An Empirical Study for the Correlation Between Disclosed Related Party Transactions and the Market Value of Companies Listed on the Amman Stock Exchange

This study examines the correlation between related parties’ transactions (RPT) and company’s market value in Jordan. In this study the related party transactions were covered through operationalized into three forms that are: Transactions with parent company, subsidiaries and affiliated companies (TPSAC), Transactions with associated companies (TAC) and Transactions with main shareholders, directors and/or managers (TMSDM), in order to see the impact on company’s value.This study considered all the companies listed in Amman Stock Exchange (ASE) at the end of year 2018 with total number of 226 companies for all sectors. After excluding companies with missing data, the final sample size was 218 companies; covering almost 96% of population. Multiple regression test was used to examine the study’s hypotheses. The result of the study indicates that the related party transactions (RPT) Shown a positive effect on (TQ) which represents the company’s value with presence of the control variables (audited by one of the big four audit firms (BIG), size of the company (SIZE), return on assets (ROA), and dividend yield (DIV). The results also show the increasing influence of the independent variable on the dependent variable with presence of the control variables.

Corporate Governance and Firm Performance in State-Owned Enterprises (SOEs) in Zambia: A Systematic Review

The research systematically documented and described the corporate governance practices and financial performance in State-Owned Enterprises (SOEs) in Zambia from 2006 to 2017. The research design that was adopted was the descriptive research design to systematically describe the corporate governance practices and financial performance of SOEs in Zambia. The corporate governance attributes for SOEs such as board size, board appointing authorities and board membership have been found to be prescribed by a diversity of Acts of Parliament for different SOEs. This finding suggests that the governance of these entities could be a challenge insofar as the uniformity of the legal framework for the governance of the entities was concerned. In addition to this, board membership which are designated by specific government positions rather than merit based, compromises board effectiveness. The study has further shown that failure to produce and publish, for public scrutiny, audited financial statements on a timely basis leads to lack of transparency and accountability. The financial performance has been found to have been poor as the SOEs on average produced negative returns on total assets and the SOEs were highly geared based on operating gearing and financing gearing. Lastly, financial performance of SOEs and the corporate governance practices differed significantly across different industries under which the SOEs operated.

Beyond Dichotomous Approach, Experts Method Compatibles with an Information System View for Developing a Valid Corporate Governance Index

This paper provides a critical review of the corporate governance quantification process at academic and professional levels to scrutinize the main troubles in the black box of CG assessment models and spot some lights on how to develop a valid Corporate Governance Index (CGI) at the firm and industry levels regarding evenly the entire stakeholders' perceptions. Prior literature has been reviewed and a Corporate Governance index was constructed merging the power of multi-methodologies: Principal Component Analysis (PCA), Delphi Technique and Stability analysis. The findings show that the validity of the results necessitates enforcing End to End processes and taking into account the country's individualization to increase the reliability and comparability of the results. As well, the governance ratings are sensitive to the applied methodology, particularly, a well-known approach in quantifying CG, i.e., dichotomous approach, is underestimated the index findings then it will directly affect all aspects of governance endogeneity with firm’s performance/value. This research has important practical implications for governance guidelines setters, companies, stakeholders and other researchers. For the G setters, it underlines the necessity to make harmonization between industries' regulations and governance code, and revise the priority of the "comply or explain" approach in practice; which could serve as a roadmap for future improvements and researches. For companies, this paper highlights which effective G mechanisms and urges the role of the boardroom in monitoring and explanations for non-compliance. For CGI users, the research highlights that ratings' users should be more precautions and concerned about the base of the assessing models.

Labor Shortage in Seven Central and Eastern European Countries in Transition: Before and During COVID 19

Based on the responses of the surveyed companies and institutions, we analyzed what government measures help to solve the problems and tensions in the labor market. By our empirical research we aimed to look for the main triggers and the typical means of labor shortage and labor retention. We also examined what efficiency improvement plans and robotization programs are either planned or have already been implemented by the responding organizations. The study reflects the empirical results conducted in 2019 in seven countries in the region. One of the key issues in these countries during the period considered is the dramatic increase in labor shortages, which has been influenced by a variety of factors, namely outbound labor migration after the change of regime, unfavorable demographic factors, national and regional economic downturns as well as persistent wage differences within the EU. Wages and work-life balance are the two important factors that have a significant impact on labor mobility and fluctuation for both skilled and less skilled labor. Responses indicated a variety of reasons for labor shortages, different reasons in different countries. The research also provided an indication that robotization alone is not a solution to address labor shortages.

Satyam Fraud: A Structural Functional Approach to Corporate Governance Reform

The paper uses Satyam Computer Services Limited as a prototypical case of corporate governance failure and recommendations for reforms. In making recommendations for corporate governance best practices, the paper analyzes Satyam’s corporate governance framework and management controls through a structural functionalist lens. The case is based on materials obtained from the news and print media, published articles, and interviews given by experts who commented on the case. Corporate governance data were obtained from the Securities and Exchange Commission’s (SEC) Edgar database. The findings suggest that corporate governance best practices should not be separate from the discrete parts of the organization. A wider context that encapsulates socio-cultural factors must not only be part of corporate governance mandates; but, also integral in the operational logistic of the corporation. As part of this discussion, the paper explicitly reviewed the governance structure and the make-up of the board of directors that were in place at Satyam prior to the resignation of Chairman Ramalinga Raju and his admission that he was involved in financial statement irregularities. Particular emphasis was placed on how management control systems and cultural controls in companies can shape corporate governance mandates to build effective governance framework.

Stakeholder Governance Paradigm in Response to the COVID-19 Pandemic

The COVID-19 pandemic has tremendous implications for people and organizations. It has influenced organization behavior and may trigger a paradigm shift regarding the way business organizations consider governance under the new normal. This study conducts a synthesis of the literature and provides an insight into the COVID-19 crisis and its impacts on organization behavior and corporate governance norms and measures. Stakeholder governance of protecting interests of all stakeholders presented in this paper is appropriate in addressing challenges brought on by the COVID-19 pandemic that affect organization behavior. These challenges and related changes will affect all aspects of business organizations from the oversight function by the board of directors to the managerial function by executives. Stakeholder governance is driven from the stakeholder primacy concept with focus on creating and protecting shared value for all stakeholders. Stewardship theory can predict changes that business organizations will make in modifying their stakeholder governance in the face of such an exogenous shock caused by the pandemic. Propositions are advanced and suggestions are provided for policy, practical, education, and research implications.

Impact of Fraud Preventive Measures on Good Corporate Governance

This study seeks to understand the impact of fraud preventive measures on good corporate governance within Omani public listed companies. Fraud preventive measures are considered as fraud risk assessment and preventive role of forensic accounting. This study also proposed that preventive role of forensic accounting mediates the relationship between fraud risk assessment and good corporate governance. Unit of analysis is public listed companies in Oman. This study utilized census sampling with quantitative cross sectional study. PLS-SEM was employed for the data and result analysis. Results suggest that, fraud risk assessment does not have significant impact on good corporate governance; whereas, preventive role of forensic accounting has significant impact on good corporate governance and it is also mediating between fraud risk assessment and good corporate governance. This study can assist regulators and policy makers towards inclusion of forensic accounting as permanent and compulsory component of the codes of corporate governance. Moreover, it is highly recommended for organizations to have in-house antifraud activity which can support and enhance good corporate governance. This study identifies forensic accounting as in-house preventive measure activity which can be available within an organization and working as governance management. This preventive role of forensic accounting is not explored before especially in the Omani market.

Corporate Governance Models and the Possibility of Future Convergence

This study explains the main corporate governance models used in the United States of America, United Kingdom, Germany and Japan by analyzing their similarities, differences, strengths and weaknesses. In addition, the possibility of future convergence between these models is discussed. Two types of corporate governance models are used in the world: Shareholder and Stakeholder models. In this study, USA, and UK will be analyzed as an example of the shareholder model, whereas Germany and Japan will be discussed as an example of the stakeholder model. The shareholder model emphasizes the benefits of shareholders and the management dominates the decision-making procedure of the companies. The stakeholder model, on the other hand, puts more emphasis on the interests of stakeholders or capital market players such as the workers, suppliers and the public. On the convergence debate, four different arguments are identified: The first and the main one is against convergence seeing it as a distant dream because of the differences between the countries. The second argument supports and expects convergence in the near future. The third argument supports the argument of functional convergence rather than formal convergence. The fourth argument supports the combination of both shareholder and stakeholder models to get effective corporate governance practices.This research supports the first argument which is against convergence, because looking at the differences between the countries in their economic, legal and political frameworks, it is still impossible to suggest convergence. Each country will continue to adopt its style according to its culture and also according to its differing needs.

Reflections and Insights on Leadership Competencies in Botswana: Lessons and Experiences for African Managers

In Africa, leadership crisis stalls many organisations from realizing their goals and holds back people from attaining their dreams. Yet African culture is rich with experiences which draw from the wisdom of traditional leadership, with its emphasis on communality, hard work and kindness as emblematic in the spirit of Ubuntu (Botho) (van de Colff, 2003) an African philosophy which inculcates compassion and integrity. This paper reflects on insights of leadership practices in some of Botswana organisations to appreciate the challenges they face in steering the leadership pedestal and their impact in fostering organizational success. The role of leadership is examined against a set of attributes and functions. For example, articulation of vision, staff welfare, customer care and more importantly the extent to which leadership contributes towards social justice and equity is considered. The study was conducted in Gaborone, the capital city of Botswana, based on exploratory mini practical survey. This involved unstructured personal interviews with industry leaders’ from private, public and non-governmental entities, to understand their roles as leaders and explore issues that preoccupy them and appreciate the challenges they face. Key findings from this research are the realization that the intersection between scholarship and practitioners provides a powerful mediatory process of reflection for leadership learning, more especially in transformation. Leaders who reflect are constantly imagining the vision of their organisations and ways of actualizing it.

Corporate Governance and Audit Fees Evidence from Bangladeshi Listed Banks and NBFIs

The study examines influence of corporate governance mechanisms on audit fees in listed Bangladeshi banks and non-bank financial institutions (NBFIs) with Dhaka Stock Exchange. Data have been collected from published annual reports of the 46 firms covering the period of 2013-2017. Among them 30 firms are banking companies the remaining firms belong to NBFIs. Using fixed-effect model, the study finds that board independence, female member representation in board, board diligence as well as audit committee diligence have positive influence on audit fees. As opposed to previous literature, the study reports that in the context of Bangladeshi banks and NBFIs board size, audit committee size, audit committee independence are negatively associated with audit fees.