Tag Archives: Corporate Governance

Theoretical Analysis of Globalisation and Corporate Performance in Chemical Industry: The Mediating Role of Corporate Governance (Published)

Good corporate governance practice is a major yardstick for standardizing business practices in the midst of a high rate of diversities and inconsistencies in global business practices. Industries are operating in a global business environment that is deeply embedded in interdependency, and is being subjected to good corporate governance requirements. In this sense, the paper examined the definitions of corporate governance, its principles and control mechanisms. It also focused on the phenomenon of globalization and links it with good corporate governance principles that can promote values in the area of code of conduct in supporting excellence and the creation of an ethical culture in the industry.  The study suggested a framework for chemical industries for enhanced performance and their continuous growth and development of industries.  It is concluded that globalization is a phenomenon that has assumed a new proportion in present day global political economy for which companies must equip and package themselves effectively and thoroughly to face their challenges in the 21st century. In recommendation, managers of industries must strictly follow principles/regulations of corporate governance in a global economy.

Keywords: Business Environment, Companies, Corporate Governance, Globalisation

Sustainability Disclosures and Market Value of Firms in Emerging Economy (Published)

This study investigates how overall sustainability disclosures and it’s disaggregate dimensions of environment, social and governance affect market value of firms in Nigeria as an emerging economy using company’s’ specific disclosures. Tobins Q were used to proxy firm market value. The study selected 93 out of 120 non-financial firms listed on the Nigerian Stock Exchange as at 2015.  Ex Post Facto research design was adopted and the secondary data was collected from annual reports of sampled firms from 2006 to 2015 through content analysis. The data were analysed with descriptive statistics, correlation analysis, principal component analysis while pooled ordinary least squares regression was employed to test formulated hypotheses. The analysis showed that overall sustainability disclosures have significant positive effects on firm value. When treated individually, environmental sustainability disclosures and corporate governance disclosures have a significant positive effect on market value of firm. The study also reveal that social sustainability disclosures have negative and insignificant effect on market value of firm. Based on these findings, the study recommended among other that companies should foster greater sustainability and long-term value creation by integrating sustainability metrics into their reporting model and strategy. Firms in Nigeria should adopt and disclose environmental friendly policies since it potray their commitment towards achieving the goal of sustainable development.

Keywords: Corporate Governance, Environmental Disclosure, Firm Value, Social Disclosures, Sustainability Disclosures

Corporate Governance and Return on Assets of Quoted Banks in Nigeria (Published)

This study examined the influence of corporate governance on return on assets of quoted banks in Nigeria. The study used secondary data from 2013 to 2017.Data sourced from selected Annual Report and Accounts of three Quoted banks by the Nigerian Stock Exchange. The study utilised both Descriptive Statistics and Ordinary Least Square-Multiple Regression method with the aid of using E-view 9 to analyse the data. The results shown that, the corporate governance has significant influence on return on assets as (F-statistics = 23.46, P <0.05). The results further indicate that, the proportion of shareholders more than 10,001 share, board of composition size and bank size exerts a positive and considerable relevance to return on assets of quoted banks in Nigeria and bank size has significant influenced on return on assets with (β=2.09, t=3.94, p<0.05). Findings suggest that board of directors size of quoted banks in Nigeria should not be too large and must be meeting regularly to effectively and efficiently carry out their oversight functions and responsibilities

Keywords: Banks’, Corporate Governance, Multiple Regressions, Nigeria, Return on Assets

The Influence of Corporate Governance Attributes and National Characteristics on Information Disclosures: A Case of Asean (Published)

This paper aims to investigate the impact of corporate governance and national characteristics on disclosure practices in ASEAN. The multiple regression models were tested through EVIEWS 10 with an ordinary least squares (OLS) method. Empirical results report that the extent of corporate disclosure in ASEAN is positively associated with a number of board meetings, level of regulation quality and level of rule of law; but it is negatively related to board size, board independence, level of political stability and absence of violence, level of government effectiveness and level of control of corruption. The obtained results provide empirical evidence for the regulators who would like to enhance a flavor business environment within ASEAN. The paper contributes to the international disclosure literature by offering a new insight into the influence of corporate governance mechanisms and national characteristics on information disclosure practices in a group of developing countries.

Keywords: ASEAN, Corporate Disclosure, Corporate Governance, Listed Company, National Characteristics

Internal Audit and Corporate Governance Effectiveness in Universities in Rivers State (Published)

The increasing demand for internal auditing and the expanded scope of work of the internal audit function places a lot of responsibilities on the internal auditor. The main objective of this study was to establish the nature of the relationship between internal audit and corporate governance in universities in Rivers State. The survey research design was adopted for this study. The population of the study was made up of all the five universities in Rivers State. Convenience sampling technique was adopted in selecting the respondents that constituted the sample of this study. Data collection was done primarily using structured questionnaire to enable the gathering of sufficient evidence about internal audit and corporate governance practices in the universities surveyed. The reliability index of the data collection instrument was 0.885, obtained using the Cronbach Alpha technique. Data analysis was carried out using descriptive statistics while linear regression and correlation analysis were used in testing the hypotheses. The investigation revealed that a positive linear relationship exists between internal audit and corporate governance in universities in Rivers State and that all the measures of internal audit have significant influence on governing council and audit committee effectiveness but do not have significant influence on external audit effectiveness in universities in Rivers State. The study concluded that the internal unit of the universities surveyed, on the average, perform financial, operational and compliance audits. One of the recommendations made was that management and those charged with governance of universities in Rivers State should make effort to inject more qualified, competent and experienced personnel into the internal audit unit; this can be done through the engagement of professional accountants (or auditors) or career internal auditors and by training and retraining their internal auditors to bring them up-to-speed with recent developments in internal auditing and corporate governance.

Keywords: Compliance audit, Corporate Governance, Financial Audit, Internal Audit, Operational Audit.

In Defence of Accounting Thought and the Development of Corporate Governance in Nigerian Deposit Money Banks (NDMB). (Published)

The study reviewed the role of accounting history in the development of corporate governance with emphasis on Nigeria deposit money banks from the primitive era to these contemporary periods. The study adopted historical review of available literature and noted how accounting developed over the years to provide necessary information and assurances to various stakeholders of the organization. The study observed how small firms and industries grew into multinationals and corporations which necessitated that management became divorced from the owners thus requiring a degree of accountability and responsibility from the management of the organizations. This need for accountability and responsibility naturally gave birth to the agency and stakeholder’s theories and also the development of practice of accounting. Through this historical antecedent, the study noted that the needs which brought about the growth of accounting also necessitated the development of codes of corporate governance and concluded that the codes of corporate governance actually developed to assist accounting plays its role effectively as a provider of information to its various stakeholders.

Keywords: Accounting History, Corporate Governance, Double Entry Book Keeping System, Nigerian Money Deposit Banks, and Accounting Development

Empirical Study on the Impact of Corporate Governance Practices on Performance: Evidence from SMES in an Emerging Economy (Published)

The study examined the impact of corporate governance practices on the performance of SMEs in Ghana. Both descriptive and correlational research design were employed for the study. Convenience sampling technique was used to select one hundred (100) SMEs from two regions in Ghana. The study utilised the annual reports of the SMEs from 2012 to 2016 financial years. Net profit margin (NPM) and return on assets (ROA) were used as proxies for performance and Ordinary Least Square (OLS) regression model was used to estimate the level of impact of corporate governance on the performance of SMEs in Ghana. The study found empirical evidence to support the view that the board size (BS) has a negative impact on NPM, though insignificant. In addition, the evidence obtained indicate that board gender (BG) and management ownership (MO), all have positive impact on NPM. The evidence also showed that role difference for CEO and board chairman (DR) has a negative and positive impact on both ROA and ROE. Similarly, the results showed that board size (BS) has an insignificant negative impact on ROA. Additionally, it was ascertained that board gender (BG) and management ownership (MO) have positive impact on ROA, though the level of impact of board gender (BG) and management ownership (MO) are statistically insignificant. The results further provide evidence that the control variables: firm age (Fage) and industry of the firms (FInd) have a significant positive impact on both NPM and ROA. Generally, the evidence obtained show that corporate governance has positive but insignificant impact on performance of SMEs.

Keywords: Corporate Governance, Ghana Stock Exchange, Manufacturing Firms, Return on Assets, Return on Equity

Do Drivers of Corporate Governance Influence shareholder Value (Published)

This study examines effect of drivers of corporate governance on shareholder value. Data from annual financial reports of listed manufacturing companies in Nigeria were analysed and tested using panel dynamic ordinary least square model and panel unit root tests. Most variables used as proxies for shareholder value responded positively to variations in audit independence while there is a non-significant effect of audit independence on all variables used as proxies for shareholder value. Board independence has a positive and non-significant effect on shareholder value whereas board size and audit size negatively and non-significantly affect shareholder value.  The study further reveals that audit size, board size and board independence have negative and non-significant impact on the economic value added which represents the market value of shareholder assets. Only audit independence has a positive and non-significant impact on economic value added. Corporate governance drivers are efficacious but do not influence shareholder value significantly.   

 

Keywords: Audit Committee, Board size, Corporate Governance, Environment, Independence, Shareholder value

Moderating Effect of Institutional Size: Empirical Evidence from Kenyan Public Health Sector (Published)

This research paper aims to establish if institutional size moderates the relationship between corporate governance and health workforce performance in the Kenyan public health sector. A cross-sectional descriptive survey was used to collect data from 365 respondents from top management, middle management, officers (supervisors) and lower cadre employees. A survey questionnaire was used for quantitative data collection and moderated multiple regression analysis was used to test the hypothesis. The results show that institutional size (number of employees) did not significantly moderate the relationship between corporate governance and health workforce performance. From the findings, regardless of their sizes, all institutions require common management skills since organizations are usually managed in a way that suits their size. Therefore, those responsible for institutional corporate governance should not base decisions of management systems on the size of their institutions.  Using statistical methods, this paper significantly contributes to the dearth literature on the effect of institutional size in the relationship between corporate governance and health workforce performance in Kenyan public health sector.

Keywords: Corporate Governance, Health Workforce Performance, Institutional Size

Corporate Governance and Audit Quality in Nigeria: Evidence from the Banking Industry (Published)

This study examined the relationship between corporate governance and the quality of auditor’s report with evidence from the Nigerian Banking Industry. The research design adopted for this study is the ex-post facto as the research relied on historic data. Eleven (11) deposit money banks quoted on the Nigerian Stocks Exchange were sampled. In testing our hypothesis, the correlation analysis was applied to a dataset covering seven (7) years from 2007 to 2014 that is   the post-corporate governance period. Analysis suggests that while board composition has a negative and insignificant relationship with audit quality, separation of the roles of the CEO from that of the chairman of the board, board size, and composition of the audit committee has positive and significant relationship with audit quality. Furthermore, findings also show that ownership concentration has a positive but insignificant relationship with audit quality. Findings  also show that the strength of the positive linear relationship between the separation of the roles of the CEO from that of the chairman of the board and the audit quality is as high as 0.702377 or 70.23% followed by the relationship between board size and audit quality which stood at 0.452896 or 45.28%. However, the   study thus concludes that effective corporate governance arises out of responsible and simultaneous vigilant actions by the managers, the board of Directors, shareholders and auditors. Good financial Reporting from the external auditors is an important building block of corporate governance because the information provided to the shareholders has to be optimal in terms of cost and benefits. The study also recommends that the relationship between management and shareholders have to be characterized by transparency and fairness.

Keywords: Audit Quality, Board Composition, Board size, Corporate Governance, Nigeria

Corporate Governance: The Stakeholders Perspective (Published)

The wave of globalization and industrialization trends experienced all over the world has resulted in the emergence of large corporations as well as conglomerates. These large corporations contribute immensely to the social, economic development of their host nations. This paper explores the concept of corporate governance as well as the need for corporate governance. Also examined are the basic principles of corporate governance. The focus of this paper is on the external group of individuals (stakeholders) to the organization. This paper defines them as well as their roles in ensuring corporate governance and wealth creation for the business organization. It concludes by making recommendations on how businesses can strike a balance between achieving organizational goals and stakeholder needs.  

Keywords: Corporate Governance, Management, Stakeholders, corporation

Corporate Governance Impacts to the Level of Accounting Information Disclosure – Evidence on Vn30 Listed Companies of Vietnam (Published)

Accounting information has important implication for users. Last time, the State Securities Commission has made provisions related to increase the quality and extent of the accounting information for listed companies. The disclosure of information by VN30 listed companies depend on the impact factors, in which corporate governance is one of the main factors. Based on the quantitative survey about the accounting information disclosure of listed companies in the regression model, results showed that two factors are size of board and the level of concentration of ownership affect the level of information disclosure for VN30 listed companies. From which the author proposes to increase the number of members of the board as well as control the concentration of power problems of a number of shareholders of listed companies to increase the level of information disclosure response to the users.

Keywords: Accounting information, Corporate Governance, Listed Company

Vol 4, Issue 6, June 2016 ()

Accounting information has important implication for users. Last time, the State Securities Commission has made provisions related to increase the quality and extent of the accounting information for listed companies. The disclosure of information by VN30 listed companies depend on the impact factors, in which corporate governance is one of the main factors. Based on the quantitative survey about the accounting information disclosure of listed companies in the regression model, results showed that two factors are size of board and the level of concentration of ownership affect the level of information disclosure for VN30 listed companies. From which the author proposes to increase the number of members of the board as well as control the concentration of power problems of a number of shareholders of listed companies to increase the level of information disclosure response to the users.

Keywords: Accounting information, Corporate Governance, Listed Company

Cost Information and Business Strategy: A Synergistic Approach of Ensuring Valid Business Decision and Growth (Published)

This paper examines cost information and business strategy as a synergistic approach of ensuring valid business decision and growth. This was hinged on the premise that cost accounting information is one of the enduring tools of management for planning, decision making and control. If this information is wrongly applied, it can jeopardize the revenue aspect of the business and by extension the overall performance of the entity. To this end, the ex-post facto and descriptive research designs were adopted to elicit information from respondents. The paper adopted the ordinary least square analytical technique for data analysis. Findings revealed that inadequate cost information, obsolete costing techniques and ineffective corporate governance mechanisms impact on organizational performance. Indeed, it was recommended that corporate entities should place more priority on cost information, modern costing techniques and effective corporate governance to facilitate growth especially in all sectors of human endeavors.

Keywords: Business Strategy, Corporate Governance, Cost Information, Growth

International Standards As Corporate Governance Mechanisms And Credibility Gap In Jordan Financial Managers’ Point Of View (Published)

This study aimed to examine what financial managers think about auditors implementation in relation with corporate governance mechanisms and credibility gap, by using an inferential descriptive statistical analysis. Corporate governance has shown flaws; where part of it was done to the weakness of financial managers activism, and since auditing is a very important avenue of faithful representation (credibility gap) of financial statements, and since shareholders depend on auditors’ reports, this article utilized primary data by distributing a questionnaire to the financial managers in Jordanian industrial companies regestered in Amman Stock Exchange to study the effect of implementation. The paper focused on the affect and relationship of the auditors’ implementation of International Audit Standards and International Standards on Quality Control; on the credibility gap by using regression analysis, and the demographic factors by using one way anova. Results showed a positive relationship between auditors’ implementation of International Audit Standards on the credibility gap as well as to the International Standards on Quality Control, and results also showed that respondants elder than 45 years were more realizable of the credibility gap than the younger ones, as well as to the PhD degree holders and those above 15 years of experience.

Keywords: Corporate Governance, Credibility Gap, International Audit Standards, International Standards, Quality control

Studying the Role of Corporate Governance in the Development of Risk Management in Commercial Banks Listed At Amman Stock Exchange (Field Study) (Published)

The study aimed to identify the role of corporate governance in the development of risk management in commercial banks listed at Amman Stock Exchange (ASE). To achieve this goal, the researcher relied adopted an analytical descriptive approach in her study to be convenient to the study nature. A questionnaire has designed as a tool to collect data. It distributed to a sample survey of the members of the committee’s corporate governance, audit committees and risk management commissions in these banks. The questionnaires have statistically analyzed using Statistical Package for Social Sciences (SPSS). The most important findings of the study that the presence of the role of corporate governance committees resulting from the Board of Directors in development of risk management in banks listed at ASE. This role was in uneven degree, between medium and high. In addition, the role of audit committees is the most development in the risk management, followed by risk management committees, and finally to corporate governance committees. The study concluded a set of recommendations including: It is necessary to activate the role of committees in the exercise of its work in development of risk management in commercial banks listed at ASE. The sub-committees should constituted of the board of directors in accordance with corporate governance, which includes financially and accounting experienced members. Finally, the financial experience should not limited to a specific number of members

Keywords: Commercial Banks, Corporate Governance, Risk Management

The Impact of Corporate Governance on Firm Performance: Evidence from Bahrain Stock Exchange (Published)

Corporate governance is recognized as one of the most important implications to build a marketplace confidence and to attract positive investors in the organization specifically and the economy generally. Promoting good corporate governance standards considered to be very important in attracting investment capital, reducing risk and developing firms’ performance. The aim of this research was to examine the impact of corporate governance characteristics on firm performance in Bahrain Stock Exchange. Previous literature reviews presented in the study found that corporate governance are successful in improving firm’s performance. The study sample contained 42 Out of 48 Bahrain’s financial companies which are listed in Bahrain Stock Exchange during the period 2007-2011. The descriptive results indicated that our sample firms fulfill corporate governance variables about 61.2% for the entire period in the study. The empirical results indicate that performance measures such as Return on Assets and Return on Equity are significantly related to corporate governance in Bahrain. However, Earning Per share performance measure is not showing any significance impact related to corporate governance. Overall, this study found a positive influence of corporate governance mechanisms on performance for the entire firm in Bahrain Stock Exchange. Thus, it is recommended that further research be undertaken from different aspects: The effect of corporate governance variables and their impact on firm’s performance in the Gulf Cooperation Council (GCC) and the effect of Global Corporate Governance on performance during the current Global Financial Crisis.

Keywords: Bahrain Stock Exchange (BSE), Corporate Governance, Firm Performance

Assessing Office Managers’ Role in Creating a Culture of Corporate Social Responsibility through Corporate Governance in Selected Business Organizations in Delta State, Nigeria (Published)

This study assessed the role of Office Managers in Corporate Governance and Corporate Social Responsibilities in selected Business Organizations in Delta State of Nigeria. In going about the study, a research instrument which consisted of 51 items was designed to cover the three research questions raised for the study. This study was survey research. The data collected from 130 respondents were analyzed using the descriptive statistics, mean and standard deviation. The results of the study revealed that organizations are measured on how well their objectives are achieved; that social responsibilities of business is an ethical ideology or theory that an entity has obligation to act in order to benefit its society, and that corporate social responsibilities cut across all aspects of human life. It was concluded that meeting the basic social, economic and political needs of the immediate communities will guarantee safe and healthy environment for organizations to operate their businesses. It was therefore recommended that there should be a working synergy between organizations and their host communities in order for their business objectives to be realized.

Keywords: Business Organizations, Corporate Governance, Environmental Issue, Interrelated Functions; Corporate Social Responsibilities, Office Manager

Effect of Corporate Governance on the Financial Performance of Banking Industry in Rwanda: (A Case Study-Commercial Banks in Rwanda) (Published)

This study investigated the effect of corporate governance on Financial Performance of commercial banks in Rwanda. The study has four objectives which determined how board size, CEO duality, institutional ownership, board composition affect financial performance of commercial banks in Rwanda. The study adopted a descriptive research design which assisted to examine the effect of corporate governance on financial performance of commercial banks. The population of the study was 120 composed by the senior managers of the commercials banks operating in Rwanda; and the sample size was 92 but only 76 responded to the questions asked which represent 84%.The key findings for this research were showing that board independence, board composition, institution ownership do not have an effect on financial performance since the majority of respondent have disagreed the effect of corporate governance variables on the financial performance of commercial banks. The analysis of variance has shown that corporate governance variables are not significant predictors to explain the increase of profitability represented by return on asset and return on equity since the p value was 0.447 and 0.186 respectively. This research has concluded that there is no effect between corporate governance using board size, board composition CEO duality as well as institutional ownership are not predictors of financial performance and recommended the regulatory body of commercial banks in Rwanda to provide a guidance on the use of corporate governance practices which may impact positively the financial performance of commercial banks

Keywords: Commercial Banks, Corporate Governance, Financial Performance

Effects of the Implementation of Good Corporate Governance on Profitability (Published)

The Indonesian Institute for Corporate Governance (IICG) always conducts research about the proper application of corporate governance every year, especially in public companies in Indonesia’s Stock Exchange. Basically, Good Corporate Governance is the procedure of company management in running their goals that result in optimal profitability or profit for the investors. In theory, the application of good corporate governance will increase the profitability of a company. But in reality, it is necessary to conduct research on the issue. Some problem identifications that arise are the questions about the implementation of good corporate governance, the level of profitability (return on assets) and how much the implementation of Good Corporate Governance affects the profitability (return on assets). This study involved 9 companies which participated in The Indonesian Institute for Corporate Governance (IICG) research. For this study, the authors used quantitative research method to test the hypothesis that has been set. The variables correlation is causal or causal associative. The statistical test measurement used to determine the effects is simple regression. The statistical tool to measure the effect of the used measurement scale is ratio and interval. Based on the research conducted by the author, the result that is obtained is the implementation of CGPI that is measured through CGPI increased and decreased, although in general it increased. Meanwhile profitability that is measured through average ROA increased. Based on the result of hypothesis testing, the implementation level of Good Corporate Governance has a positive effect on the sampled company’s profitability (return on assets). The effect is 19.8%.

Keywords: Corporate Governance, Profitability