Academic literature on the topic 'The Influence of Company Characteristics and Regulatory Factors on the Quality of Corporate Governance Implementation'

The monetary crisis that hit Indonesia in 1998 added to the confidence of economists and company management to implement Good Corporate Governance (GCG) practices in Indonesia. The implementation of good corporate governance is expected to be able to create added value for all interested parties. This study aims to determine the effect of ownership concentration, investment opportunity, leverage, profitability, and firm size on corporate governance rating. Using annual data for the period January 1, 2015 – December 31, 2020, with Panel Data Regression analysis with the Eviews 11 tool. The panel data regression test results show that leverage, profitability, and company size as macroeconomic variables influence corporate governance rating. Meanwhile, Ownership Concentration and Investment Opportunity do not affect corporate governance rating.

The objective of this paper is to review the research patterns that examined factors influencing ethical values and practices disclosures among public listed companies in Malaysia. Through a systematic literature review (SLR) process, the paper reports a step-by-step approach to examining past studies and theories by utilizing the PRISMA (Preferred Reporting Items for Systematic reviews and Meta-Analyses) method. Past articles were identified through Scopus, Web of Sciences, and Google Scholar, which cover a period from when the Malaysian Code on Corporate Governance (MCCG) was established in 2000 until 2021. The results of our systematic literature review managed to categorize these factors into internal (board commitment, board characteristics, and company characteristics) and external (regulatory framework and international guidelines). While the sub-categories in each factor were mostly driven by compliance with the MCCG 2012 and MCCG 2017, the items on ethical practices and actions require more attention for further research. This paper recommends more studies to be conducted to examine these factors from the perspectives of board commitment, board characteristics, and firm characteristics as moderating variables. Our paper recommends large companies to adopt integrated reporting based on a globally recognised framework in promoting greater transparency and accountability as well as reducing duplication. The recommendations in this regulatory framework may influence the Board of Directors’ commitment to report more reflections of quality, and ethical values voluntarily. This paper is among the first of its kind to present a systematic literature review, which examines factors influencing ethical values and practices on disclosures, specifically in developing countries.

This study examines the relationship between the quality of accounting information and the composition and structure of an organization’s board of directors. Given the importance of accurate and transparent financial reporting for decision-making, the study explores how different board characteristics influence the reliability, relevance, and clarity of accounting data. It also considers how organizational features, industry-specific factors, and regulatory environments may moderate this relationship. A mixed-methods approach is used, combining quantitative analysis of financial data with qualitative insights gathered from surveys or interviews with board members and financial executives. By integrating these methods, the study aims to provide a comprehensive understanding of how board structure impacts accounting information quality. The findings have important implications for corporate governance, regulatory policies, and strategic business decisions. This research offers valuable insights for investors, policymakers, auditors, and company leaders, supporting greater accountability and transparency in financial reporting.

The telecoms sector is the focus of this research project, which thoroughly explores the critical success factors associated with the implementation of Agile project management techniques. It has shown out to be beneficial in the industry of telecommunications, notably in digital services and managed services. Research is primarily focused on identifying the key success factors related to both individuals & organizational aspects, and how they impact the success of projects within the managed services and digital services functional departments of selected organizations. The study examines the influence of 5 major variables which includes Team Size, Team Communication, Team Performance, Customer Involvement, and Management Involvement. Survey was conducted using random sampling, and 110 participants from two telecom organizations, Pakistan Telecommunication Company Ltd (PTCL) and Special Communications Organization (SCO), replied. According to findings, team size and performance (in terms of experience & Agile expertise) was found as critical success element. Furthermore, active customer interaction on a daily basis, as governance (rather than micromanagement), was highlighted as essential factors to project success. These five variables appeared as essential in this study. The study found a positive correlation between these characteristics and project performance, specifically in terms of project value. However, it was not possible to make precise statistical predictions about the strength of this association. Study also identified additional areas for investigation, with a particular emphasis on team communication, customer interaction, contract formats, and internal corporate regulations. While the study provided new insights into contract formats and the use of Agile methodology in quality assurance, more research is needed to gain a better understanding of the impact of people and organizational factors, especially in the telecommunications industry, which includes data services and managed services functional domains.

PurposeThe purpose of this study is to investigate the effects of ownership structure, board attributes and eXtensible Business Reporting Language (XBRL) on annual financial reporting timeliness of non-financial companies listed on Borsa Istanbul (BIST).Design/methodology/approachTo conduct the analyses, the authors used two samples. The main sample consists of 187 companies, while the subsample includes 54 companies in the BIST 100 index. The data set covers the 2010–2018 period. To investigate the influence of ownership structure, board attributes and XBRL on timeliness, panel regression and univariate analyses were used. To explore the factors associated with the likelihood of late filing, panel logistic regression analyses were employed.FindingsThe findings provide evidence that companies that have a high level of institutional ownership and women board membership file earlier. In line with prior studies, profitable companies file their accounts faster. Highly leveraged companies are late reporters. Further, XBRL has a positive influence on the filing of financial reports for the BIST 100 companies due to technological agility. Finally, companies that have less institutional ownership and that get qualified audit opinions are more subject to late filing.Research limitations/implicationsThe authors acknowledge that this study has certain limitations. First, the results may not be generalized to the entire BIST population due to the exclusion of financial companies from the samples. Future research may explore the financial reporting timeliness of these companies. Second, the study did not investigate the relationship between timeliness and the information content in financial statements and the market reactions they arouse. Third, this study is trying to find out early evidence on the mandatory adoption of XBRL filings, which cover only three-year period due to the recent implementation of this regulatory practice. Thus, it needs further elaboration after the accumulation of data in the forthcoming years by the expansion of the sample beyond the 2016–2018 period. As companies would have more time to become familiar with XBRL, a more reliable conclusion may be drawn. Further, the study particularly focuses on the effect of XBRL adoption on the timeliness among filers. XBRL could also influence investors, auditors and other stakeholders. Future research could investigate the influence of XBRL on different stakeholders to produce more insightful implications.Practical implicationsThis study offers several implications for managers, regulators and policy makers. First, companies that do not make timely financial reporting may find it more difficult to attract long-term capital by means of institutional investors. Since these investors view timely reporting as an ideal ingredient in corporate governance, it may have a positive impact on company reputation and corporate sustainability. The results also provide insights for regulatory authorities, policy makers and auditors on the causes of the reporting lag, thereby increasing their awareness and helping them in their decision-making process since improvements in timely availability and accessibility of financial information reduce information asymmetry for users and increase market efficiency. Additionally, companies that reduce their filing timeframe will be able to compare their results with other companies. However, the XBRL mandate could be much more burdensome to smaller firms. This may stem from the fact that larger firms may tend to use the in-house approach for XBRL and can afford more advanced financial reporting systems with automated coding algorithms attached to streamline their XBRL filings, whereas smaller firms are more likely to use the outsourcing approach due to the difference in the level of resources available for XBRL preparation. This finding also lends support to recent concerns that new technology creates an unleveled benefit in reporting efficiency for large companies, but not for small ones (e.g. Blankespoor et al., 2014). This benefit may change the dynamics of the financial market and information environment, leading to further segmentation of the capital markets. The positive effects of XBRL adoption may accrue over time due to the potential benefits of learning curve experience since the XBRL mandate will help companies automate their reporting process and information processing, thereby strengthening internal control over financial reporting (Deloitte, 2013; Du et al., 2013; Li, 2017). Companies may also efficiently incorporate auditor-proposed adjustments by cross-referencing impacted accounts and prepare revised versions of the financial reports, which are automatically rendered in various formats for auditors to assess (Wu and Vasarhelyi, 2004). Finally, investors and other users of financial information benefit from having quicker access to data, since this allows them to make more timely and reliable decisions, leading to greater benefits.Originality/valueThis paper contributes to the literature on the impact of adopting XBRL on the timeliness of financial reporting in emerging markets. Second, this study extends the literature and provides evidence on determinants of timeliness, covering both ownership structure and board attributes besides firm-specific characteristics. Hence, it provides valuable insights for companies, investors, auditing firms and policy makers.

Dear Authors and Readers, vol. 48, number 4 of “Zeszyty Teoretyczne Rachunkowości” (ZTR, “The Theoretical Journal of Accounting”) includes articles in English accepted for the special issue of ZTR in 2024, entitled Sustainable Development, Accounting, and Accountants. This issue also contains a review of the collective work entitled Handbook of Accounting, Accountability and Governance, edited by Garry D. Carnegie and Christopher J. Napier, as well as a list of reviewers of articles in ZTR in 2024. Starting in 2012, this marks the 13th thematic issue of ZTR in English. The papers featured in this issue focus on the theme of sustainable development. The shifting landscape, marked by recent sustainability reporting regulations such as the European Union’s Corporate Sustainability Reporting Directive (CSRD), the European Sustainability Reporting Standards (ESRS), and the global standards introduced by the International Sustainability Standards Board (ISSB), has the potential to drive significant transformation in both the practice and teaching of accounting. Together, the papers in this Special Issue provide valuable insights into the intersection of accounting, sustainability, regulation, and education, highlighting the challenges and opportunities faced by those navigating the evolving landscape of sustainability reporting. Sustainable Development Goals (SDGs) are central to the United Nations’ Agenda 2030, which outlines a global framework for achieving sustainable development across economic, social, and environmental dimensions. Arleta Szadziewska, Anna Szychta, and Halina Waniak-Michalak examine how companies listed on the Warsaw Stock Exchange (WSE) communicate their commitment to the SDGs, using indicators proposed by the Intergovernmental Working Group of Experts on International Accounting and Reporting Standards (UNCTAD-ISAR). Through a content analysis of 235 reports from 2019 to 2022, their study reveals a gap between companies’ declared commitments to the SDGs and their actual disclosures. The research identifies company size, industry type, and the number of declared SDGs as key factors that influence the extent of SDG reporting. In contrast, the reporting standards used (e.g., GRI) did not significantly affect disclosure levels. Hanna Mysaka and Ivan Derun conducted a bibliometric analysis of the theoretical frameworks underlying sustainability reporting (SR) and non-financial reporting (NFR) within the context of EU regulatory changes. Their analysis shows that SR has become the dominant framework in shaping EU corporate reporting regulations, both quantitatively and qualitatively. Their study underscores the need for further development in the NFR domain, highlighting the underdevelopment of its theoretical framework as a key factor hindering the effectiveness of the EU’s non-financial reporting regulations. Materiality analysis serves as a fundamental pillar of sustainability reporting. Mohamed Anas Belidan and Halima Baghad provide a scoping review of the theoretical foundations of materiality in sustainability reporting, comparing single and double materiality approaches. Their findings highlight a growing emphasis on double materiality, driven by evolving stakeholder expectations and regulatory mandates. The authors argue that harmonizing reporting standards and fostering active stakeholder engagement are crucial for enhancing the quality and consistency of sustainability disclosures. Paweł Szalacha’s study also focuses on the concept of materiality, examining the implementation of double materiality by early adopters among Polish companies. Using 2023 sustainability reports as empirical data, he finds that integrating double materiality into sustainability reporting has brought changes to the content of reports and the disclosure of materiality determination processes. The study identifies key drivers behind these changes and highlights reporting gaps, offering valuable insights into the challenges companies face in implementing double materiality. The CSRD introduces mandatory sustainability assurance at a limited level; however, some companies already have experience in this area through voluntary practices. Małgorzata Macuda and Paweł Zieniuk analyze voluntary assurance practices in European companies’ sustainability reports prior to the CSRD’s implementation. Their research, based on a sample of 576 companies, shows that the decision to seek voluntary assurance was influenced by company-specific factors, prior experience in sustainability reporting, and the strength of auditing standards in the country. Their study provides valuable insights into the extent of voluntary assurance practices before the introduction of mandatory assurance requirements under the CSRD. Finally, a new approach to accounting education is needed to better align with this evolving context. The paper by Abdel K. Halabi, Alan Labas, and Craig Hurley explores whether introducing a transformative subject on sustainability, the environment, and the SDGs into a master’s accounting course can foster critical thinking and shift student attitudes. Using qualitative data from student reflective journals, analyzed thematically through NVIVO software, the findings reveal transformative outcomes, including changed atti-tudes, increased self-efficacy to drive positive change, enhanced critical thinking, and a deeper understanding of business impacts on the environ-ment. Most students expressed a preference for working in environmentally responsible businesses. The research addresses a gap by highlighting account-ing students’ perspectives on sustainability-related issues and supports calls to redefine accounting beyond technical practice. The Reviews section of this issue of ZTR contains a review of Handbook of Accounting, Accountability and Governance, a collective work published in the “Research Handbooks on Accounting” series by Edward Elgar Publishing in 2023. This comprehensive publication, edited by eminent professors of accounting Garry D. Carnegie and Christopher J. Napier, is a compendium of knowledge on the interconnections between accounting, accountability, and governance. It includes an Introduction and 21 chapters authored by 45 specialists in the fields of accounting, accountability, and governance. The Handbook is a valuable source of information for researchers and doctoral students about the history, present and possible future of the triad of issues expressed in the title of this work. We are pleased to announce that the Editorial Team of ZTR has completed a project under the “Development of scientific journals” program for the period 4 October 2022 – 4 October 2024 (Agreement RCN/SP/0062/2021/1; funding from the Ministry: PLN 80,000, total project amount: PLN 122,560). The final report was submitted to the Ministry of Science and Higher Education in November 2024. All planned activities were completed on time. During the implementation of the project, eight issues of ZTR were prepared for publication and published, containing 77 articles: 41 in English and 36 in Polish. Of the 41 articles in English, 19 were published in two thematic issues (Vol. 46, No. 4 in 2022 and Vol. 47, No. 4 in 2023), while the remaining 22 articles were included in the six other issues of ZTR published in 2023 and 2024. The Editorial Team would like to thank all the reviewers of ZTR articles so far, especially the 71 specialists who provided anonymous reviews and insightful feedback in 2024. The list of Polish and foreign reviewers is included in this issue of ZTR and on the website of our journal https://ztr.skwp.pl/cms/reviewers. We would also like to thank all the authors of articles published in the four issues of ZTR in 2024 for their cooperation with the Editorial Team. We encourage authors and readers to visit ZTR’s website at https://ztr.skwp.pl/, where you can find a lot of information about the journal, including its objectives and scope, publication ethics, principles of reviewing, accepting, and preparing articles, and the procedures for submitting a paper to the journal. Polish and foreign authors are invited to submit interesting papers for future issues of ZTR, including a thematic issue in 2025 entitled Contemporary chal-lenges, conditions, and directions of development of accounting (for more, see Call for papers published in ZTR, Vol. 48, No. 2 and at https://ztr.skwp.pl/cms/CMS:647). On behalf of the entire ZTR Editorial Team, we wish all authors, reviewers, members of the Editorial Board, and readers of ZTR a lot of health, happiness, and peace, as well as numerous professional successes in 2025. We hope that all your plans come to fruition. Yours faithfully Joanna Krasodomska, Nadia Albu, Anna Szychta

Modern business conditions present new challenges to the management of enterprises and require them to always have flexible and adaptive strategic action plans. Spending on staff development should be seen as an investment in the future and sustainable growth of the business. The development of the labor potential of modern enterprises is an extremely important area of ​​ensuring the stability of transformational processes. Highly qualified and motivated personnel are able to perform their duties effectively and efficiently, which directly affects the overall productivity of enterprises, and also, thanks to the reduction in the number of errors in work, ensures an increase in the quality of products and services. Employees with a high level of knowledge and skills are able to generate new ideas and implement innovations thanks to the use of effective and modern methods and tools, this contributes to ensuring the competitiveness of the enterprise on the market, as well as more efficient use of available resources, which ensures a reduction in production costs and an increase in profitability. In today's turbulent conditions, the development of labor potential at enterprises allows employees to quickly adapt to changes in technologies, market conditions and regulatory requirements. This ensures flexibility and adaptability of the enterprise and increases its level of stability in a changing environment. Management of enterprises investing in the development of their employees creates a positive image on the labor market, which reduces staff turnover, helps attract creative specialists and increases the value of company vacancies. Building the trajectory of labor potential development is a key factor for achieving strategic success and stable business development. The analysis of literary sources confirms that this scientific direction is quite relevant, taking into account the new requirements and possibilities of conducting business activities of enterprises and needs further development. The purpose of the article is the theoretical and methodological substantiation of the principles of building trajectories of the development of personnel potential of enterprises and their influence on the transformation of business in modern turbulent economic conditions. The development of personnel potential that meets the needs and scale of changes at enterprises is a key structural component of the implementation mechanism of the country's socio-economic development strategy. The personnel potential of enterprises is a strategic factor that determines the success of socio-economic reforms. Qualitative and quantitative characteristics of the workforce determine the possibilities of structural restructuring of the economy, diversification and expansion of production, improvement of product quality and growth of labor productivity. The personnel potential of the enterprise is a set of abilities and skills of employees that can be used in the process of achieving the strategic goals of the enterprise. The high level of skills and knowledge of the company's personnel is the basis for active development and effective achievement of the company's goals. Personnel potential also represents a qualitative and quantitative characteristic of human capital as one of the types of active resources of the enterprise. Separately, this economic category can be considered as existing and potential personnel capabilities that are already used, can be used when needed, or can be acquired when needed. The uniqueness of personnel potential is that it can constantly develop and improve, and each of the individual characteristics (knowledge, skills) can belong to one person or a group of persons as necessary. The personnel potential of a modern enterprise forms a specific structural architecture that reproduces the relationships and properties of groups of employees. The main elements of the personnel potential structure are physiological, social, intellectual and technological components. In addition, socio-demographic, personnel and, depending on the level of management at the enterprise, can be cited. The need to develop personnel potential in today's economic conditions is a necessary fact for the sustainable development of the enterprise. Solving the tasks of effective functioning and ensuring the competitiveness of enterprises is directly related to the development of their personnel potential. Unstable business conditions, competition and intensity of economic activity, increasing attention to management problems and trends, the need for modern knowledge of management and marketing, increasing the value of personnel and ensuring adequate development costs, as well as increasing the social responsibility of enterprises for the development of personnel potential - these factors determine the principles building trajectories of the development of personnel potential of enterprises and determine the level of their influence on business transformation. The principles of building human resources development trajectories are necessary and relevant tools for modern enterprises. They provide a systematic and strategic approach to personnel development, increase business competitiveness and efficiency, promote innovative development and adaptation to changes, and also have a positive impact on corporate culture and employee satisfaction. Thus, these principles play a key role in business transformation, ensuring its successful development and sustainability in dynamic market conditions.

ABSTRAK Penelitian ini bertujuan untuk memetakan penelitian-penelitian sebelumnya tentang audit syariah dan perannya dalam meningkatkan kepatuhan syariah di lembaga keuangan syariah (LKS). Penelitian ini juga menguraikan tantangan yang dihadapi oleh LKS dan solusi dalam mengimplementasikan audit syariah. Sebanyak 308 publikasi diperoleh dari database Google scholar, Emerald Insight, Research Gate, Crossref, Microsoft Academic and Pubmed yang diakses dengan perangkat lunak Publish or Perish (PoP) dalam kurun waktu 2008-2021. Studi ini menerapkan analisis bibliometrik menggunakan VOSviewer, yang mengubah metadata publikasi menjadi visualisasi sesuai dengan co-occurrence. Hasil penelitian ini menemukan bahwa audit syariah telah diterapkan di beberapa negara yang didominasi oleh Malaysia. Sebagian besar praktik audit syariah merupakan bagian dari fungsi audit internal. Audit syariah diidentifikasi sebagai mekanisme untuk memastikan kepatuhan syariah. Tantangan utama dalam pelaksanaan audit syariah antara lain: kurangnya kerangka dan standar audit syariah yang menyebabkan perselisihan di antara praktisi LKS, kurangnya auditor syariah yang berkualitas yang memiliki pengetahuan syariah yang memadai dan terlatih dengan baik, audit syariah dianggap menciptakan masalah inefisiensi. Peran komite tata kelola syariah dan dewan pengawas syariah direkomendasikan agar lebih optimal untuk memastikan efektivitas audit syariah. Penelitian ini memberikan pembahasan komprehensif tentang audit syariah, perannya dalam meningkatkan kepatuhan syariah, tantangan dan solusi yang ditawarkan belajar dari berbagai negara. Kata Kunci: Audit syariah, kepatuhan syariah, lembaga keuangan syariah, bibliometrik. ABSTRACT This study aimed to map out previous studies on sharia auditing and its role in improving sharia compliance in Islamic financial institutions (IFIs). It also outlined the challenges faced by IFIs and solutions in implementing shariah audit. A total of 308 publications were obtained from the Google scholar database, Emerald Insight, Research Gate, Crossref, Microsoft Academic and Pubmed which were accessed using the Publish or Perish (PoP) software in the 2008-2021 period. This study finds that sharia audits have been implemented in several countries, dominated by Malaysia. Most shariah audit practices are part from internal audit function of IFIs. Sharia audit is identified as a mechanism to assure shariah compliance. The main challenges in implementing sharia audit include: a lack of framework and standard of shariah audit that led to dispute among IFIs practitioners, a lack of qualified shariah auditors who have an adequate shariah knowledge and well trained , shariah audit identifed creating an efficiency issue. The role of the shariah governance committee and the shariah supervisory board may be optimized to ensure the effectiveness of shariah audit. 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<strong>Introduction</strong> One of the major fields of business is corporate governance, which boost investors&rsquo; confidence and protect stakeholders&rsquo; interest. Investors have identified the importance of corporate governance system at national and international level (Owen, 2003). Corporate governance has got great concentration in developing and under developed economies (Mallin, 2004; Reed, 2002; Solomon &amp; Solomon, 2004). Due to financial scandals in underdeveloped counties, corporate governance has given much consideration (Baydoun, Maguire, Ryan &amp; Willett, 2013). Many developing countries have also given more concentration as many of these countries lack appropriate corporate governance practices (Ekanayake, Perera &amp; Perera, 2010). Pakistan is an underdeveloped country and the Securities and Exchange Commission of Pakistan (SECP) is focusing on proper implementation of corporate governance mechanism after issuing the code of corporate governance in 2002 as it plays a significant role in economic development. SECP has made corporate governance obligatory for all potential listed firms on Pakistan Stock Exchange in order to instill confidence of investors, ensure transparency, accountability and safeguard the interest of all stakeholders in particular of minority stakeholders. The code of corporate governance varies from country to country. USA, UK and rest of English speaking countries follow Anglo Saxon system of corporate governance and Germany, France and Spain use European Continental system of corporate governance. Pakistan corporate governance system is based on Anglo Saxon system. In Anglo Saxon system of corporate governance, one independent board of directors monitors and controlled the entire functions of management for increasing shareholders value.&nbsp; A very few people possess the legal authority over management team and minority investors own very low protection, who look to the support of independent director (Hasan, 2009). The corporations try to magnetize investors across the world by offering comparative sound return. The goal of corporation and other stakeholders (lenders, business associates, employees and government) are achieved by applying good corporate governance system. Good governed companies produce good return to all stakeholders including shareholders. Poor governed corporations cannot attain profit and hence cannot meet operating needs and other financial requisites and become insolvent. Corporate governance is the mechanism used for sound performance (Ghabayen, 2012).&nbsp; According to (John, Litov &amp; Yeung, 2005), application of corporate governance system mitigates risk and managers invest in riskier but advantageous projects. This study examine the influence of one of the significant facet of corporate governance: CEO duality on solvency risk of Textile firms listed on PSX from 2010 to 2018. The code of corporate governance of Pakistan requires that one person should not hold dual positions; position of CEO and chairperson in the company. Studies have proved a positive association between CEO duality and solvency risk in developed and under-developed countries. This study also investigates the influence of CEO duality on solvency risk of listed Textile firms on PSX from the period of 2010 to 2018. &nbsp; <strong>Literature Review</strong> Corporate governance plays a substantial role in every sector across the globe due to emergence of markets, liberation of trade, financial crises and scandals, development of technology and mobility of capital. Corporate bodies are required to be governed as per the codes of corporate governance prevailing in the country. The system of corporate governance varies from country to country and applied in the world (Hasan, 2009). Outsider system of corporate governance (Unitary System) is followed in United State and English speaking countries, whereas, Insider Model (Dual System) of corporate governance is applied in European countries (Germany) (Nestor Thompson, 2000).&nbsp; Both the systems of corporate governance have developed from different regulatory, political and institutional environments (Babic, 2003). Outsiders Model of corporate governance inclined towards corporate managers&rsquo; reward and control, while Insider Model of corporate governance relies upon controlling the behavior of managers and owners (Shleifer &amp; Vishny, 1997). There is insider system of corporate governance in Pakistan and Germany. However, Uni-boarded system exist in Pakistan, whereas companies have supervisory and management board. For the very first time, the system of corporate governance was introduced in USA in 1970 while the Securities and Exchange Commission of Pakistan firstly notified the codes of corporate governance in March 2002 that has been upgrading time to time based on the national and international market demand. Traditionally the system of corporate governance is concerned with shareholders (principals) and managers (agents) conflict. Jensen and Meckling, (1976) describes in Agency Theory that the conflict arises when principal assign the corporate operation to agents. The principals expect agents for successfully operation of firm in the best interest of firm, however, the interest of agent deviate from the principal interest that causes more problems in the organization. Due to interest divergence, firm may bear financial and non-financial risks including solvency risk. Solvency risk effect corporate stakeholders. Stakeholders interest collide often times. A few hold greater control in corporate decisions. Therefore, a system is required which can preserve the interest of each stakeholder from exploitation form individual stakeholder&rsquo;s decision.&nbsp; Butt, (2012) describe that corporate governance is the system employed in companies for getting the interest of each stakeholder. The mechanism applied in order to direct and control firm activities is termed as corporate governance (Australian Standard, 2003). The central purpose of corporate governance system is directing and controlling for brining precision in firms which impact performance and risk of corporation. Separation of firm&rsquo;s ownership and control is the fundamental reason of the agency conflict, which demands for effective implication of corporate governance mechanism. The firms adhering the codes of corporate governance accomplish its objectively easily whereas, those firms do not exercise the corporate governance practices bear risk. Saito, (2008) defined risk as the chances that actual return deviates from expected return. Roggi, Garvey and Damodaran, (2012) linked risk to the expectation of human beings, furthermore they grouped risk into controllable (unsystematic) risk and uncontrollable (systematic) risk. Uncontrollable risk is market risk which affects the entire economy not an individual firm and firms are affected due to external factors (high inflation, interest and recession). Uncontrollable risk cannot be controlled but can be mitigated via diversification. Controllable risk is the business risk which is affected due to corporate inside factors (Aggarwal &amp; Samwick, 1999). &nbsp;Corporate governance effect corporate risk (Prasetyo, 2011). Good corporate governance system can minimize corporate business risk. Sound corporate governance system improves efficiency of managers, reduce risk, boost stakeholders&rsquo; worth and get competitive advantage. The code of corporate governance of Pakistan (2018) requires that CEO must not hold the position of chairperson. Studies have proved that CEO duality has positive association with solvency risk (Mayers &amp; Smith, 2010; Rogers, 2002; Sharpe &amp; Stadnik, 2007). Agyei and Owusu,&nbsp; (2014) conducted a study on Ghanaian listed manufacturing companies from year 2008 to 2012 to check the influence of CEO duality on solvency risk. The outcomes of their studies revealed a positive association between CEO duality and risk. They described further that one person controlling both the position causes increase in risk. Ullah et al., (2017) conducted a research to check the impact of corporate governance: board independence, board size and CEO duality on solvency risk of cement firms listed on PSX from year 2005 to 2014. The outcomes proved a positive association between CEO duality and solvency risk whereas a negative relation between board independence and board size, and solvency risk. The basic objective of this study was to analyze the effect of CEO Duality on solvency risk of Textile manufacturing corporations on PSX from 2010 to 2018 and recommend indicators for mitigating solvency risk. In this research CEO Duality is defined as one person perform dual role in the organization mean that one person performing the role of chairperson and chief executive officer duality, whereas solvency risk is calculated with times interest earned and defined as earnings before interest and taxes, and measured as earnings before interest and taxes divided by interest expenses. For accomplishment of research objective, the hypothesis is developed as; <strong>H₁: </strong>CEO duality and solvency risk have positive association. The given below model is developed on the basis of proceeding works of (Agyei &amp; Owusu, 2014; Azeem, Hassan &amp; Kouser, 2013; ). &nbsp; <strong>CCEO Duality</strong> <strong>Solvency Risk</strong> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <strong><em>Figure No.1.</em></strong><strong>&nbsp; Model</strong> &nbsp; <strong>Data Analysis</strong> The Statistical Package for Social Sciences 21 is deployed for the descriptive statistics, Pearson correlation and linear regression analyses of the facets of CG, CS and risk.The sample of 20 Textile sector firms enlisted on the PSX from 2010 to 2018 is chosen for this study. Based on the nature of study, quantitative technique and deductive approached is used. Data regarding CEO duality and solvency risk is ascertained from the audited annual reports of these firms. The data regarding CEO Duality and solvency risk is analyzed by deploying descriptive statistics, correlation analysis and fixed effect regression model using SPSS21. &nbsp; Model Equations &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In this model, Solvency Risk is regressed on CEO Duality (See Table 3). Solvency Risk =&nbsp;&pi; + &beta;1 {CEOD} + &micro;t&nbsp;&nbsp;&nbsp;&nbsp; (Equation 1) In this equation, CEOD denotes CEO Duality,&nbsp;&pi; constant, &beta; denotes beta and &micro;t denotes the error term. &nbsp; &nbsp; &nbsp; <strong>Results and Discussions</strong> <strong>Descriptive Statistics of the Variables </strong> The descriptive statistics of CEO Duality and solvency risk is documented in given Table 1. The minimum means values are 0.01 to 1.01 whereas the 0.97 to 1.49 for standard deviation that shows that variables were operated for use. <strong>Table 1</strong>:&nbsp; <em>Internal Consistency and Reliability (N=200)</em> Variables &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mean Std. Dev Min &nbsp;&nbsp; Max CEO Duality &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.17 &nbsp;&nbsp;&nbsp; 0.38 0.01 &nbsp;&nbsp; 1.01 Solvency Risk &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.49 &nbsp;&nbsp;&nbsp; 0.39 &nbsp;0.97 &nbsp;&nbsp; 1.49 &nbsp; Correlation Analysis <strong>Solvency Risk and CEO Duality.</strong> The results of solvency risk with CEO Duality in below Table 2 reveals that CEO duality has positive association with solvency risk (0.34). <strong>Table 2:</strong> <em>Correlation Analysis: Risk with CEO Duality</em> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; CEO Duality&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Solvency Risk CEO Duality&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Times Interest Earned&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.35**&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -- &nbsp; Regression Analysis &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The hypothesis is tested by using fixed effect regression model to analyze the association between CEO duality and solvency risk. The CEO duality is exogenous variable whereas solvency risk is outcome variable. &nbsp; <strong>CEO Duality and Solvency Risk<em>.</em></strong> The outcomes of equation 1 are shown in Table 3 that shows the impact of CEO Duality with solvency risk. The results are robust and &nbsp;indicates that R²=0.45 that shows 45% change in solvency risk due to CEO duality. The results also prove that F value=6.43 at P &lt;0.05. The outcomes documents beta value of 0.25 and t value 2.09 for CEO duality. The results demonstrate CEO duality has positive effect on solvency risk. The outcomes of this research support the hypothesis that CEO duality positively influences solvency risk. The results of current study are in line with earlier studies that have proved a positive association between CEO duality and solvency risk (Agyei &amp; Owusu, 2014; Mayers &amp; Smith, 2010; Rogers, 2002; Sharpe &amp; Stadnik, 2007). <strong>Table 3:</strong><em> Regression Analysis: CEO Duality and Solvency Risk</em> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Coef.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Std. Err.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; t&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; P&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [95% Conf. Interval] CEO Duality&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.25&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.35&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.09&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.04&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -05.40&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.90 Number of observations &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; =&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 200 F Value &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; = &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.43 P Value&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; =&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp; 0.00 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; R²&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;=&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.45 Note:&nbsp; **= p&lt;0.01, *= p&lt;0.05 &nbsp; <strong>Conclusion</strong> The result revealed that solvency risk is significantly affected by the CEO Duality. There are several evidences of hypothesis used in this study that CEO Duality positively affects solvency risk. The analysis presents evidence that CEO duality positively affects solvency risk. The outcomes reveal that firms with CEO duality bear more solvency risk and in particular to Textile sector firms listed on Pakistan Stock Exchange. The code of corporate governance of Pakistan (2018) also requires firm to have separate individuals for chairperson and CEO of the firm which in turn minimize risk. This study proves the previous research work done the relationship between CEO duality and solvency risk (Anderson &amp; Reeb, 2003; Cheng, Evans &amp; Nagarajan, 2008; Wahla, Shah&nbsp; &amp; Hussain, 2012). &nbsp; <strong>REFERENCES</strong> Abbott, L. J., Park, Y., &amp; Parker, S. (2000). The effects of audit committee activity and independence on corporate fraud. <em>Managerial Finance</em>, 26 (11),&nbsp; 55-68. Aggarwal, R. K., &amp; Samwick, A. A. (1999). 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Purpose The purpose of this study is to investigate whether the corporate environmental, social and governance (ESG) performance of companies is influenced by the barriers and opportunities created by three factors characterising a country’s governance landscape: democracy, political stability and regulatory quality. Additionally, this study separately explains the influence of the three country governance factors on the ESG performance of companies and how they are affected by the profitability of the company. Design/methodology/approach Fixed effects multiple linear regression is performed on 6,035 firm-year observations drawn from 27 countries relating to 1,207 unique constituents of the S&amp;P Global 1200 index for a five-year period from 2015 to 2019. Clustered standard errors robust to heteroscedasticity and serial correlation are estimated for a specification that includes Refinitiv ESG scores as the dependent variable, selected Worldwide Governance Indicators as the independent variables and several country- and firm-level controls. Findings The study finds that companies’ ESG performance is higher in countries with a lower level of democracy and political stability, and corporate governance performance is higher in countries with higher regulatory quality. A component-level analysis finds significant variation in the results across the different ESG pillars. Firm profitability moderates the relationship between country-level governance factors and companies’ ESG performance. Practical implications The study reveals that national governments can prompt companies to enhance their governance performance, invariably leading to greater engagement in sustainability by improving their regulatory environment and enforcement mechanisms. Thus, the implementation of regulations targeting corporate environmental and social performance is not always needed to prompt better corporate ESG performance. Social implications This study shows that internationalised companies proactively work towards achieving sustainability in countries where the country governance landscape is ineffective and inadequate to enable it. Originality/value This study addresses the association between country-level governance and firm-level ESG performance, in contrast to firm-level corporate social responsibility disclosure that has been the focus of prior research. As disclosures can be symbolic and may not reflect actual ESG performance, the results of prior studies examining the relationship between country-level governance performance and corporate social responsibility disclosure is inappropriate to explain the factors affecting the ESG performance of companies.