scholarly journals Compliance with the German Corporate Governance Code: Can the heterogeneous implementation be explained?

2019 ◽  
Vol 2019 (101 (157)) ◽  
pp. 167-200
Author(s):  
Karsten Eisenschmidt ◽  
Ute Vanini
Keyword(s):  
Corporate Governance ◽  
Peer Group ◽  
Empirical Studies ◽  
Influence Factors ◽  
Family Influence ◽  
Institutional Setting ◽  
Future Research ◽  
Agency Conflicts ◽  
Corporate Governance Code ◽  
Code Compliance

Starting with the Cadbury code in 1992, various national and international Corporate Governance (CG) codes have been issued all over the world. So far, empirical studies have revealed mixed results concerning the effects and outcomes of code implementation and thus supported the hypothesis of a ‘one system does not fit all’ approach in CG. Therefore, this paper empirically analyses influence factors on compliance with the German Corporate Governance Code for a large sample of 306 listed firms in 2015. We chose German companies because of the specific institutional settings in Germany, e.g., the strong influence of founder families on a firm’s management or the relevance of debt financing. It is assumed that the country-specific institutional setting limits the transferability of results of US and UK studies. Thus, we used the German setting to derive relevant influence factors on Code compliance. In addition, we applied a more sophisticated measure of Code implementation than previous studies. Overall, we find a significant positive effect of ownership dispersion and firm size on Code compliance, whereas the other influence factors, e.g., family influence or the supervisory board’s size, reveal the right direction of impact but not the required level of statistically significance. In contrast to institutional theory, we find a negative although statistically insignificant impact of the strength of foreign investors’ influence on Code compliance. Overall, our results indicate that the institutional setting is not decisive for Code compliance. Instead, we assume that the main rationale for Code compliance is not the reduction of agency conflicts but the alignment with peer group practices as indicated by the variable company size. Future research should investigate the peer effects on the level of Code compliance in detail.

scholarly journals Climate change risk: Challenge for corporate governance

2021 ◽  
Vol 10 (2, special issue) ◽  
pp. 258-268
Author(s):  
Hugh Grove ◽  
Maclyn Clouse ◽  
Tracy Xu
Keyword(s):  
Climate Change ◽  
Corporate Governance ◽  
Global Climate Change ◽  
Boards Of Directors ◽  
Global Climate ◽  
Research Question ◽  
Empirical Studies ◽  
Future Research ◽  
Climate Change Risk ◽  
Climate Change Risks

The major research question of this paper is to analyze climate change risk as a challenge to corporate governance. Climate action failure was the environmental risk most frequently listed in the top ten country risks. It also becomes a major reason that many companies are taking their own initiatives on climate change action which poses an imminent challenge for corporate governance as boards of directors track and assess such initiatives by their own companies. Boards can play a key role in guiding their organizations into the next new normal in the wake of global pandemic, economic disruptions, and ongoing climate change problems. This paper identifies and studies the corporate governance risks and opportunities related to global climate change risk and provides recommendations to boards of directors. The major sections of this paper are global climate change risks, corporate climate change pledges, climate-related financial disclosures, major topics in the Global Climate Change report, whether companies are ready to manage major climate change risks and opportunities, climate-related investment benchmarks, and conclusions. Future research could investigate this climate change risk challenge with case studies or empirical studies.

Corporate Governance and Voluntary Disclosure: A Synthesis of Empirical Studies

2020 ◽  
Vol 8 (2) ◽  
pp. 117-138
Author(s):  
Rupjyoti Saha ◽  
K. C. Kabra
Keyword(s):  
Corporate Governance ◽  
Voluntary Disclosure ◽  
Emerging Market ◽  
Empirical Studies ◽  
Practical Importance ◽  
Empirical Literature ◽  
Future Research ◽  
Explanatory Variables ◽  
Legal Enforcement ◽  
The Relationship

Voluntary disclosure (VD) is considered potentially important for efficient functioning of the capital market as it communicates firms’ performance and governance to shareholders and potential investors, which boost their confidence. This article attempts to provide a brief conceptual framework of VD and corporate governance (CG), and also reviews the empirical literature dealing with relationship between them. To this end, the article uses systematic electronic literature search method, which takes into account 65 empirical studies published over the period 1998–2018. An investigation of empirical findings points to some factors that may have contributed toward the apparent inconsistent findings observed to date. In particular, the article focuses on two intervening factors for variation of results—such as CG system and measurement of explanatory variables. The findings suggest that studies mostly from Anglo-Saxon system (ASS) show complementary relationship between different attributes of CG with VD, whereas in case of communitarian system, studies mostly depict an insignificant impact of CG attributes on VD except for few studies showing their positive/negative impact on VD. However, in case of emerging market system (EMS), some studies show substitutive relationship between board independence (BI) and VD while other CG attributes such as board size (BS), (GD), and audit committee independence (ACI) in most of the studies complement VD supporting the resource-based perspective. Furthermore, the association of ownership structure (OS) and role duality (RD) with VD is mixed. Another factor, which is considered to be added to variation of results, is measurement of explanatory variables whereby albeit studies employed same concepts, operational definition of variables intervenes into the relationship between CG and VD. The findings of this article provide some deeper insights about the complementary and substitutive relationships between CG and VD by integrating diverse empirical findings under different research contexts. Future research can extend to analyze some other institutional factors like investors’ protection rights and legal enforcement, which might also have played some role in influencing the relationship between CG and VD. Furthermore, it is also evident from the review that BS and BI are the most commonly studied CG attributes in relation to VD, whereas attributes like GD and ACI, despite their theoretical relevance and practical importance are least studied in relation to VD, thus signaling the need to focus on these attributes in future studies.

scholarly journals Corporate Governance, Ownership Structure and Stock Market Liquidity in Saudi Arabia: A Conceptual Research Framework

2017 ◽  
Vol 6 (4) ◽  
pp. 17
Author(s):  
Abdulaziz Mohammed Alsahlawi ◽  
Mohammed Abdullah Ammer
Keyword(s):  
Corporate Governance ◽  
Information Asymmetry ◽  
Ownership Structure ◽  
Empirical Studies ◽  
Market Liquidity ◽  
Institutional Setting ◽  
Trading Systems ◽  
Research Framework ◽  
Regulatory Policies ◽  
Conceptual Research

This paper aimed to provide a review of the literature concerning the effects of corporate governance and ownership structure on the devices of market microstructure. It provided a clear overview of empirical archival studies in literature regarding the way corporate governance and ownership structure mechanisms influence market liquidity, with focusing on the Saudi institutional setting. It aimed to pinpoint the differences and similarities in empirical outcomes of studies and determine the areas that call for further exploration. On the basis of the thorough review of literature and the theoretical basis, our study proposed a conceptual research framework. The framework is based on the premise that effective corporate governance can lead to enhanced disclosure quality, which in turn, lead to mitigating the information asymmetry and ultimately, enhanced market liquidity. Although theoretical studies argued the presence of the relationship between corporate governance, ownership and liquidity, we find that outcomes from empirical studies are still mixed. Majority of extant studies, with majority in the context of the U.S. firms, provide ambiguous results, making it challenging to reconcile the differences among them. Our paper provides important guidance for both new and experienced researchers, and it has implications for stock exchange authorities in terms of adopting effective regulatory policies and efficient trading systems to tackle information asymmetry.

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