of SOEs in Indonesia. Methodology – This study used 16 privatized SOEs that are listed in Indonesia Stock Exchange and also 16 privatized non-SOEs as the comparison. The data is collected from the year 2014 to 2018 and analyzed by using multiple regression panel data. Findings – This study found that director size and board independence have a positive impact toward SOEs financial performance. The director size and board independences have a positive significant impact toward the SOEs financial performance while the privatized non-SOEs is not significantly affected Novelty – This study examines proper governance structure in SOEs and non-SOEs, thus providing new insights about good corporate governance regulation in the Indonesian context.

Corporate Governance, Firms’ Characteristics and Environmental Performance Disclosure Practices of Indian Companies

2019 ◽  
Vol 12 (2) ◽  
pp. 142-155
Author(s):  
Ritu Pareek ◽  
Krishna Dayal Pandey ◽  
Tarak Nath Sahu
Keyword(s):  
Corporate Governance ◽  
Environmental Performance ◽  
Positive Impact ◽  
Stock Exchange ◽  
Panel Data Analysis ◽  
Independent Directors ◽  
Regulatory Body ◽  
Board Size ◽  
The Public ◽  
Negative Effect

This study attempts to explore the effect of corporate governance parameters like board size and independent directors along with firm-specific characteristics such as age, size and profitability on the environmental performance disclosure of 38 National Stock Exchange (NSE) listed Indian non-financial companies for the period of 2013–2017. This study uses panel data analysis and finally documents a positive impact of board size and age of firm on the environmental performance disclosures of Indian companies. The study also finds a significant and negative effect of board independence on the environmental performance disclosure of such companies. The study based on its findings questions the role of independent directors as an internal regulatory body and suggests external regulatory specifications for better environmental performance and its disclosure to the public.

scholarly journals The effects of corporate governance mechanisms on the financial leverage–profitability relation

2019 ◽  
Vol 43 (4) ◽  
pp. 387-409
Author(s):  
Hanh Song Thi Pham ◽  
Duy Thanh Nguyen
Keyword(s):  
Corporate Governance ◽  
Panel Data ◽  
Emerging Market ◽  
State Ownership ◽  
Board Independence ◽  
Financial Leverage ◽  
Governance Mechanisms ◽  
Board Size ◽  
Content Type ◽  
Corporate Governance Mechanisms

Purpose This paper aims to investigate the moderating effects of corporate governance mechanisms on the financial leverage–profitability relation in emerging market firms. Design/methodology/approach The paper examines the impacts by estimating the empirical model in which a firm’s accounting profitability is a dependent variable, while financial leverage, board size, board independence, CEO duality, CEO ownership, state ownership and the interaction variables are predictors. The paper uses the panel data set of 295 listed firms in Vietnam in the period 2011-2015 and two key econometric methods for panel data, namely, the two-stage least square instrumental variable and general moments method. Findings The paper finds the evidence for the significant and positive effect of board size, board independence and state ownership on the financial leverage–profitability relation. The effect of CEO duality on the financial leverage–profitability relation tends to be negative, and the impact CEO ownership inclines to be positive, although both of them are statistically insignificant. The results are consistent across different estimation methods. Originality/value This paper is the first investigating the moderating effect of various corporate governance mechanisms on the financial leverage–profitability relationship in emerging market firms.

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