The Corporate Governance in turnaround strategy: the definition of index of good governance and evidence on performance

In an organizational setting, the board members are the persons in whom power is entrusted by the principals to act as fiduciaries and to guide the organization. A main cause of concern originates from the elassical problem of the separation of ownership and control. Although agency theory, the dominant approach to research on corporate governance in particular, holds that the separation of ownership and control constitutes an efficient division of labor, there is widespread awareness that managers and boards may take actions that hurt principals or constituencies they are meant to serve. An agency problem can manifest in several ways. First, managers and boards exert insufficient effort while overcommitting themselves to external activities. Secon, they might reap private benefits in the form of perks. Last, they may take unnecessary risks by committing to mature projects. This basic agency problem suggests a possible definition of corporate governance and nongovernmental (organizational) governance as addressing both and adverse selection and a moral hazard problem. A good governance structure is then one that selects the most able managers and makes them accountable to relevant constituents. Moreover, strengthening board performance in NGOs and thus their governance structure is widely recognized as being a major requisite for the improvement of community services that NGOs provide.

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Corporate governance and performance in turnaround: A synthetic index

Corporate Ownership and Control ◽

10.22495/cocv10i1art6 ◽

2012 ◽

Vol 10 (1) ◽

pp. 62-74 ◽

Cited By ~ 4

Author(s):

Giovanna Mariani ◽

Delio Panaro

Keyword(s):

Corporate Governance ◽

Ad Hoc ◽

Good Governance ◽

Warning Signs ◽

Governance System ◽

Balance Sheets ◽

Synthetic Index ◽

And Performance ◽

Corporate Governance Quality ◽

Definition Of

In this work we carried out an empirical research on a panel of companies in turnaround SMEs, venture capital backed, with the objective of deepening the analysis: Firstly, if warning signs were submitted from firms in turnaround. Secondly, we tried to verify the role played by the Corporate Governance in restructuring, with the definition of an index of good Governance for SMEs (scG) and Performance ad hoc index (scP). Thirdly, the definition of a Synthetic Index (SI) aggregates the two kinds of information: Corporate Governance Quality and Performance. We conducted an analysis of the balance sheets of the companies in turnaround participated by a turnaround fund, in the years 2004 and 2009. In relation to the total number of firms involved in turnaround in the period in question, which were 26 in total; it was possible to reconstruct the historic trend only for 12 of them, for the others the balance sheets could not be found.In conclusion, it can be noted that the analysis of important aspects of management through the development of Z-score, and scG, scP, and SI can summarize complex concepts into a number and allows for comparisons between situations that are not readily comparable in terms of accounting. This study can suggest the definition of Corporate Governance Index for SME in critical situations. This study offers some ideas about the opportunity of stimulating the SME to introduce the Corporate Governance System spread to listed companies

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The corporate governance drivers, performance and risk: empirical evidence from Italian context

Corporate Ownership and Control ◽

10.22495/cocv11i1conf2p4 ◽

2013 ◽

Vol 11 (1) ◽

pp. 126-139 ◽

Cited By ~ 1

Author(s):

Francesca Bernini ◽

Giovanna Mariani ◽

Delio Panaro

Keyword(s):

Corporate Governance ◽

Default Risk ◽

Good Governance ◽

Risk Level ◽

Z Score ◽

Governance Index ◽

Governance Quality ◽

Corporate Governance Quality ◽

Definition Of ◽

Risk Parameters

In this work we carried out an empirical research on a sample of 98 Italian companies continuously listed during 2005-2011, with the objective of deepening the analysis : we tried to verify the role played by the Corporate on performance and default risk, with the definition of an index of good Governance (scG); we tried to verify the variables of Corporate Governance that produce effects on performance and risk of default (Z-score and leverage); we tried to verify the difference of effects of Corporate governance Index on performance and risk for family business and for companies active in M&A; we conducted an analysis on a sample of Italian companies to measure Corporate Governance quality and to evaluate the relationship with the accounting and market performance and the effect on risk level. We find that The Corporate Governance quality presents some correlation with performance and risk parameters. The non family companies are better structured. They show a positive correlation between some Corporate Governance drivers and performance and Z-score. We can observe that le “well-advised” firms in external strategies are able to obtain a better correlation with performance and also a good relation with Z-score. This study can suggest the definition of Corporate Governance Index according to the need to evaluate the opening to shareholders and stakeholders.We examine the relation between the different CG variables and some measure of performance and risk

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Board Effectiveness: An Evaluation based on Corporate Governance Score

Think India ◽

10.26643/think-india.v18i1.7802 ◽

2015 ◽

Vol 18 (1) ◽

pp. 16-23

Author(s):

Hitesh Shukla ◽

Nailesh Limbasiya

Keyword(s):

Corporate Governance ◽

Good Governance ◽

Sustainable Growth ◽

Governance Mechanism ◽

Minority Shareholders ◽

Effective Governance ◽

Performance Orientation ◽

Corporate Governance Mechanism ◽

And Performance ◽

Ethical Governance

Growth, progress, and prosperity of any country depend highly on the corporate governance mechanism of that country. Good governance of a country helps it to sustainable growth and consistency in progress. The good governance should contribute towards the improvement in transparency, ethics, morality, and disclosure. The principles of good governance stand on honesty, trust, integrity, openness, and performance orientation. Our honorable Prime Minister Narendra bhai Modi had given the three E for good governance during his speech on Independence Day i.e. Effective Governance, Electronic Governance, and Ethical Governance. The fundamental concern of corporate governance mechanism is to ensure the protection of minority shareholders/owners of specific firms. Mechanism of a corporate governance specifies the relations among the shareholders, board of directors, and managers. The present paper is an attempt to evaluate the effectiveness of the board by calculating the corporate governance score. The mandatory and non-mandatory guidelines have been considered while assigning points to specific parameters of the corporate governance.

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COMPETENCE APPROACH IN EUROPEAN PUBLIC ADMINISTRATION: ESSENCE AND DEVELOPMENT TRENDS (ARCHETYPAL ASPECT)

UKRAINIAN ASSEMBLY OF DOCTORS OF SCIENCES IN PUBLIC ADMINISTRATION ◽

10.31618/vadnd.v1i14.106 ◽

2018 ◽

Vol 1 (14) ◽

pp. 132-143

Author(s):

Martha Ivanivna Karpa

Keyword(s):

Public Administration ◽

Good Governance ◽

Public Institutions ◽

Public Authorities ◽

European Public ◽

Territorial Organization ◽

Characteristic Features ◽

State And Local ◽

Main Components ◽

Definition Of

The article reveals the main features of the competence approach in the practice of European public administration. The features of the competence approach in public administration are determined on the basis of analysis of the basic concepts of public administration. In the dynamics of the formation and development of popular theories of interaction between state and local authorities, such as the theory of a free community, community (public) and public and state (the theory of municipal dualism), we can trace a number of characteristic features of a competency approach, which manifests itself both through the general theoretical relations and manifestations, and through the practice of coexistence of public authorities. There is a problem of definition and distribution of public functions as a prerequisite for defining and shaping the competences of public institutions. An important issue in the context of a competent approach is the institutional consolidation of functions in the context of the existence of the basic models of territorial organization of power. In each of the varieties of the Governance concept (Responsive Governance concept, Democratic Governance concept, Good Governance concept), the specifics of the use of competencies are defined. The archetypal symbols in the European public administration are singled out using the analysis of competence in public administration in its main constituents. A brief description of the archetypal aspect of European public administration is given. The main components of competence are shown in connection with the existing archetypal symbols and the characteristic trends of their development. Their connection is shown according to the scheme “the entity component (who?) — the object component (what?) — the administrative component (how?) — the basis (in what environment?)”. Concerning the trends of development of a competence approach in the context of practice and theory of public administration, it is determined that modern concepts of public administration are characterized by shifting the balance between state and public institutions to the sphere of common goals and tasks, and thus responsibility. The joint activity of all subjects of society requires new forms of cooperation, definition of the spheres and subjects of each entity’s activity for effective cooperation, distribution of functions and competences of the entities, formation and consolidation of their status characteristics.

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The New Governance

10.1093/oso/9780198786108.003.0010 ◽

2017 ◽

Author(s):

R. A. W. Rhodes

Keyword(s):

Public Management ◽

New Public Management ◽

Good Governance ◽

Democratic Accountability ◽

British Government ◽

New Governance ◽

New Public ◽

Cybernetic System ◽

Definition Of ◽

Self Organizing

The chapter reviews the several definitions of governance: the minimal state; corporate governance; the new public management, ‘good’ governance; a socio-cybernetic system. It then stipulates a definition of governance as self-organizing, inter-organizational networks. It argues there is a trend from government to governance in British government because of the hollowing-out pressures and the tools for intergovernmental management are integral to effective steering. Policy networks are already widespread. This trend is not widely recognized and has important implications not only for the practice of British government but also for democratic accountability. Governance as self-organizing networks is a challenge to governability because the networks can become autonomous and resist central guidance. They are set fair to become the prime example of governing without government.

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Understanding decoupling in response to corporate governance reform pressures

Journal of Financial Regulation and Compliance ◽

10.1108/jfrc-04-2014-0019 ◽

2015 ◽

Vol 23 (4) ◽

pp. 369-382 ◽

Cited By ~ 3

Author(s):

Mario Krenn

Keyword(s):

Corporate Governance ◽

Design Methodology ◽

Good Governance ◽

Regulatory Change ◽

Compliance Monitoring ◽

Governance Reform ◽

Firm Level ◽

Content Type ◽

Good Corporate Governance ◽

Actual Use

Purpose – The purpose of this article is to explain under what circumstances firm-level adoption of codes of good corporate governance will more likely be superficial rather than substantive in nature. The article contains lessons for any agency or country that attempts to implement deep and lasting changes in corporate governance via codes of good corporate governance. Design/methodology/approach – The article reviews the literature on compliance with codes of good corporate governance and develops a conceptual model to explain why some firms that have formally adopted a code of good governance decouple this policy from its actual use. Findings – Decoupling in response to the issuance of codes of good corporate governance will be more attractive to firms and also more sustainable under the following conditions: firms’ compliance costs are relatively high firms’ costs of outright and visible non-compliance are relatively high and outsiders’ compliance monitoring costs are relatively high. Originality/value – The article contributes to the debate on compliance and convergence and provides policymakers with a conceptual framework for assessing the likelihood of successful regulatory change in corporate governance.

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Is internal and external mechanism of governance enriching the performance of the banking sector of Pakistan?

Corporate Governance ◽

10.1108/cg-05-2016-0116 ◽

2017 ◽

Vol 17 (4) ◽

pp. 629-642 ◽

Cited By ~ 5

Author(s):

Sundas Sohail ◽

Farhat Rasul ◽

Ummara Fatima

Keyword(s):

Corporate Governance ◽

Banking Sector ◽

Good Governance ◽

Random Effect ◽

Random Effect Model ◽

General Meeting ◽

Governance Structure ◽

Board Structure ◽

Content Type ◽

The Impact

Purpose The purpose of this study is to explore how governance mechanisms (internal and external) enhance the performance of the return on asset (ROA), return on equity (ROE), earning per share (EPS) and dividend payout ratios (DP) of the banks of Pakistan. The study incorporates not only the internal factors of governance (board size, out-ratio, annual general meeting, managerial ownership, institutional ownership, block holder stock ownership and financial transparency) but also the external factors (legal infrastructure and protection of minority shareholders, and the market for corporate control). Design/methodology/approach The sample size of the study consists of 30 banks (public, private and specialized) listed at the Pakistan Stock Exchange (PSE) for the period 2008-2014. The panel data techniques (fixed or random effect model) have been used for the empirical analysis after verification by Hausman (1978) test. Findings The results revealed that not only do the internal mechanisms of governance enhance the performance of the banking sector of Pakistan but external governance also plays a substantial role in enriching the performance. The findings conclude that for a good governance structure, both internal and external mechanisms are equally important, to accelerate the performance of the banking sector. Research limitations/implications Internal and external mechanisms of corporate governance can also be checked by adding some more variables (ownership i.e. foreign, female and family as internal and auditor as external), but they are not added in this work due to data unavailability. Practical implications The study contributes to the literature and could be useful for the policy makers who need to force banks to mandate codes of governance through which they can create an efficient board structure and augment the performance. The investments from different forms of ownership can be accelerated if they follow the codes properly. Social implications The study facilitates the bankers in incorporating sound codes of corporate governance to enhance the performance of the banks. Originality/value This work is unique as no one has explored the impact of external mechanism of governance on the performance of the banking sector of Pakistan.

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Contemporary issues in financial reporting, auditing and corporate governance

10.32890/9789670474564 ◽

2013 ◽

Author(s):

Noor Afza Amran

Keyword(s):

Corporate Governance ◽

Financial Reporting ◽

Ethnic Diversity ◽

Good Governance ◽

Internal Auditors ◽

Corporate Managers ◽

Auditor Choice ◽

External Auditors ◽

Expectation Gap ◽

Corporate Social

Contemporary Issues in Financial Reporting, Auditing and Corporate Governance offers theoretical and empirical background on three fundamental areas of accounting, namely financial reporting, auditing and corporate governance.This book is written in a clear and reader-friendly manner to create readers interest in the central issues of discussion. The uniqueness of this book is in its extensive coverage of national and internationally-oriented issues of financial reporting, auditing and corporate governance. This book is ideal for accounting and business related courses at upper undergraduate and post-graduate levels. With its broad coverage, the book should also be of interest to academicians, professionals, corporate managers, regulatory bodies and researchers.The articles written in this book are: Corporate Social Responsibility and Post-Crisis StrategyEmployee Stock Options Popularity of Financial Ratios in the Annual ReportsThe Relationship between Pension Funds and Dividend PayoutDoes Audit Firm Merger Add Value to Its Clients? Co-operation between Internal and External Auditors: From the Perspective of Internal Auditors in Malaysian Local Authorities Auditor Choice: Events and TheoriesThe Global Audit Expectation Gap: Within and between Muslim CountriesOwnership Holdings: Selected Malaysian Family Businesses Ethnic Diversity in Malaysian Initial Public OfferingsCEO Succession in Malaysian PLCs: Does Firm Characteristic Make a Difference?A Framework of Good Governance: Lessons for the Inland Revenue Board Malaysia.

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Corporate governance and firm performance: empirical evidence from Pakistan

Corporate Governance ◽

10.1108/cg-07-2020-0286 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Muhammad Farooq ◽

Amna Noor ◽

Shoukat Ali

Keyword(s):

Corporate Governance ◽

Firm Performance ◽

Firm Size ◽

Good Governance ◽

Positive Impact ◽

Least Square ◽

Local Context ◽

Content Type ◽

Governance Index ◽

Governance Quality

Purpose The purpose of this research is to look into the governance–performance relationship in the context of critical firm characteristics, such as firm size. Design/methodology/approach Based on total assets, sample firms were classified as small or large. The governance index, which is based on 29 governance provisions covering the audit committee, board committee, ownership and compensation structure of the respective firm, measures governance quality among sample firms. A higher governance index indicates a higher level of governance quality and vice versa. Accounting and market value measures are used to determine firm profitability. The authors used the two-stage least square (2SLS) method of estimation of the model to eliminate the simultaneous equation bias. Findings Corporate governance (CG) appears to have a positive impact on accounting return and market indices (Tobin’s Q), but it has little impact on return on equity. In terms of firm size, larger companies profited more from better governance implementation than smaller firms that lacked these principles, thus improving CG. The findings indicate that small businesses should improve their governance mechanisms to reap the benefits of CG in terms of increased profitability. Research limitations/implications There are certain drawbacks to this research. First, the authors omitted qualitative aspects of CG from the CG index, such as the board’s decision-making process, directors’ perceptions of the board’s position and directors’ age and qualifications. Such a qualitative component will improve the governance index in the future while building the governance index. Second, as the current study only looks at the nonfinancial sector, caution should be exercised before applying the findings to the entire population. Practical implications The findings show that companies that follow good governance standards have better accounting and market efficiency than those that do not. As a result, good governance practices can help firms in developing countries improve their performance. Academic researchers, regulators, investors, lenders and practitioners can find the findings useful in establishing a true relationship between firm performance and CG practices in Pakistan. Originality/value The relationship between governance and profitability in the context of firm size is examined in this research. Firms with varying resources and ability to implement CG codes have varying effects on profitability. To the authors’ knowledge, there was a gap in the literature that addressed this topic in the local context.

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