A Review of Corporate Governance: Ownership Structure of Domestic-Owned Banks in Term of Government Connected Ownership, and Foreign Ownership of Commercial Banks in Malaysia

Purpose Previous studies that dealt with corporate governance have witnessed gradually significant growth that created some new trends. The purpose of this paper is to be involved in such trends through examining the link between ownership structure as one of the important corporate governance mechanisms and firm performance in Jordan as one of emerging economies. Design/methodology/approach The current study used the multiple regression method to analyze available data for non-financial firms listed in the Amman Stock Exchange for the fiscal year 2012. Findings The findings revealed that managerial ownership has a positive impact on performance. On the other hand, the findings surprisingly showed no evidence to support the impact of foreign ownership on performance. Moreover, there is a significant evidence to support the fact that company size has no impact on firm performance. The findings also revealed that industry type has no impact on firm performance. Practical implications The practical implications of the current study demonstrated that good corporate governance is imperative to all organizations and must be encouraged for the interest of all stakeholders. Unlike the majority of the previous studies, the current study unexpectedly found that foreign ownership is not significantly contributing to the firm performance. Thus, Jordanian Government and other related/responsible parties should formulate policies for the foreign investors. Originality/value Interestingly, from developed and developing countries perspective, the study is the first of its kind that exclusively chose the mechanisms of ownership structure in its relationship with firm performance represented by market share, where no previous study has tested foreign ownership in such relationship. In that, this study is the first study in emerging economies to investigate such a link. Such new insights on this relationship by current study provide helpful information that is of great value to the government, academics, policy makers, and other stakeholders.

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Corporate Governance Features and Efficiency: Evidence from the Saudi Arabian Banks

International Journal of Economics and Finance ◽

10.5539/ijef.v12n1p43 ◽

2019 ◽

Vol 12 (1) ◽

pp. 43

Author(s):

Adel Bogari

Keyword(s):

Corporate Governance ◽

Technical Efficiency ◽

Ownership Structure ◽

Saudi Arabian ◽

Foreign Ownership ◽

State Ownership ◽

Scale Efficiency ◽

Private Ownership ◽

Board Size ◽

Banking Efficiency

The aim of this article is to examine the effect of the Corporate Governance features as measured by the Independence of the board of directors, the board size and the ownership structure (private ownership/State ownership and foreign ownership) on the banking efficiency of Saudi Arabian banks. A data set of the twelve biggest banks for the period 2000 to 2017 is used. As for banking efficiency scores, the methodology is based on the Data Envelopment Analysis (DEA). It allows for Technical Efficiency, Pure Technical Efficiency and Scale Efficiency scores. The results of this study point to the significant role of The Independence (INDEP) variable supported by a positive and significant effect on efficiency in all regressions, indicating a positive relationship with the Technical Efficiency (TE) and the Pure Technical Efficiency (PTE). In the contrary, the independence of the board directors has a negative and significant effect on scale efficiency (SE). According to Board Size variable, results related to this later reveal a negative and a significant effect on technical efficiency (TE), Pure Technical Efficiency (PTE) and Scale Efficiency (SE) in all regressions. Finally, as for the ownership structure variables, results confirm that Private Ownership (OWEN-P) provides positive and significant effects on both the Technical and the Scale Efficiency. This effect seems to be turn to be negative and significant when it is correlated to the Pure Technical Efficiency. State Ownership (OWEN-S) impacts positively and significantly the Technical Efficiency, the Pure Technical Efficiency and Scale Efficiency separately. As for the Foreign Ownership (OWEN-F) variable, except for the Pure Technical Efficiency (PTE), we note a positive and significant effect on the Technical and Scale Efficiency. This study implies better Corporate Governance practices should be supported to improve the overall efficiency and its components. This includes in particular, the Board Size and the Ownership structure variables.

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Pengaruh Mekanisme Corporate Governance Terhadap Konservatisme Akuntansi Dengan Intensitas Fair Value Sebagai Pemoderasi

Paediatrica Indonesiana ◽

10.24036/wra.v8i1.109028 ◽

2020 ◽

Vol 8 (1) ◽

pp. 65

Author(s):

Kazbarani Alvino ◽

Nurzi Sebrina

Keyword(s):

Corporate Governance ◽

Ownership Structure ◽

Audit Quality ◽

Institutional Ownership ◽

Fair Value ◽

Foreign Ownership ◽

Accounting Conservatism ◽

Manufacturing Companies ◽

Governance Mechanisms ◽

Corporate Governance Mechanisms

The purpose of this research is to examine the effect of corporate governance mechanisms that are moderated by fair value on the level of accounting conservatism. The corporate governance mechanism consists of an independent commissioner, an institutional ownership structure, a foreign ownership structure and audit quality. Research conducted on manufacturing companies and financial companies listed on the Stock Exchange period 2016-2018, purposive sampling method was used to determine the research sample so that 93 manufacturing companies and 52 financial companies was obtained. Hypothesis testing is done by multiple regression methods. The results showed that the independence of commissioners had a positive effect on the level of accounting conservatism. In manufacturing companies, institutional ownership structure does not affect the level of conservatism, whereas in financial companies, institutional ownership structure influences the level of accounting conservatism. Other corporate governance mechanisms, foreign ownership and audit quality, do not influence the level of accounting conservatism in both manufacturing and financial companies. The intensity of fair value in both sectors of the company has a negative effect, or weakens the relationship of corporate governance mechanisms to the level of accounting conservatism Keywords: Accounting Conservatism; Fair Value; Corporate Governance

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Ownership Structure and Return on Assets of Commercial Bank in Nigeria

American Finance & Banking Review ◽

10.46281/amfbr.v2i2.134 ◽

2018 ◽

Vol 2 (2) ◽

pp. 20-33

Author(s):

Joseph Igbiks Orumo

Keyword(s):

Ownership Structure ◽

Commercial Banks ◽

Institutional Ownership ◽

Foreign Ownership ◽

Fixed Effect ◽

Ownership Concentration ◽

Private Ownership ◽

Return On Assets ◽

Investment Promotion ◽

Management Ownership

This study examined the effect of ownership structure on return on assets of deposit money banks in Nigeria. The objective was to investigate the relationship between the composition of ownership structure and deposit money banks return on assets. Cross sectional data was sourced from financial statement of fifteen quoted commercial banks. Return on assets was modeled as a function of domestic ownership, ownership concentration, foreign ownership institutional ownership and management ownership. After cross examination of the validity of the pooled effect, fixed effect and the random effect, the study accepts the fixed effect model. The result found that ownership concentration, management ownership and institutional ownership have negative relationship with the dependent variable while private ownership and management ownership have positive relationship with the dependent variable which is return on investment. While private ownership, ownership concentration, institutional ownership and foreign ownership have positive effect on the dependent variable which is return on assets while management ownership have negative effect on the dependent variable. We recommend that regulatory authorities such as the Securities and Exchange Commission, the Nigerian investment promotion council should encourage private investors to invest into the equity shares of the commercial banks and the need for commercial banks to increase their ownership structure through public listing, right issue and other means of attracting public and institutional investors.

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Assessing the influence of Corporate Governance, Ownership Concentration and Bank Size on the Firm's Value and Bank's Performance: Evidence from Pakistan

Global Economics Review ◽

10.31703/ger.2020(v-iv).04 ◽

2020 ◽

Vol V (IV) ◽

pp. 34-46

Author(s):

Ihtesham Khan ◽

Wisal Ahmad ◽

Syed Arshad Ali Shah

Keyword(s):

Corporate Governance ◽

Empirical Study ◽

Ownership Structure ◽

Commercial Banks ◽

Banking Sector ◽

Stock Exchange ◽

Ownership Concentration ◽

The Impact

This empirical study examines the impact of corporate governance, ownership structure and bank size on the bank's performance and firm's value of the banking sector in Pakistan. The data is extracted for 17 commercial banks listed at the Pakistan Stock Exchange for the period of 2006-2016. The results show that corporate governance and bank size positively affect bank's performance while ownership concentration does not have any effect on bank's performance. Moreover, firm's value is positively affected by ownership concentration, while it is not affected by corporate governance and bank size.

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Corporate governance and financial performance of banks in Ghana: the moderating role of ownership structure

International Journal of Emerging Markets ◽

10.1108/ijoem-09-2020-1146 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Christopher Boachie

Keyword(s):

Corporate Governance ◽

Financial Performance ◽

Ownership Structure ◽

Positive Impact ◽

Chief Executive ◽

Foreign Ownership ◽

African Countries ◽

Content Type ◽

The Government ◽

Practical Implications

PurposeThe purpose of this paper is to investigate the moderating effect of ownership on the links between corporate governance and financial performance in the context of Ghanaian banks.Design/methodology/approachThe current study used a sample of 23 banks and the multiple regression method to analyze a panel dataset of 414 from banks over an 18-year period.FindingsThe findings revealed that audit independence, chief executive officer (CEO) duality, non-executive directors and banks size have a positive impact on performance. The findings also revealed that foreign ownership has an interacting effect between corporate governance and profitability.Practical implicationsThe practical implications of the current study demonstrated that good corporate governance creates value and must be invigorated for the interest of all stakeholders. Foreign ownership has an interacting effect between corporate governance and performance. Policymakers should formulate policies for attracting foreign investors.Originality/valueInterestingly, this study is the first of its kind that exclusively chose ownership structure to interact between corporate governance and bank performance in Ghanaian perspective. Such new insights on this relationship provide useful information to the government, academics, policymakers and other stakeholders. The growing economies of African countries, and the inadequate governance–performance literature in African context, have created a demand to appreciate the governance parameters in these countries and its influence on firm's performance.

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Corporate governance and the financial performance of commercial banks in Ghana

Journal of Research in Emerging Markets ◽

10.30585/jrems.v2i4.541 ◽

2020 ◽

Vol 2 (4) ◽

pp. 33-47

Author(s):

Samuel Gyamerah ◽

Hannah Fosuaa Amo ◽

Sandra Adomako

Keyword(s):

Corporate Governance ◽

Commercial Banks ◽

Audit Committee ◽

Banking Sector ◽

Foreign Ownership ◽

Ceo Duality ◽

Good Corporate Governance ◽

Income Ratio ◽

Corporate Governance Practice

This study aims to provide further evidence on the effect of corporate governance on the performance of Ghanaian banks. Two performance measures were used in this study, namely: Return on Asset (ROA) and Cost-Income Ratio (CIR). Data for the analysis were sourced from 21 commercial banks from 2005 to 2015. Regression estimation techniques were employed for analysis purposes. The result revealed that large board size reduces banks’ performance. Furthermore, CEO duality and foreign ownership negatively affect the performance of banks. However, while the effect of CEO duality was significant on CIR, it was not significant in the case of ROA. On the contrary, the effect of foreign ownership was only significant on ROA. Moreover, board independence has a significant positive effect on both CIR and ROA, while audit committee independence has no significant effect on CIR and ROA. The paper argues that for a good corporate governance practice, banks should institute a small board with more than half of the members being independent directors. Furthermore, the role of the board chair should be separated from that of the managing director/CEO. The study provides insight and further evidence to stakeholders and regulators to deal with the crisis in the Ghanaian banking sector.

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Corporate governance and firm performance: an empirical evidence from Syria

International Journal of Islamic and Middle Eastern Finance and Management ◽

10.1108/imefm-05-2017-0107 ◽

2018 ◽

Vol 11 (4) ◽

pp. 591-607 ◽

Cited By ~ 7

Author(s):

Zukaa Mardnly ◽

Sulaiman Mouselli ◽

Riad Abdulraouf

Keyword(s):

Corporate Governance ◽

Firm Performance ◽

Ownership Structure ◽

Audit Committee ◽

Political Stability ◽

Foreign Ownership ◽

Content Type ◽

Governance Indicators ◽

Governance Index ◽

The Impact

Purpose This study aims to examine the impact of aggregate and individual corporate governance provisions on firm performance on all firms listed at Damascus Securities Exchange (DSE) for the period between 2011 and 2015. In addition, it disentangles ownership structure provision to ownership concentration and foreign ownership and investigates which component of ownership structure stands behind the significance of ownership structure in explaining firm performance. Design/methodology/approach The study uses multiple linear regression models to analyze the relationship between aggregate corporate governance index and its provisions and firm performance. A corporate governance index is built on the basis of four mechanics (i.e. board of directors, audit, disclosure and ownership structure) for all firms listed at DSE. On the other hand, the dependent variable (firm performance) is measured using Earnings Per Share (EPS) and Return On Assets (ROA). The authors capture current war conditions using political stability and absence of violence indicator, one of Worldwide Governance Indicators accumulated by the World bank. Findings This study finds that ownership structure is the only significant corporate governance provision in determining Syrian firms’ performance, as it loads positively and significantly on firm performance proxies (ROA and EPS). Moreover, the analysis of ownership structure items shows that foreign ownership is the main source of this positive and significant impact. This result is robust for both measures of firm performance and in the presence of political stability indicator. Originality/value This paper provides evidence on corporate governance measures from Syrian Arab Republic, a developing country with an emerging stock exchange. It examines board structure, ownership structure, audit committee and disclosure in a period of crisis because of the war in this country. Moreover, it uncovers that foreign ownership is the only influential provision affecting firm performance at DSE. Furthermore, it combines firm-level governance indicators with country governance indicator of political stability and absence of violence.

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Corporate Governance, Bank Performance and Value:-Evidence from Pakistan

NICE Research Journal ◽

10.51239/nrjss.v13i3.191 ◽

2020 ◽

pp. 102-129

Author(s):

Ayaz Ali ◽

Abdul Rasheed ◽

Muhammad Ibrahim ◽

Khalil-Ur-Rehman Wahla

Keyword(s):

Corporate Governance ◽

Ownership Structure ◽

Commercial Banks ◽

Bank Performance ◽

Board Structure ◽

Time Period ◽

The Board Of Directors ◽

Almost All ◽

Relationship Of ◽

The Relationship

The study aims to examine the relationship of board structure, ownership structure, and bank-specific variables with bank performance and value. Panel Data is collected from eighteen conventional commercial banks of Pakistan for the time period of 2012 to 2017. The analysis is carried out by employing pooled OLS model estimation, descriptive statistics, and correlation analysis, using Eviews-9, with 108 observations. The board size and board independence are found to have a determinant effect on the bank performance and value. This implies that the larger boards are more likely to improve corporate performance. Also, an ample number of independent directors, in the board of directors, result in better bank performance. The study also reveals that ownership structure does not contribute directly in bank performance and value; however, foreign shareholding is found to have positive relationship with the value of banks which reduces agency problems. Additionally, adequate capital reserves help banks sustain in the market while the size of banks and non-performing loans contribute to bank performance. The study established a link between corporate governance attributes with the performance and market value of banks while taking bank-specific variables as well. This study has an implication for almost all the stakeholders in banks i.e. corresponding banks, shareholders, central banks, practitioners, and academicians. The study includes only conventional commercial banks and can be extended to study the overall financial sector in a setting or in a comparative manner.

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Board governance, ownership structure and foreign investment in the Saudi capital market

Journal of Financial Reporting and Accounting ◽

10.1108/jfra-11-2020-0329 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Mohammed Bajaher ◽

Murya Habbash ◽

Adel Alborr

Keyword(s):

Corporate Governance ◽

Saudi Arabia ◽

Foreign Investment ◽

Ownership Structure ◽

Capital Market ◽

Foreign Ownership ◽

Board Governance ◽

Foreign Investors ◽

Content Type ◽

The Impact

Purpose This paper aims to examine whether board governance mechanisms and ownership structure play a role in foreign investors’ decisions when buying shares in Saudi listed companies Design/methodology/approach Foreign investment in the Saudi capital market started in 2015 and reached a peak in 2019, with corporate governance regulations having been updated in 2017. The authors tested the proposed relationships using hand collected data for all Saudi non-financial firms in 2019. Findings This study found that it does not play a role in attracting foreign investment in the Saudi capital market. Foreign investors also seem to avoid firms with concentrated ownership that either have high government or director ownership; however, accounting and market variables show significant impact on foreign investors' decisions. The outcomes of this study provide empirical evidence that current foreign investors in the Saudi stock market do not place enough merit on board governance and their investment decisions tend to depend on share performance. Thus, the results show that the current governance changes and capital market regulations in Saudi Arabia may not have been sufficient to stimulate the inflow of institutional foreign investment to the country to date, but rather they have attracted individual retail foreign investors. Originality/value This empirical study is one of only a small number of studies to investigate the impact of internal corporate governance on foreign ownership in developing countries and the first in the Saudi context. In fact, most previous governance research in Saudi Arabia focused on how board governance and ownership structure influences firm performance. A review of the prior studies found that only Badawi et al. (2019) examined the determinants of foreign ownership among Saudi listed firms. Thus, the present investigation extends that study by examining the role of board governance in attracting foreign investors.

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