Tag Archives: Corporate Governance

The Role of Cooperative Model as Moderation on Effect of Corporate Governance on Performance (Published)

The research objective analyzes the effect of corporate governance, entrepreneurship, and the culture of innovation on the performance that is moderated by the cooperative business model. The object of research in the small business (SMEs) in the Kenjeran tourist area of Surabaya in Indonesia. The research samples, of sixty-three  SME respondents from four types of businesses. Primary data were analyzed using structural equation modeling – partial least squares (SEM–PLS) software. The results showed that the cooperative business model strengthens the effect of entrepreneurship and a culture of innovation on performance. The effect of corporate governance is not directly on performance but through entrepreneurship. While the culture of innovation does not directly affect the performance of SMEs.

Keywords: Cooperation, Corporate Governance, Entrepreneurship, Innovation, Performance

Corporate Governance and Financial Stability of Nigeria Quoted Deposit Money Banks (Published)

The development in corporate governance and the practice play important role in developing and enhancing the global economy, business firms and improving financial stability of deposit money banks. The rising of non-performing loans, decline in asset quality, credit concentration and high foreign exchange exposure and volatility have led to financial instability and financial distress in deposit money banks in Nigeria. The study examined the effect of corporate governance on the financial stability of deposit money banks in Nigeria. Ex-post facto research design was adopted for the study. The population of the study comprised the 21 listed deposit banks on the Nigerian stock exchange as at September 2016. The study made use of a total of 10 banks as sample size which was categorized under the listed deposit money banks in Nigeria. These banks were selected using stratified sampling technique. Data were collected from the annual reports for the period of ten years (2007-2016). Descriptive Statistics test were carried out, hausman test and cross-section random effect test were analyzed. The analysis revealed that all corporate governance variables have a positive and negative effect on capital adequacy at Adj.R2 = 0.052 and F test score of 2.832, capital structure at Adj.R2 = 0.088 and F test score of 4.187, and liquidity at Adj.R2 = 0.004 and F test score of 1.149. Corporate governance has a positive and negative effect on financial stability with P-value of F statistics at 0.000 and Adjusted R= 12.9%. The study concluded that corporate governance has a significant effect on financial stability. This means that as the content of corporate governance improves financial stability increases. The study recommended that to increase financial stability, management should focus on ensuring that there is effective corporate governance in the organization. 

Keywords: Corporate Governance, Volatility, capital adequacy, capital structure and liquidity, financial stability

Corporate Governance and Reported Earning Quality in Deposit Money Banks in Nigeria (Published)

This study examined the effect of Corporate Governance on Reported Earnings Quality in Nigerian deposit money banks. Cross sectional data were obtained from Ten (10) listed deposit money banks in Nigerian Stock Exchange for over a period of ten years (2008-2017). The data were analyzed using both descriptive and inferential statistics. Earnings predictability was adopted as a proxy for reported earnings quality, while board size, board independence, foreign directorship and firm size were used as proxies for corporate governance. The study found board size having a positive and insignificant relationship with earnings quality; a negative and insignificant relationship between board independence and earnings quality; a positive and significant relationship between foreign directors on board and earnings quality; and also a negative and insignificant relationship between firm size and earnings quality. It was therefore recommended that deposit money banks should increase both their board size and number of foreign directors on board as these will enhance their reported earnings quality.

Keywords: Board independence, Board size, Corporate Governance, earning quality, foreign directors

Board Characteristics and Earnings Management: Empirical Analysis of UK Listed Companies (Published)

Present study investigates to find out the associations between characteristics of the boards and the level of earnings management. For the investigation, level of the earnings management has taken from UK listed companies during 2012 to 2016. Moreover, the abnormal accruals are considered as the proxy of the level of earnings management, and which show the level of earnings management for the companies. The study uses Modified-Jones model to measure the abnormal accruals, and uses Random effects model to find out whether the characteristics of the boards are related with the level of earnings management. By running the regression, it finds out that the CEO duality and board size are negatively related the level of earnings management at the significant level. However, the study fails to find out the board meetings, percentage of independent directors and the percentage of female directors in the board is significantly associated with the level of earnings management.

Keywords: Accruals, Corporate Governance, Earnings Management, dependent variables, independent variables

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