How Credit Portfolio Diversification Affects the Profitability of Vietnamese Commercial Banks

This study analyzed the impact of credit portfolio diversification on the profitability by using the data of 20 Vietnam commercial banks from 2009 to 2015. The results from feasible generalized least squares (FGLS) estimation show that the strategy of diversifying the credit portfolio increased the profitability of commercial banks. In addition, the study also indicates that the positive correlation of the ratio of owners' equity, credit growth, liquidity, assets, inflation rate with the profitability while the increase in non-performing loan decreased the profitability of these commercial banks.

The Promotion of Partnership Value Through Employee Share Ownership and Customer Share Ownership

This chapter proposes an enriched analysis of value creation seeking to integrate all the stakeholders. To this end, they suggest two practices that counterbalance the power of shareholders and managers by allowing other stakeholders to exercise political and financial power. They are interested in employee share ownership and customer shareholding. In fact, the property grants customers and employees the superior status of the shareholder in order to enjoy a higher power likely to limit the attempts of managerial entrenchment and shareholder supremacy.

Effects of People's IPO on the Russian Financial Market and Corporate Governance Praxis

People's IPO is a project that aims at distribution shares of state-owned entities to members of the public. Three Russian state-owned enterprises, VTB, SBERBANK, and ROSNEFT, conducted People's IPO between 2006 and 2007. The aim of these IPOs was to offer the general public an opportunity to own shares in state-owned enterprises. Such an investment opportunity would give ordinary citizens a stake in Russia's biggest state enterprises. Authors investigated the success or otherwise of these IPOs in distributing shares of government enterprises to ordinary citizens and gave recommendations on possible ways of improving public participation in People's IPOs. The aim of this chapter is to propose People's IPO as one of the ways of ensuring proper wealth distribution and eradicating injustice in the financial system. Authors recommend adoption of offer prices that friendly to small investors, creation of credit lines that would avail funds for investing in the IPOs. Companies going public should also adherer to the world's best to ensure growth in shareholders wealth.

Audit Committee Characteristics and Earnings Quality

This chapter investigates the relationship between the audit committee and earnings quality of listed companies in Bahrain Bourse and to examine whether those companies comply with the obligatory code of corporate governance. The sample of this study includes 40 companies listed in Bahrain Bourse for the period 2013-2017. The model of the study tested the relationship between the independent variables of audit committee characteristics and the dependent variable of earnings quality using pooled data regression. The findings of the study showed that the Bahraini listed companies comply and follow the code of corporate governance and some audit committee characteristics have an impact on earnings quality.

System Dynamics Modelling for Policy Design

The system dynamics model was developed in the Vensim software. The model was developed based on the Yamaguchi study. The construct and behavioral validity of the model were addressed. Construct validity means that the correlations that construct the model, that is, the “rationale” of the model, are consistent with the correlations in the real system. There were five sub-models in the model. These were manufacturers and consumers sub-model, banks sub-model, central bank sub-model, balance of payments sub-model, exchange rate market sub-model. Five sub models included in the model developed with the VENSIM software are included in the appendices.

Equilibrium in Corporate Governance

Corporate governance systems around the world are shaped by legal traditions, but the most important determinant of their effectiveness is law enforcement. Developing countries tend to have weak institutional structures and contracting environments. In this context, markets are inefficient and ownership concentration becomes the main corporate governance mechanism in order to protect property rights. How can developing countries design an optimal corporate governance system in their poor business environments? Corporate governance mechanisms are interdependent, and each country needs to search for a set of mechanisms in equilibrium—that is, an optimal combination of control and incentives—that solves its own agency problems. But another problem in developing countries is the lack of public enforcement. Just as internal mechanisms may substitute for ineffective external mechanisms, private initiatives may reinforce weak public enforcement.

Financial Distress Overview, Determinants, and Sustainable Remedial Measures

The failure of top firms in the world who once represented the icon of their industries has renewed the interest of research scholars, practitioners, policymakers, and academics on the subject matter of financial distress. A firm is financially distressed when the operating cash flow is not sufficient for meeting the current obligation of the firm. It also involves a situation where the firm constantly experiences loss, breach loan contract, and find it difficult in honouring organisational commitment. This chapter is set out to synthesize the recent development in the topics of financial distress and corporate recovery. This chapter primarily focuses on financial distress, its determinants, and the way forward on how firms can recover from financial distress. The chapter also discussed the financial distress theories as well as sustainable remedial measures of financial distress. Finally, the chapter provides the concluding remarks and policy implications.

Systemic Financial Institutions' Corporate Governance Features

Several international and European regulatory and supervisory authorities, such as the Basel Committee for Banking Supervision, the European Banking Authority or the European Central Bank, are increasingly emphasizing that the structure of banks' managing bodies is a key driver of future financial stability and ask for reviews of existing skills, competencies, and expertise in order to cope with the newest economic, social, and technological challenges. The chapter subscribes to these views and aims at investigating two research directions: 1) whether there are resemblances in large, systemic banks' management board structure and 2) whether systemic banks' financial performance is determined by the management board's features (board size, number of women in the board, number of independent members). The empirical approach relies on several complementary methods (descriptive statistics, cluster analysis, panel regression) to reveal dominant board features in a sample of 29 European systemic banks, over a time frame of 11 years.

Corporate Governance Role of the Board Committees in India

The establishment of board sub-committees has been strongly recommended as a suitable mechanism for improving corporate governance by delegating specific tasks from the main board to a smaller group and harnessing the contribution of non-executive directors. This chapter discusses the constitution of board committees in Indian context, their composition, processes, and their role in promoting good corporate governance. India has constantly made efforts to update its corporate governance regulations in line with the international best practices. This chapter will help the readers to understand the corporate governance scenario in India with special reference to the board committees and will have implications for the regulators, policymakers, corporate governance practitioners, researchers, and academicians in the developing countries.

Audit Committee Effectiveness, Audit Quality, and Internal Control Information Disclosures

This chapter examined the linkages between audit committees' effectiveness, audit quality, and internal control information disclosure. Empirical evidence on the effect of audit committee effectiveness and audit quality on internal control information disclosure is scanty. Using a 210 firm-year sample of firms listed on the Ghana Stock Exchange for the period 2013-2017, the chapter tried to fill the research gap. After controlling for board size, proportion of independent directors, and leverage, the results from univariate and multivariate analyses indicated that effective audit committee and audit firm size play complimentary and substitution roles in ensuring internal control information disclosure. Board size and proportion of independent directors were also found to influence the disclosure of quality voluntary information.