Abstract: The paper investigates the relationship between the foreign direct investment (FDI) and the corporate governance or transparency by investigating the country-level FDI flows, FDI inward performance, corporate governance and transparency variables. From the regression analysis with Newey-West estimator of 28 country panel data from 1990- 2002, we find strong positive relationships between corporate governance or transparency level of hosting countries and FDI inward performance within hosting countries. A strong positive relationship is found between anti-director rights level or number of analysts of hosting countries and FDI inward performance within hosting countries. Also, we find a positive relationship between the number of analysts of hosting countries and FDI inflows. The empirical results are consistent with stock market liberalizations and corporate governance explanations of reasons for FDI.
Abstract: The purpose of this paper is to explore the relationship
between the customers- issues in company corporate governance and
the financial performance. At the beginning theoretical background
consisting stakeholder theory and corporate governance is presented.
On this theoretical background, the empirical research is built,
collecting data of 60 Czech joint stock companies- boards
considering their relationships with customers. Correlation analysis
and multivariate regression analysis were employed to test the sample
on two hypotheses. The weak positive correlation between
stakeholder approach and the company size was identified. But both
hypotheses were not supported, because there was no significant
relation of independent variables to financial performance.
Abstract: Several recent studies have shown that the
transparency of financial reporting have a significant influence on investor-s decisions. Thus, regulation authorities and professional
organizations (IFAC) have emphasized the role of XBRL (eXtensible Business Reporting Language) and interactive data as a means of
promoting transparency and monitoring corporate reporting. In this
context, this paper has as objective the analysis of interactive reporting through XBRL and its use as a support in the process of
taking decisions in corporate governance, namely the potential of interactive reports in XBRL to increase the transparency and
monitoring process of corporate governance.
Abstract: This paper investigates several factors affecting the
cost of capital for listed Romanian companies. Although there is a
large amount of literature investigating the drivers of the cost of
capital internationally, there is currently little evidence from
emergent markets. Based on a sample of 19 Romanian listed
companies followed by financial analysts for the years 2008-2010,
according to Thomson Reuters- I/B/E/S data base, the paper confirms
the international trends, showing that size, corporate governance
policies, and growth are negatively correlated with the cost of capital.
Abstract: Not many studies have been undertaken on shareholder activism in emerging economies, including Malaysia. Shareholder activism in emerging economies is on the rise. This paper seeks to comprehend the elements of this activism that are unique to Malaysia, specifically with respect to how the agency problem is controlled through shareholder activism in improving corporate governance practices within target companies. Through shareholder activism, shareholders make contact with a target company to voice their dissatisfaction, suggestions, or recommendations. This paper utilises agency theory to explain institutional shareholder activism. This theory has been extensively used within literature on corporate governance with regards to shareholder activism. The effectiveness of shareholder activism in improving corporate governance will be examined as well. This research provides a further understanding of shareholder activism in emerging economies, such as Malaysia; this research also has the potential to enhance shareholder activism and corporate governance practices in general.
Abstract: This research aimed to study employees- perceptions and expectations toward their organization-s corporate social responsibility (CSR), to study the differences between employees- personal factors and level of perceptions and expectations toward CSR, and to study the relationship between employees- perceptions and expectations toward CSR. Purposive sampling and questionnaire were applied to collect information from 400 private company employees in Bangkok metropolitan area. The results revealed that employees had “high" level of perceptions and expectations toward CSR, of which the highest level were given on the area of “corporate governance and transparency". It was found that there was different level of expectations of employees with different period of employment, position and employment (by listed and non-listed companies). Employees of different age and period of employment also had different level of expectations. Employees- perceptions were correlated with their expectations toward CSR.
Abstract: This study examines the influence of information
transparency and corporate governance on purchase directors and
officers liability (D&O) insurance decisions. The results show that
companies with greater information transparency have significant
demand for D&O insurance. Greater transparency in voluntary
disclosures is significantly and positively associated with demand for
insurance, indicating that increasing the degree of information
disclosure reduces information asymmetry for insurers, which
stimulates their willingness to provide greater protection.
Analysis of insured and uninsured subsamples indicates that
uninsured companies have superior corporate governance compared to
insured companies. Although insured companies tend to have weaker
corporate governance structures, they appoint Big 4 firms or industry
experts to compensate for the weakness of their corporate governance.
Empirical results indicate that purchasing D&O insurance can
strengthen external corporate governance and increase companies’
willingness to voluntarily provide more transparent information.
Abstract: The inability to implement the principles of good
corporate governance (GCG) as demonstrated in the surveys is due to
a number of constraints which can be classified into three; namely internal constraints, external constraints, and constraints coming
from the structure of ownership. The issues in the internal constraints
mentioned are related to the function of several elements of the company. As a business organization, corporation is unable to
achieve its goal to successfully implement GCG principles since it is
not support by its internal elements- functions. Two of several numbers of internal elements of a company are ethical work climate
and leadership style of the top management.
To prove the correlation between internal function of organization
(in this case ethical work climate and transformational leadership)
and the successful implementation of GCG principles, this study
proposes two hypotheses to be empirically tested on thirty surveyed organizations; eleven of which are state-owned companies and
nineteen are private companies. These thirty corporations are listed in
the Jakarta Stock Exchange. All state-owned companies in the
samples are those which have been privatized.
The research showed that internal function of organization give
support to the successful implementation of GCG principle. In this
research we can prove that : (i) ethical work climate has positive
significance of correlation with the successful implementation of
social awareness principle (one of principles on GCG) and, (ii) only
at the state-owned companies, transformational leadership have
positive significance effect to forming the ethical work climate.
Abstract: There are many studies in the literature on
institutional investors- efforts to improve corporate governance,
generally focused on the role of pension funds and private equity
firms. There are only a few studies that analyze the influence of
development banks in the governance of investee companies. The
objective of this research is to examine the role of the Brazilian
Development Bank (BNDES) in the governance of listed companies.
Our analysis provides evidence that companies in which BNDES is a
shareholder have better governance.
Abstract: This paper presents an exploration into the structure of the corporate governance network and interlocking directorates in the Czech Republic. First a literature overview and a basic terminology of the network theory is presented. Further in the text, statistics and other calculations relevant to corporate governance networks are presented. For this purpose an empirical data set consisting of 2 906 joint stock companies in the Czech Republic was examined. Industries with the highest average number of interlocks per company were healthcare, and energy and utilities. There is no observable link between the financial performance of the company and the number of its interlocks. Also interlocks with financial companies are very rare.
Abstract: While the form of crises may change, their essence
remains the same (such as a cycle of abundant liquidity, rapid credit
growth, and a low-inflation environment followed by an asset-price
bubble). The current market turbulence began in mid-2000s when the
US economy shifted to imbalanced both internal and external
macroeconomic positions. We see two key causes of these problems
– loose US monetary policy in early 2000s and US government
guarantees issued on the securities by government-sponsored
enterprises what was further fueled by financial innovations such as
structured credit products. We have discovered both negative and
positive lessons deriving from this crisis and divided the negative
lessons into three groups: financial products and valuation, processes
and business models, and strategic issues. Moreover, we address key
risk management lessons and exit strategies derived from the current
crisis and recommend policies that should help diminish the negative
impact of future potential crises.
Abstract: After the accounting scandals and the financial crisis, regulators have stressed the need for more financial experts on boards. Several studies conducted in countries with developed capital markets report positive effects of board financial competencies. As each country offers a different context and specific institutional factors this paper addresses the subject in the context of Romania. The Romanian capital market offers an interesting research field because of the heterogeneity of listed firms. After analyzing board members education based on public information posted on listed companies websites and their annual reports we found a positive association between the proportion of board members holding a postgraduate degree in financial fields and market based performance measured by Tobin q. We found also that the proportion of Board members holding degrees in financial fields is higher in bigger firms and firms with more concentrated ownership.
Abstract: Compliance requires an effective communication
within an enterprise as well as towards a company-s external
environment. This requirement commences with the
implementation of compliance within large scale compliance
projects and still persists in the compliance reporting within
standard operations. On the one hand the understanding of
compliance necessities within the organization is promoted.
On the other hand reduction of asymmetric information with
compliance stakeholders is achieved. To reach this goal, a
central reporting must provide a consolidated view of different
compliance efforts- statuses. A concept which could be
adapted for this purpose is the balanced scorecard by Kaplan /
Norton. This concept has not been analyzed in detail
concerning its adequacy for a holistic compliance reporting
starting in compliance projects until later usage in regularly
compliance operations.
At first, this paper evaluates if a holistic compliance
reporting can be designed by using the balanced scorecard
concept. The current status of compliance reporting clearly
shows that scorecards are generally accepted as a compliance
reporting tool and are already used for corporate governance
reporting. Additional specialized compliance IT - solutions
exist in the market. After the scorecard-s adequacy is
thoroughly examined and proofed, an example strategy map as
the basis to derive a compliance balanced scorecard is defined.
This definition answers the question on proceeding in
designing a compliance reporting tool.