scholarly journals The Effect of Corporate Governance on Firm Performance: Empirical Evidence from Indonesia

2015 ◽  
Vol 3 (1) ◽  
pp. 33-39
Author(s):  
Mariana Ing Malelak ◽  
Sautma Ronni Basana
Keyword(s):  
Corporate Governance ◽  
Data Analysis ◽  
Firm Performance ◽  
Panel Data ◽  
Ownership Structure ◽  
Institutional Ownership ◽  
Managerial Ownership ◽  
Board Structure ◽  
Return On Equity ◽  
Board Of Director

Objective - The main purpose of this research is to examine the effect of corporate governance on firm performance. The corporate governance characteristics was represented by the board structure (board of commissioner, board of director and independent commissioner) and ownership structure (institutional ownership, managerial ownership and public ownership), while the proxy of firm performance is return on equity. Methodology/Technique - This research used data from Indonesian Stock Exchange (IDX) period 2004-2014 with purposive sampling method and panel data regression analysis as data analysis method. Findings - The empirical result indicate that board of director, independent commissioner, institutional ownership and public ownership in a company has significant effect on firm performance, otherwise the board of commissioner and managerial ownership has no significant effect on firm performance. Overall, all of the independent variables (board and ownership structure) have significant effect on firm performance. Novelty - The use of long research period during 2000 to 2014 allows to see the consistency of the application of corporate governance in Indonesia since 2001. Confirmed that Corporate Governance (Board and Ownership Structure) have significant effect on firm performance in Indonesia. Type of Paper - Empirical Keywords : Board Structure; Corporate Governance; Firm Performance; Panel Data Analysis; Return on Equity; Ownership Structure

scholarly journals The board of directors and firm performance: empirical evidence from listed companies

2019 ◽  
Vol 19 (3) ◽  
pp. 508-551 ◽  
Author(s):  
Alessandro Merendino ◽  
Rob Melville
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Agency Theory ◽  
Ownership Structure ◽  
Listed Companies ◽  
Independent Directors ◽  
Board Structure ◽  
Board Size ◽  
Ceo Duality ◽  
Content Type

PurposeThis study aims to reconcile some of the conflicting results in prior studies of the board structure–firm performance relationship and to evaluate the effectiveness and applicability of agency theory in the specific context of Italian corporate governance practice.Design/methodology/approachThis research applies a dynamic generalised method of moments on a sample of Italian listed companies over the period 2003-2015. Proxies for corporate governance mechanisms are the board size, the level of board independence, ownership structure, shareholder agreements and CEO–chairman leadership.FindingsWhile directors elected by minority shareholders are not able to impact performance, independent directors do have a non-linear effect on performance. Board size has a positive effect on firm performance for lower levels of board size. Ownership structure per se and shareholder agreements do not affect firm performance.Research limitations/implicationsThis paper contributes to the literature on agency theory by reconciling some of the conflicting results inherent in the board structure–performance relationship. Firm performance is not necessarily improved by having a high number of independent directors on the board. Ownership structure and composition do not affect firm performance; therefore, greater monitoring provided by concentrated ownership does not necessarily lead to stronger firm performance.Practical implicationsThis paper suggests that Italian corporate governance law should improve the rules and effectiveness of minority directors by analysing whether they are able to impede the main shareholders to expropriate private benefits on the expenses of the minority. The legislator should not impose any restrictive regulations with regard to CEO duality, as the influence of CEO duality on performance may vary with respect to the unique characteristics of each company.Originality/valueThe results enrich the understanding of the applicability of agency theory in listed companies, especially in Italy. Additionally, this paper provides a comprehensive synthesis of research evidence of agency theory studies.

scholarly journals Does Corporate Governance Influence the Firm Value in Bangladesh? A Panel Data Analysis

2021 ◽  
Vol 24 (2) ◽  
pp. 84-100
Author(s):  
Mohammed Nazim Uddin ◽  
Mosharrof Hosen ◽  
Shahnur Azad Chowdhury ◽  
Mustafa Manir Chowdhury ◽  
Manjurul Alam Mazumder
Keyword(s):  
Corporate Governance ◽  
Data Analysis ◽  
Panel Data ◽  
Firm Value ◽  
Panel Data Analysis ◽  
Small Scale ◽  
Board Structure ◽  
Corporate Governance Code ◽  
Regulatory Bodies ◽  
The Impact

Corporate governance has been widely debated for over a decade with the collapse of the financial and capital market under the prejudicial roles of regulatory bodies. Therefore, the study examined the impact of corporate governance on firm value in Bangladesh. A total of 63 DSE-listed companies from 2005 to 2019 consisting of 8,505 observations on an average of 15 years were chosen. The subsequent tests for the given data were conducted to identify the appropriate panel data analysis method for adjusted diagnostic problems. In the specific panel data, the Panel Corrected Standard Error (PCSE) was utilised following the application of the random effects method to control econometric limitations. It was revealed that corporate governance lowered firm value when the board structure was familially and politically affiliated and led by CEO-duality. Moreover, the inclusion of dynamic professionals and independent members in the board structure increased the firm value. The use of the corporate governance code was proven to be highly challenging due to the participation of political and family leaders in corporate firms. Additionally, proper law enforcement was required to ensure transparency and accountability, thus reflecting firm value. As previous studies on corporate governance were conducted on a small scale and partial to the context of developing countries, this paper contributes a novel value in identifying and resolving the corporate governance crisis by reforming the board structure with diverse and professional directors. The regulatory bodies require improvement by including autonomous professional and independent members to exercise the corporate governance code.

scholarly journals CORPORATE GOVERNANCE AND FIRM PERFORMANCE NEXUS: A CASE OF CEMENT INDUSTRY OF PAKISTAN

2018 ◽  
Vol 1 (1) ◽  
pp. 1-6 ◽  
Author(s):  
Abdul Ghafoor Kazi ◽  
Muhammad Asad Arain ◽  
Payal Devi Sahetiya
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Ownership Structure ◽  
Significant Relationship ◽  
Stock Exchange ◽  
Study Data ◽  
Cement Industry ◽  
Annual Reports ◽  
Board Structure ◽  
The Impact

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 “quantitative research” 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, Pearson’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.

scholarly journals PENGARUH PRAKTIK MANAJEMEN LABA DAN GOOD CORPORATE GOVERNANCE TERHADAP NILAI PERUSAHAAN PADA PERUSAHAAN MANUFAKTUR YANG TERDAFTAR DI BURSA EFEK INDONESIA

2019 ◽  
Vol 12 (1) ◽  
pp. 35 ◽  
Author(s):  
Charlie Charlie
Keyword(s):  
Corporate Governance ◽  
Data Analysis ◽  
Earnings Management ◽  
Firm Value ◽  
Institutional Ownership ◽  
Managerial Ownership ◽  
Analysis Method ◽  
Good Corporate Governance ◽  
Data Analysis Method ◽  
Observation Period

<p class="Style1"><em>The purpose of this study is to examine the effect of corporate governance </em><em>(GCG) which is proxied through managerial ownership and institutional ownership, as </em><em>well as earnings management on firm value. The sample used is LQ 45 company with </em><em>observation period from 2011 to 2015. Data analysis method uses multiple linear </em><em>regression. The results of this study are that there are positive and significant effects of </em><em>managerial ownership, institutional ownership and earnings management on firm </em><em>value.</em></p><p class="Style1"><strong><em><br /></em></strong></p>

scholarly journals Ownership Structure, Corporate Governance and Capital Structure of Non-Financial Firms of Pakistan

2018 ◽  
Vol 10 (1) ◽  
pp. 31-46
Author(s):  
Hassan Ahmad ◽  
Nasreen Akhter ◽  
Tariq Siddiq ◽  
Zahid Iqbal
Keyword(s):  
Corporate Governance ◽  
Capital Structure ◽  
Ownership Structure ◽  
Negative Impact ◽  
Institutional Ownership ◽  
Board Independence ◽  
Managerial Ownership ◽  
Debt Ratio ◽  
Significant Negative Impact ◽  
The Impact

This study is undertaken with the purpose of investigating the impact of ownership structure and corporate governance on the capital structure of Pakistani listed firms from 2011-2014, feasible general least square is used to investigate the impact of ownership structure and corporate governance on capital structure of KSE 100 index firms. Explanatory variables include ownership concentration, managerial ownership, foreign ownership, institutional ownership, board size, board independence and CEO duality along with the three control variables namely firm size, firm profitability and liquidity. There is insignificant positive relationship between ownership concentration and capital structure, managerial ownership has a significant negative impact on debt ratio. Foreign ownership has also a significant negative impact on firm capital structure and institutional ownership has significant positive impact on capital structure. Board size is positively related to capital structure, board independence also positively related to firm’s debt ratio but CEO duality negatively related to the dependent variable, all these variables have significant impact on capital structure of Pakistani firms. 

scholarly journals WOMEN AT THE LEVEL OF MANAGEMENT, AGENCY CONFLICT MECHANISMS, AND FINANCIAL PERFORMANCE

2020 ◽  
Vol 3 (2) ◽  
pp. 52-62
Author(s):  
Lukas Surjaatmaja ◽  
◽  
Hendra Wijaya ◽  
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Institutional Ownership ◽  
Manufacturing Firms ◽  
Top Management ◽  
Managerial Ownership ◽  
Female Representation ◽  
Return On Equity ◽  
Management Agency ◽  
Agency Conflict

This study analyzes the effect of female representation in top management, agency conflict mechanism on firm performance in Indonesia Manufacturing Firms. Agency conflict in this reseach consist of managerial ownership, institutional ownership, and debt. The sample of this study consist of 90 manufacturing firms over the period 2013-2017. This study measures firm performance with return on asset and return on equity. Data on this research were analyzed using multiple regression. This study found that female representation in top management and managerial ownership do not affect firm performance. This study also found that institutional ownership positively affects the firm performance and debt negatively affects the firm performance

Board Structure and Firm Performance: Evidence from Australia

2004 ◽  
Vol 10 (1) ◽  
pp. 14-24 ◽  
Author(s):  
Ingrid Bonn
Keyword(s):  
United States ◽  
Corporate Governance ◽  
Firm Performance ◽  
Boards Of Directors ◽  
Board Structure ◽  
Return On Equity ◽  
Book Value ◽  
Business Context ◽  
European Business ◽  
Female Director

ABSTRACTThe influence of corporate governance on firm performance has been discussed for a number of years, but mainly in a United States and European business context. This article investigates the composition of boards of directors in large Australian firms and analyses whether board structure has an impact on performance, as measured by return on equity and market-to-book value ratio. The results showed that outsider ratio and female director ratio were positively associated with firm performance, whereas board size and directors' age had no influence on firm performance.

scholarly journals Corporate Governance and Firm Performance: Empirical Evidence from India

2016 ◽  
Vol 1 (2) ◽  
pp. 48-65 ◽  
Author(s):  
Surya Bahadur G.C.
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Panel Data ◽  
Financial Performance ◽  
Ownership Structure ◽  
Independence Number ◽  
Negative Relationship ◽  
Governance System ◽  
Board Committees ◽  
Governance Practices

The paper attempts to analyze inter-linkages between corporate governance, ownership structure, capital structure and firm performance in India. The study employs a panel data of all CNX Nifty companies from 2008 to 2012. Using LSDV panel data models and 2SLS model the study reveals that that good corporate governance practices adopted by companies is positively related with financial performance. Board independence, number of board committees, and director remuneration are found to have positive relationship while larger board size, ownership by promoters and financial leverage have negative relationship with performance. There is existence of bi-directional relationship between corporate governance and financial performance. Companies with sound financial performance are more likely to conform to corporate governance norms and standards and implement sound corporate governance system. In addition, the findings reveal that corporate governance practices adopted by the listed firms depend on their ownership structure. Ownership concentration is found to effect corporate governance negatively.Journal of Business and Management Research, Vol. 1 (2), 2016, pp. 48-65. 

Board Structure and Firm Performance: Evidence from Australia

2004 ◽  
Vol 10 (1) ◽  
pp. 14-24 ◽  
Author(s):  
Ingrid Bonn
Keyword(s):  
United States ◽  
Corporate Governance ◽  
Firm Performance ◽  
Boards Of Directors ◽  
Board Structure ◽  
Return On Equity ◽  
Book Value ◽  
Business Context ◽  
European Business ◽  
Female Director

ABSTRACTThe influence of corporate governance on firm performance has been discussed for a number of years, but mainly in a United States and European business context. This article investigates the composition of boards of directors in large Australian firms and analyses whether board structure has an impact on performance, as measured by return on equity and market-to-book value ratio. The results showed that outsider ratio and female director ratio were positively associated with firm performance, whereas board size and directors' age had no influence on firm performance.

scholarly journals STRUKTUR KEPEMILIKAN MANAJERIAL, STRUKTUR KEPEMILIKAN INSTITUSIONAL, DAN UKURAN PERUSAHAAN TERHADAP KINERJA PERUSAHAAN DAN DAMPAKNYA TERHADAP MANAJEMEN LABA PADA PERUSAHAAN SEKTOR PERTAMBANGAN BATUBARA PADA TAHUN 2017-2019

2021 ◽  
Vol 9 (1) ◽  
pp. 29
Author(s):  
Rina Malahayati
Keyword(s):  
Panel Data ◽  
Coal Mining ◽  
Firm Size ◽  
Ownership Structure ◽  
Institutional Ownership ◽  
Earning Management ◽  
Managerial Ownership ◽  
Company Performance ◽  
Performance Effect ◽  
The Impact

This study is aimed to examine the influence of managerial ownership structure, institutional  ownership structure, and firm size on company performance and the impact on the earning  management on companies of sector  coal mining in 2017 – 2019. Unit analysis are companies listed on coal mining  for period 2017-2019. The population are 75 observations (25 companies x 3 years). Data processing uses panel data processed by using SPSS. For testing the hypothesis, the study uses path analysis. The result showed that (1) managerial ownership structure, institutional  ownership structure, and firm size simultaneously to company performance, (2) the managerial ownership structure no effect on company performance, (3) the institutional  ownership structure effect to negatively on company performance, (4) the firm size effect to  positively on  company performance, and (5) the company performance effect to negatively on earning management.

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