scholarly journals The Relationship between ESG and Financial Performance Indicators in the Public Sector: Empirical Evidence from the Republic of Serbia

2021 ◽  
Author(s):  
Violeta Domanović
Keyword(s):  
Corporate Governance ◽  
Public Sector ◽  
Financial Performance ◽  
Performance Measures ◽  
Performance Indicators ◽  
Energy Sector ◽  
Public Enterprises ◽  
The Public ◽  
The Republic ◽  
Financial Performance Measures

Research Question: This paper investigated whether a relationship exists between environmental, social and corporate governance (ESG) performance indicators and financial performance measures in the public sector. Motivation: Performance measurement plays a significant role in public management and public policy and could be considered to be a segment of the whole performance management process. Growing awareness of climate change, human capital and corporate governance issues have imposed the necessity of introducing environmental, social and corporate governance performance indicators (ESG) in public enterprises’ annual reports. ESG performance indicators encourage investors to make socially responsible investment decisions (De Lucia, Pazienza & Bartlett, 2020). Hence, the paper is focused on the specifics of measuring performance in the public sector. Besides, it is very interesting to acquire knowledge about the correlation between ESG indicators and financial performance measures (Kalaitzoglou, Pan & Niklewski, 2020; Landau, Rochell, Klein & Zwergel, 2020). Idea: The purpose of the research is to highlight relevant performance measures in the public enterprises in the energy sector in the Republic of Serbia and to examine whether the application of the ESG indicators implies better financial performance. Data: Four large Serbian companies in the energy sector were analysed. Data were collected on the web site of the Agency for Business Registers of the Republic of Serbia. The observation period is from 2017 to 2019. The financial performance indicators are ROA, ROE and the economy ratio. Tools: Based on annual financial statements, non-financial reporting of public companies is monitored, whether companies invest in environmental and social protection, as well as whether they implement activities directed to more consistent implementation of corporate governance. The dynamics of selected financial indicators is analysed according to base and chain indices. Findings: The results show that the public enterprises in the energy sector of the Republic of Serbia mainly report on traditional financial measures in their annual financial statements. One of them applies all ESG indicators and the others do it partially. However, no direct and positive correlation between ESG indicators and financial performance measures could be found. Conversely, there is the case that ESG indicators have no linkage with the financial performance measures. Contribution: This paper contributes to the existing literature in the field of public enterprises’ sustainability.

scholarly journals Corporate Governance in the Digital world

2020 ◽  
Vol 14 (1) ◽  
pp. 333-342
Author(s):  
Diana Moşneanu
Keyword(s):  
Corporate Governance ◽  
Public Sector ◽  
Public Administration ◽  
Selection Process ◽  
Public Enterprises ◽  
Recruitment Process ◽  
The Public ◽  
Initial Stage ◽  
The Future ◽  
Recruitment And Selection

AbstractModeling a process of digitized recruitment and selection of the future members of the Board of Directors of Public Enterprises, where several models of software programs secured and adapted to the needs of the Public Administration, such as be DM Software (decision making software), oriented towards Corporate Governance with a view to transparent and decentralize the recruitment and selection process will be developed. At the international level, there is a tendency of intense digitization, affecting the area of recruitment beyond the initial stage, reaching the development of specialized recruitment software through algorithms to determine the best solutions and eliminate the human factor from the process. The best way to select the right software is to set up a digital recruitment process that tests new solutions based technologies in order to implement innovative services.Adding a new selection way, in order to elaborate an optimal composition of the governing bodies, a well-known method of selection is the RACI matrix method, offering diversity elements and strategic requirements, for the members of the Board, introducing the electronic selection and applying the criteria for an algorithm which will obtain the best score. This innovation brought to light, is not only limited to the digitization of the recruitment of the future members of the Boards of Public Enterprises, instead we want to bring profound changes in the application of the framework of corporate governance until the end, introducing a new initial stage in the process. The proposal in this direction provides for a new initial stage in the recruitment process, namely the Waiting List. In the romanian public administration, the recent progress has contributed to the improvement of the legal and regulatory framework against abuse, which is why I proposed to bring to the fore the importance of studying this area, adding value, by studying the possibility of adopting new tools for the public sector in Romania, support mechanisms, simple, uncompromising, completing the digitalization process in public sector. Is this transposition in the digital environment of a service outsourced by the state in order to fight corruption? Is this methodology ultimately effective? In the simplest way, digitization involves transforming any information from analog to digital. Digitalization is inevitable, we are witnessing a change in society, and the world we know today, over the next few years, it will not look the same. In this way, we get to wonder: we embrace digitalization and try to get as many benefits from the process or reject it, leaving us overwhelmed by this tendency.The transition from the classical methods of recruiting and selection process, to the digitalization of the entire processes regarding corporate governance, is bringing the actual transformation of the system, of recruitment of the future members of the Boards of the public enterprises, such a revolution of the public authorities, which are currently in charge of this endeavor, has as a consequence the shaping of the future of public administration, a model that is almost completely different from the one we know today.

MEASURES FOR PREVENTION OF CORRUPTION IN PUBLIC ADMINISTRATION IN R. MACEDONIA

2018 ◽  
Vol 28 (6) ◽  
pp. 1919-1923
Author(s):  
Tatijana Ashtalkoska-Baloska ◽  
Aleksandra Srbinovska-Doncevsk
Keyword(s):  
Public Sector ◽  
Public Administration ◽  
Legal Protection ◽  
The Public ◽  
Republic Of Macedonia ◽  
Modest Contribution ◽  
Serious Crime ◽  
New Strategy ◽  
Main Motive ◽  
The Republic

A number of abuses of power and position, daily committed for acquisition of unlawful profit, beyond of permitted and envisaged legal jobs, starting from the lowest level, to the so-called, daily corruption, which most often is related to existential needs and it acts harmless, not even grow into another form, to one that uses such profits as the main motive for generating huge illegal gains for a longer period of time, by exploiting and abusing high social position, corruption in public sector, but today already in private sector too, are part of corruption in the broadest sense, embracing all its forms, those who do not enter in zone of punishment and those who means committing of serious crime. It has many forms, but due to focusing on a particular problem, as a better way to contribute a solution, this paper will focus on the analysis of corruption in the public administration in the Republic of Macedonia, and finding measures for its prevention and reduction, which we hope will give a modest contribution to its real legal protection, not only in declarative efforts in some new strategy for its prevention and suppression.

SYSTEM OF INDICATORS FOR MANAGEMENT OF PURCHASING ACTIVITY OF THE FUEL AND ENERGY COMPLEX ENTERPRISE

2020 ◽  
Vol 1 (10) ◽  
pp. 69-75
Author(s):  
I. V. BRATKO ◽  
Keyword(s):  
Corporate Governance ◽  
Performance Indicators ◽  
Key Performance Indicators ◽  
Energy Sector ◽  
Strategic Orientation ◽  
Energy Complex ◽  
Production And Consumption ◽  
Energy Companies ◽  
Fuel And Energy Sector

In modern realities, the number of fuel and energy companies managed on corporate principles is increasing every year. Accordingly, we are talking about the transition of state command management of the fuel and energy sector to private, competition-based and corporate governance. The study proposed a system of "balanced key performance indicators procurement", aimed at optimization of performance to meet the principles of the classic system of Kaplan-Norton and focused on the strategic orientation reflects the characteristics of the processes of production and consumption of services of energy companies. It is concluded that in a balanced system, it is necessary to distinguish between indicators that measure the results achieved and indicators that reflect the processes that contribute to the achievement of these results.

A benchmarking study of Indian seaports

2019 ◽  
Vol 13 (1) ◽  
pp. 88-102
Author(s):  
Sajeev Abraham George ◽  
Anurag C. Tumma
Keyword(s):  
Financial Performance ◽  
Future Research ◽  
Data Envelopment ◽  
Operational Parameters ◽  
Two Stage ◽  
Content Type ◽  
The Public ◽  
Port Authorities ◽  
Financial Performance Measures ◽  
The Government

Purpose The purpose of this paper is to benchmark the operational and financial performances of the major Indian seaports to help derive useful insights to improve their performance. Design/methodology/approach A two-stage data envelopment analysis (DEA) methodology has been used with the help of data collected on the 13 major seaports of India. The first stage of the DEA captured the operational efficiencies, while the second stage the financial performance. Findings A window analysis over a period of three years revealed that no port was able to score an overall average efficiency of 100 per cent. The study identified the better performing units among their peers in both the stages. The contrasting results of the study with the traditional operational and financial performance measures used by the ports helped to derive useful insights. Research limitations/implications The data used in the study were majorly limited to the available sources in the public domain. Also, the study was limited to the major seaports which are under the Government of India and no comparisons were carried out with other local or international ports. Practical implications There is a need to prioritize investments and improvement efforts where they are most needed, instead of following a generalized approach. Once the benchmark ports are identified, the port authorities and other relevant stakeholders should work in detail on the factors causing inefficiencies, for possible improvements in performance. Originality/value This paper carried out a two-stage DEA that helped to derive useful insights on operational efficiency and financial performance of the India seaports. A combination of the financial and operational parameters, along with a comparison of the DEA results with the traditional measures, provided a different perspective on the Indian seaport performance. Considering the scarcity of research papers reported in the literature on DEA-based benchmarking studies of seaports in the Indian context, it has the potential to attract future research in this field.

How firms' performance mediates the relationship between corporate governance quality and earnings quality?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mohammed Adel Elzahaby
Keyword(s):  
Corporate Governance ◽  
Analytical Model ◽  
Performance Measures ◽  
Earnings Quality ◽  
Direct Path ◽  
Content Type ◽  
Indirect Path ◽  
Governance Quality ◽  
Financial Performance Measures ◽  
Corporate Governance Quality

PurposeThe purpose of this study is to propose an analytical model that investigates both a direct path between corporate governance quality and earnings quality and an indirect path, in which firms' performance is a mediating variable that is influenced by corporate governance quality and that, in turn, influences earnings quality.Design/methodology/approachThe study employs a structural equation modelling (SEM), to a sample of Egyptian listed firms during 2011–2017, to test the proposed analytical model and to determine the relative importance of both the direct and indirect paths.FindingsThe findings show a statistically significant evidence of both a direct path from corporate governance quality to earnings quality, and an indirect path that is mediated by firms' performance, suggesting that both corporate governance quality and performance have a complementary effect on earnings quality. However, the weight of the evidence favouring the direct path is more important in case of accounting-based performance measures; and the weight of the evidence favouring the indirect path is more important in case of market-based performance measures.Research limitations/implicationsThe current study has some limitations. First, the study focuses specifically on one proxy for measuring earnings quality which is the absolute value of discretionary accruals. Other proxies of earnings quality could be examined in future research, such as income smoothing, earnings persistence and timely loss recognition. Another limitation is that only financial performance measures were examined, namely, return on assets, return on equity, price-to-earnings ratio and market-to-book value. Notwithstanding, non-financial performance measures could be investigated in future studies, such as balanced scorecard (BSC). Furthermore, considering cultural, political and legislative differences among countries, the results may not be generalised outside the scope of the current sample (i.e. Egyptian listed firms).Practical implicationsThe implications of the findings for both theory and practice are discussed.Originality/valueThis study is distinguished by validating an analytical model that has been overlooked by prior studies. Moreover, it provides a new constructed index for measuring corporate governance quality. Furthermore, it uses a new sophisticated statistical technique, which is SEM, for testing the proposed model.

A Production Approach to Performance of Banks with Microfinance Operations

2014 ◽  
Vol 6 (2) ◽  
pp. 18-35 ◽  
Author(s):  
Emilyn Cabanda ◽  
Eleanor C. Domingo
Keyword(s):  
Data Envelopment Analysis ◽  
Financial Performance ◽  
Performance Measures ◽  
Negative Relationship ◽  
The Philippines ◽  
Productive Efficiency ◽  
Data Envelopment ◽  
Production Frontier ◽  
Financial Performance Measures ◽  
Production Approach

Banking institutions, nowadays, serve as intermediaries of funds to a variety of clients, including the micro enterprisers. This study analyzes and measures the performance of rural and thrift banks with microfinance operations in the Philippines, using combined measures of data envelopment analysis and traditional financial performance indicators. Data envelopment analysis (DEA) method is employed to measure the productive efficiency of these banks under the production approach. The variable returns to scale is also used, with the assumption that not all banks are operating at optimal scale over the long-run period. DEA findings reveal that sample banks performed below the production frontier. The average technical efficiency score of these banks is 66.09% and additional 33.91% is needed to reach the production frontier. Overall, thrift banks are found to be more productively efficient than rural banks as depository banks. The authors have also found a strong relationship between financial performance measures and bank's productive efficiency. For thrift banks, sustainability, ROE and ROA measures showed a statistically significant positive correlation to the banks' productive efficiency while a negative relationship was observed in rural banks. Lastly, the authors can suggest that both DEA's productive efficiency and financial performance measures are consistently and strongly correlated when evaluating the overall performance of banks with microfinance operations.

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