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1
Soana, Maria Gaia, and Giuseppe Crisci. "Duties and responsibilities of the nominating committee." Corporate Ownership and Control 15, no. 1 (2017): 246–52. http://dx.doi.org/10.22495/cocv15i1c1p8.
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Many corporate governance codes and reports emphasize the importance of creating nominating committees within boards. Focusing on banks, the Basel Committee on Banking Supervision (2015) recommends that boards of directors should create an internal nomination/human resources/governance committee. In this context, we have analysed the presence and main characteristics of this committee in the 30 systemically important banks (G-SIBs). To the best of our knowledge, this is the first paper describing in depth the activities of the nominating committees. Our analysis shows that the nominating committee is often also a “governance committee”. Its main responsibilities towards the full board of directors usually include identifying individuals qualified to become board members, guiding the board in its annual review, reviewing succession plans and, occasionally, monitoring education programs for directors. Most charters also entrust the appointment committee with the role of identifying members, and/or reviewing the composition, of board committees and, in a minority of cases, reviewing the suitability of the charters adopted by each board committee. The nominating committee is also frequently required to oversee for the board corporate governance policies and occasionally required to review policies relating to public/strategic issues, relationships with external entities affecting the bank’s reputation and ESG matters. Many charters also entrust the appointment committee with reviewing/appointing directors to the boards of important subsidiaries (9 out of 29) and reviewing/appointing managers (14 out of 29). The nominating committees of G-SIBs are primarily composed of independent directors. The male gender is the most represented. In 2016, the effective average number of meetings of nominating committees in was seven.
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Rix, Mark. "The new Australian system of corporate governance: Board governance and company performance in a changing corporate governance environment." Corporate Law and Governance Review 1, no. 2 (2019): 29–41. http://dx.doi.org/10.22495/clgrv1i2p3.
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This paper investigates the changing duties and responsibilities of boards and directors of Australian public companies. The corporate governance environment in Australia is currently going through a period of significant transformation raising the question of whether in this fluid and shifting environment company and board performance can still be assessed largely on the basis of profit, share price and dividends generated over the short term. These almost certainly will continue for some time to be the key metrics of company and board performance and it is hard to see how it could be otherwise. Nevertheless, a growing chorus of influential stakeholders is calling for the introduction of a more balanced and comprehensive suite of performance indicators that better reflect the realities of corporate governance early in the Twenty-first Century. The paper examines how these stakeholders are reshaping corporate governance in Australia and also calling for a reconsideration of the way in which performance is assessed.
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Seng, Dyna, and Justin Findlay. "Corporate governance and earnings management in New Zealand." Corporate Ownership and Control 10, no. 2 (2013): 40–55. http://dx.doi.org/10.22495/cocv10i2art4.
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This paper examines the relation between corporate governance mechanisms and earnings management. Using data collected from New Zealand listed companies for the financial year ending in 2005, the results show that the size of the board of directors is significantly positively associated with earnings management. This suggests that larger boards seem to be ineffective in their oversight duties relative to smaller boards. On the other hand, the independence of the board of directors, the independent role of the board chair and chief executive officer, and the independence of audit committees are not significantly associated with earnings management. Thus, these three corporate governance mechanisms are ineffective at monitoring the discretionary choices of management. The lack of effective corporate governance in New Zealand, particularly with regard to boards of directors, is mainly due to the lack of “experience and skills required to oversee the scale, complexity, and characteristics of finance operations” (Ministry of Economic Development, 2009, p.8)
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Atkins, Jill, Mohamed Zakari, and Ismail Elshahoubi. "Implementing the board of directors’ mechanism – An empirical study of the listed firms in Libya." Corporate Board role duties and composition 14, no. 1 (2018): 22–33. http://dx.doi.org/10.22495/cbv14i1art2.
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This paper aims to investigate the extent to which board of directors’ mechanism is implemented in Libyan listed companies. This includes a consideration of composition, duties and responsibilities of the board directors. This study employed a questionnaire survey to collect required data from four key stakeholder groups: Boards of Directors (BD), Executive Managers (EM), Regulators and External Auditors (RE) and Other Stakeholders (OS). The results of this study provided evidence that Libyan listed companies generally comply with the Libyan Corporate Governance Code (LCGC) requirements regarding the board composition: the findings assert that most boards have between three and eleven members, the majority of whom are non-executives and at least two or one-third of whom (whichever is greater) are independent. Moreover, the results indicate that general assemblies in Libyan listed companies are practically committed to the LCGC’s requirements regarding the appointment of board members and their length of tenure. The findings provide evidence that boards in Libyan listed companies are carrying out their duties and responsibilities in accordance with internal regulations and laws, as well as the stipulations of the LCGC (2007). Furthermore, the stakeholder groups were broadly satisfied that board members are devoting sufficient time and effort to discharge these duties and responsibilities properly. This study helps to enrich our understanding and knowledge of the current practice of corporate boards as a significant mechanism of corporate governance (CG) by being the first to address the board of directors’ mechanism in Libyan listed companies.
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Profumo, Giorgia. "Editorial: Advancing research on good corporate governance practices: The role of the board." Corporate Board role duties and composition 16, no. 2 (2020): 4–6. http://dx.doi.org/10.22495/cbv16i2editorial.
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The latest issue (volume 16, issue 2) of the journal Corporate Board: Role, Duties and Composition is exploring the topics of board director benchmarking information, board gender and risk-taking, board structure and firm performance, corporate veil and innovation governance. Overall, the articles in the present issue are dealing with timely topics and their results call for further research as, in some cases, they are challenging traditional corporate governance theories.
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Clarke, Thomas. "Dangerous frontiers in corporate governance." Journal of Management & Organization 20, no. 3 (May 2014): 268–86. http://dx.doi.org/10.1017/jmo.2014.37.
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AbstractThe historical evolution of corporate governance is considered, highlighting the different eras of governance, the dominant theoretical and practical paradigms, the reformulation of paradigms and counter paradigms. Two alternative and sharply contrasting theorizations, one collective and collaborative (the work of Berle and Means), the other individualistic and contractual (agency theory and shareholder value) are focused upon. The explanatory potential of Blair and Stout's team production theory is elaborated, and its conception of the complexity of business enterprise, with a mediating hierarch (the board of directors) securing a balance between the interests of different stakeholders. The potential for reform of corporate purpose, corporate governance and directors’ duties is examined with reference to the UK Modern Company Law Review. The impact of the intensification of the financialization of corporations is analysed, with the increased emphasis upon short-termism. The origins of the global financial crisis in shareholder value orientations and the continuing reverberations of the crisis are explored. Finally, the imperative of the advance of sustainable enterprise is argued, and the critical changes necessitated in corporate purpose and directors’ duties.
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Bavoso, Vincenzo. "Editorial." Corporate Board role duties and composition 14, no. 2 (2018): 4–5. http://dx.doi.org/10.22495/cbv14i2_editorial.
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The recent issue of the journal “Corporate Board: Role, Duties and Composition” is devoted to the issues of interlocking directorates, corporate governance, social network analysis, corporate networks, power structure, financial distress, sustainability, liquidation, corporate law, decision making, cognitive science, behavioural finance, executive compensation, firm performance, commercial banks, board of directors etc.
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Arora, Jaskiran. "Corporate governance: a farce at Volkswagen?" CASE Journal 13, no. 6 (November 13, 2017): 685–703. http://dx.doi.org/10.1108/tcj-09-2016-0078.
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Synopsis This case on “Corporate governance: a farce at Volkswagen (VW)” is set in September of 2015. The precipitating events, which started with the Emissions scandal and tampering of the technology, unfold a history of threatening organizational culture, deliberate cheating, and failure of good governance. The case presents that though the outgoing CEO took the responsibility for the event but said that he was shocked by the event and stunned that the misconduct of such a scale could occur in the VW Group. Given the roles and responsibilities of board of management and the supervisory board, how could the scandal of such magnitude go unnoticed? Were robust corporate governance practices being not followed at VW? Research methodology The case is based on the material available in the public domain, records, press reports, published books, interviews published by key board members of Volkswagen and the company website. Relevant courses and levels This case can be used for undergraduate senior classes or graduate and executive education level courses in corporate governance and ethical practices. This case will sync best with the topics around Board Composition and size, Board Independence, fiduciary duties of supervisory board, board duality and leadership and its impact on organizational culture.
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Kgarabjang, Tshegofatso. "Evaluation of governance challenges associated with the exercise of fiduciary duties by the board members of the state-owned entities." Corporate Law and Governance Review 2, no. 1 (2020): 8–17. http://dx.doi.org/10.22495/clgrv2i1p1.
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There are fundamental challenges encountered by the non-executive directors (board members) of state-owned entities in a course of exercise of fiduciary duties. These challenges are, inter alia, conflict of interests, failure to uphold the fundamental principles of corporate governance, lack of necessary skill and competencies, and this impact on the ultimate performance of the company. The article seeks to evaluate the potential challenges encountered by board members of state-owned entities in the course of exercise of their fiduciary duties. The results indicate that failure to comply with fiduciary duties may have drastic effects on a state as a shareholder and may lead to a decline in corporate governance of state-entity. The article will make a brief reference to fiduciary duties in terms of common law, the Companies Act, PFMA and King IV, secondly examine potential challenges and thirdly conduct a comparative approach with the international instruments with the aim of making recommendations/best practices. The article makes reference to various case laws dealing with fiduciary duties, journal articles, internet sources and textbooks, common law and legislations.
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Kurniawanto, Hudi. "The Effect Board Characteristics On Enterprise Risk Management Disclosures: Evidence from State-Owned Enterprise In Indonesia." Archives of Business Research 8, no. 12 (January 15, 2021): 230–37. http://dx.doi.org/10.14738/abr.812.9525.
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The purpose of this study is to examine the effect of corporate governance, namely board characteristics on enterprise risk management disclosure. The research object of State-Owned Enterprises listed on the Indonesia Stock Exchange in 2018-2019, with a total sample of 40 annual reports with purposive sampling technique and multiple regression analysis. The results of this study prove that board size no effect on enterprise risk management disclosure, while board independence effect enterprise risk management disclosure. This shows that the commissioners understand and carry out their duties as an independent party in supervising, directing, and evaluating the implementation of corporate governance and corporate strategic policies so that Board Independence in State-Owned Enterprises in Indonesia functions properly.
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Fijabi, Lateef. "Corporate governance and auditors’ expectation." Caleb International Journal of Development Studies 3, no. 2 (November 30, 2020): 166–93. http://dx.doi.org/10.26772/cijds-2020-03-02-010.
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This study investigated the impact of Code of Corporate governance on the auditor’s expectation gap, following the implementation of the Nigerian corporate governance code. The study outcomes were based on the literature review, the analysis of the qualitative data and discussions of generated themes. The results revealed that adopting effective corporate governance (accountability) system positively contributes in narrowing the audit expectation gap due to the increasing interest in the role of accountability in fighting corruption in Nigeria. The Study recommends; the need for continued sensitization of the public, by both the auditing profession and other stake holders on the role and duties of the auditor, management and the board to avoid expectation gap from the public. The CBN, NAICOM, PENCOM and NCC should implement and enforce the approved Code of Governance. Keywords: Audit Expectation Gap, Corporate Accountability, Audit committees, Code of Corporate Governance, Regulatory agencies.
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Barnes, Associate Professor Lisa. "Corporate Governance and Company Directors: Are They Alice in Wonderland?" Frontiers in Education Technology 3, no. 1 (December 6, 2019): p1. http://dx.doi.org/10.22158/fet.v3n1p1.
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Corporate governance is not a new concept. In fact the last 15 years has seen a surge in academic publications and case law in relation to the lack of corporate governance. Research Gap is that Company Directors are attending a “mad hatters’ tea party” when it comes to the implementation of governance codes, with the recent spate of court cases involving breaches of directors fiduciary duties. Methodology used was review of case law using archival data. This research looks at the type of case law issues of corporate governance in Australia and in particular accountability, and relates the case law to the Corporations Act (2001) to find where company directors are getting corporate governance wrong. The findings indicate that perhaps the “if not why not” prescription, should not be an option for corporate governance for some Boards. For some Boards the invitation from Alice to jump down the rabbit hole into creative accounting and bad board behaviour at the “mad hatters’ tea party” is just too great an incentive. Implications show that this review of important corporate governance case law will assist Boards to concentrate their efforts on improving the environment they operate in, as good governance equates to good business. “In another moment down went Alice after it, never once considering how in the world she was to get out again.” Carroll, Lewis (1865) Alice’s Adventures in Wonderland.
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Sjåfjell, Beate. "Sustainable Value Creation Within Planetary Boundaries—Reforming Corporate Purpose and Duties of the Corporate Board." Sustainability 12, no. 15 (August 3, 2020): 6245. http://dx.doi.org/10.3390/su12156245.
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Business, and the dominant legal form of business, that is, the corporation, must be involved in the transition to sustainability, if we are to succeed in securing a safe and just space for humanity. The corporate board has a crucial role in determining the strategy and the direction of the corporation. However, currently, the function of the corporate board is constrained through the social norm of shareholder primacy, reinforced through the intermediary structures of capital markets. This article argues that an EU law reform is key to integrating sustainability into mainstream corporate governance, into the corporate purpose and the core duties of the corporate board, to change corporations from within. While previous attempts at harmonizing core corporate law at the EU level have failed, there are now several drivers for reform that may facilitate a change, including the EU Commission’s increased emphasis on sustainability. Drawing on this momentum, this article presents a proposal to reform corporate purpose and duties of the board, based on the results of the EU-funded research project, Sustainable Market Actors for Responsible Trade (SMART, 2016–2020).
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Wahba, Hayam. "The joint effect of board characteristics on financial performance." Review of Accounting and Finance 14, no. 1 (February 9, 2015): 20–40. http://dx.doi.org/10.1108/raf-03-2013-0029.
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Purpose – This paper aims to investigate the joint effect of board characteristics on financial performance. Most of the existing literature implicitly assumes that the relationship between either board composition, or board leadership structure and financial performance is direct. Design/methodology/approach – The generalized least squares method was performed as a panel data analysis on a sample of 40 Egyptian listed firms during the period from 2008 to 2010. Findings – The results demonstrated that under board leadership structure that assigns the duties of the CEO and chairman to the same person, increasing the proportion of non-executive members to the total number of directors has a negative impact on firm financial performance. Practical implications – First, corporate governance structures do not operate in a vacuum, and therefore, corporate governance mechanisms must be considered and assessed altogether. Second, failure to understand the underlying interdependency among corporate governance mechanisms may result in arguments that blame some corporate governance designs for poor financial performance. Third, there is no single board governance mechanism that can be considered ideal, but there are combinations of these mechanisms that are preferred. Originality/value – The paper adds to the corporate governance literature by providing empirical evidence from the emerging market of Egypt. The evidence shows that the relationship between board characteristics and financial performance is not a monotonic relationship. Consequently, these findings imply that existing evidence explaining the relationship between board characteristics and financial performance needs to be interpreted with some caution.
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Boubaker, Sabri. "Editorial: Advances in corporate governance practices." Corporate Board role duties and composition 17, no. 1 (2021): 4–6. http://dx.doi.org/10.22495/cbv17i1editorial.
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Corporate governance has gone through three decades of profound changes in terms of new regulations, new practices, and environmental conditions. Many countries drafted guidelines for best corporate governance practices following Cadbury report (Cadbury, 1992). These practices were mainly related to the board of directors (composition and functioning), internal controls, and internal audit. The Enron scandal followed by the collapse of Arthur Andersen, one of the big five audit firms, and the enactment of the “Public Company Accounting Reform and Investor Protection Act” (Sarbanes-Oxley law) in 2002 were other milestones in the evolution of corporate governance. This law brought about significant changes related to public company accounting oversight, auditor independence, financial disclosure, and corporate responsibility. The financial crisis in 2008 started in the United States and has shaken the world economy. This crisis was due to weak corporate governance that led to fraudulent financial reporting and excessive risk-taking. Grove and Victoravich (2012) consider CEO duality, lack of board independence, weak management control systems, short-termism, weak codes of ethics, and opaque disclosures among the main drivers of this crisis. The COVID-19 has consistently shown that firms with better corporate governance and corporate social responsibility practices were the most resilient entities during the first quarter of the pandemic (Ramelli & Wagner, 2020). All these topics are addressed in this collection of high-quality research papers of this year’s first issue of Corporate Board: Role, Duties, and Composition.
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Al-Yahyaee, Khamis H., and Ahmed Al-Hadi. "Ineffective corporate governance: busyness of internal board monitoring committees." Corporate Ownership and Control 13, no. 3 (2016): 309–25. http://dx.doi.org/10.22495/cocv13i3c2p5.
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We examine whether the voluntary formation of a Risk Committee (RC) compromises the effectiveness of other monitoring duties carried out by the board members. We argue that adding more monitoring committees increases the board’s internal busyness, which reduces the effectiveness of monitoring by the Audit Committee (AC). Using a sample of financial firms over the period 2007 to 2011 from the Gulf Cooperation Countries (GCC), we find that voluntarily adopting a risk committee impairs the effectiveness of the audit committee, which in turn reduces financial reporting quality. Our findings suggest that multiple layers of monitoring capacity viz-a-viz the existence of both an audit and risk committee may weaken the quality of monitoring provided by the audit committee.
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Tsene, Chryssoula. "Corporate governance and board of directors in Greek listed companies." Corporate Board role duties and composition 13, no. 2 (2017): 38–45. http://dx.doi.org/10.22495/cbv13i2art4.
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Corporate governance is widely acknowledged as a key factor of market’s efficiency and corporate performance. Greek company law, under the influence of the financial crisis, has responded actively by incorporating in national law EU directives on corporate governance of listed companies and by adopting recently self-regulatory provisions. This regulatory framework contributes essentially to enhance board accountability and transparency, empower shareholder protection and promote financial disclosure. In that regard, two pillars should be illustrated as regards board of directors in listed companies: Greek company law provides traditionally for the establishment of the general duties of loyalty and care of all board members in companies limited by shares, which are furthermore reinforced by the provisions of the Hellenic Code of Corporate Governance for listed companies. Secondly, hard law rules introduce the participation of non-executive and non-executive independent directors as a legal mechanism of confronting agency problems in listed companies. These provisions have been strongly argued as regards the exact content of the obligations of all board members of listed companies to promote the corporate interest and especially as regards the monitoring role of non-executive directors. These conceptions should be followed by empirical researches in order to address a completely legal and functional approach.
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Zhang, Xu Bei. "The Comparison on Corporate Governance between Temasek and State-Owned Companies in China." Advanced Materials Research 998-999 (July 2014): 1634–37. http://dx.doi.org/10.4028/www.scientific.net/amr.998-999.1634.
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This paper proceeds as follows. Corporate governance, broadly speaking, is a science which studies enterprise power arrangement. In the narrow sense, it belongs to the ownership of enterprises; it is a science which researches how to empower professional managers and to use regulatory authority to their performance of duties. The improvement of the efficiency of the state-controlled corporate governance depends on the choice of corporate governance mechanism. Constrained by the institutional environment, the corporate governance is also affected by the internal governance structure. State-owned enterprises still face great difficulties when they manager to make a clear boundary between the central enterprises and government, separate ownership and management completely, achieve a sound governance structure. Temasek has a high quality management mode. The company special board composition and the control method of the layered progressive and effective restraint mechanism play a key role. State-owned enterprises can learn from Temasek’s experience of corporate governance, and promote the reform of the governance structure, to stimulate the vitality of enterprises.
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Satifa, Orisa, and Edy Suprapto. "PERAN DEWAN PENGAWAS SYARIAH DALAM PEMENUHAN PRINSIP SYARIAH DALAM PELAKSANAAN GOOD CORPORATE GOVERNANCE PADA PERBANKAN SYARIAH." JURNAL EKONOMI DAN PERBANKAN SYARIAH 2, no. 2 (June 23, 2020): 69–93. http://dx.doi.org/10.46899/jeps.v2i2.148.
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This research is departing from the development of Islamic banking industry, which is growing rapidly. Moreover, the bank demanded to implement good corporate governance (GCG) in order to prevent any risk of islamic banking losses, both financial loss and reputation risk. The implementation of GCG in islamic banking industry have to meet the shariah compiance. Thus, to ensure the shariah compliance, it requires shariah supervisiory board (DPS), which it serves to maintain the bank‟s adherence to islamic principles in their activities to manage customer funds. The regulation of Bank of Indonesia no. 11/33/PBI/2009 on the implementation of GCG in islamic banks provide a comprehensive policy regarding the duties and the responsibilities of the DPS to ensure the fulfillment of islamic principles in implementation of good corporate governance in islamic banking.Keywords: Good corporate governance, Islamic Banking, Shariah Supervisiory Board, Shariah Principles, Regulation of Bank of Indonesia
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Hopt, Klaus J. "Corporate Governance of Banks and Financial Institutions: Economic Theory, Supervisory Practice, Evidence and Policy." European Business Organization Law Review 22, no. 1 (March 2021): 13–37. http://dx.doi.org/10.1007/s40804-020-00201-z.
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AbstractBanks are special, and so is the corporate governance of banks and other financial institutions. Empirical evidence, mostly gathered after the financial crisis, confirms this. Banks practicing good corporate governance in the traditional, shareholder-oriented style fared less well than banks having less shareholder-prone boards and less shareholder influence. The special governance of banks and other financial institutions is firmly embedded in bank supervisory law and regulation. Most recently there has been intense discussion on the purpose of (non-bank) corporations. For banks stakeholder governance and, more particularly, creditor or debtholder governance is more important than shareholder governance. The implications of this for research and reform are still uncertain. A key problem is the composition and qualification of the board. The legislative task is to enhance independent as well as qualified control. The proposal of giving creditors and even supervisors a special seat in the board is not convincing. Other important special issues of bank governance are for example the duties and liabilities of bank directors in particular as far as risk and compliance are concerned, but also the remuneration paid to bank directors and senior managers or key function holders. Claw-back provisions, either imposed by law or introduced by banks themselves, exist already in certain countries and are beneficial. Much depends on enforcement, an understudied topic.
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Lastanti, Hexana. "PENGARUH GOOD CORPORATE GOVERNANCE TERHADAP EARNINGS MANAGEMENT." JURNAL INFORMASI, PERPAJAKAN, AKUNTANSI, DAN KEUANGAN PUBLIK 8, no. 1 (May 7, 2019): 35. http://dx.doi.org/10.25105/jipak.v8i1.4503.
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<p class="Style2">To be able to achieve good corporate governance, in addition to managerial ownership, institutional ownership and board of directors, the role of the audit committee also needed to further enhance the quality of information contained in the financial statements in accordance with his duties. Good corporate governance is one way to address the practice of earnings management. Study to examine the effect of the mechanisms of good corporate governance on earnings management that uses the data in the Indonesian capital market, still very little is done. Earnings management is a management action in the process of preparing financial statements to influence the level of profit that is displayed. The goal is to improve the welfare of certain parties, which can be identified as an advantage. Earnings management problem is the agency problem that is often triggered by a separation of the role or the difference between the interests of the owners (shareholders) with managing the company's management.</p>
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Larasati, Desi, and Asrori Asrori. "The Effect of Corporate Governance Mechanisms, Capital Structure and Firm Size on Risk Management Disclosure." Accounting Analysis Journal 9, no. 1 (July 29, 2020): 60–66. http://dx.doi.org/10.15294/aaj.v9i1.20956.
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This study aims to determine the effect of the duties and responsibilities of directors, institutional ownership, managerial ownership, capital structure and firm size on RMD in an Islamic banks. The population in this study is the Islamic Banks in Indonesia. There is 35 annual reports of Islamic banks as samples. The analytical method used is multiple linear regression analysis using SPSS tool. The results showed that the firm size significant positive effect on RMD. While the other variables are the duties and responsibilities of directors, institutional ownership, managerial ownership and capital structure does not affect the RMD. Researchers further advised to analyze other factors that may affect the RMD on Islamic banks such as the duties and responsibilities of the board of commissioners.
Keywords: Risk Management Disclosure (RMD), Mechanism Corporate Governance, Duties and Responsibilities of Directors, Institution Ownership, Management Ownership, Capital Structure, Firm Size.
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Dell’Atti, Stefano, Stefania Sylos Labini, and Pasquale di Biase. "The effects of Solvency II on corporate boards: A survey on Italian insurance companies." Corporate Ownership and Control 16, no. 1-1 (2019): 134–44. http://dx.doi.org/10.22495/cocv16i1c1art3.
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Governance and the internal control system represent a fundamental pillar in the Solvency II Directive. In that context, the insurance companies’ board plays a key role in assuming new responsibilities and duties. The present work aims to examine the role of insurance companies’ boards in view of the important changes introduced by Solvency II. An empirical analysis is conducted on a sample of 102 Italian insurance companies. Three areas of investigation, size and composition, board self-assessment processes and board remuneration policies, are covered by the survey. The results show a satisfactory level of compliance of the boards with respect to the requirements established by Solvency II. There is still room for improvement as regards the level of disclosure and diversity. The paper contributes to deepen the understanding of Solvency II effects on the composition and functioning of insurance companies’ boards. In addition, the study provides, through the Italian case analysis, some indications on the likely future development of the insurance companies.
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Asghar, Affaf, Seemab Sajjad, Aamer Shahzad, and Bolaji Tunde Matemilola. "Role of discretionary earning management in corporate governance-value and corporate governance-risk relationships." Corporate Governance: The International Journal of Business in Society 20, no. 4 (April 16, 2020): 561–81. http://dx.doi.org/10.1108/cg-11-2019-0347.
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Purpose Corporate governance (CG) is an ongoing interesting topic getting the attention of market participant, business regulators and researchers in today’s business environment. The purpose of this study is to analyze the moderating role of earnings management on CG-value and CG-risk relationship in the emerging economy of Pakistan. Design/methodology/approach A panel data analysis is used in this study. A panel data of 71 non-financial listed companies of Pakistan for the 2008-2017 period is considered for this study. Secondary data is collected from the annual reports of non-financial firms listed on PSX. Seven econometric equations are developed to test the research hypothesis. Findings The results reveal that CG significantly enhances the firm value and performance measures. Moreover, CG mitigates the practices of earning management and eliminates the risk that develops opportunistic behavior among managers to commit frauds. Practical implications The results of this study suggest that the board of directors (BODs) should intensify their governance role and ensure that the executives perform their duties to maximize the wealth of the shareholders and not engage in any misrepresentation of accounts that may lower the company position and decrease the firm value. Moreover, the managers should be informed about their accountability and acknowledged that at the end of the year, they would be audited by an expert’s auditors for their responsibilities. Concerning regulatory bodies, regulatory authorities should ensure that there must be at least one independent member on the board. The better-governed system reduces both agency conflicts and enhances firm value. Originality/value A number of studies have already been undertaken by multiple investigators to build connection among CG with firm performance, but there is not even a single study in the literature that considers CG, firm value, firm Risk and discretionary earning management as a whole in one model to generalize its results in the emerging economy of Pakistan. A fundamental element of current analyzation process addresses that this is the very first graft of study conducted in Pakistan having combination of four variables together in one revision. There is minimal work that focuses on moderating effects of earning management on the CG-value and CG-risk relationships. This study uses two standard measures of firm performance (i.e. ROA and Tobin’s Q), one proxy of earning management (DEM) and three attributes of CG (board size, audit quality and ownership structure). Previously, researchers have not investigated a model that combines variables (CG as independent and Firm performance and Firm Risk as dependent along with DEM as moderator) in a single study.
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GOO, Say H. "An Economic Efficiency Approach to Reforming Corporate Governance: The Case of Multiple Stakeholder Boards." Asian Journal of Law and Society 4, no. 2 (July 24, 2017): 387–404. http://dx.doi.org/10.1017/als.2017.10.
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AbstractThis paper points out the problems of the current law on directors’ duties that forces directors to ignore stakeholder interests, with the unintended consequences of misallocation of resources and the weaknesses of a traditional legal approach to law reform, and uses multiple stakeholder boards as an example to demonstrate how an economic efficiency approach to law reform, adopting economic principles, could avoid some of the unintended consequences of a legal approach to law reform and help design better rules that promote allocative efficiency for the benefit of society as a whole. It argues that international organizations should take the lead in promoting the use of stakeholder directors in the board of directors of multinational corporations that have a history of corporate abuses for corporate decisions that have an impact on all stakeholders.
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Klein, April. "Likely Effects of Stock Exchange Governance Proposals and Sarbanes-Oxley on Corporate Boards and Financial Reporting." Accounting Horizons 17, no. 4 (December 1, 2003): 343–55. http://dx.doi.org/10.2308/acch.2003.17.4.343.
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One of the primary aims of the Sarbanes-Oxley Act of 2002, the New York Stock Exchange, and the NASDAQ corporate governance proposals is to improve the reporting systems for publicly traded companies. Many of the exchange proposals redefine the composition and duties of firms' boards of directors and their compensation and nominating committees. Sarbanes-Oxley places new duties on audit committees and provides oversight and restraints on public accounting companies. This paper describes many of the exchange proposals and puts them in their historical context. I also present the likely effects of the new corporate governance proposals on future boards of directors and assess their impact on the financial reporting system.
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Dewi, R. Rosiyana, and Tia Tarnia. "PENGARUH KINERJA KEUANGAN TERHADAP NILAI PERUSAHAAN DENGAN GOOD CORPORATE GOVERNANCE SEBAGAI VARIABEL MODERASI." JURNAL INFORMASI, PERPAJAKAN, AKUNTANSI, DAN KEUANGAN PUBLIK 6, no. 2 (May 8, 2019): 115. http://dx.doi.org/10.25105/jipak.v6i2.4486.
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<p class="Style1">This study will examine how the instruments of good corporate governance can moderate the impact of thefanancial performance of the company. Financial performance proxied by ROA, ROE and Leverage, while the value of the company with the Tobins Q. Good corporate governance is measured by the percentage ofinstitutional ownership. Hypothesis testing is done by multiple regression method with the classical assumption test first. The total population sample of 129 companies from manufacturing companies listed on the Stock Exchange.<em> The results of this study is good corporate governance as a system that can regulate the division of duties, rights and obligations of parties interested in the life of the company, including shareholders, board members, and managers can improve company performance impact on company value.</em></p>
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Nguyen, Huu Cuong. "Factors causing Enron’s collapse: An investigation into corporate governance and company culture." Corporate Ownership and Control 8, no. 3 (2011): 585–93. http://dx.doi.org/10.22495/cocv8i3c6p2.
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This paper investigates and evaluates the weaknesses of Enron’s corporate governance structures, weaknesses that lead to the collapse of the company. Overall, poor corporate governance and a dishonest culture that nurtured serious conflicts of interests and unethical behaviour in Enron are identified as significant findings in this paper. Employing the case study method, the paper synthesizes, analyses, and interprets all aspects of corporate governance that lead to Enron’s collapse based on three main reports: The Powers Report (Powers, Troubh and Winokur 2002), the Testimony of Chief Investigation (Roach 2002), and The Subcommittee’s Report (United States Senate’s Permanent Subcommittee on Investigations 2002). Firstly, Enron’s Board of Directors failed to fulfil its fiduciary duties towards the corporation’s shareholders. Secondly, the top executives of Enron were greedy and acted in their own self-interest. Thirdly, many of Enron’s employees witnessed the wrongdoings of Enron’s top executives, and quite a few whistleblowers came forward. Lastly, Enron outsourced external auditing for its internal audit function instead of establishing a functionally internal audit mechanism and its external auditor acquiesced in the application of questionable accounting and fraudulent financial reporting. Although Enron’s collapse has been widely discussed in the literature, no paper has been found that synthesizes the various aspects of corporate governance that resulted in the Corporation’s collapse. This paper contributes to the literature on the numerous weaknesses of Enron’s corporate governance structures, including the following: the role of the Corporation’ board, especially its top executives; the Corporation’s corporate culture and whistle-blowing system; and the Corporation’s internal auditor and external auditors.
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Ferris, Stephen P., and Min-Yu (Stella) Liao. "Busy boards and corporate earnings management: an international analysis." Review of Accounting and Finance 18, no. 4 (November 11, 2019): 533–56. http://dx.doi.org/10.1108/raf-07-2017-0144.
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Purpose Because of our limited understanding of the incidence and effect of board busyness globally, the mixed evidence of the effect of board busyness obtained in the USA and the divergence of international patterns of director busyness from that observed in the USA, the author contends that there is a strong need to examine board busyness from a global perspective. The literature, however, does not examine the effect of board busyness on reported earnings quality and certainly does not analyze it internationally. Consequently, the purpose of this study is to examine the effect of multiple board appointments on the quality of a firm’s reported earnings. Design/methodology/approach The research design for this study is empirical. It uses both univariate and multivariate statistical analysis to examine historical corporate accounting, finance and governance data. Findings Consistent with the busyness hypothesis of corporate governance, the author finds that firms with a higher proportion of busy independent directors or busy CEOs manage their earnings more extensively. Further, the findings of this study present that firms with a higher proportion of busy independent audit committee members have poorer financial reporting quality. Using a sample of American Depository Receipts (ADRs), this study determines that the ineffectiveness of busy boards regarding earnings management is mitigated by the listing regulations imposed by US exchanges. Research limitations/implications The author believes that this study offers new and important evidence regarding the debate whether busy directors provide knowledge, skill and corporate connections, or whether they are overextended and, thus, unable to fully perform their monitoring duties. This study shows that firms with busy directors are associated with poorer financial reporting quality and, consistent with the busyness hypothesis, are less effective as managerial monitors. Practical implications This study provides useful guidance regarding board design and the kinds of policies that firms should adopt regarding multiple boarding. Social implications The social implications focus on the public policy implications regarding the importance of effective corporate governance in the reporting of financial wealth, wealth creation and wealth management. Originality/value This is the first study that examines the relation between board/committee busyness and corporate earnings management using a comprehensive set of international firms. Second, the author expands the analysis of audit committee into a new dimension: committee quality as captured by the busyness of its independent members. This study also contributes to the ongoing debate in the corporate finance literature regarding the reputation and busyness hypotheses of multiple directorships.
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Gracheva, M. "Development of Corporate Governance Standards in UK: The Higgs Report." Voprosy Ekonomiki, no. 1 (January 20, 2004): 118–28. http://dx.doi.org/10.32609/0042-8736-2004-1-118-128.
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In 2001-2002 numerous scandals have occurred in developed countries in connection with financial reports' distortions and breaches of good corporate governance principles. As a result, regulatory bodies began to study the role of boards of directors in preventing such cases, putting an emphasis on the duties and powers of non-executive directors. Serious steps have been taken in United Kingdom, where the first corporate governance standards were established in the beginning of the 1990s. The article analyses the document published in January 2003 — the review of the role and effectiveness of non-executive directors prepared by D. Higgs team. The author considers the peculiarities of the British corporate governance system and examines most important provisions of the Higgs report.
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Azheri, Busyra, and Upita Anggunsuri. "The Implementation of Business Judgment Rule Principle in Managing the Company." Nagari Law Review 3, no. 2 (April 28, 2020): 32. http://dx.doi.org/10.25077/nalrev.v.3.i.2.p.32-44.2020.
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A business decision is very important to determine the quality of the Board of Directors in carrying out their duties professionally and responsibly as expected by Good Corporate Governance (GCG). The effectiveness of the Board of Directors is the center of the implementation of Good Corporate Governance. Bank Business is very risky (such: credit risk, reputation risk, etc.). The Board of Directors in making a business decision, will always face unpredictable condition. In Banking practice, the Head of Branch Office Bank is the extension of Director, if the Head of Branch Office Bank signs credit agreement out of the rules (plafond). His action has categorized as ultra vires, so the consequence is the Head of Branch Office Bank can be held responsible for his action. In this case, the Board of Directors has not taken responsibility for the action of the Head of Branch Bank, based on Business Judgment Principle, the Director has not taken its responsibility for ultra vires act which is done by the Head of Branch Office Bank, as along as Director has managed the Company in good faith, carefully and does not against the law. Therefore, Business Judgment Principle gives legal protection to the Director in making a business decision
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Nipper, Marvin. "Board financial expertise and IPO performance: An analysis of U.S. public offerings and withdrawals." Corporate Ownership and Control 18, no. 3, special issue (2021): 307–24. http://dx.doi.org/10.22495/cocv18i3siart6.
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Potential investors examine governance characteristics prior to an initial public offering (IPO) to assess the quality and prospects of the issuing firm. One important governance characteristic is board financial expertise, as it provides directors with the relevant knowledge for an IPO process and is valuable for the board’s monitoring duties. Therefore, the purpose of this paper is to examine whether and how board financial expertise affects IPO outcomes. To do so, I employ a sample of 414 completed and 85 withdrawn IPOs that were filed from 2014–2017 at NYSE or NASDAQ. I document that the ratio of directors with financial expertise on the board is negatively associated with the level of underpricing and the probability of IPO withdrawal. The results suggest that particularly outside directors with financial expertise have a positive signaling effect and help to reduce information asymmetry around initial public offerings. Above that, using quantile regression, I find that director financial expertise is most valuable for issuances with high levels of investor uncertainty. Therefore, this study makes important contributions to the corporate governance and IPO literature by providing a comprehensive analysis of the effects of board financial expertise on IPO outcomes
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Agrawal, Anup, and Mark A. Chen. "Boardroom Brawls: An Empirical Analysis of Disputes Involving Directors." Quarterly Journal of Finance 07, no. 03 (August 21, 2017): 1750006. http://dx.doi.org/10.1142/s2010139217500069.
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We investigate the internal workings of US corporate governance with a hand-collected dataset of director resignations that are related to power struggles within the board. About two-thirds of the conflicts arise because of how board members interact in carrying out their duties, while most of the remaining cases involve disagreements between directors and top management over corporate strategy or financial policy. Conflicts are more likely to occur at companies where the CEO is the founder or is relatively new to the position. Tensions also increase when there are independent directors with large blockholdings. Stock prices decline sharply on average after a director turnover amid dispute, which may indicate that investors expect the firm to continue to have poor operating performance. The aftermath of such a resignation often includes shareholder class-action lawsuits, proxy contests, asset divestitures, and stock market delistings. Our results highlight the importance of a well-functioning board for reducing agency problems and maximizing shareholder value.
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Aisyah, Siti, Widiya N. Rosari, and Tito Sofyan. "Strengthening Corporate Legal Functions in Achieving Good Corporate Governance at PT Bank Bengkulu." Bengkoelen Justice : Jurnal Ilmu Hukum 10, no. 2 (December 10, 2020): 173–84. http://dx.doi.org/10.33369/j_bengkoelenjust.v10i2.13797.
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The increase in company value is reflected in the increase in performance and company image. PT Bank Bengkulu in enhancing the value of the company is done by applying the principles of Good corporate governance supported by the Corporate Legal division. The principles of Good Corporate Governance include: openness, accountability, responsibility, independence and fairness. Corporate Legal functions to regulate matters relating to the legal field which include: Organization and authority, advice or provision of legal assistance andhandling legal cases, risk management and mitigation, documentation, administration and reporting. Previously, Corporate Legal was part of the Compliance Division. However, since the transfer of Corporate Legal to Corporate Secretary, there has been overlapping of authority, duties and functions. The problem in this research is how to strengthen Corporate Legal in realizing Good Corporate Governance and what are the factors that inhibit the strengthening of Corporate Legal function in realizing Good Corporate Governance at PT Bank Bengkulu. This type of research is empirical research, data sources obtained from interviews, documents, as well as literature and legislation relevant to research. The results of the study are the strengthening of Corporate Legal at PT Bank Bengkulu conducted by organizational restructuring based on Directors Decree No.17.1 / HP.00.01 / D.1 / 2019/2019 regarding changes in the organizational structure of the transfer of Corporate Legal to Corporate Secretary which was formerly Corporate Legal part of Compliance division, thistransfer makes Corporate Legal have a wider authority that is able to provide legal oponi which includes external banks where previously in compliance with Compliance, Corporate Legal can only provide legal opinions that cover only the internal parts of the bank. The factor that inhibits the strengthening of the function of Corporate Legal in realizing good corporate governance at PT Bank Bengkulu is the overlapping authority between the Compliance division and the Corporate Secretary, in which there are no restrictions on what should be reviewed by the Compliance Division and Corporate Secretary, then in policytaken by the Board of Directors cannot be immediately decided by Corporate Legal so the problem becomes slow to be resolved immediately.
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Hakim, Lukman. "Efektivitas Peran Audit Internal Syariah: Studi Literatur Terbatas." Jurnal Akuntansi dan Governance 2, no. 1 (July 16, 2021): 14. http://dx.doi.org/10.24853/jago.2.1.14-24.
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The Islamic financial Institutions (IFI) governance structure required an internal shariah auditors to assist the duties of Shariah Supervisory Board (SSB). Internal audit was a key player besides SSB, External auditors and the Audit and Governance Committees (AGC). This study was to examine the effectiveness of the role of internal shariah auditors. By adopting limited literature review of indexed international journals was used in this study. The result of the study based on limited literature data sources were the effevtiveness of internal shariah audit on internal audit organizations ini the Good Corporate Governance (GCG) structure, namely the structure, requirements and processes of internal shariah audit. In addition, internal and external factors also affected the effectiveness of internal shariah audit. The Role of the AGC affected the effectiveness of internal audit. Governance and internal audit of Shariah non compliant income were important parts of risk management in IFI
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Espigares Huete, José Carlos, and María del Carmen Ortiz del Valle. "CONTROLLED REMUNERATION. ABOUT THE REMUNERATION OF SENIOR OFFICIALS AND DIRECTORS IN STATE-OWNED COMPANIES." Spanish Journal of Legislative Studies, no. 2 (December 1, 2020): 1–40. http://dx.doi.org/10.21134/sjls.vi2.1289.
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Controlled remuneration in state-owned companies, or those assisted by the state - giving them grant-in-aids -, is a matter that raises a certain sensibility. Therefore, there’s a need to combine - particularly in the corporate scope - the concept of transparency and good corporate governance. This sensitivity, which is increasingly demanded within private companies, shall be even more pronounced within the public business sector. The worldwide-known concept of Corporate Governance has been developing an essential leading role for years, which is directly linked to the desire of having companies with better functioning. In this sense, and as an example, the most recent expression of this can be found in the Law of Spain, exclusively with regard to the private sector, in the Act 21/2014, of 3rd December, by which the Spanish Capital Company Act is consolidated for the amelioration of corporate governance. Among the introduced amends, the most highlighted ones are notably those affecting the governing body. For instance, the duties of diligence and loyalty are specified and there’s a more detailed regulation of the liability regime of administration members regarding management, organization and functioning of the board of directors, enhancing its supervising role in terms of performance of directors with executive functions and, more specifically, establishing stricter controls on remuneration of senior official positions.
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Abtahi, Hamideh Sadat, Ali Radan Jebeil, Majid Bonakdar, Omolbanin Darvishpoorian, and Gholamhossein Masud. "Trade Firms Managers' Authorities in Iranian Trade Law." Journal of Politics and Law 9, no. 2 (March 31, 2016): 41. http://dx.doi.org/10.5539/jpl.v9n2p41.
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<p>Corporate of joint-stock companies with the rule of law is done by a group of directors as the Board of Directors and the CEO assignment but corporate of other firms such conduct is not legally binding and can also pay a manager to manage them individually that this a great damage because of his individual actions contradict interests of the firms and director, he/she will be taking a personal interest and this not only for the third parties but also for partners will be susceptible to harm and great responsibilities. The studies in this paper indicate that the authorities and duties of managers in joint-stock companies in law stated separately but about the other trade, generally known as a lawyer and representative. Managers of joint-stock companies must be in accordance with the law and the resolutions of the General Assembly and the Board of Directors' decisions on corporate governance but in other trade firms, most of the managers' authorities, is general.</p>
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Kulaha, E., and O. Melnychenko. "LEGAL STATUS OF SUPERVISORY BOARDS OF STATE-OWNED JOINT-STOCK COMPANIES." Bulletin of Taras Shevchenko National University of Kyiv. Legal Studies, no. 115 (2020): 35–40. http://dx.doi.org/10.17721/1728-2195/2020/5.115-8.
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The purpose of this work is to analyse the current state of regulation of the supervisory boards of joint stock companies in Ukraine, in particular the features of their work on state-owned enterprises. A review of the practical aspects of regulating the activities of supervisory boards of joint stock companies in Ukraine is made. By applying analytical methods the provisions of regulations in the field of corporate law the latest changes in the legal status of supervisory boards of joint-stock companies are studied, and their applicability to state joint-stock companies is assessed. In addition, these changes are compared with the provisions of international standards in the field of corporate governance of state-owned enterprises, in particular the standards of the Organization for Economic Cooperation and Development (OECD). The article deals, inter alia, with the concepts of "supervisory board", "state-owned enterprise", "fiduciary duties", as well as issues of transparency and integrity of the work of supervisory boards. In addition, the issues of the latest practice in the work of supervisory boards of state-owned joint stock companies and how the powers of the supervisory boards were exercised are considered. According to the results of the study, the current regulations are quite complex, inconsistent and contain internal contradictions, which, on the one hand, create risks for the effective exercise of powers by supervisory boards, and on the other hand, the risks of abuse by supervisory boards. The authors concluded that it is necessary to improve the legal framework governing the work of supervisory boards of state-owned joint-stock companies, generalize and unify practices on various issues of competence of supervisory boards, as well as provide certain criteria for compliance of supervisory board members with professional experience requirements in a particular field and with requirements of transparency about the absence of conflict of interest.
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Osman Mahmoud Dalil, Abdelmotalab. "THE SIGNIFICANCE OF INDEPENDENCE OF BOARD OF DIRECTORS ONFINANCIAL ANDADMINISTRATIVEPERFORMANCEEVALUATION IN COMMERCIAL BANKS A FIELD STUDY ON A SAMPLE OF SUDANESE COMMERCIAL BANKS." International Journal of Advanced Research 9, no. 08 (August 31, 2021): 607–26. http://dx.doi.org/10.21474/ijar01/13305.
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This research aimed to identify the effect of bank risk management on the performance evaluation in the banking sector. To effect the field study, the research used the questionnaire as a tool to collect the data. The research also used the descriptive analytical approach to describe the field study. The research has reached a number of findings, key of which, is that, the board of directors is committed to the regulations related to the stakeholders parties, in order to guarantee the treatment of any irregularities in accordance with the rules and principles in force in the bank. The application of corporate governance guidelines will help in the potentiality of the inspection and evaluation of the efficiency and effectiveness of the financial and administrative performance in the bank. The research findings have also shown that there is a correlation that is statistically significant between the independence of the board of directors and the financial and administrative performance evaluation in the bank. The research, on the other hand, recommended the activation of the role of the boards of directors in the commercial banks by assuming their tasks and duties, which may lead to reduce risk.
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Malkawi, Bashar H. "Editorial: Corporate governance and COVID-19 in the context of coming drastic changes." Corporate Board role duties and composition 16, no. 3 (2020): 4–6. http://dx.doi.org/10.22495/cbv16i3editorial.
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Corporate governance faces a new set of challenges in light of COVID-19. Corporations would have to reduce their finance by assuming more debt and providing dividends for shareholders. This will lead to a stable financial environment. Corporations might choose among diverse interests that would include a mix of government interests and concentrated ownership. Also, as a result of increase in the use of technology, there will a shift in the bargaining power between capital and labor as corporations will have a wide spectrum in hiring employees worldwide. As we have seen over the past few years, there is increasing pressure to limit foreign investment in strategic sectors and focus on national security screening for foreign corporation accruing domestic firms. This trend is expected to continue as a result of COVID-19 as countries are trying to shore up their economics against external shocks. Moreover, there would be an increase in government ownership in corporations and other types of controls. The presence of the COVID-19 health crisis is likely to push the debate toward stakeholder perception of the corporation, shifting away – over the next few years – from shareholders’ interests. There could be even more focus on employees and the role they play in the corporation. Employees are expected to act as active players in running the affairs of the corporation. Overall, these topics are addressed in the current issue of Corporate Board: Role, Duties and Composition.
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Bhasin, Madan Lal. "Creative Accounting Practices at Satyam Computers Limited: A Case Study of India’s Enron." International Journal of Business and Social Research 6, no. 6 (June 27, 2016): 24. http://dx.doi.org/10.18533/ijbsr.v6i6.948.
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<p>Satyam Computers were once the crown jewel of Indian IT industry, however, the debacle of Satyam raised a debate about the role of CEO in driving a company to the heights of success and its relation with the board members and core committees. The scam brought to the light the role of corporate governance (CG) in shaping the protocols related to the working of audit committees and duties of board members. The Satyam scam was a jolt to the market, especially to Satyam stockholders. This paper attempts an in-depth analysis of India’s Enron, Satyam Computer’s “creative-accounting” scandal. In public companies, this type of ‘creative’ accounting leading to fraud and investigations are, therefore, launched by the various governmental oversight agencies. The accounting fraud committed by the founders of Satyam in 2009 is a testament to the fact that “the science of conduct is swayed in large by human greed, ambition, and hunger for power, money, fame and glory.” Scandals have proved that “there is an urgent need for good conduct based on strong corporate governance, ethics and accounting & auditing standards.” The Satyam scandal highlights the importance of securities laws and CG in emerging markets. Indeed, Satyam fraud “spurred the government of India to tighten the CG norms to prevent recurrence of similar frauds in future.” Thus, major financial reporting frauds need to be studied for ‘lessons-learned’ and ‘strategies-to-follow’ to reduce the incidents of such frauds in the future. The increasing rate of white-collar crimes “demands stiff penalties, exemplary punishments, and effective enforcement of law with the right spirit.”</p><h2> </h2>
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Grassa, Rihab. "Shariah supervisory systems in Islamic finance institutions across the OIC member countries." Journal of Financial Regulation and Compliance 23, no. 2 (May 11, 2015): 135–60. http://dx.doi.org/10.1108/jfrc-02-2014-0011.
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Purpose – This paper aims to discuss the different practices and regulatory frameworks of Shariah supervision in Islamic Financial Institutions (IFIs) across Organisation of Islamic Cooperation (OIC) member states and to identify the gaps in current Shariah supervisory practices. Parallel with the rapid growth of Islamic finance worldwide, corporate governance has received a considerable amount of attention in Islamic finance. Shariah is a unique characteristic of Islamic finance. That is why the need for a good and efficient Shariah governance system for IFIs is considered to be a crucial requirement to ensure the development and the stability of the Islamic finance industry. Design/methodology/approach – The paper is based on critical review of current laws and regulations for IFIs; this provides a reflective synthesis on the practical work of the Shariah supervisory system across the 25 different OIC member states. Findings – The paper reveals several findings. First, the authors observe a weak and poor Shariah supervisory system in most OIC member states. Furthermore, the authors detect various gaps in the current Shariah supervisory practices. Most of these shortfalls are linked to the current regulatory frameworks: the roles and the responsibilities of the national Shariah authority, and the institutional Shariah board’s duties and attributes. Originality/value – This paper’s originality and value lies in its critical review of current Shariah supervisory practices across 25 OIC member states. Also, the paper puts forward various suggestions to the regulatory authorities and to the Islamic Financial Services Board to enhance the Shariah governance system and to standardize the different practices of Shariah governance worldwide.
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Santoso, Wahyu, and Cynthia Afriani Utama. "The Indirect Impact of Busy Directors on the Relationship of Family Structure and Cash Flow Sensitivity of Cash (Empirical Research in Indonesia’s Manufacturing Sector 2013-2017)." Jurnal Manajemen Bisnis 12, no. 1 (March 4, 2021): 111–14. http://dx.doi.org/10.18196/mb.v12i1.9344.
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Research aims: This research aimed to determine the impact of family structure on the cash flow sensitivity of cash (CFSC) in the manufacturing sector. It also investigates the indirect impact of busy directors as a moderating effect.Design/Methodology/Approach: Based on a sample of Indonesia’s manufacturing companies from 2013 to 2017, the researcher uses GLS regression models on this panel data calculated with robustness fit test at the firm’s level.Research findings: It indicated that family structure has a impact positively on cash flow sensitivity of cash and statistically significant. Meanwhile, the indirect impact of busy directors found to have a impact negatively and weakened on the relationship of family structure and CFSC, it also indiciated that quality of busy directors is an tool of corporate governance that is effectively to monitor of every family firm’s decisions.Theoretical contribution: This article enriches previous literature by justifying the impact of busy directors on the relation between every each of family’s firm decision and CFSC. Furthermore, it showed us a metric for agency problems that is the sensitivity of cash to corporate cash flows.Implication policy: Based on POJK regulations, the context of busy directors in this research refers to the roles and duties of the Board of Commissioners (BOC) which concurrently hold positions for other public companies.Research Limitation/Implication: The implications suggest that almost most of Indonesian family corporation are tend to expropriate minority by extracting rents through coporate cash flow sensitivity of cash behavior.
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Grove, Hugh, Maclyn Clouse, and Tracy Xu. "Strategies for boards of directors to respond to the COVID-19 pandemic." Corporate Board role duties and composition 17, no. 1 (2021): 8–19. http://dx.doi.org/10.22495/cbv17i1art1.
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The COVID-19 pandemic has caused escalating levels of business, economic, and societal uncertainty and created extensive disruptions in the global market. The major research question of this study is how boards of directors can manage uncertainty in the post-COVID environment, especially in their duties as gatekeepers for both their own shareholders and all the stakeholders, including employees, customers, creditors, and suppliers. It is critical for boards to develop practices to help their companies manage uncertainty in the COVID and post-COVID times, as shown by the following topics discussed and analyzed in this paper: managing uncertainty with visibility, control, and agility practices; risk strategies for non-executive directors; global risk concerns; disruptive risks and opportunities from emerging technologies; boardroom risk advice; and boardroom risk questions. All these issues and areas of concern are relevant, even critical, to help boards develop sound practices for managing post-COVID uncertainty, to help their companies survive, and to strengthen corporate governance. Future research could use case studies and interviews of company boards to investigate how they have developed risk strategies and procedures to manage uncertainty as lessons learned from the 2020 COVID pandemic, which was a coronavirus “black swan” (a surprise event with major effects).
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Malinas, Mark. "The rise of shareholder activism—what you need to know." APPEA Journal 55, no. 2 (2015): 448. http://dx.doi.org/10.1071/aj14083.
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The past few years have seen a dramatic rise in shareholder activism in Europe and the US and it is a trend becoming more common in Australia. Companies operating in the oil and gas sector have been subject to particular attention and there are a growing number of examples of this in Australia. The targets of shareholder activism range in size and performance, but are often companies with perceived board weakness, those that are considered to adhere to outdated corporate governance, those whose strategic direction is in question or those that have an under-performing share price, though other factors can also be relevant. Using these issues or concerns as a pretext, activists are increasingly focused on using tactics that allow them to exert control or exercise influence to realise returns or agitate for change in companies that: have significant assets (such as oil and gas reserves) relative to their market value; have high costs, large capital expenditures and long revenue generation lead time (such as exploration projects); or, operate in low growth or fluctuating markets (such as with the price of oil and gas). Unsurprisingly, the oil and gas sector is being increasingly seen by certain funds and investors as fertile ground for shareholder activism. The Australian legal landscape also presents shareholders with a platform from which to exert influence. For instance: shareholders are able to requisition general meetings (and resolutions to be put to those meetings) if they hold sufficient shares and put the entire board up for re-election following the introduction of the two strikes rule; and, directors are required to adhere to statutory and common law duties in responding to shareholders. Shareholder activist campaigns are often played out in public and can be highly disruptive to companies’ operations. Accordingly, directors and senior management of oil and gas companies should be aware of shareholder activism in Australia and, in the broader interests of all shareholders and their company, consider how they should respond or be ready to respond. This may be done through various processes, including testing the company’s perceived weaknesses and addressing them and having a plan to address activism should it arise.
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Bukair, Abdullah Awadh, and Azhar Abdul Rahman. "Bank performance and board of directors attributes by Islamic banks." International Journal of Islamic and Middle Eastern Finance and Management 8, no. 3 (August 17, 2015): 291–309. http://dx.doi.org/10.1108/imefm-10-2013-0111.
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Purpose – The purpose of this paper is to examine the relationship between board structure (consisting of board size, board composition, CEO role duality and chairman composition), investment account holders (IAHs) and social contribution and the bank performance in one of the fastest-growing industries, Islamic banking. Design/methodology/approach – A generalized least square (GLS) regression model was used to investigate such relationship applying data from a sample of 40 Islamic banks operating in Gulf Cooperation Council (GCC) countries over the period of 2008 until 2011. Findings – The results show that both size and composition of the board have a negative effect on bank performance. On the other hand, the separation of CEO and chairman roles and the IAHs have no effect, while the chairman independence has a positive impact. As for the control variables, bank size positively influences bank performance whereas leverage has a negative effect. Zakah and gross domestic product produce no significant effect on bank performance. Research limitations/implications – Even though the model has explained the significant part of the variation in performance, there are other factors considered as noise in the model which are unexplained due to the lack of data. As such, other mechanisms of corporate governance (CG) comprising attributes of the remuneration and nominating committees and ownership structure may be used in future research. The sample size is also limited; thus, in future research, the sample size could be increased by including Islamic banks operating in all Middle East countries. Practical implications – The results suggest that to yield a better bank performance, Islamic banks should enhance the effectiveness of CG through the board of directors (BODs), whereby any decisions made by the BODs would lead to greater investors’ confidence in the market. The results suggest that policymakers should impose new mechanisms that could impact the effectiveness and compliance of BODs on the code of CG and guidelines of micro-finance, in general, and among Islamic banks, in particular. The community also has the right to know up to what extent are the Islamic banks are in compliance with Shariah principles and rules and the impact of their transactions on the society’s welfare. Originality/value – BODs’ failures are the primary reason for the recent financial collapses, and Islamic banks are not spared from these events. Even though many studies have examined the influence of BODs effectiveness on the performance of conventional banking industry over time, studies on the Islamic financial institutions are quite scarce. In addition, the results obtained by the studies on conventional banks may not be applicable to Islamic banks. This is because the BODs of Islamic banks discharge their responsibilities and duties along with the existence of the Shariah supervisory board (a multi-layer structure), which is quite different from the CG structure in conventional banks that is dependent on the BODs (a single-layer). Therefore, this research attempts to fill the gap in the literature by addressing this issue in the Islamic banking industry by using a stakeholder theory based on Islamic perspective which has not been used yet in previous studies.
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Knapp, Vanessa. "Sustainable Corporate Governance: A Way Forward?" European Company and Financial Law Review 18, no. 2 (April 1, 2021): 218–43. http://dx.doi.org/10.1515/ecfr-2021-0010.
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Abstract This article looks at proposals to improve sustainable corporate governance of companies. These include: how to deal with shareholder primacy; a proposed requirement for companies to have an overarching purpose “to create sustainable value within planetary boundaries;” a directors’ duty to promote the undertaking’s interests to fulfil its overarching purpose; a directors’ duty to balance stakeholders’ interests; a duty to undertake a due diligence sustainability assessment; company and director liability for breaches; stakeholder enforcement of directors’ duties and public enforcement of directors’ duties. It considers problems with the proposals. It suggests alternative ways to make companies’ corporate governance more sustainable, including: improved corporate reporting relating to engagement with key stakeholders and how this contributes to the company’s long-term sustainability; better viability reporting by companies; reporting on capital allocation; better stewardship similar to the UK Stewardship Code 2020; more collaborative engagement by shareholders with companies in a manner similar to that promoted by the UK Investor Forum; making requisitioning of resolutions work better in practice; and, possibly, a vote on whether the company is creating sustainable value in the long term (a say on sustainability).
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Bruno, Sabrina. "Climate Corporate Governance: Europe vs. USA?" European Company and Financial Law Review 16, no. 6 (December 6, 2019): 687–723. http://dx.doi.org/10.1515/ecfr-2019-0027.
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According to economic literature, climate change is a financial factor: this is the logical premise of the European Directive N. 2014/95/EU requiring disclosure on the policies adopted by big corporations on climate change risks and opportunities. Through disclosure, climate change imprints the contents of directors’ duty of skill and care in Europe. On the contrary, in US there is no federal legislation or SEC regulations specifically on climate disclosure. Absent any binding decision yet, the current assessment of directors’ fiduciary duties under state law does not include consideration of climate change risks and opportunities according to American authors, even though fiduciary duties may evolve. The sole effective tool is the Martin Act. Levels of disclosure of US and EU corporations are therefore already significantly different both in terms of climate risks and opportunities. This situation can drive the financial sector to direct capital to Europe. Institutional investors in US have been trying to increase disclosure through shareholders’ proposals under Rule 14a-8 but these efforts have been recently undermined by the micro-management argument used by SEC. The conclusion is that the market cannot govern climate change by itself: because of regulation, European corporations are better positioned to mitigate the “carbon bubble”. What is at stake is the profitability of American corporations.
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Sridhar, I. "Duties of directors in corporate governance: an Indian perspective." International Journal of Indian Culture and Business Management 17, no. 4 (2018): 442. http://dx.doi.org/10.1504/ijicbm.2018.095680.
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Sridhar, I. "Duties of directors in corporate governance: an Indian perspective." International Journal of Indian Culture and Business Management 17, no. 4 (2018): 442. http://dx.doi.org/10.1504/ijicbm.2018.10016718.
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