scholarly journals THE INFLUENCE OF MANAGEMENT POWER ON ENTERPRISE PERFORMANCE

2021 ◽  
pp. 95-103
Author(s):  
Xinping Zeng
Keyword(s):  
Power Systems ◽  
Internal Control ◽  
Profit Maximization ◽  
Institutional Arrangement ◽  
Annual Growth Rate ◽  
Enterprise Performance ◽  
Minority Shareholders ◽  
Governance System ◽  
Management Board ◽  
Management Power

According to the statistics, from 1980 to 2017, China's economy and investment both showed a tendency of rapid growth, in which the average annual growth rate of GDP was as high as 9%. However, in the process of rapid macroeconomic growth, inefficient enterprise development is found to be hidden at the microlevel, which is caused by the agency conflict between shareholders and managers and the separation of enterprise ownership from the management board. Therefore, in pursuit of personal profit maximization, management tends to have self-serving and inefficient investment behaviors and decisions with the power at hand, thus greatly affecting the performance of enterprises. As a necessary supplement, internal control is substantially an institutional arrangement that is aimed to maximize the realization of organizational goals, coordinate and maintain the relationship of interests between enterprise stakeholders, and avoid the conflicts of interests, which is a significant component of corporate internal governance. The issue concerned in this paper is that in the context of the existing corporate governance system in China, what influence does management power have on enterprise performance? In this paper, the influence of management power on enterprise performance is empirically tested, and recommendations for effective supervision and control of management power systems are provided, as they are expected to have a positive effect on improving enterprise performance and protecting the interests of minority shareholders.  

The German Supervisory Board on its Way to Professionalism

2010 ◽  
Vol 11 (2) ◽  
pp. 115-158 ◽  
Author(s):  
Jan Lieder
Keyword(s):  
Corporate Governance ◽  
Internal Control ◽  
Supervisory Board ◽  
Decision Making Process ◽  
European Level ◽  
Governance System ◽  
Management Board ◽  
Corporate Governance System ◽  
Flow Of Information ◽  
Board System

The paper shows how the efficiency of the German supervisory board has been significantly improved in the last decade. These legal changes made the supervisory board climb to a higher position of power. In particular, the supervisory board is now significantly involved in the decision-making process on a company's overall strategic concept and on management decisions of fundamental importance. This emphasizes the future-oriented monitoring obligation of the supervisory board, which gained much more importance in the last decade. Furthermore, the new provisions increased the flow of information from the management board to the supervisory board, and they facilitated the monitoring efficiency of every single supervisory board member. In addition, several important changes improved the cooperation of supervisory board and auditors. The most recent changes strengthened the supervisory board's responsibility with regard to internal control and risk management.The vest majority of those changes in the German supervisory board system are very welcome. However, the current regime of German codetermination as well as the excessive size of the supervisory board has to be changed. Under the important developments on the European level, the time has come to act now in this direction. The advocated concept of codetermination by consensus provides a solid basis for more flexibility in the rigid German corporate governance system. It is also desirable to further limit the size of the supervisory board to no more than twelve members. Finally, the efficiency of the corporate governance system would be improved by allowing enterprises to choose between a one-tier and a two-tier board system.

Does gender diversity in supervisory boards affect gender diversity in management boards in Germany? An empirical analysis

2021 ◽  
pp. 239700222199714
Author(s):  
Dennis Fleischer
Keyword(s):  
Fixed Effects ◽  
Structural Equation ◽  
Gender Diversity ◽  
Supervisory Board ◽  
Board Members ◽  
Governance System ◽  
Management Board ◽  
Supervisory Boards ◽  
Gender Quota ◽  
The Impact

Social aspects like gender diversity in the boardroom are becoming increasingly relevant and are a popular topic of public debate in the context of gender equality in business. However, there is little clarity about the potential spill-over effects of gender diversity. Both theory and empirical results have led to ambiguous conclusions with respect to the effect of gender diversity in the supervisory board on gender diversity in the management board. In addition, it is not clear whether the German gender quota legislation positively affects this relationship. This study analyses whether gender diversity in the supervisory board supports the gender diversity of the management board, and whether this relationship is affected by the gender quota legislation, focusing on the unique case of Germany. To cope with endogeneity concerns, this study employs a cross-lagged panel model with fixed effects using maximum likelihood structural equation modelling. The results of the analysis of the impact of the number of female supervisory board members on the number of female management board members do not support the view of positive spill-over effects of gender diversity in the environment of the German two-tier corporate governance system. Furthermore, this study finds no evidence of an effect of the German gender quota on this relationship. JEL Codes G38, M12, M14, M51

Valuing Streamflow Forecasts in Centrally Controlled Power Systems

2021 ◽  
Author(s):  
Jordan Kern ◽  
Nathalie Voisin ◽  
Sean Turner ◽  
Hongxiang Yan ◽  
Konstantinos Oikonomou
Keyword(s):  
Power Systems ◽  
Electricity Markets ◽  
Management Strategies ◽  
Profit Maximization ◽  
Value Added ◽  
Marginal Value ◽  
Wide Range ◽  
Streamflow Forecasts ◽  
Hydropower Production ◽  
Bulk Power

<p>Given the wide range of institutional and market contexts in which hydroelectric dams are operated, determining the value added from improvements in hydrologic forecasts is a challenge. Many previous examples of hydrologic forecasts being used to optimize hydropower production strategies at dams focus on a single reservoir system or watershed, with a key assumption that the marginal value of hydropower production is exogenously-defined (dams are ‘price takers’ in markets for electricity that exhibit no market power). In some cases, this may accurately reflect current institutional boundaries and decision making processes. However, with increased attention being paid to how more coordinated grid management strategies, including management of hydropower assets, could facilitate deep integration of renewable energy, it is critical to understand how the use of improved hydrologic forecasts could produce wider grid-scale benefits, including  lower costs and emissions. In this study, we quantify the value of streamflow forecasts to a centralized power system operator in charge of coordinating sub-weekly operations of hydropower assets, using the Western U.S. as a case study. We propagate flow forecasts through realistic models of reservoir operations and models of bulk power systems/wholesale electricity markets. Our results shed light on how the value of flow forecasts to grid operations can vary across regions and power systems. They also highlight the potential for conflicts between firm-specific objectives (profit maximization) and system-wide objectives (minimization of costs and emissions) when determining value added from hydrologic forecasts.  </p>

scholarly journals BACIS THEORETICAL CHARACTERISTICS OF INTERNAL CONTROL

2019 ◽  
Vol 8 (4) ◽  
Author(s):  
Firdaus I. Kharisova ◽  
Alisa V. Samoilova
Keyword(s):  
Control System ◽  
Internal Control ◽  
Rapid Change ◽  
Complete Information ◽  
Governance System ◽  
Corporate Governance System ◽  
Internal Control System ◽  
Competitive Relations ◽  
High Level ◽  
Commercial Organizations

The question of the existence of an effective internal control system is now of particular relevance. The current stage of the economic entities operation in the Russian Federation is a stage of changing the external and internal environment of management, characterized by a high level of uncertainty and instability, which consists in toughening of competitive relations. Domestic organizations have to operate in the conditions of rapid change and development of technologies, a tough competitive environment, growing business diversification, and inconsistency of domestic legislation. One of the main factors for creating the competitiveness of organizations is effective management, based on quality, reliable and complete information about the managed facility. The paper reveals key questions about the internal control of commercial organizations in the non-financial sector. The main interpretations of the term "internal control" and components of the internal control system are considered, the stages of internal control formation are outlined, the place of internal control in a corporate governance system is substantiated, and official powers in the internal control system are identified. Also, the authors present the main documents which should be noted when studying the issue of internal control. The main methods used in this work are the information systematization, processing and generalization.

scholarly journals Konsentrasi Kepemilikan, Transaksi Pihak Berelasi, dan Kinerja Perusahaan

2019 ◽  
Vol 29 (2) ◽  
pp. 592
Author(s):  
Nitami Galih Pangesti ◽  
Widi Hidayat
Keyword(s):  
Firm Performance ◽  
Stock Exchange ◽  
Ownership Concentration ◽  
Manufacturing Companies ◽  
Minority Shareholders ◽  
Governance System ◽  
Related Party Transactions ◽  
Analysis Technique ◽  
Quantitative Descriptive ◽  
Positive Effect

Agency theory describe that ownership concentration is a good corporate governance system that helps to reduce agency problems arising from the divergence of interest between shareholders and managers. But, when ownership concentration becomes high, lead to another agency problem that is conflict between controlling shareholders and minority shareholders. This study purposed to examine the relation of ownership concentration and related party transactions on firm performance. This research uses quantitative descriptive method with associative approach. Sample used in this study was 474 manufacturing companies listed on the Indonesia Stock Exchange in 2014-2018. We used multiple linear regression as analysis technique. Results showed that ownership concentration had a positive effect on firm performance and related party transactions had a positive effect on firm performance. Keywords : Ownership Concentration; Related Party Transactions; Firm Performance.

Independent Directors: Decision-Makers in the us, Powerless Advisers in China

2016 ◽  
Vol 3 (1) ◽  
pp. 70-111
Author(s):  
Wenjia Yan
Keyword(s):  
Corporate Governance ◽  
Company Law ◽  
Decision Makers ◽  
Independent Directors ◽  
Minority Shareholders ◽  
Governance System ◽  
Governance Model ◽  
Corporate Governance System ◽  
Independent Decision ◽  
Corporate Governance Model

As a global popular corporate governance system developed in the us, independent directors were officially adopted by China through ‘Guiding Opinions on the Establishment of Systems of Independent Directors by Listed Companies’ (hereinafter Independent Directors Opinion) in 2001 and through Article 123 of Company Law when it was amended in 2005. The emphasis on minority shareholders’ protection by adopting independent directors in China can be attributed to the global influence of the American corporate governance model, which depends on disinterested directors as independent decision-makers. However, with more than 10 years having passed, independent directors serve as powerless advisers rather than decision-makers in China. Accordingly, this paper aims to ascertain some profound reasons for powerless advisers in China and provide recommendations to address this problem by comparing the role of independent directors in China and the us.

scholarly journals JAPANESE CORPORATE GOVERNANCE REFORM : WHAT IS REQUIRED FOR EFFECTIVE FUNCTIONING OF OUTSIDE DIRECTORS ?

2019 ◽  
Vol 8 (1) ◽  
pp. 11
Author(s):  
Masaru Suzuki
Keyword(s):  
Corporate Governance ◽  
Boards Of Directors ◽  
Lessons Learned ◽  
Gradual Change ◽  
Governance Reform ◽  
Outside Directors ◽  
Governance System ◽  
Corporate Scandals ◽  
Management Board ◽  
Corporate Governance Reform

<p>The topic of outside directors’ functions has been attracting significant attention for many years now, especially in the discussions about corporate governance reform in Japan. Over the last two decades, most listed Japanese companies have voluntarily introduced outside directors into their boardrooms, in line with the gradual change in an overall corporate governance system toward a monitoring board model moving away from the more traditional management board model. It appears the recent trend is for companies to add outside directors to their boards of directors to increase corporate values.<strong> </strong>In the midst of transforming the management board model into the monitoring board model, closely reexamining the functions of outside directors is necessary. What can be concluded from the lessons learned from recent corporate scandals and the discussions concerning the functions of outside directors is: (1) outside directors should be truly independent from the company’s management; and (2) outside directors need access to the company’s corporate information in order to prevent corporate scandals and to provide appropriate advice to the company’s management. <strong> </strong>This paper aims at considering how to make outside directors more effective and their roles more substantial, based on the history of corporate governance reform in Japan.</p>

scholarly journals Informal Institutions in the Corporate Governance System in Russia

2016 ◽  
Vol 19 (4) ◽  
Author(s):  
Monika Fiedorczuk
Keyword(s):  
Corporate Governance ◽  
Dominant Role ◽  
Informal Institutions ◽  
Point Of View ◽  
Minority Shareholders ◽  
Governance System ◽  
Market Mechanisms ◽  
Role Of The State ◽  
Corporate Governance System

The corporate governance system in Russia, having evolved through years, can be characterized by the following features: the dominant role of the concentrated ownership structure, corporate supervision relying on a combination of ownership function and company management, the significant role of the state as the owner, and the fairly marginal relevance of external market mechanisms. Those features result partly from particular legal solutions and partly from the unwritten, informal customs or patterns of behaviour of the so-called informal institutions.The article’s main thrust is to analyse selected informal institutions which were considered the most significant from the Russian corporate governance system point of view. These are, among others: the tendency not to obey the rights of minority shareholders, informal relationships of enterprises with authorities of various levels, and corruption. The author assumes that informal institutions decide upon the specificity of the corporate governance system in Russia and its particular elements, and upon the efficient functioning of supervisory mechanisms.

Does one size fit all? A configurational approach to board effectiveness in limiting the excess cash

2021 ◽  
Vol 59 (13) ◽  
pp. 136-163
Author(s):  
Marina Brogi ◽  
Carmen Gallucci ◽  
Rosalia Santulli
Keyword(s):  
Internal Control ◽  
Family Firms ◽  
Qualitative Comparative Analysis ◽  
Cash Holdings ◽  
Type Ii ◽  
Minority Shareholders ◽  
Board Effectiveness ◽  
Control Female ◽  
Content Type ◽  
Configurational Approach

Purpose The study, by focusing on a context dominated by firms with a concentrated ownership, in which type-II agency problems (principal-principal conflicts) may occur, aims to depict which board configurations may be effective in protecting minority shareholders by mitigating the risk of controlling shareholders' expropriation via cash holdings.Design/methodology/approach The research adopts a configurational approach and empirically conducts a fuzzy set/qualitative comparative analysis on a sample of 268 Italian listed companies.Findings The analysis depicts three combinations of board configurations and ownership structures that can be considered effective, namely Active Independent Control, Female Active Control and Double Internal Control.Originality/value The study revisits the topic of the risk of expropriation via cash holdings in a type-II agency problem framework and delineates the meaning of board effectiveness in a mature context ruled by family firms, like Italy. Furthermore, by drawing on a configurational approach, it overcomes the causality relationship between each board characteristic and cash holdings policies and reasons from a “bundle” perspective.

INTERNAL AUDIT - EFFECTIVE INSTUMENTY OF CORPORATE GOVERNANCE SYSTEM

2016 ◽  
Vol 11 (2) ◽  
pp. 95-99 ◽  
Author(s):  
Закирова ◽  
Alsu Zakirova ◽  
Клычова ◽  
Augul Klychova ◽  
Клычова ◽  
...  
Keyword(s):  
Internal Control ◽  
Internal Audit ◽  
Governance System ◽  
Internal Audit Function ◽  
Wide Range ◽  
Corporate Governance System ◽  
Internal Control System ◽  
Range Of Functions ◽  
Domestic Companies

Today the debatable problem is the effectiveness of internal control system. That internal audit, as a part of interfarm monitoring systems, has a wide range of functions, that go beyond the range of issues, relating to internal control. In Russia, there are no laws and regulations, governing the internal audit organization. The absence of a rigid framework is a prerequisite for creating the most effective internal audit service. The establishment an internal audit function is also becoming increasingly necessary because of competition and integration of foreign and domestic companies. This article provides an irreplaceable role of internal audit in terms of its objectives and functions.

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