THE EFFECTS OF CORPORATE GOVERNANCE PRACTICES ON FIRM-LEVEL FINANCIAL PERFORMANCE: EVIDENCE FROM BORSA ISTANBUL XKURY COMPANIES

Corporate governance (CG) is a fundamental criteria for enhancing investors’ and stakeholders’ trust, relatively recently recognized in emerging markets. This study investigates the effects of CG practices on the firm-level financial performance of Borsa Istanbul XKURY-indexed companies during 2007–2019. Four specific aspects of CG are analysed: shareholders’ rights, public disclosure and transparency, stakeholders’ rights, and board of directors functioning, as defined by the Turkish Code of Corporate Governance, in line with international principles of CG issued by OECD. Alternative estimations of panel regression analysis indicate a positive association between stakeholder-oriented governance practices and firm-level financial performance expressed by accounting measures for both financial and non-financial companies. Shareholder protection policies have a negative influence on accounting-based performance, especially for non-financial industries, whereas the corporate practices related to board of directors and public disclosure vary between financial and non-financial entities. These findings contribute to international research on CG implications for emerging markets, providing evidence about the importance of stakeholders’ protection and the distinctive effects of CG dimensions for corporate financial performance.

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COMPARATIVE ANALYSIS OF ACCOUNTING AND FINANCIAL PERFORMANCE OF COMPANIES WITH GOOD CORPORATE GOVERNANCE PRACTICES IN BRAZIL

Revista Contabilidade e Controladoria ◽

10.5380/rcc.v4i1.25258 ◽

2012 ◽

Vol 4 (1) ◽

Author(s):

Marcelo Alvaro Da Silva Macedo ◽

Luiz João Corrar

Keyword(s):

Corporate Governance ◽

Comparative Analysis ◽

Financial Performance ◽

Good Corporate Governance ◽

Governance Practices

Este artigo tem como objetivo analisar comparativamente o desempenho contábil-financeiro de empresas com boas práticas de governança corporativa e outras sem esta característica, através da aplicação da Análise Envoltória de Dados (DEA) às informações do setor de distribuição de energia elétrica no Brasil no período de 2005-2007. Para tanto, utiliza-se de informações sobre lucratividade, margem de lucro, giro do ativo, liquidez, endividamento e imobilização obtidas na base Melhores e Maiores da Exame-FIPECAFI. Em linhas gerais, a comparação entre o desempenho médio destes dois grupos, utilizando o teste não paramétrico de Mann-Whitney, ao nível de significância de 5 %, mostra que para o ano de 2005 e para o desempenho médio no período de análise pode-se concluir que as empresas com boas práticas de governança corporativa têm desempenho contábil-financeiro estatisticamente superior. Porém, em relação a 2006 e 2007 o desempenho dos dois grupos é estatisticamente igual ao nível de 5 %. Isso suporta apenas parcialmente as indicações de superioridade de desempenho apresentadas na literatura de governança corporativa.

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Board of directors, performance and firm value in Brazilian listed state-owned enterprises

Brazilian Review of Finance ◽

10.12660/rbfin.v18n2.2020.80898 ◽

2020 ◽

Vol 18 (2) ◽

pp. 1

Author(s):

Carolina Coletta ◽

Roberto Arruda de Souza Lima

Keyword(s):

Corporate Governance ◽

Firm Performance ◽

Board Of Directors ◽

Firm Value ◽

Board Structure ◽

Agency Conflicts ◽

Governance Practices ◽

The Board Of Directors ◽

Structure Index ◽

Corporate Governance Practice

<p>This paper investigates the relationship between the board of directors' structure and firm performance and the value of Brazilian listed state-owned enterprises (SOEs), from 2002 to 2017, totaling 327 observations using an unbalanced panel data with fixed and random effects regressions. The evolution of corporate governance practices adopted by the boards is presented for this period, using a Board Structure Index (BSI). The results indicate a significant positive relation between the board's structure and firm performance, measured by ROE and ROA, and firm value, measured by Tobin's <em>q</em>. These findings are consistent with corporate governance literature, in the sense that the board's role of monitoring management reduces agency conflicts. The results also show an improvement in adopting corporate governance practice on Brazilian SOEs' boards over the last decade.</p>

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Performance, corporate governance and new regulation

ENERO-JUNIO 2021 - Revista Innovaciones de Negocios ◽

10.29105/rinn9.18-4 ◽

2017 ◽

Vol 9 (18) ◽

Author(s):

Heriberto García

Keyword(s):

Corporate Governance ◽

Financial Performance ◽

Financial Market ◽

Information Disclosure ◽

Potential Growth ◽

Listed Firms ◽

Risk Return ◽

Corporate Governance Code ◽

Governance Practices ◽

The Relationship

Abstract. After the adoption of the Corporate Governance Code (Code) in Mexico, many companies increased financial performance and the leveraged during the following five years; we investigated the effect of how those firms improved the corporate governance practices and how was translated into better risk return company. We analyzed how and where better corporate governance practices affects performance and what was the relationship with Transparency, New Regulation and Governance Practices. Also we explored the gaps between transparency and information disclosure of Mexican Firms listed in U.S stockexchange and non U.S listed firms our findings were related to the potential growth of the Mexico Financial Market, Law and Finance.Keywords: corporate governance, financial performance, regulationResumen. Después de la adopción del Código de Gobierno Corporativo en México, algunas compañías incrementaron el desempeño financiero y el uso de deuda durante los siguientes cinco anos, nuestra investigación se enfoca en como dichas compañías mejoraron sus prácticas de gobierno corporativo y como estas prácticas se han traducido en un mejor relación de riesgo y rendimiento. En esta investigación exploramos cómo y en dónde mejores prácticas de gobierno corporativo afectan el desempeño y qué relación tiene con laTransparencia, Nuevas Regulaciones y prácticas de Gobierno Corporativo. Con lo anterior también identificamos aquellas compañías que cotizan fuera de México para identificar potenciales diferencias en dichas prácticas.Palabras clave: desempeño financiero, gobierno corporativo, regulación

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The Relationship Between Corporate Governance Practices and Financial Performance: Evidence from Amman Stock Exchange

10.47260/jfia/1014 ◽

2021 ◽

pp. 63-87

Author(s):

Hussein Ahmad Bataineh ◽

Sulaiman Salim Al Harthy ◽

Raqiya Ali Al Balushi

Keyword(s):

Corporate Governance ◽

Financial Performance ◽

Stock Exchange ◽

Predictor Variable ◽

P Value ◽

Amman Stock Exchange ◽

Governance Practices ◽

Unit Increase ◽

Beta Coefficient ◽

The Relationship

The objective of the study was to establish the relationship between corporate governance Index and financial performance and evidence from Amman stock exchange. To achieve this objective, this study applied descriptive research structure. In this case, the research focused on the 181 firms listed at the Amman Stock Exchange (Appendix I). The statistical techniques that was applied to analyze collected data included descriptive statistics. The information analyzed revealed that the model summary indicated that the R² to be 0.243. This meant that 24.3% of the variation in performance (ROA) was due to the predictor variable captured in the study. This also implied that 75.7% of the variation in ROA was attributed to the measurements of error and other factors that could have had an effect on the ROA but were not captured in the study. The estimated model showed that ROA when other factors are held constant was 1.610. The outcomes also revealed that governance score had a beta coefficient of 0.573 indicating that for every unit increase in governance score on the ROA went up by 0.573. This relationship is significance since P-value of 0.025<0.05. Therefore, the model qualified as a good predictor. Keywords: Corporate Governance, Financial Performance, Amman stock Exchange.

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FINANCIAL PERFORMANCE: THE ROLE OF GOOD CORPORATE GOVERNANCE (CASE STUDY IN THE MANUFACTURING COMPANIES OF BASIC AND CHEMICAL INDUSTRIAL SECTORS REGISTERED ON THE INDONESIA STOCK EXCHANGE 2016-2018)

Primanomics Jurnal Ekonomi & Bisnis ◽

10.31253/pe.v18i2.350 ◽

2020 ◽

Vol 18 (2) ◽

pp. 36

Author(s):

Ari Susanti ◽

Sri Lestari

Keyword(s):

Corporate Governance ◽

Financial Performance ◽

Board Of Directors ◽

Quantitative Research ◽

Audit Committee ◽

Stock Exchange ◽

Manufacturing Companies ◽

Financial Reports ◽

Industrial Sectors ◽

Good Corporate Governance

This study aims to examine the effect of implementing good corporate governance as measured by an independent board of commissioners, board of directors, and audit committee on financial performance measured using Return of Equity (ROE). This research uses quantitative research. The population in this study are manufacturing companies in the basic and chemical industry sectors that consistently publish financial reports on the Indonesia Stock Exchange from 2016 to 2018. Based on the purposive sampling method, a sample of 11 companies is obtained each year to obtain 33 observational data. The data in this study use warpPLS 6.0 software. The results of this study indicate that the independent board of commissioners, the board of directors affect the financial performance, while the audit committee has no effect on financial performance.

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Corporate governance and board of directors in Greek listed companies

Corporate Board role duties and composition ◽

10.22495/cbv13i2art4 ◽

2017 ◽

Vol 13 (2) ◽

pp. 38-45 ◽

Cited By ~ 3

Author(s):

Chryssoula Tsene

Keyword(s):

Corporate Governance ◽

Board Of Directors ◽

Listed Companies ◽

Company Law ◽

Board Members ◽

Executive Directors ◽

Shareholder Protection ◽

Key Factor ◽

Code Of Corporate Governance ◽

Legal Mechanism

Corporate governance is widely acknowledged as a key factor of market’s efficiency and corporate performance. Greek company law, under the influence of the financial crisis, has responded actively by incorporating in national law EU directives on corporate governance of listed companies and by adopting recently self-regulatory provisions. This regulatory framework contributes essentially to enhance board accountability and transparency, empower shareholder protection and promote financial disclosure. In that regard, two pillars should be illustrated as regards board of directors in listed companies: Greek company law provides traditionally for the establishment of the general duties of loyalty and care of all board members in companies limited by shares, which are furthermore reinforced by the provisions of the Hellenic Code of Corporate Governance for listed companies. Secondly, hard law rules introduce the participation of non-executive and non-executive independent directors as a legal mechanism of confronting agency problems in listed companies. These provisions have been strongly argued as regards the exact content of the obligations of all board members of listed companies to promote the corporate interest and especially as regards the monitoring role of non-executive directors. These conceptions should be followed by empirical researches in order to address a completely legal and functional approach.

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Do corporate governance practices restrain earnings management in banking industry? Lessons from India

Journal of Financial Reporting and Accounting ◽

10.1108/jfra-02-2021-0060 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Deepa Mangala ◽

Neha Singla ◽

Neha Singla

Keyword(s):

Corporate Governance ◽

Earnings Management ◽

Board Of Directors ◽

Audit Committee ◽

Least Square ◽

Loan Loss ◽

Content Type ◽

Governance Practices ◽

Indian Banks

Purpose This study aims to investigate the role of corporate governance practices in restraining earnings management in Indian commercial banks. Design/methodology/approach Estimation of earnings management is based on discretionary loan loss provision and discretionary realised security gains and losses using Beatty et al. (2002) model. The effect of corporate governance on earnings management is examined by performing two-way least square dummy variable regression. Data for a period of five years (2016–2020) is collected from the Centre for Monitoring Indian Economy ProwessIQ database, Reserve Bank of India website, annual report of banks, National Stock Exchange and bank’s website. Findings Regression results exhibit that number of board committees, size and independence of audit committee and joint audit are significantly effective in curbing earnings management. Other board-related variables (size, independence, meetings and diligence) and audit committee variables (meetings and diligence) are not effective in restraining earnings management in Indian banks. Practical implications The findings may prove to be helpful to regulators, board of directors and investors. It shows the weak area of corporate governance in India that is lack of autonomy to independent directors, which needs regulators attention and it also suggests that the number of independent auditors should be adequate for audit purposes. The board of directors must ensure the formulation of an adequate number of committees, which perform their own super specialised functions. This study brings an alarm to investors not to rely on reported earnings alone as they may be manipulated. Originality/value This paper substantiates the scant literature on the role of corporate governance practices in restraining earnings management in banks of emerging markets and to the best of the authors’ knowledge impact of joint audits on earnings management is previously unexplored in Indian banks, which are examined in this study.

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Product market competition, state-ownership, corporate governance and firm performance

Asian Review of Accounting ◽

10.1108/ara-05-2017-0080 ◽

2018 ◽

Vol 26 (1) ◽

pp. 62-83 ◽

Cited By ~ 4

Author(s):

Li Liu ◽

Wen Qu ◽

Janto Haman

Keyword(s):

Corporate Governance ◽

Firm Performance ◽

Board Of Directors ◽

Market Competition ◽

State Ownership ◽

Product Market Competition ◽

Content Type ◽

Good Corporate Governance ◽

Governance Practices ◽

Negative Effect

Purpose The purpose of this paper is to examine the association between firm performance and product market competition (PMC), and then examine the mitigation effect of corporate governance and/or state-ownership (SOEs) in the association between PMC and firm performance using Chinese listed firms. Design/methodology/approach The authors consider three determinants of the PMC that affect the nature of competition, and use market concentration, product substitutability and market size as proxies for PMC. The authors construct a corporate governance index which measures the extent of board independence, monitoring strength of supervisory board over board of directors, and monitoring strength of board of directors over CEO. The authors use Tobin’s Q as a proxy for firm performance. The authors use a sample of 20,706 firm-year observations listed on the Chinese stock market between 2001 and 2016 to empirically investigate the research questions proposed in the paper. Findings The authors find that higher PMC is associated with lower firm performance. The authors find that good corporate governance practices moderate the negative effect of higher PMC on firm performance. The association between higher PMC and lower performance is weaker for firms controlled by SOEs compared to non-SOEs. Further, the moderation effect of SOEs on the association between higher PMC and lower performance is more pronounced for firms with good corporate governance practices compared to firms with weak corporate governance practices. Originality/value Extant studies investigating the relationship between PMC and corporate governance suggest an either complementary or substitution relationship in developed economies. Our study highlights the interactive role played by SOEs and good corporate governance practices in firm performance in highly competitive product markets in an emerging economy. The findings provide insightful information to regulators of other emerging countries that SOEs with good corporate governance practices can play an important role in the economy by mitigating the negative effect of higher PMC on firm performance.

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Corporate Governance and Cost of Capital: Evidence from Emerging Market

Risks ◽

10.3390/risks8040104 ◽

2020 ◽

Vol 8 (4) ◽

pp. 104

Author(s):

Muhammad Yar Khan ◽

Anam Javeed ◽

Ly Kim Cuong ◽

Ha Pham

Keyword(s):

Corporate Governance ◽

Lower Cost ◽

Cost Of Capital ◽

Emerging Market ◽

Firm Level ◽

Listed Firms ◽

Corporate Failure ◽

Governance Index ◽

Governance Practices ◽

Code Of Corporate Governance

This study used a researcher self-constructed corporate governance index as a proxy to measure the firm-level corporate governance compliance and disclosure with the 2002 Pakistani Code of Corporate Governance, to examine the relationship between corporate governance and cost of capital. We found a negative and significant association between the Pakistani Corporate Governance Index (PCGI) and block ownership with the firm-level cost of capital. On average, better-governed Pakistani listed firms tend to be associated with a lower cost of capital than their poorly governed counterparts are. As an emerging market, good corporate governance practices are mainly related to minimise corporate failure and assist firms in attracting capital at a lower cost.

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The Current Rights of Minority Shareholders in Saudi Arabia

International Law Research ◽

10.5539/ilr.v6n1p185 ◽

2017 ◽

Vol 6 (1) ◽

pp. 185

Author(s):

Khalid Saad Al-habshan

Keyword(s):

Corporate Governance ◽

Saudi Arabia ◽

Board Of Directors ◽

Legal Framework ◽

Minority Shareholders ◽

Shareholder Protection ◽

Minority Shareholder Protection ◽

The Board Of Directors ◽

Standards And Regulations ◽

Minority Shareholdings

The preceding articles examined the legal framework of corporate governance in Saudi Arabia and the important elements of the institutional framework for Saudi corporate governance. The discussion in this chapter first focuses on government and government-regulated institutions established to enforce compliance and see that the actions of corporations are in line with corporate governance law. This chapter then examines minority shareholdings interests and rights and investigates minority shareholder protection under the CL. In addition, the board of directors is described, which controls and guides firm operations in compliance with corporate governance standards and regulations.

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