Brennan, Niamh M. and Solomon, Jill [2008] Corporate Governance, Accountability and Mechanisms of Accountability: An Overview, Accounting, Auditing and Accountability Journal 21 (7) (September): 885-906.
Purpose – This paper reviews traditional corporate governance and accountability research, to suggest opportunities for future research in this field. The first part adopts an analytical frame of reference based on theory, accountability mechanisms, methodology, business sector/context, globalisation and time horizon. The second part of the paper locates the seven papers in the special issue in a framework of analysis showing how each one contributes to the field. The paper presents a frame of reference which may be used as a 'roadmap' for researchers to navigate their way through the prior literature and to position their work on the frontiers of corporate governance research.
Design/methodology/approach – The paper employs an analytical framework, and is primarily discursive and conceptual.
Findings – The paper encourages broader approaches to corporate governance and accountability research beyond the traditional and primarily quantitative approaches of prior research. Broader theoretical perspectives, methodological approaches, accountability mechanism, sectors/contexts, globalisation and time horizons are identified.
Research limitations/implications – Greater use of qualitative research methods are suggested, which present challenges particularly of access to the “black box” of corporate boardrooms.
Originality/value – Drawing on the analytical framework, and the papers in the special issue, the paper identifies opportunities for further research of accountability and corporate governance.
The corporate governance is a popular topic within two last decade, and the emerging economies are practicing &enhancing their performances. The review is conducted to assess the effectiveness of the corporate governance implications on firm’s performances. The study followed the deductive approach and the journal articles, and the reports have used the source of the review. As per the literature findings, the researcher developed a conceptual design for the case review. The independent variable is the corporate governance mechanism, and the dependent variable is organizations performances. Both independent and dependent variables comprise the different type of corporate governance practice and the different function of the organizational performances. The review found that all the types of corporate governance practices are influenced to the organizational performance and the better corporate governance mechanism can enhance all type of performances.
Investigating Corporate Governance And Its Effect on Firm Performance with As...QUESTJOURNAL
ABSTRACT: Corporate governance and its effect on firm performance are investigated in this research. Research independent variables include non-bound members of board of directors, board of directors’ independence, institutional shareholders, and dependent variable includes assets return which is the index of firm’s performance. Accordingly, data of 125 accepted firms in Tehran securities exchange during 2009 to 2013 was extracted and panel data regression model was applied to test the hypotheses. Results indicate an inverse significant relationship between non-bound members of board of directors and assets return and a positive significant relationship between board of directors’ independence and firm’s performance. Also, there is a positive relationship between institutional shareholders and firm’s performance. In general, results showed that appropriate corporate governance improves firms’ performance.
This study examines the relationship between corporate governance and financial performance of pharmaceutical firms in Pakistan. The study uses data from annual reports of 20 multinational and 90 national pharmaceutical firms from 2003-2013. Regression analysis is used to analyze the impact of various corporate governance mechanisms (board composition, board size, board education, board experience) and CEO duality on financial performance measured by return on assets and return on sales. The results indicate that board composition, size, education and experience are positively associated with financial performance, while CEO duality is negatively associated with performance. Thus, better corporate governance through greater board independence and separation of CEO/chairperson roles can enhance pharmaceutical firm performance in Pakistan.
Brennan, Niamh M. [2008] “Introduction. Corporate Governance and Financial Re...Prof Niamh M. Brennan
Corporate governance is the subject of a burgeoning literature. Accordingly it is impossible to summarise an entire field in a book of readings. For this reason, I have focused this selection of readings on the financial reporting aspects of corporate governance, which marries two of my research interests. Given the speed of change in the area of corporate governance, generally-speaking the volume of readings is skewed towards more recent publications. However, some seminal material is included from which a considerable amount of corporate governance empirical research was derived, especially Jensen and Meckling (1976), Fama & Jensen (1983) and Jensen (1993). Denis (2001) suggests that the groundswell for research on corporate governance by financial economists stated with Jensen and Meckling’s (1976) paper on the theory of the firm and featuring agency theory.
This is a focussed interdisciplinary compilation of readings which brings together corporate governance and financial reporting, and issues of accountability. It does not comprise a broad coverage of all corporate governance issues. Instead, it takes a narrower perspective, concentrating only on those corporate governance mechanisms influencing financial reporting and accountability.
This document provides a literature review of research on the corporate governance bundle. It begins with background on the evolution of the concept of a corporate governance bundle and key related theories. It then summarizes several studies that have applied the bundle concept, finding evidence that multiple governance mechanisms can act as complements or substitutes to limit manager opportunism. The research also indicates there are multiple bundles of practices that can lead to high firm performance within models of corporate governance. Overall, the literature review examines perspectives on and applications of the corporate governance bundle concept.
The effects of corporate governance on company performance evidence from sri ...Alexander Decker
This document examines the relationship between corporate governance and company performance in Sri Lanka's financial services industry from 2008-2011. It reviews literature showing mixed results on relationships between governance factors like board size/composition and performance measures like return on assets/equity. The study analyzes 20 randomly selected banks/insurers, finding no significant relationships between governance variables and performance. This is consistent with prior Sri Lankan research finding corporate governance does not affect financial performance metrics.
The document discusses the evolution of formal organizations from traditional structures like feudalism and bureaucracy to more modern forms. It notes that organizational change occurs over time in response to environmental factors. Traditional structures emphasized hierarchy, rules and specialization, while new forms focus on flexibility, collaboration, outsourcing and empowerment. The emergence of new practices like supply chain integration, quality improvement and information technology have helped organizations adapt to increasingly dynamic business environments.
The Impact of Corporate Governance on Firms’ Profitability in Nigeriainventionjournals
The purpose of this paper is to investigate the impact of corporate governance on firms’ profitability in Nigeria. This research has been performed using a sample of 60 companies listed on the Nigeria Stock Exchange (NSE) from 2004 to 2014. The relationship between corporate governance mechanisms (board characteristics, audit committee, board independence, size, growth and profit variability) and firms’ profitability was observed. The results of the multiple regression analysis were statistically significant at 0.05 level. The F Statistics of 1.036 also shows that the result typically explained the model. The findings of the study confirmed that corporate governance mechanisms enhance firms’ profitability in Nigeria.
The corporate governance is a popular topic within two last decade, and the emerging economies are practicing &enhancing their performances. The review is conducted to assess the effectiveness of the corporate governance implications on firm’s performances. The study followed the deductive approach and the journal articles, and the reports have used the source of the review. As per the literature findings, the researcher developed a conceptual design for the case review. The independent variable is the corporate governance mechanism, and the dependent variable is organizations performances. Both independent and dependent variables comprise the different type of corporate governance practice and the different function of the organizational performances. The review found that all the types of corporate governance practices are influenced to the organizational performance and the better corporate governance mechanism can enhance all type of performances.
Investigating Corporate Governance And Its Effect on Firm Performance with As...QUESTJOURNAL
ABSTRACT: Corporate governance and its effect on firm performance are investigated in this research. Research independent variables include non-bound members of board of directors, board of directors’ independence, institutional shareholders, and dependent variable includes assets return which is the index of firm’s performance. Accordingly, data of 125 accepted firms in Tehran securities exchange during 2009 to 2013 was extracted and panel data regression model was applied to test the hypotheses. Results indicate an inverse significant relationship between non-bound members of board of directors and assets return and a positive significant relationship between board of directors’ independence and firm’s performance. Also, there is a positive relationship between institutional shareholders and firm’s performance. In general, results showed that appropriate corporate governance improves firms’ performance.
This study examines the relationship between corporate governance and financial performance of pharmaceutical firms in Pakistan. The study uses data from annual reports of 20 multinational and 90 national pharmaceutical firms from 2003-2013. Regression analysis is used to analyze the impact of various corporate governance mechanisms (board composition, board size, board education, board experience) and CEO duality on financial performance measured by return on assets and return on sales. The results indicate that board composition, size, education and experience are positively associated with financial performance, while CEO duality is negatively associated with performance. Thus, better corporate governance through greater board independence and separation of CEO/chairperson roles can enhance pharmaceutical firm performance in Pakistan.
Brennan, Niamh M. [2008] “Introduction. Corporate Governance and Financial Re...Prof Niamh M. Brennan
Corporate governance is the subject of a burgeoning literature. Accordingly it is impossible to summarise an entire field in a book of readings. For this reason, I have focused this selection of readings on the financial reporting aspects of corporate governance, which marries two of my research interests. Given the speed of change in the area of corporate governance, generally-speaking the volume of readings is skewed towards more recent publications. However, some seminal material is included from which a considerable amount of corporate governance empirical research was derived, especially Jensen and Meckling (1976), Fama & Jensen (1983) and Jensen (1993). Denis (2001) suggests that the groundswell for research on corporate governance by financial economists stated with Jensen and Meckling’s (1976) paper on the theory of the firm and featuring agency theory.
This is a focussed interdisciplinary compilation of readings which brings together corporate governance and financial reporting, and issues of accountability. It does not comprise a broad coverage of all corporate governance issues. Instead, it takes a narrower perspective, concentrating only on those corporate governance mechanisms influencing financial reporting and accountability.
This document provides a literature review of research on the corporate governance bundle. It begins with background on the evolution of the concept of a corporate governance bundle and key related theories. It then summarizes several studies that have applied the bundle concept, finding evidence that multiple governance mechanisms can act as complements or substitutes to limit manager opportunism. The research also indicates there are multiple bundles of practices that can lead to high firm performance within models of corporate governance. Overall, the literature review examines perspectives on and applications of the corporate governance bundle concept.
The effects of corporate governance on company performance evidence from sri ...Alexander Decker
This document examines the relationship between corporate governance and company performance in Sri Lanka's financial services industry from 2008-2011. It reviews literature showing mixed results on relationships between governance factors like board size/composition and performance measures like return on assets/equity. The study analyzes 20 randomly selected banks/insurers, finding no significant relationships between governance variables and performance. This is consistent with prior Sri Lankan research finding corporate governance does not affect financial performance metrics.
The document discusses the evolution of formal organizations from traditional structures like feudalism and bureaucracy to more modern forms. It notes that organizational change occurs over time in response to environmental factors. Traditional structures emphasized hierarchy, rules and specialization, while new forms focus on flexibility, collaboration, outsourcing and empowerment. The emergence of new practices like supply chain integration, quality improvement and information technology have helped organizations adapt to increasingly dynamic business environments.
The Impact of Corporate Governance on Firms’ Profitability in Nigeriainventionjournals
The purpose of this paper is to investigate the impact of corporate governance on firms’ profitability in Nigeria. This research has been performed using a sample of 60 companies listed on the Nigeria Stock Exchange (NSE) from 2004 to 2014. The relationship between corporate governance mechanisms (board characteristics, audit committee, board independence, size, growth and profit variability) and firms’ profitability was observed. The results of the multiple regression analysis were statistically significant at 0.05 level. The F Statistics of 1.036 also shows that the result typically explained the model. The findings of the study confirmed that corporate governance mechanisms enhance firms’ profitability in Nigeria.
A re balanced scorecard- a strategic approach to enhance manageriPhuong Dx
This document proposes a re-balanced scorecard framework to better evaluate managerial performance in complex environments. It views the firm as having social contracts beyond shareholders to stakeholders like employees, communities, and the environment. The conceptual framework is based on social contract theory and sees the firm as a nexus of social rather than just economic contracts. It then maps this conceptual framework to a practical re-balanced scorecard structure that can induce improved managerial behavior aligned with long-term sustainability and social contract obligations. This framework aims to better account for multidimensional factors managers face and costs of misconduct in evaluating performance.
Ch01 - Organisation theory design and change gareth jonesAnkit Kesri
Organizations exist to create value by bringing together people and resources to produce goods and services. They do this through three stages: input, conversion, and output. Organizations exist for five major reasons: to increase specialization, use large-scale technology, manage the external environment, exert power and control, and economize on transaction costs. Organizational effectiveness is important because it allows organizations to maximize value creation and perform well through approaches like control, innovation, and efficiency. Managers measure effectiveness using goals like the mission, official goals, and operative goals.
Ch10 - Organisation theory design and change gareth jonesAnkit Kesri
This document summarizes key points about organizational change from a chapter in an organizational theory textbook. It defines organizational change as moving from the present state to a desired future state to increase effectiveness. It discusses targets of change including human resources, functional resources, technological capabilities, and organizational capabilities. It also outlines forces that drive change like competition as well as resistances to change like inertia, power struggles, and uncertainty. Finally, it describes different types of evolutionary and revolutionary change and models for managing change like action research.
Article: Influence of Corporate Board Characteristics on Firm Performance of ...McRey Banderlipe II
Using disclosure information from 29 listed property companies in the Philippines, the results revealed that managerial ownership positively influences firm performance. Moreover, firm size, leverage, and age influence the accounting-based measures of performance to a great extent than the market-based measures. Further research should focus on the overall impact of corporate governance using different measures of performance to better assist the decision making of the company’s stakeholders.
Dr. William Allan Kritsonis earned his BA in 1969 from Central Washington University, Ellensburg, Washington. In 1971, he earned his M.Ed. from Seattle Pacific University. In 1976, he earned his PhD from the University of Iowa. In 1981, he was a Visiting Scholar at Teachers College, Columbia University, New York, and in 1987 was a Visiting Scholar at Stanford University, Palo Alto, California.
In June 2008, Dr. Kritsonis received the Doctor of Humane Letters, School of Graduate Studies from Southern Christian University. The ceremony was held at the Hilton Hotel in New Orleans, Louisiana.
Ownership and control in corporate organisations in developing countries evid...Alexander Decker
This document summarizes a study that examines how ownership and board control structures function to achieve good corporate governance in developing countries, using four large quoted corporate organizations in Ghana as case studies. The study finds that these companies have large shareholders who wield extensive control through involvement in decision-making, helping to address principal-agent issues but potentially disadvantaging small shareholders. The study also finds that boards tend to exercise more control when major shareholders do not interfere, acting more as advisory bodies otherwise. It proposes that establishing audit and remuneration committees with independent directors as well as separating CEO and chairperson roles leads to more extensive board control.
Ch03 - Organisation theory design and change gareth jonesAnkit Kesri
The document discusses organizational environments and how organizations manage uncertainty. It defines the specific and general environments and factors like complexity, dynamism, and richness that cause uncertainty. Organizations use strategies like developing reputations, co-optation, strategic alliances, and mergers to manage dependencies with other organizations for resources. Transaction cost theory also explains how organizations minimize costs of exchanging resources externally through various linkage mechanisms or internally.
The Level of Corporate Governance Disclosures by UK FirmsRuth Noel
This document provides an overview of a study on corporate governance disclosures by UK firms. It begins with an introduction stating the importance of corporate governance disclosures and the aim of investigating disclosure levels over time in two UK companies. A literature review then discusses why corporate governance is necessary due to conflicts between shareholders and managers. Regulations require certain disclosures and the study will analyze annual reports to assess disclosure quality and adherence to regulations. The goal is to determine if the sample companies provide transparent governance practices to investors.
This document provides an overview and learning objectives for a textbook on organizational theory, design, and change. It introduces key concepts like organizational structure, culture, and effectiveness. The textbook is intended to help students understand why organizations exist, how to design and change organizations using principles of organizational theory, and ways to measure organizational effectiveness, including external resource control, internal systems innovation, and technical efficiency. It also notes that organizational design and change are important for dealing with contingencies, gaining competitive advantages, and promoting efficiency.
Principles of Corporate Governance and Ethics for Sustainable Businessinventionjournals
This theoretical paper examines the importance of corporate governance and business ethics that impact organizations and individuals. In the aftermath of the public embarrassment of corporate malfeasance, organizations should underpin their policies and regulations to overcome numerous ethical issues and to ensure the well-being of all. Further, corporate governance is concerned with the ownership, control and accountability of organizations, and how the corporate pursuit of economic objectives relates to a number of wider ethical and societal considerations. Thus, this paper presents an adoption of proper governance practices and business ethics standards, and discusses the importance of such an approach in analyzing and understanding corporate governance practices. Many studies have discovered that an integrated approach towards corporate governance and business ethics should help organizations implement high standards of ethical behavior throughout the organization. In general, the prominence of such a holistic approach, by integrating several components, is the precondition of better understanding of corporate governance practices and procedures to enhance ethical behavior in organizations.
Impact of corporate governance practices on firm capital structure and profit...Alexander Decker
This document summarizes a research study that investigated the relationship between corporate governance practices and capital structure and profitability among listed hotels and restaurant companies in Sri Lanka. The study examined relationships between board composition, board size, and CEO duality as corporate governance factors, and debt ratio, debt-to-equity ratio, return on equity, and return on assets as measures of capital structure and profitability. The results did not find any statistically significant relationships between the corporate governance and performance measures.
This document summarizes recommendations for improving corporate governance in the wake of the Enron scandal and the subsequent legal responses in the US and UK. There are differing views between supporters of the stakeholder model versus the shareholder model. Recommendations that find broad support include: (1) providing more training and professional development for board members; (2) conducting industry-sponsored research on best practices; and (3) requiring companies to publish codes of ethics. The US responded through laws like the Sarbanes-Oxley Act that aimed to increase management accountability and disclosure of transactions. The UK issued reports like the Higgs Report that recommended improving board independence and transparency.
Corporate Governance and Corporate Profitability Empirical Study of Listed La...ijtsrd
Corporate governance is concerned with ways in which all parties interested in the well- being of the organization attempt to ensure that mangers and other insiders take measures or adopt mechanisms that safeguard the interests of the stakeholders.. The purpose of the study is to find out the impact of corporate governance on profitability of listed Land and Property companies in Sri Lanka. Return of Assets is used as dependent variable. To measure the corporate governance, Board size, Board composition and independent directors of Remuneration committee. number of auditors are considered in this study. Firm size was considered as control variable in this study. The data were collected from firms annual financial reports and Data Stream over the period of 2011to 2016, from the CSE website. Descriptive statistics, correlation analysis, multiple linear regression analysis were used to analyse the data and examine the hypotheses by using the E-views 10 version, in this study. The findings revealed that there is a positive and significant relationship between ROA with auditors, board composition. Independent directors of Remuneration committee and board size are insignificantly correlated with ROA. Furthermore, it was found that the control variable firm size was insignificant in influencing firm performance ROA ..This study provides useful information for policy makers, regulators in improving the corporate governance policies in the future and also helps in increasing and understanding the relationship between corporate governance and firms performance. S. Anandasayanan | H. Thavarasasingam "Corporate Governance and Corporate Profitability: Empirical Study of Listed Land and Property Companies in Sri Lanka" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-3 | Issue-2 , February 2019, URL: https://www.ijtsrd.com/papers/ijtsrd20309.pdf
Paper URL: https://www.ijtsrd.com/management/accounting-and-finance/20309/corporate-governance-and-corporate-profitability-empirical-study-of-listed-land-and-property-companies-in-sri-lanka/s-anandasayanan
The Impact of Corporate Governance on Improving Overall Performance of the Co...CSCJournals
Corporate governance is recognized as one of the most important implications in building marketplace confidence. The study will assess the level of implementation of corporate governance and level of performance in seven companies from different industries in some countries. We selected seven companies (Audi Bank, Nestlé Group, Dana Gas, Medgulf, Coca Cola, SABIS, Al Baraka Banking Group) which operate in different sectors (Banking, Food and beverages, Energy, Insurance, Education, and Islamic Banking).
The result of the study shows that there is a significant relationship between corporate governance practices and companies' performance. It is expected that the findings of this research paper would contribute to improve understanding about corporate governance practices and their impacts on improving overall performance of the companies.
Results of the study shows that through appropriate application of the standards of corporate governance companies increase profitability, effectiveness and efficiency, improve their credibility, sustainability, transparency, disclosure, reputation, competitiveness and quality in all aspects and enhance management control, risk management, financial management, oversight and relations with key stakeholders such as investors, business partners, employees, customers, etc.
The study recommends that companies should implement corporate governance principles and standards in their strategy and decision making process. They should focus on board of directors, committee structure, risk management, internal audit, external audit, internal control, human capital, sustainability, social responsibility, financial management, disclosure, transparency and the rights of shareholders.
The relationship between generic strategies and organizational performance: A...AI Publications
The main purpose of this research is to examine the relationship between generic strategies and organizational performance in selected furniture companies in Kurdistan.The researcher used quantitative research method to analyze the relationship between generic strategies and organizational performance of furniture companies in Kurdistan. The researcher printed and distributed 100 questionnaires, but received only 76 questionnaires from participants. Accordingly the sample size of this study is 76 unitsThe findings of this study revealed that the three generic strategies (cost strategy, differentiation strategy and focus strategy) have positive relationship with organizational performance in selected furniture companies in Kurdistan. A research could be completed in different businesses to see if similar outcomes will be gotten. This research likewise recommends that an exploration study could be done to decide factors impacting successful execution of effective strategy in the business.
Ch12 - Organisation theory design and change gareth jonesAnkit Kesri
The document discusses various models of organizational decision making including the rational model, Carnegie model, incrementalist model, unstructured model, and garbage can model. It also covers organizational learning, knowledge management, factors affecting learning such as cognitive biases, and strategies to improve decision making like using devil's advocates and dialectical inquiry.
The document summarizes a study that examined the influence of top management team (TMT) characteristics on the performance of companies listed on the Nairobi Securities Exchange. The study found a moderate positive relationship between TMT characteristics (functional background, tenure, age, gender, education) and company performance. Specifically, it was found that functional background had the strongest influence on performance, followed by education, tenure, gender, and age. The results support the theory that TMT characteristics impact strategic decision-making and innovation, thereby affecting company performance. The study concludes that appointing TMT members with relevant values, qualifications, and characteristics is important for driving business success.
International Journal of Business and Management Invention (IJBMI)inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
The Journal will bring together leading researchers, engineers and scientists in the domain of interest from around the world. Topics of interest for submission include, but are not limited to
Ch06 - Organisation theory design and change gareth jonesAnkit Kesri
The document discusses various types of organizational structures and when each may be appropriate. It describes functional, divisional, matrix, and network structures. A functional structure groups employees by expertise while divisional structures divide the organization along product, geographic, or market lines. Matrix structures combine functional and divisional approaches. Network structures coordinate separate organizations through contracts rather than a hierarchy. Choosing the right structure depends on factors like the diversity of products, markets, and locations involved.
Road infrastructure companies in incident management indiaElsamex INdi
Consult Elsamexindia.com,Or call 011-46154600 for all deal of Road Infrastructure and Road Maintenance in India.Also You can send query at:-info.india@elsamex.com
Road infrastructure companies in indiaElsamex INdi
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Road Infrastructure, Road Operations and Maintenance.
A re balanced scorecard- a strategic approach to enhance manageriPhuong Dx
This document proposes a re-balanced scorecard framework to better evaluate managerial performance in complex environments. It views the firm as having social contracts beyond shareholders to stakeholders like employees, communities, and the environment. The conceptual framework is based on social contract theory and sees the firm as a nexus of social rather than just economic contracts. It then maps this conceptual framework to a practical re-balanced scorecard structure that can induce improved managerial behavior aligned with long-term sustainability and social contract obligations. This framework aims to better account for multidimensional factors managers face and costs of misconduct in evaluating performance.
Ch01 - Organisation theory design and change gareth jonesAnkit Kesri
Organizations exist to create value by bringing together people and resources to produce goods and services. They do this through three stages: input, conversion, and output. Organizations exist for five major reasons: to increase specialization, use large-scale technology, manage the external environment, exert power and control, and economize on transaction costs. Organizational effectiveness is important because it allows organizations to maximize value creation and perform well through approaches like control, innovation, and efficiency. Managers measure effectiveness using goals like the mission, official goals, and operative goals.
Ch10 - Organisation theory design and change gareth jonesAnkit Kesri
This document summarizes key points about organizational change from a chapter in an organizational theory textbook. It defines organizational change as moving from the present state to a desired future state to increase effectiveness. It discusses targets of change including human resources, functional resources, technological capabilities, and organizational capabilities. It also outlines forces that drive change like competition as well as resistances to change like inertia, power struggles, and uncertainty. Finally, it describes different types of evolutionary and revolutionary change and models for managing change like action research.
Article: Influence of Corporate Board Characteristics on Firm Performance of ...McRey Banderlipe II
Using disclosure information from 29 listed property companies in the Philippines, the results revealed that managerial ownership positively influences firm performance. Moreover, firm size, leverage, and age influence the accounting-based measures of performance to a great extent than the market-based measures. Further research should focus on the overall impact of corporate governance using different measures of performance to better assist the decision making of the company’s stakeholders.
Dr. William Allan Kritsonis earned his BA in 1969 from Central Washington University, Ellensburg, Washington. In 1971, he earned his M.Ed. from Seattle Pacific University. In 1976, he earned his PhD from the University of Iowa. In 1981, he was a Visiting Scholar at Teachers College, Columbia University, New York, and in 1987 was a Visiting Scholar at Stanford University, Palo Alto, California.
In June 2008, Dr. Kritsonis received the Doctor of Humane Letters, School of Graduate Studies from Southern Christian University. The ceremony was held at the Hilton Hotel in New Orleans, Louisiana.
Ownership and control in corporate organisations in developing countries evid...Alexander Decker
This document summarizes a study that examines how ownership and board control structures function to achieve good corporate governance in developing countries, using four large quoted corporate organizations in Ghana as case studies. The study finds that these companies have large shareholders who wield extensive control through involvement in decision-making, helping to address principal-agent issues but potentially disadvantaging small shareholders. The study also finds that boards tend to exercise more control when major shareholders do not interfere, acting more as advisory bodies otherwise. It proposes that establishing audit and remuneration committees with independent directors as well as separating CEO and chairperson roles leads to more extensive board control.
Ch03 - Organisation theory design and change gareth jonesAnkit Kesri
The document discusses organizational environments and how organizations manage uncertainty. It defines the specific and general environments and factors like complexity, dynamism, and richness that cause uncertainty. Organizations use strategies like developing reputations, co-optation, strategic alliances, and mergers to manage dependencies with other organizations for resources. Transaction cost theory also explains how organizations minimize costs of exchanging resources externally through various linkage mechanisms or internally.
The Level of Corporate Governance Disclosures by UK FirmsRuth Noel
This document provides an overview of a study on corporate governance disclosures by UK firms. It begins with an introduction stating the importance of corporate governance disclosures and the aim of investigating disclosure levels over time in two UK companies. A literature review then discusses why corporate governance is necessary due to conflicts between shareholders and managers. Regulations require certain disclosures and the study will analyze annual reports to assess disclosure quality and adherence to regulations. The goal is to determine if the sample companies provide transparent governance practices to investors.
This document provides an overview and learning objectives for a textbook on organizational theory, design, and change. It introduces key concepts like organizational structure, culture, and effectiveness. The textbook is intended to help students understand why organizations exist, how to design and change organizations using principles of organizational theory, and ways to measure organizational effectiveness, including external resource control, internal systems innovation, and technical efficiency. It also notes that organizational design and change are important for dealing with contingencies, gaining competitive advantages, and promoting efficiency.
Principles of Corporate Governance and Ethics for Sustainable Businessinventionjournals
This theoretical paper examines the importance of corporate governance and business ethics that impact organizations and individuals. In the aftermath of the public embarrassment of corporate malfeasance, organizations should underpin their policies and regulations to overcome numerous ethical issues and to ensure the well-being of all. Further, corporate governance is concerned with the ownership, control and accountability of organizations, and how the corporate pursuit of economic objectives relates to a number of wider ethical and societal considerations. Thus, this paper presents an adoption of proper governance practices and business ethics standards, and discusses the importance of such an approach in analyzing and understanding corporate governance practices. Many studies have discovered that an integrated approach towards corporate governance and business ethics should help organizations implement high standards of ethical behavior throughout the organization. In general, the prominence of such a holistic approach, by integrating several components, is the precondition of better understanding of corporate governance practices and procedures to enhance ethical behavior in organizations.
Impact of corporate governance practices on firm capital structure and profit...Alexander Decker
This document summarizes a research study that investigated the relationship between corporate governance practices and capital structure and profitability among listed hotels and restaurant companies in Sri Lanka. The study examined relationships between board composition, board size, and CEO duality as corporate governance factors, and debt ratio, debt-to-equity ratio, return on equity, and return on assets as measures of capital structure and profitability. The results did not find any statistically significant relationships between the corporate governance and performance measures.
This document summarizes recommendations for improving corporate governance in the wake of the Enron scandal and the subsequent legal responses in the US and UK. There are differing views between supporters of the stakeholder model versus the shareholder model. Recommendations that find broad support include: (1) providing more training and professional development for board members; (2) conducting industry-sponsored research on best practices; and (3) requiring companies to publish codes of ethics. The US responded through laws like the Sarbanes-Oxley Act that aimed to increase management accountability and disclosure of transactions. The UK issued reports like the Higgs Report that recommended improving board independence and transparency.
Corporate Governance and Corporate Profitability Empirical Study of Listed La...ijtsrd
Corporate governance is concerned with ways in which all parties interested in the well- being of the organization attempt to ensure that mangers and other insiders take measures or adopt mechanisms that safeguard the interests of the stakeholders.. The purpose of the study is to find out the impact of corporate governance on profitability of listed Land and Property companies in Sri Lanka. Return of Assets is used as dependent variable. To measure the corporate governance, Board size, Board composition and independent directors of Remuneration committee. number of auditors are considered in this study. Firm size was considered as control variable in this study. The data were collected from firms annual financial reports and Data Stream over the period of 2011to 2016, from the CSE website. Descriptive statistics, correlation analysis, multiple linear regression analysis were used to analyse the data and examine the hypotheses by using the E-views 10 version, in this study. The findings revealed that there is a positive and significant relationship between ROA with auditors, board composition. Independent directors of Remuneration committee and board size are insignificantly correlated with ROA. Furthermore, it was found that the control variable firm size was insignificant in influencing firm performance ROA ..This study provides useful information for policy makers, regulators in improving the corporate governance policies in the future and also helps in increasing and understanding the relationship between corporate governance and firms performance. S. Anandasayanan | H. Thavarasasingam "Corporate Governance and Corporate Profitability: Empirical Study of Listed Land and Property Companies in Sri Lanka" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-3 | Issue-2 , February 2019, URL: https://www.ijtsrd.com/papers/ijtsrd20309.pdf
Paper URL: https://www.ijtsrd.com/management/accounting-and-finance/20309/corporate-governance-and-corporate-profitability-empirical-study-of-listed-land-and-property-companies-in-sri-lanka/s-anandasayanan
The Impact of Corporate Governance on Improving Overall Performance of the Co...CSCJournals
Corporate governance is recognized as one of the most important implications in building marketplace confidence. The study will assess the level of implementation of corporate governance and level of performance in seven companies from different industries in some countries. We selected seven companies (Audi Bank, Nestlé Group, Dana Gas, Medgulf, Coca Cola, SABIS, Al Baraka Banking Group) which operate in different sectors (Banking, Food and beverages, Energy, Insurance, Education, and Islamic Banking).
The result of the study shows that there is a significant relationship between corporate governance practices and companies' performance. It is expected that the findings of this research paper would contribute to improve understanding about corporate governance practices and their impacts on improving overall performance of the companies.
Results of the study shows that through appropriate application of the standards of corporate governance companies increase profitability, effectiveness and efficiency, improve their credibility, sustainability, transparency, disclosure, reputation, competitiveness and quality in all aspects and enhance management control, risk management, financial management, oversight and relations with key stakeholders such as investors, business partners, employees, customers, etc.
The study recommends that companies should implement corporate governance principles and standards in their strategy and decision making process. They should focus on board of directors, committee structure, risk management, internal audit, external audit, internal control, human capital, sustainability, social responsibility, financial management, disclosure, transparency and the rights of shareholders.
The relationship between generic strategies and organizational performance: A...AI Publications
The main purpose of this research is to examine the relationship between generic strategies and organizational performance in selected furniture companies in Kurdistan.The researcher used quantitative research method to analyze the relationship between generic strategies and organizational performance of furniture companies in Kurdistan. The researcher printed and distributed 100 questionnaires, but received only 76 questionnaires from participants. Accordingly the sample size of this study is 76 unitsThe findings of this study revealed that the three generic strategies (cost strategy, differentiation strategy and focus strategy) have positive relationship with organizational performance in selected furniture companies in Kurdistan. A research could be completed in different businesses to see if similar outcomes will be gotten. This research likewise recommends that an exploration study could be done to decide factors impacting successful execution of effective strategy in the business.
Ch12 - Organisation theory design and change gareth jonesAnkit Kesri
The document discusses various models of organizational decision making including the rational model, Carnegie model, incrementalist model, unstructured model, and garbage can model. It also covers organizational learning, knowledge management, factors affecting learning such as cognitive biases, and strategies to improve decision making like using devil's advocates and dialectical inquiry.
The document summarizes a study that examined the influence of top management team (TMT) characteristics on the performance of companies listed on the Nairobi Securities Exchange. The study found a moderate positive relationship between TMT characteristics (functional background, tenure, age, gender, education) and company performance. Specifically, it was found that functional background had the strongest influence on performance, followed by education, tenure, gender, and age. The results support the theory that TMT characteristics impact strategic decision-making and innovation, thereby affecting company performance. The study concludes that appointing TMT members with relevant values, qualifications, and characteristics is important for driving business success.
International Journal of Business and Management Invention (IJBMI)inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
The Journal will bring together leading researchers, engineers and scientists in the domain of interest from around the world. Topics of interest for submission include, but are not limited to
Ch06 - Organisation theory design and change gareth jonesAnkit Kesri
The document discusses various types of organizational structures and when each may be appropriate. It describes functional, divisional, matrix, and network structures. A functional structure groups employees by expertise while divisional structures divide the organization along product, geographic, or market lines. Matrix structures combine functional and divisional approaches. Network structures coordinate separate organizations through contracts rather than a hierarchy. Choosing the right structure depends on factors like the diversity of products, markets, and locations involved.
Road infrastructure companies in incident management indiaElsamex INdi
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This document provides an overview of key concepts in corporate governance, including:
- The five main theories of corporate governance: special interest group control, governmental control, independent director control, managerial control, and shareholder democracy.
- The roles and responsibilities of directors, officers, and shareholders. Directors manage the corporation, officers operate it, and shareholders own it.
- Shareholder rights like examining records, receiving dividends, transferring shares, and preemptive rights to purchase new stock offerings.
- Laws and rules governing management responsibilities, like the business judgment rule, fairness rule, and Sarbanes-Oxley Act requiring directors to monitor legal compliance.
Companies and Corporate Governance – An OverviewAhmed Ibrahim
The document discusses corporate governance rules for companies in the UAE as outlined in a new decree. It summarizes the key aspects of the decree including requirements for board composition, definitions of independent and non-executive board members, separation of the chairman and CEO roles, formation of board committees, and remuneration of board members. The decree aims to provide oversight of company management and protect shareholder interests through establishing standards for board structure, duties, and transparency.
Corporate governance is defined as the system by which companies are directed and controlled, specifying the distribution of rights and responsibilities among stakeholders like boards, managers, and shareholders. It involves ensuring both an individual and company's welfare and that of the surrounding society. Social responsibility is the obligation of decision-makers to protect and improve societal welfare along with their own interests through intelligent and objective concern. It represents an extension of business ethics within corporate governance.
This document provides an overview of the existing systems for incoming raw materials and liquid materials at Henkel Teroson India Ltd. It describes the multi-step process for accepting imported and domestic raw materials which involves unloading, sampling, quality testing, approval and storage. It also outlines the specific process for unloading liquid plasticizers delivered by tankers, which involves physical checks, sampling, quality testing, weighing and storage. The document notes that liquid materials are issued directly to production without store control, representing a potential area for waste.
A project report on the inventory management at ranna sugar ltdBabasab Patil
This document provides an overview of inventory management practices at Ranna Sugar Ltd, a sugar manufacturing company in India. It discusses the company profile, objectives, products, and departments. Key points include:
1) Ranna Sugar Ltd is located in Bagalkot district of Karnataka and has over 500 employees. It produces sugar, bagasse-based power, and utilizes byproducts.
2) The objectives include sugar, alcohol, and byproduct manufacturing and utilization. It aims to train people in sugar technology.
3) Inventory management is studied to control costs and eliminate waste. ABC analysis classifies items into A, B, C based on value and control required.
3) Findings show A
The document discusses the fertilizer industry in India, noting that it plays a pivotal role in agriculture and food production in the country. It outlines the growth of the fertilizer industry from its beginnings in the early 20th century to the present day, where India is now the third largest producer and consumer of fertilizers globally. The importance of the fertilizer industry to India's economy and agriculture is highlighted, as fertilizers have been a major factor in India achieving self-sufficiency in food grain production.
The document discusses inventory management. It defines inventory as goods held for production or sale. Maintaining optimal inventory levels is important for meeting production needs and customer demand while minimizing costs associated with excess inventory. Effective inventory management requires tracking inventory levels, maintaining accurate records, and controlling the supply/demand balance. The goals of inventory management are to have the right level of inventory at the lowest possible cost.
This document discusses inventory management. It defines inventory and describes the variables involved in inventory problems including controlled variables like order quantity and timing, and uncontrolled variables like costs. It describes the objectives of inventory management as maintaining optimal inventory levels to maximize profitability. Different types of inventories like raw materials, work in progress, and finished goods are explained. The functions and importance of inventory management are provided along with methods like periodic review and fixed order quantity systems. The economic order quantity model and assumptions are outlined.
Corporate governance refers to the structures and processes used to direct and manage companies in the interests of all stakeholders. The basic principles of corporate governance include accountability, transparency, fairness, integrity, responsibility and commitment. Good corporate governance enhances company performance, access to capital, and long-term prosperity while providing barriers against corruption. Both public and private sectors benefit from good corporate governance through better management, resource allocation, and reduced financial risk.
This document provides an overview of corporate governance. It defines corporate governance as applying best management practices and complying with laws and ethical standards to effectively manage a company and create wealth for stakeholders. Good corporate governance provides benefits like better access to financing, lower costs of capital, improved performance, and reduced risk. The four pillars of corporate governance are accountability, fairness, transparency, and independence. In India, organizations like CII and SEBI have worked to establish corporate governance standards and regulations like Clause 49 to strengthen practices at publicly listed companies.
This document contains a list of 133 potential MBA project topics. The topics cover a wide range of business subjects including marketing, finance, human resources, operations management, and more. Some of the topics listed include customer satisfaction studies, investment pattern analyses, brand analyses, capital structure analyses, and export/import procedures. The list provides students with many options for choosing an MBA project on an area of business that interests them.
This document discusses corporate misgovernance and governance issues in India and other countries. It provides examples of corporate scandals in India like the Harshad Mehta case and preferential allotment scam. Examples from the US like the Worldcom and Enron scandals are also mentioned. Reasons for misgovernance like a closed economy and lack of regulatory frameworks are discussed. The document also covers various corporate governance models and theories. It examines the roles, composition and responsibilities of boards of directors. Benefits of good governance and issues regarding boards, disclosure, and shareholder rights are summarized.
Similar to Brennan, Niamh M. and Solomon, Jill [2008] Corporate Governance, Accountability and Mechanisms of Accountability: An Overview, Accounting, Auditing and Accountability Journal 21 (7) (September): 885-906.
Brennan, Niamh M. [2010] “A Review of Corporate Governance Research: An Irish...Prof Niamh M. Brennan
An overview of corporate governance is provided in this chapter, commencing with a discussion of alternative definitions of governance. Internal and external mechanisms of governance are described. The role of boards of directors, and theories explaining those roles, are also considered. In order to provide some insights into governance research, 15 academic papers with an Irish angle were selected for analysis, by reference to theoretical perspective, governance mechanism studied, research method adopted and results. The analytical table demonstrates the variety of research conducted. Some concluding comments are then drawn.
r Academy of Management Journal2015, Vol. 1015, No. 1, 1–9..docxmakdul
r Academy of Management Journal
2015, Vol. 1015, No. 1, 1–9.
http://dx.doi.org/10.5465/amj.2014.4006
FROM THE EDITORS
RETHINKING GOVERNANCE IN MANAGEMENT RESEARCH
In the field of management, the study of gover-
nance has primarily dealt with decision-making by
boards of directors, chief executives, and senior
managers. The corporate governance literature has
generated important insights regarding incentive
alignment, risk taking, and coordination chal-
lenges. Emerging trends, highlighted in this issue,
raise new questions regarding managerial roles,
organizational contexts, internal and social pro-
cesses, and changes in governance over time. We
encourage management scholars to rethink their
approach to governance research by considering
stakeholder engagement, the implications of big
data, social impact, global dimensions, and com-
parative analysis of governance. A broadened con-
ceptualization of governance may also deal with the
dynamics of interorganizational arrangements, in-
cluding the co-creation of organizations of varying
governance forms.
WHAT IS GOVERNANCE?
In this “thematic issue,” we assembled articles
that reflect evolving practices in governance.1
Corporate governance is the system by which
companies are directed and controlled. Boards of
directors are responsible for the governance of
their companies. The shareholders’ role in gover-
nance is to appoint the directors and the auditors
and to satisfy themselves that an appropriate gov-
ernance structure is in place. The responsibilities
of the board include setting the company’s strategic
aims, providing the leadership to put them into
effect, supervising the management of the business,
and reporting to shareholders on their stewardship.
The board’s actions are subject to laws, regulations,
and the shareholders in general meeting (Cadbury,
1992). Corporate governance is therefore about
what the board of a company does and how it sets
the values of the company, but is distinct from the
operational management of the company by full-
time executives.
These views of corporate governance stem pre-
dominantly from a financial perspective. For ex-
ample, Shleifer and Vishny (1997: 737) address
corporate governance as “the ways in which sup-
pliers of finance to corporations assure themselves
of getting a return on their investment. How do the
suppliers of finance get managers to return some
of the profits to them? How do they make sure
that managers do not steal the capital they supply
or invest it in bad projects? How do suppliers
of finance control managers?” These views stem
primarily from an agency theoretical perspective
that investigates the consequences of separation of
ownership and control in the modern corporation
(Jensen & Meckling, 1976). Recent corporate ac-
tivity and views, however, have an expanded view
of governance as involving stewardship and lead-
ership, in addition to the narrower financial pru-
dence role. From a survey of board members from
15 countri ...
Abstract
Corporate governance is very important in our business world today, especially after the frequent non-stop worldwide financial crises. Strong corporate governance is now considered a basic condition to accept and register an organization in most of the Stock Exchange Markets all over the world. The audit committee plays a major role in corporate governance regarding the organization’s direction, control, and accountability. As a representative of the board of directors and main part of the corporate governance mechanism, the audit committee is involved in the organization’s both internal and external audits, internal control, accounting and financial reporting, regulatory compliance, and risk management. This paper focuses on the audit committee’s powers, functions, responsibilities, and relationships within the framework of corporate governance.
1. Corporate Governance-Assessment of the Determinants of the Effectiveness o...cpamutui
The document discusses factors that determine the effectiveness of corporate boards of directors. It reviews theories of board effectiveness, including agency theory, stewardship theory, and stakeholder theory. Structural factors like board size and composition, as well as non-structural factors like decision-making processes, board cohesiveness, and cognitive conflict are examined. The literature finds that decision-making quality and board cohesiveness positively influence board effectiveness in fulfilling its roles of control, service, and strategy. However, accurately assessing individual director characteristics and board processes remains challenging.
Literature Review on the Relationship between Board.pdfShubhiAgarwal83
This literature review examines research on the relationship between board structure and firm performance. It reviews studies that analyze factors like board size, independence, meeting frequency, and their impact on performance. The results show that reasonable board meeting frequency, smaller board size, independence of directors, and other factors can positively impact firm performance and reduce agency costs. However, the findings are mixed, with some studies finding negative or insignificant relationships between certain board factors and performance. Overall, the literature aims to understand how board structure contributes to both increasing firm performance and mitigating agency costs.
A proposed model of balance score cards for enterprise governanceAlexander Decker
This document proposes a model for a balanced scorecard approach to enterprise governance. It begins by defining enterprise governance and discussing existing governance frameworks. It then reviews balanced scorecards, which use financial and non-financial metrics across four perspectives - financial, customer, internal processes, and learning and growth. The document suggests that a balanced scorecard could provide a framework to evaluate an enterprise's governance across conformance with standards and policies, as well as performance and strategic objectives. It proposes testing a model that applies the balanced scorecard approach to comprehensively assess an enterprise's governance arrangements and outcomes.
11.a proposed model of balance score cards for enterprise governanceAlexander Decker
This document proposes a model for balanced scorecards for enterprise governance. It consists of two parts:
1. The conformance balanced scorecard with 5 dimensions: financial indicators, customer satisfaction, operations systems, employee factors, and compliance.
2. The performance balanced scorecard with 6 dimensions: SWOT analysis, strategy implementation, technology needs, HR decisions, mergers and acquisitions, and risk management.
The model is intended to help boards of directors evaluate enterprise governance in terms of both accountability (conformance) and value creation (performance). It draws on prior literature discussing balanced scorecards and their use in assessing strategic decision making, resource allocation, and risk management at the enterprise level.
This document discusses incorporating value-based approaches like ethics into corporate governance practices. It argues that compliance-based governance is insufficient and that integrating ethics can help address shortcomings. The paper explores institutionalizing ethics through mechanisms like establishing an ethics committee and codes of conduct. A case study of a Malaysian communications company found it had implemented several ethical mechanisms like a "Defalcation Committee" to handle ethical issues, showing how institutionalizing ethics can enhance corporate governance.
A Synopsis On -Corporate Governance And Performance Around The World What We...Allison Koehn
1. The document discusses a survey of research on the relationship between corporate governance and firm performance.
2. Most studies find a positive correlation between better corporate governance practices and higher valuations or stock returns, though some question this relationship. However, establishing the causal direction of this relationship is difficult due to endogeneity problems.
3. While better governance may improve performance, higher performing firms may also be able to adopt better governance; more work is needed to determine the causal direction using better identification methods.
11.vol 0003www.iiste.org call for paper no 1 pp 26-44Alexander Decker
This study examines the level of compliance with key Indonesian accounting regulations (IARC) for inventory, fixed assets, and depreciation by analyzing 160 listed Indonesian companies' 2006 annual reports. The study finds a high level of compliance, at 71.63% for inventory, 51.13% for fixed assets, and 99.69% for depreciation. Through statistical analysis, the study investigates factors that influence compliance levels, such as firm size, ownership concentration, corporate governance structures, auditor type, return on assets, and industry. The study aims to advance understanding of accounting compliance in Indonesia and identify areas needing regulatory intervention.
This document is a dissertation submitted by Mohit Kumar to Leeds University Business School in partial fulfillment of an MSc in Finance and Investment. The dissertation examines the impact of managerial ownership on firm performance during a financial crisis using a sample of 180 UK firms from 2009-2011. The dissertation includes an abstract, acknowledgements, table of contents, literature review on the relationship between ownership structure and firm performance, research methods and methodology, findings and conclusions.
Impact of Corporate Governance on Organizational PerformanceJenıstön Delımä
Citation: Delima, V. J., & Ragel, V. R. (2017). Impact of corporate governance on organizational performance. International Journal of Engineering Research and General Science, 5(5).
Abstract- This study examined whether corporate governance has impact on organizational performance in Financial Institutions as research problem. This research was carried out with objective to measure association between Corporate Governance and Financial Institution’s Performance in Batticaloa district. Conceptual framework has been developed to measure linkages between Corporate Governance and Financial Institution’s Performance. Board Size, Corporate Governance Mechanism, Communication Strategies, and Code of Conduct are considered as the measurement variables of Corporate Governance which was derived from Changezi & Saeed (2013) and Customer Satisfaction, Employee Commitment and Corporate Reputation are considered as the measurement variable of Organizational Performance which was derived from Bayoud (2012) and Carton (2004). Questionnaires were used to collect data for this study. 115 Management Respondents and 115 Customers from whole Financial Institutions in Batticaloa district have been selected for this study. Data were analyzed and evaluated by Univariate and Bivariate techniques. In Univariate analysis, Descriptive statistic has been used for the analysis. In Bivariate analysis, Correlation and multiple regressions have been used for the analysis. Findings have shown the Corporate Governance and Organizational Performance are at high level. Moreover, it also found that there is a strong positive relationship between Corporate Governance and Organizational Performance. Corporate Governance significantly impacts Organizational Performance of Financial Institutions. These findings would be useful to consider more on Corporate Governance practices to avoid the Corporate Collapses and to achieve successful Organizational Performance
ethical considerations of corporate governanceMahamIqbal14
This study examines the relationship between ethics, corporate governance, and organizational performance. It hypothesizes that ethical considerations influence corporate governance practices and family management, which in turn impact organizational performance. A key finding is that supervision/balancing, creative mechanisms, and ethical leadership positively impact corporate governance, while creative mechanisms negatively impact family management. Overall, the study aims to understand how ethics can enhance corporate governance and competitiveness.
This document provides an overview of corporate governance in banks and its impact on risk and performance based on a review of the literature. It discusses three main areas:
1. Ownership structure - Specifically examines different types of bank owners and how their incentives and goals impact risk taking.
2. Board structure - Focuses on boards of directors and their framework which is dependent on the legal, regulatory and ethical environment.
3. Risk management - Looks at governance mechanisms aimed at preventing excessive risk taking in banks.
The document reviews theories around agency problems and stakeholder interests in corporate governance. It also discusses how the institutional context is important for understanding governance approaches across different societies.
The Relationship between Board Tenure and Financial Performance. The Allegian...IJMREMJournal
PURPOSE: The purpose of this paper was to examine the relationship between the tenure of the board and
financial distress of listed firms in Kenya.
DESIGN/METHODOLOGY: The research design used in this study was exploratory design. The study employed
panel regression analysis and simultaneously used pooled regression and random effects on sample size of 57
listed firms in Kenya during the period of 2007-2016.
FINDINGS: The study found that board tenure was found to be negatively and significantly related to financial
performance (β=-0.091; p<0.01).
THEORETICAL IMPLICATIONS: This study adds value to theory by studying the effect of tenure on
financial performance by updating empirical literature from a developing country.
ORIGINALITY: The paper fills an important gap in academic literature by providing insights into the role of
board tenure in performance of firms particularly in developing economies. In addition, given the increasing
collapsing of companies in developing nations, this paper provides policy makers with evidence on the
implications of board composition on financial distress.
This document summarizes research on factors that influence the successful implementation of mergers and acquisitions. It reviews literature from economics, finance, strategic management, and behavioral perspectives. Key findings include:
1) Research shows fewer than 20% of mergers and acquisitions achieve their desired objectives due to issues like unrealistic expectations, poor planning, talent loss, and cultural clashes during integration.
2) Significant research has explored factors like organizational culture, personnel morale, and career impacts, but human and organizational dynamics remain less explored than strategic and technological dimensions.
3) A landmark study of over 50 mergers identified problems like underestimating integration challenges, destruction of core competencies, and cultural clashes triggering stress as primary causes of
Internal audit effectiveness an approach proposition to develop the theoretic...Alexander Decker
This document discusses developing a theoretical framework for measuring internal audit effectiveness. It proposes using agency theory, institutional theory, and communication theory as the basis for the framework. Agency theory can explain the relationship between internal auditors and organizational members. Institutional theory relates internal audit effectiveness to compliance with professional standards. Communication theory highlights the importance of effective communication between internal auditors and other parties. The document also reviews prior literature on measuring internal audit effectiveness and identifying factors that influence it.
This study attempts to investigate the role of Corporate Governance in mitigating agency cost. For
this purpose a sample of 100 firms selected on the basis of 100 INDEX of Karachi Stock Exchange during the
period 2007 to 2011. To do so, alternative proxies for agency costs are employing: the ratio of total sales to total
assets (asset turnover) and the ratio of selling, general & administrative expenses (SG&A) to total sales.
Multivariate fixed effect regression is used to analyze the data. The explanatory variables include director
ownership, institutional ownership, ownership Concentration, board size, CEO/Chair duality, Non Executive
Directors, Debt Ratio, remuneration structure and board independence. The analysis is controlled for the
influence of company size. The results show that higher director and institutional ownership reduces the level of
agency cost. Smaller sized boards also results in lowering agency cost. Board independence has positive
association with asset utilization ratio. The separation of the post of CEO and chairperson and higher
remuneration lower agency cost. Bank debt constitutes one of the most important Corporate Governance devices
for Pakistani Listed Companies. Also, managerial ownership, managerial compensation and ownership
concentration seem to play an important role in mitigating agency costs
Influence of corporate governance on the performance of public organizations ...Alexander Decker
This document summarizes a research study that examined the influence of corporate governance on the performance of public organizations, using Kenya Ports Authority (KPA) as a case study. The study found that of the four variables studied - board composition, management compensation, governance structure, and board size - board composition had the greatest influence on performance. Specifically, the representation of outsiders and professionals on the board was found to support KPA's performance, while political influence and the number of government officials on the board was viewed as less supportive of performance. The document provides background on corporate governance and reviews relevant literature before describing the research methodology and findings.
Dynamic Capabilities in SMEs: The Integration of External CompetenciesCSCJournals
In spite of substantial body of theoretical and conceptual contributions, empirical evidence of nature of dynamic capabilities and their influence on firm performance is still relatively scarce. We present review of empirical studies of well-known processes that highlight constituting elements of dynamic capabilities, and conclude that relatively little research has been conducted to address managerial practices and processes employed to integrate external competencies. We propose concept of ‘relationship capability’, that denotes integrative dynamic capability constituted of managerial practices and processes that are employed in SMEs, first, to sense and interpret firm’s environment, second, to reconfigure internal organizational processes to integrate external competencies in the firm and third, to develop specialized offerings based on platforms.
Similar to Brennan, Niamh M. and Solomon, Jill [2008] Corporate Governance, Accountability and Mechanisms of Accountability: An Overview, Accounting, Auditing and Accountability Journal 21 (7) (September): 885-906. (20)
Brennan, Niamh and Clarke, Peter [1985] Objective Tests in Financial Accounti...Prof Niamh M. Brennan
A multiple choice questionnaire (MCQ) style examination typically consists of 20/30 short statements, each of which is followed by a number of alternative answers. Only one answer is strictly correct. This allows the examiner to mark candidates' responses in an objective rather than subjective fashion. This style of examination question has recently been adopted by the Institute of Chartered Accountants in Ireland and is also used in third level institutions.
MCQs have a number of advantages over traditional examination formats. First, they allow the examiner to ask questions on every topic on the syllabus and thus test the candidates range of knowledge. Perhaps more importantly, correction of answers is entirely objective and comparatively easy. Large numbers of scripts can be objectively tested in a short space of time.
Objective tests can also be an effective teaching tool. The topics covered in each chapter are logically sequenced so that as the student progresses through the chapter they build up their know¬ledge and skills in relation to that topic. In addition, the book emphasises problem areas and attempts to help students avoid common mistakes in financial accounting. Thus the tutor can indicate the correct solution and also explain or seek responses as to why other plausible answers are incorrect to the given statement. Such a process should ensure greater understanding of the topic under discussion.
This book is suitable for students taking introductory financial accounting examinations of the professional accountancy bodies, third level accounting students or other students studying introductory financial accounting courses. The three revision examinations at the end of this book are reproduced with the kind permission of the Institute of Chartered Accountants in Ireland.
03 14 brennan merkl davies accounting narratives and impression managementProf Niamh M. Brennan
This chapter examines impression management in accounting communication through four theoretical perspectives: economic, psychological, sociological, and critical. Impression management refers to organizations constructing impressions to appeal to audiences like shareholders and stakeholders. Discretionary accounting narratives in corporate reports are analyzed for seven communication choices that could constitute impression management. The chapter concludes by discussing implications for corporate reporting practice and suggestions for future research on how impression management may undermine reporting quality and influence stakeholder perceptions.
Brennan, Niamh M., Merkl-Davies, Doris M., and Beelitz, Annika [2013] Dialogi...Prof Niamh M. Brennan
We conceptualise CSR communication as a process of reciprocal influence between organisations and their audiences. We use an illustrative case study in the form of a conflict between firms and a powerful stakeholder which is played out in a series of 20 press releases over a two-month period to develop a framework of analysis based on insights from linguistics. It focuses on three aspects of dialogism, namely (i) turn-taking (co-operating in a conversation by responding to the other party), (ii) inter-party moves (the nature and type of interaction action characterising a turn i.e., denial, apology, excuse), and (iii) intertextuality (the intensity and quality of verbal interaction between the parties). We address the question: What is the nature and type of verbal interactions between the parties? First we examine (a) whether the parties verbally interact and then (b) whether the parties listen to each other.
We find evidence of dialogism suggesting that CSR communication is an interactive process which has to be understood as a function of the power relations between a firm and a specific stakeholder. Also, we find evidence of intertextuality in the press releases by the six firms which engage in verbal interaction with the stakeholder. We interpret this as linguistic evidence of isomorphic processes relating to CSR practices resulting from the pressure exerted by a powerful stakeholder. The lack of response by ten firms that fail to issue press releases suggests a strategy of ‘watch-and-wait’ with respect to the outcome of the conflict.
Brennan, Niamh M. and Flynn, Maureen A. [2013] Differentiating Clinical Gover...Prof Niamh M. Brennan
This document proposes new definitions to distinguish between clinical governance, clinical management, and clinical practice. It analyzes 29 existing definitions of "clinical governance" and finds they confuse governance, management, and practice roles. The document suggests 3 new separate definitions: clinical governance focuses on accountability, oversight, and setting standards; clinical management focuses on efficient service delivery through processes and resources; and clinical practice focuses on delivering high-quality care. Clearer distinctions between these roles could help implement clinical governance more effectively.
Brennan, Niamh M. and Conroy, John P. [2013] Executive Hubris: The Case of a ...Prof Niamh M. Brennan
Purpose – Can personality traits of Chief Executive Officers (CEOs) be detected at-a-distance? Following newspaper speculation that the banking crisis of 2008 was partly caused by CEO hubris, this paper analyses the CEO letters to shareholders of a single bank over ten years for evidence of CEO personality traits, including: (i) narcissism (a contributor to hubris), (ii) hubris, (iii) overconfidence and (iv) CEO-attribution. Following predictions that hubris increases the longer individuals occupy positions of power, the research examines whether hubristic characteristics intensify over time.
Design/methodology/approach – This paper takes concepts of hubris from the clinical psychology literature and applies them to discourses in CEO letters to shareholders in annual reports. The research comprises a longitudinal study of the discretionary narrative disclosures in the CEO letters to shareholders in eight annual reports, benchmarked against disclosures in the CEO letters to shareholders of the previous and subsequent CEOs of the same organisation.
Findings – Results point to evidence of narcissism and hubris in the personality of the Bank CEO. Over half the sentences analysed were found to contain narcissistic-speak. In 45% of narcissistic-speak sentences, there were three of more symptoms of hubris – what Owen and Davison (2009) describe as extreme hubristic behavior. In relation to CEO overconfidence, only seven (2%) sentences contained bad news. More than half of the good news was attributed to the CEO and all the bad news was attributed externally. The research thus finds evidence of hubris in the CEO letters to shareholders, which became more pronounced the longer the CEO served.
Research limitations/implications – The analysis of CEO discourse is highly subjective, and difficult to replicate.
Originality/value – The primary contribution of this research is the adaptation of the 14 clinical symptoms of hubris from clinical psychology to the analysis of narratives in CEO letters to shareholders in annual reports to reveal signs of CEO hubris.
Craig, Russell J. and Brennan, Niamh M. [2012] An Exploration of the Relation...Prof Niamh M. Brennan
This paper proposes a taxonomy to assist in more clearly locating research on aspects of the association between corporate reputation and corporate accountability reporting. We illustrate how our proposed taxonomy can be applied by using it to frame our exploration of the relationship between measures of reputation and characteristics of the language choices made in CEO letters to shareholders. Using DICTION 5.0 software we analyse the content of the CEO letters of 23 high reputation US firms and 23 low reputation US firms. Our results suggest that company size and visibility each have a positive influence on the extent to which corporate reputation is associated with the language choices made in CEO letters. These results, which are anomalous when compared with those of Geppert and Lawrence (2008), highlight the need for caution when assessing claims about the effects on corporate reputation arising from the language choice in narratives in corporate annual reports.
Merkl-Davies and Brennan A Conceptual Framework of Impression Management: New...Prof Niamh M. Brennan
In this paper we develop a conceptual framework, based on the concepts of rationality and motivation, which uses theories and empirical research from psychology/behavioural finance, sociology and critical accounting to systematise, advance and challenge research on impression management. The paper focuses on research which departs from economic concepts of impression management as opportunistic managerial discretionary disclosure behaviour resulting in reporting bias or as ‘cheap talk’. Using alternative rationality assumptions, such as bounded rationality, irrationality, substantive rationality and the notion of rationality as a social construct, we conceptualise impression management in alternative ways as (i) self-serving bias, (ii) symbolic management and (iii) accounting rhetoric. This contributes to an enhanced understanding of impression management in a corporate reporting context.
Brennan, Niamh [1996] Disclosure of Profit Forecasts during Takeover Bids. Do...Prof Niamh M. Brennan
This thesis examines disclosure of 250 profit forecasts in 701 UK takeover bids in the period 1988 to 1992 against five research issues:
• Factors influencing disclosure of forecasts
• Influence of prevailing market expectations
• Effect of disclosure of forecasts on the outcome of bids
• Factors influencing disclosure content in forecasts
• Whether forecasts disclosed convey good news
Logit analysis and negative binomial regression are the two primary statistical techniques used to analyse the results.
Results show the domination of the takeover-context of the research. Two variables accounted for almost all the influence on disclosure of forecasts for both bidders and targets: bid horizon and type of bid. Probability of disclosure of a forecast is greater the shorter the bid horizon and during contested bids.
In addition to bid horizon and type of bid, for bidders, year, value of bid and purchase consideration were significant, and for targets value of bid and industry were significant in one of the two models estimated.
Evidence supporting the hypothesis that forecast disclosure is more likely when market expectations are out of line with actual results is provided.
There is some evidence that forecasts by targets affect the outcome of bids, but there is no such evidence for bidders.
Takeover-context variables and forecast-related variables were most relevant in determining disclosures in forecasts. Disclosure content in forecasts was significantly greater during contested bids, in voluntary forecasts and in longer period forecasts. Significantly more assumptions were disclosed by target forecasters and in longer horizon forecasts.
Evidence shows a tendency to disclose good news, with some disclosure of bad news. Good news forecasts are more likely during contested bids. Targets are more likely to disclose bad news forecasts, but when bidders disclose bad news it tends to be worse on average than targets’ bad news.
Merkl-Davies, Doris M., Brennan, Niamh M. and McLeay, Stuart J. [2011] Impres...Prof Niamh M. Brennan
Purpose – Prior accounting research views impression management predominantly though the lens of economics. Drawing on social psychology research, we provide a complementary perspective on corporate annual narrative reporting as characterised by conditions of ‘ex post accountability’ (Aerts, 2005, p. 497). These give rise to (i) impression management resulting from the managerial anticipation of the feedback effects of information and/or to (ii) managerial sense-making by means of the retrospective framing of organisational outcomes.
Design/methodology/approach – We use a content analysis approach pioneered by psychology research (Newman et al., 2003) which is based on the psychological dimension of word use to investigate the chairmen’s statements of 93 UK listed companies.
Findings – Results suggest that firms do not use chairmen’s statements to create an impression at variance with an overall reading of the annual report. We find that negative organisational outcomes prompt managers to engage in retrospective sense-making, rather than to present a public image of organisational performance inconsistent with the view internally held by management (self-presentational dissimulation). Further, managers of large firms use chairmen’s statements to portray an accurate (i.e., consistent with an overall reading of the annual report), albeit favourable, image of the firm and of organisational outcomes (i.e., impression management by means of enhancement).
Research limitations – The content analysis approach adopted in the study analyses words out of context.
Practical implications – Corporate annual reporting may not only be understood from a behavioural perspective involving managers responding to objectively determined stimuli inherent in the accountability framework, but also from a symbolic interaction perspective which involves managers retrospectively making sense of organisational outcomes and events.
Originality/value – Our approach allows us to investigate three complementary scenarios of managerial corporate annual reporting behaviour: (i) self-presentational dissimulation, (ii) impression management by means of enhancement, and (iii) retrospective sense-making.
Brennan, Niamh M., Daly, Caroline A. and Harrington, Claire S. [2010] Rhetori...Prof Niamh M. Brennan
This exploratory study extends the analysis of narrative disclosures from routine reporting contexts such as annual reports and press releases to non-routine takeover documents where the financial consequences of narrative disclosures can be substantial. Rhetoric and argument in the form of impression management techniques in narrative disclosures are examined. Prior thematic content analysis methods for analysing good and bad news disclosures are adapted to the attacking and defensive themes in the defence documents of target companies subject to hostile takeover bids. The paper examines the incidence, extent and implications of impression management in ten hostile takeover defence documents issued by target companies listed on the London Stock Exchange between 1 January 2006 and 30 June 2008. Three impression management strategies – thematic, visual and rhetorical manipulation – are investigated using content analysis methodologies. The findings of the research indicate that thematic, visual and rhetorical manipulation is evident in hostile takeover defence documents. Attacking and defensive sentences were found to comprise the majority of the defence documents analysed. Such sentences exhibited varying degrees of visual and rhetorical emphasis, which served to award greater or lesser degrees of prominence to the information conveyed by target company management.
While exploratory in nature, this paper concludes with suggestions for future more systematic research allowing for greater generalisations from the findings.
Brennan, Niamh M., Guillamon-Saorin, Encarna and Pierce, Aileen [2009] Impres...Prof Niamh M. Brennan
Purpose – This paper develops a holistic measure for analysing impression management and for detecting bias introduced into corporate narratives as a result of impression management.
Design/methodology/approach – Prior research on the seven impression management methods in the literature is summarised. Four of the less-researched methods are described in detail, and are illustrated with examples from UK Annual Results’ Press Releases (ARPRs). A method of computing a holistic composite impression management score based on these four impression management methods is developed, based on both quantitative and qualitative data in corporate narrative disclosures. An impression management bias score is devised to capture the extent to which impression management introduces bias into corporate narratives. An example of the application of the composite impression management score and impression management bias score methodology is provided.
Findings – While not amounting to systematic evidence, the 21 illustrative examples suggest that impression management is pervasive in corporate financial communications using multiple impression management methods, such that positive information is exaggerated, while negative information is either ignored or is underplayed.
Originality/value – Four impression management methods are described in detail, illustrated by 21 examples. These four methods are examined together. New impression management methods are studied in this paper for the first time. This paper extends prior impression management measures in two ways. First, a composite impression management score based on four impression management techniques is articulated. Second, the composite impression management score methodology is extended to capture a measure for bias, in the form of an impression management bias score. This is the first time outside the US that narrative disclosures in press releases have been studied.
Merkl-Davies, Doris M. and Brennan, Niamh M. [2007] Discretionary Disclosure ...Prof Niamh M. Brennan
This paper reviews and synthesizes the literature on discretionary narrative disclosures. We explore why, how, and whether preparers of corporate narrative reports use discretionary disclosures in corporate narrative documents and why, how, and whether users react thereto. To facilitate the review, we provide three taxonomies based on: the motivation for discretionary narrative disclosures (opportunistic behavior, i.e. impression management, versus provision of useful incremental information); the research perspective (preparer versus user); and seven discretionary disclosure strategies.
Brennan, Niamh M. and McGrath, Mary [2007] Financial Statement Fraud: Inciden...Prof Niamh M. Brennan
This document summarizes a research paper that studied 14 cases of financial statement fraud from the US and Europe. It found that senior management was usually responsible, and the most common method of fraud was recording false sales to meet external earnings forecasts. Fraud was typically discovered by management, either existing or new management taking over.
Brennan, Niamh and Kelly, John [2007] A Study of Whistleblowing Among Trainee...Prof Niamh M. Brennan
Over the last number of years whistleblowers have been gaining prominence. This paper investigates some of the factors that influence the propensity or willingness to blow the whistle among trainee auditors. Three categories of factors are examined: audit firm organisational structures, personal characteristics of whistleblowers and situational variables.
A survey of 240 final year students of the Institute of Chartered Accountants in Ireland was undertaken. Trainee auditors (just about to sit their finals) were asked about their confidence in internal and external reporting structures in their firms. Using four scenarios, audit trainees were questioned on their willingness to challenge an audit partner’s inappropriate response to concerns raised during the audit. Finally, audit trainees were asked about the influence of legal protection on their likelihood of whistleblowing.
Results indicate that where firms have adequate formal structures for reporting wrongdoing, trainee auditors are more likely to report wrongdoing and have greater confidence that this will not adversely affect their careers. Training increases this confidence. Trainee auditors also express a willingness to challenge an audit partner’s unsatisfactory response to wrongdoing. Significant differences were found in attitudes depending on whether the reports of wrongdoing were internal or external. The willingness to report wrongdoing externally reduces for older (aged over 25) trainees.
Brennan, Niamh [2006] Boards of Directors and Firm Performance: Is there an E...Prof Niamh M. Brennan
Reflecting investor expectations, most prior corporate governance research attempts to find a relationship between boards of directors and firm performance. This paper critically examines the premise on which this research is based. An expectations gap approach is applied for the first time to implicit expectations which assume a relationship between firm performance and company boards. An expectations gap has two elements: A reasonableness gap and a performance gap. Seven aspects of boards are identified as leading to a reasonableness gap. Five aspects of boards are identified as leading to a performance gap. The paper concludes by suggesting avenues for empirically testing some of the concepts discussed in this paper.
Brennan, Niamh and Gray, Sidney J. [2005] The Impact of Materiality: Accounti...Prof Niamh M. Brennan
This paper comprises a review of the literature on materiality in accounting. The paper starts by examining the context in which materiality is relevant, and the problems arising from applying the concept in practice. Definitions of materiality from legal, accounting and stock exchange sources are compared. The relevance of materiality to various accounting situations is discussed. Methods of calculating quantitative thresholds are described and illustrated. Prior research is reviewed, focussing on materiality thresholds, and on the materiality judgments of auditors, preparers and financial statement users. The paper concludes with some suggestions for future research and for policy makers concerning this best kept accounting secret.
Brennan, Niamh [2005] Accounting Expertise in Litigation and Dispute Resoluti...Prof Niamh M. Brennan
This document summarizes the role of expert witnesses in litigation, with a focus on accounting experts. It discusses how expert witnesses are used to assist courts in resolving complex issues outside the knowledge of judges and juries. The expert's primary duty is to the court, not to the hiring party. The summary also outlines important qualities of expert testimony like being unbiased, relevant, reliable, and cost-effective. It notes that experts can face civil liability for negligence if these qualities are lacking. Finally, it provides an overview of the process for selecting and engaging expert witnesses.
Brennan, Niamh and McDermott, Michael [2004] Alternative Perspectives on Inde...Prof Niamh M. Brennan
This paper examines the issue of independence of boards of directors and non-executive direc¬tors of companies listed on the Irish Stock Exchange. Based on information published in annual reports, the study found that most Irish listed companies were complying with the Combined Code’s recommendations for a balanced board structure, albeit with only 60 per cent having majority-independent boards. The study found a lack of consistency in inter-preting the definition of “independence”, a lack of disclosure of information and, by apply¬ing criteria generally regarded as prerequisite to independence of non-executive directors, certain situations which imposed upon their independence.
Brennan, Niamh [2003] Accounting in crisis: A story of auditing, accounting, ...Prof Niamh M. Brennan
Recent accounting scandals are the product of multiple failings of auditing, accounting, corporate governance and of the market. In discussing the many factors that led to failure, this paper attempts to provide insights on regulatory inadequacies that contributed to these problems. At the centre is human failure – in particular greed and weakness. Reforms in progress are briefly examined, with the caveat that no reforms will ever fully cater for human weakness.
Brennan, Niamh [2001] Reporting Intellectual Capital in Annual Reports: Evide...Prof Niamh M. Brennan
This paper examines the extent to which a sample of 11 knowledge-based Irish listed companies is adopting methodologies for reporting of intellectual capital in their annual reports. Their market and book values were compared and a content analysis of the annual reports of the 11 listed companies was conducted. With the exception of two of the 11 listed companies, significant differences in market and book values were found suggesting that knowledge-based Irish listed companies have a substantial level of non-physical, intangible, intellectual capital assets. The level of disclosure of intellectual capital attributes by the 11 listed companies studied was low.
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Brennan, Niamh M. and Solomon, Jill [2008] Corporate Governance, Accountability and Mechanisms of Accountability: An Overview, Accounting, Auditing and Accountability Journal 21 (7) (September): 885-906.
1. Corporate Governance, Accountability and Mechanisms of Accountability:
An Overview
Niamh M. Brennan
Michael MacCormac Professor of Management
University College Dublin, Ireland
Jill Solomon
Reader in Finance
University of Cardiff, UK
(Published in Accounting, Auditing and Accountability Journal
21(7)(September 2008): 885-906.)
1
Acknowledgments: We are indebted to the many authors who made submissions to this special issue.
We are also grateful for the large number of colleagues who reviewed those submissions. We thank
James Guthrie and Lee Parker for their guidance throughout the preparation of the special issue.
Finally, we thank the referees and Howard Mellett (Cardiff University) for their constructive and useful
comments on this introduction to the special issue.
2. Abstract
Purpose – This paper reviews traditional corporate governance and accountability
research, to suggest opportunities for future research in this field. The first part adopts
an analytical frame of reference based on theory, accountability mechanisms,
methodology, business sector/context, globalisation and time horizon. The second part
of the paper locates the seven papers in the special issue in a framework of analysis
showing how each one contributes to the field. The paper presents a frame of
reference which may be used as a 'roadmap' for researchers to navigate their way
through the prior literature and to position their work on the frontiers of corporate
governance research.
Design/methodology/approach – The paper employs an analytical framework, and is
primarily discursive and conceptual.
Findings – The paper encourages broader approaches to corporate governance and
accountability research beyond the traditional and primarily quantitative approaches
of prior research. Broader theoretical perspectives, methodological approaches,
accountability mechanism, sectors/contexts, globalisation and time horizons are
identified.
Research limitations/implications – Greater use of qualitative research methods are
suggested, which present challenges particularly of access to the “black box” of
corporate boardrooms.
Originality/value – Drawing on the analytical framework, and the papers in the
special issue, the paper identifies opportunities for further research of accountability
and corporate governance.
Keywords Corporate governance, Accountability, Mechanisms of Accountability
Paper type Research review
3. 1. Introduction
Corporate governance is an eclectic subject but for the purposes of this Accounting,
Auditing & Accountability Journal special issue the focus is exclusively on corporate
governance research within the accounting and finance discipline, given the nature of
the journal. In this editorial, first the traditional body of research in corporate
governance within accounting and finance is reviewed. Then, the ways in which
corporate governance and accountability research is expanding are discussed,
providing a frame of reference depicting the frontiers of research into corporate
governance. This frame of reference is used to show how each paper in the special
issue represents a significant contribution to corporate governance research, and the
ways in which each paper is adding to knowledge on the frontiers of the discipline.
The special issue fills a gap in the academic literature by building on existing work in
order to extend the boundaries of corporate governance research along a number of
dimensions.
The paper is organized as follows. In section 2, the traditional body of corporate
governance research is summarised. The extent to which corporate governance
research is broadening away from the traditional body of work is shown in Section 3.
Also, it highlights how the frame of reference depicting the frontiers of work in the
area emerges from the discussion. Section 4 locates the papers included in this special
issue within the frame of reference. The discussion in Section 5 concludes with a
summary of main themes arising from the special issue as well as some suggestions
for future research in corporate governance.
1
4. 2. Corporate Governance Research: The Nature of Prior Research
Excellent reviews of corporate governance have been published (e.g. Shleifer and
Vishney, 1997; Becht et al., 2002; Huse, 2005). In this section, prior corporate
governance research is reviewed, from an accountability perspective – the theoretical
perspectives adopted, the mechanisms of accountability studied, the methodologies
applied, and the sectors/contexts, countries and time horizons considered.
2.1 Theoretical framework and accountability
Traditionally, research into corporate governance has adopted an agency theory
approach, focusing exclusively on resolving conflicts of interest (agency problems)
between corporate management and the shareholder (Jensen and Meckling, 1976;
Fama, 1980; Fama and Jensen, 1983; Eisenhardt, 1989). This finance paradigm
dominating corporate governance research emanated from the US, arising from the
original work of Berle and Means (1932) on the separation of ownership and control
in listed companies. Other disciplines treated corporate governance similarly, for
example transactions cost theory in economics (Williamson, 1985, 1996).
The effective dominance of corporate governance research in accounting and finance
by agency theory has engendered shareholder-centric definitions of corporate
governance, for example,
"... the process of supervision and control…intended to ensure that the
company’s management acts in accordance with the interests of
shareholders (Parkinson, 1993, p. 159).
The prior literature has provided significant insights into the problems associated with
requiring companies to discharge their accountability to the dominant stakeholder
2
5. group, the shareholders. This shareholder-oriented perspective has been reflected in
corporate governance policy documents and codes of practice. For example, in the
UK, the Cadbury Report (1992), the Combined Code (1998; 2003; 2006), the
Greenbury Report (1992) and the Higgs Report (2003) all approached corporate
governance reform from the perspective of protecting and enhancing shareholder
wealth; similarly in the US with the arguably costly Sarbanes Oxley legislation. Other
countries have adopted similar approaches and perspectives.
2.2 Mechanisms of accountability
Traditionally, accounting and finance researchers have focused on a variety of
corporate governance mechanisms of accountability, where accountability has been
interpreted only as corporate accountability to shareholders. Finance researchers have
focused on internal company mechanisms relating to boards and board performance.
Studies of the impact of boards/board effectiveness on corporate profitability and
shareholder value have dominated corporate governance research in finance. These
researchers focused on the influence of non-executive directors, splitting of the roles
of chairman and chief executive, or the introduction of board sub-committees, have
enhanced board effectiveness which in turn has added to shareholder value. For
example, Dahya et al., (2002) investigated the relationship between top management
turnover (a measure of board effectiveness) and financial performance (a measure of
management effectiveness). Others have studied the appointment of non-executive
directors and their role in monitoring company management, on behalf of
shareholders (e.g. Byrd and Hickman, 1992; Ezzamel and Watson, 1997; Hermalin
and Weisbach 1991; Kirkbride and Letza, 2005). Research has considered whether
3
6. there is a positive relationship between the number of non-executive directors and
corporate financial performance, generally showing that there is (e.g. Kaplan and
Reishus, 1990; Ferris et al., 2003).
Another area of research has examined sub-committees of the board as mechanisms
for improving board effectiveness, for example remuneration committees (Main and
Johnston, 1993; Newman and Mozes, 1999; Newman, 2000) and nomination
committees (Ruigrok et al., 2006). Some studies have suggested, for example, that the
existence of remuneration committees affects the level and structure of top
management pay (Conyon and Peck, 1998), whereas other work has found evidence
to the contrary (Daily et al., 1998).
Managerial turnover, proportion of non-executive directors, CEO duality and
existence/composition of board subcommittees are crude proxies for board
effectiveness. Brennan (2004) has critiqued this kind of research calling for more
pertinent measures relating to firm performance to be included in this kind of
research, especially measures of CEO competence and activity.
Researchers have also investigated the relationship between executive remuneration
and financial performance (e.g. Jensen and Murphy, 1990; Core et al., 1999)1. A host
of corporate governance research has focused on takeovers and mergers and their
relationship with performance, stemming from a seminal study which identified
takeover as a disciplining mechanism over company management, again within the
finance paradigm of agency theory (Jensen and Ruback, 1983).
1
Tosi et al. (2000); Bruce and Buck (2005) provide useful reviews of literature in this area.
4
7. Another important mechanism for improving corporate governance is the role of
institutional investors. There has been a steady growth of research into their
developing role as monitors of corporate management (e.g. Coffee, 1991; Karpo et
al., 1996; Faccio and Lasfer, 2000) and the evolving relationship between institutional
investors and their investee company management (Holland and Stoner, 1996;
Holland, 1998).
Accounting researchers have concerned themselves with mechanisms of transparency
(particularly financial reporting) which seek to align the interests of management and
shareholders, and with mechanisms of accountability such as audit committees,
internal audit and risk management as assurances of the quality of financial reporting.
Cohen et al., (2004) reviewed the relationships between financial reporting quality
and corporate governance mechanisms. As such, their review article goes to the heart
of this Accounting, Auditing & Accountability Journal special issue, in which they
discuss the interrelationships between financial reporting quality, management and
boards of directors, audit committees, internal audit and external audit. They also
acknowledged the influence of regulations (legislators, the courts, stock exchanges),
financial analysts and shareholders. However, this special issue considers
accountability issues beyond the financial reporting focus of Cohen et al., (2004).
Mechanisms of transparency, in the form of accounting, financial reporting and
voluntary disclosures have also taken their place in corporate governance research.
Again, traditionally, these have been researched from an agency theory perspective
whereby transparency in the form of disclosures to shareholders is an important
5
8. mechanism for aligning shareholder and management interests (e.g. Healy et al.,
1999; Hermanson, 2000; Bushman and Smith, 2001; Healy and Palepu, 2001). The
influence of corporate governance on transparency/corporate disclosures has been
studied at the level of country (e.g. Bushman and Smith 2001, 2003; Francis et al.,
2003; Bushman et al., 2004b) and also at the level of the firm (e.g. Forker 1992;
Bushman et al., 2004a; Beekes and Brown 2006; Cheng and Courteney 2006). The
governance variables predicted to influence disclosure and transparency vary from
external mechanisms in the form of legal systems for the country-level studies, to
internal governance mechanisms relating to the board of directors, its committees, its
independence, share ownership by directors and managers, ownership concentration
among large shareholders and the quality of auditors.
Again in the accounting discipline, within the area of transparency, the US Treadway
Commission (1987) and the UK Turnbull Report (1999; 2005) highlighted companies'
systems of internal control as important aspects of the corporate governance
framework. There has been some academic research into this area, although
admittedly less than in other areas, which has examined mechanisms of risk
identification, assessment, management and disclosure (e.g. Solomon, Solomon,
Norton and Joseph, 2000, Spira and Page, 2003; Linsley and Shrives 2006).
Audit committees are board mechanisms to enhance accountability around the
financial reporting and accounting functions, and have been extensively researched
(e.g. Collier 1992, 1996; Kalbers and Fogarty 1993, 1998; DeZoort and Salterio 2001;
Klein, 2002a, 2002b; Collier and Gregory, 1999; Gendron et al., 2004; Collier and
Zaman, 2005; Gendron and Bédard 2006; Turley and Zaman 2007). Also, DeZoort et
6
9. al., (2002) provides a comprehensive review of the literature in this area. There has
been relatively less research on internal audit. However, Raghunandan et al., (2001),
Davidson et al., (2005), Goodwin-Stewart and Kent (2006), Gendron and Bédard
(2006) and Turley and Zaman (2007) have touched on the subject to varying extents.
Also, Gramling et al., (2005) provided an overview of the role of internal audit in a
corporate governance context.
2.3 Methodology, sector/context, globalisation and time horizon
The traditional preoccupation with the agency theory framework has affected a series
of other choices made by researchers, namely the methodological approach adopted,
the sector/context chosen, the analytical techniques applied, internationalisation of
corporate governance and the time horizon studied. It is probably accurate to say that
the traditional, dominant approach to researching and analysing corporate governance
has involved adopting quantitative, positive methodology, including the application of
econometric techniques. Previous studies investigating a wide range of governance
factors relating to board performance have adopted such methodologies.
Corporate governance research has mainly focused on the corporate sector,
particularly listed companies. The way that other types of organisations have been
directed and controlled has not been the primary focus of accounting and finance
researchers until relatively recently. Parker (2007b; 2008) is an exception – he
considers the unique governance context of non-profit organisations, and studies
board processes in two such organisations.
7
10. Particular contexts have also been the subject of corporate governance research,
notably corporate failures and corporate fraud. Studies of governance failures have
pinpointed corporate governance weaknesses contributing to the failure. For example,
Beasley (1996) and Beasley et al., (2000) examined the relation between fraud and
corporate governance mechanisms, while Agrawal and Chadha (2005) considered the
influence of corporate governance on the probability of firms having to restate their
earnings. Clarke (2004) considered the cyclical nature of corporate governance
failures, which he predicted was likely to continue.
Traditionally, accounting and finance research in corporate governance has focused
on Anglo-Saxon stock markets, again reflecting the traditional dominance of agency
theory. Since the publication of the first code of ‘best practice’ in corporate
governance (Cadbury Report, 1992) there has been a proliferation in codes of practice
across the globe, with the majority of countries developing codes of practice suited to
their individual needs. As a result, corporate governance research has started to focus
on systems which do not fit the Anglo-Saxon, market-based mould. Indeed, most
countries have been shown to fall into the insider-dominated model of corporate
governance, where companies tend to be owned and controlled by insiders such as
founding families, the state, banks, or other companies. A body of research has
examined the factors determining different models of corporate governance,
concluding that legal systems dictate stock market growth, according to the level of
shareholder protection they provide (La Porta et al., 1997, 1998, 1999). However,
until recently, the majority of work in international corporate governance has been
pre-occupied with developing economies and their uptake of corporate governance
‘best practice’.
8
11. Researchers often use the Cadbury Report (1992) as the starting point for corporate
governance research, and most research is located in the period since it publication.
However, governance issues have arisen for as long as there has been separation of
ownership and control in business, and merits a broader time horizon. It now seems
important for researchers to begin adopting a less myopic view by delving into the
past in order to gain insights and lessons for future corporate governance research and
policy. The next section turns to the ways in which corporate governance research is
starting to expand, away from the traditional mould, and suggests the dimensions and
frontiers of this expansion.
3. Broadening frontiers of corporate governance, accountability and mechanisms
of accountability research
There are movements among the accounting and finance academic community to
extend the established body of work in corporate governance in several ways. An in-
depth analysis of the extant literature suggests these may be as follows. Figure 1
summarises the analytical frame of reference adopted in this paper. This frame of
reference was developed through a careful analysis of the extant literature in corporate
governance within the accounting and finance field. An in-depth knowledge and
consideration of the corporate governance literature formed the basis for the analysis.
From a methodological point of view, the development of the analytical framework
was similar to factor analysis in quantitative research, in that 'factors' or 'themes' were
derived from their interpretation of existing research.2
2
Clearly, such an analysis dons a subjective, normative coat, as the analytical framework is derived
from the authors' personal interpretation of the work they have read.
9
12. The analytical framework has six elements, based on theory, accountability
mechanisms, methodology, business sector/context, globalisation and time horizon.
These six ‘dimensions’ of corporate governance research are extended in Figure 1 to
point to the frontiers and to indicate how researchers are starting to broaden
understanding by considering broader perspectives on theory, studying a wider range
of mechanisms, using different methodological approaches, adopting a broader set of
techniques, looking at governance and accountability in different sectors/contexts,
seeking to study models in previously un-researched markets, and extending the time
horizon studied. The following sections discuss how corporate governance research
could be extended for each of the six dimensions in the analytical framework.
10
13. 3.1 Broadening the theoretical framework and notion of accountability
More recently, as the consideration of corporate governance has started to broaden in
its coverage, there has been a change of emphasis, away from the traditional
shareholder-centric approach towards a more stakeholder-oriented approach to
corporate governance. There is now a growing interest among researchers in broader
theoretical frameworks (e.g., Parker 2007a), which incorporate other non-
shareholding stakeholders. Stakeholder theory and enlightened shareholder theory are
being used increasingly to offer a more inclusive approach to corporate governance
(e.g. Hill and Jones, 1992, Wheeler and Sillanpää, 1997; Coyle, 2007; Solomon,
2007). Acknowledging, incorporating and considering the needs and requirements of
a greater number of company stakeholders has been a relatively recent stage in the
development of corporate governance as a discipline in its own right.
This broader approach has started to seep into the practitioner arena, as the Tyson
Report (2003) in the UK, for example, sought to broaden boardroom diversity and
inclusivity, by encouraging non-executive directors to be drawn from more diverse
backgrounds, representing a broader group of external constituencies. The two King
Reports (1994; 2002), produced in South Africa, represented a turning point in the
international agenda for corporate governance reform, as they drew attention to the
need for companies to act responsibly towards their diverse stakeholders. These
reports laid the foundations for the more stakeholder-oriented code of best practice
produced by the Commonwealth Association on Corporate Governance (CACG)
(1999). Also, international initiatives, epitomised by the OECD's approach (OECD,
1999; 2004) have highlighted the need for corporate accountability to stakeholders by
11
14. making stakeholder concerns one of the primary principles of corporate governance
best practice.
An increasingly stakeholder-oriented view of corporate governance has resulted in
redefining corporate governance in broader terms, for example:
“… the system of checks and balances, both internal and external to
companies, which ensures that companies discharge their accountability to
all their stakeholders and act in a socially responsible way in all areas of
their business activity” (Solomon, 2007, p. 14).
In exploring the ways in which corporate governance research is broadening by
incorporating a broader corporate accountability, researchers are starting to ask
'accountability to whom?' Recent years have witnessed a growing realisation that
corporate governance and corporations per se have an impact on a constantly
expanding number of groups in society. Stakeholder accountability is increasingly
intertwined with corporate governance, with stakeholders representing any group who
affect, or are affected by, a company's operations. Recent research has begun to
acknowledge the links between corporate governance and corporate social
responsibility (e.g. Cobb et al., 2005). In our view, one of the frontiers of corporate
governance research is represented by a gradual adoption and acceptance of
theoretical frameworks which seek to extend corporate accountability to non-
shareholding stakeholder groups.
Other theoretical approaches mostly adopted in the management literature could be
extended to accounting studies, including resource dependency theory, stewardship
12
15. theory and institutional theory. For example, Toms and Filatotchev (2004) examined
managerial accountability in the context of resource dependency theory but there are
few other studies marrying corporate governance, accountability and resource
dependency. O’Connell (2007) called for more stewardship-related research in
financial reporting, what he calls “stewardship reporting”. Roberts et al., (2005)
challenged the dominance of agency theory and called for greater theoretical
pluralism in studying the dynamic processes of accountability in the boardroom.
3.2 Broadening research into mechanisms of accountability
Accompanying the gradual shift away from agency theory towards stakeholder theory
and enlightened shareholder theory, corporate governance research has started to
examine a broader range of mechanisms of accountability. Traditional mechanisms of
accountability include governance regulations, boards of directors, financial reporting
and disclosure, audit committees, external audit and institutional investors. In the
finance discipline, research into institutional investors as a mechanism for improving
corporate governance has started to adopt a more stakeholder-oriented approach. For
example, there is a greater focus on financial services accountability to a broader
range of stakeholders. The financial services industry has responded in practice by
starting to consider environmental, social and governance considerations in
institutional investment (e.g. Freshfields Bruckhaus Deringer, 2005). This broader
orientation is represented by recent research into socially responsible investment, a
corporate governance mechanism by which institutional investors aim to encourage
their investee companies to be more stakeholder inclusive (e.g. Friedman and Miles,
2001; Solomon and Solomon, 2006). This reorientation within the financial services
13
16. industry is paving the way for new research in corporate governance which examines
the broader accountability of financial institutions.
In the accounting field, there has been a broadening of research in the area of
transparency, towards greater stakeholder inclusivity, again reflecting a deep shift
away from the dominance of agency theory frameworks and towards a more
stakeholder-oriented framework. For example, a relatively recent departure has
involved growing research into the social responsibility aspects of transparency,
namely social, environmental and sustainability reporting and assurance as means of
improving corporate accountability to a broader range of stakeholders, (e.g. Gray et
al., 1987; Gray, 1992; Gray et al., 1993; Gray et al., 1996; Unerman, et al., 2007).
Research in this area has intensified over the last decade. Not only is the theoretical
framework extended in such work by adopting a broader stakeholder approach, it also
analyses different governance mechanisms.
3.3 Broadening the methodological approach and techniques applied
Corporate governance research is broadening along the ‘dimension’ of
methodological approach and application of research techniques. As research into
corporate governance has developed, researchers are using a variety of analytical
techniques, associated not solely with a positivist, econometric, hypothesis-testing
approach, but with a more interpretative methodological approach. Studies involving
interviews, case studies (e.g. Matthews 2005) and questionnaires/surveys (e.g.
Fitzgerald, 2001; Vermeer et al., 2006) are becoming increasingly common. Parker
(2007b; 2008) uses a more in-depth participant observer methodology. Researchers
are focusing less on testing established hypotheses derived from finance theory and
14
17. more on developing new theoretical models using, for example, a grounded theory
approach to research (e.g. Holland, 1998; Goddard, 2004; Solomon and Solomon,
2006). There are also a range of analytical techniques which can be applied to
corporate governance research, such as newly-developed econometric techniques,
focus groups studies, content analysis and archival analysis.
3.4 Broadening research into different sectors and different contexts
Parker (2005; 2007a) has pointed to a dearth of studies in financial and external
reporting research from a corporate governance perspective, suggesting significant
future opportunities for accounting researchers. What research there is has
traditionally focused on listed companies. There is extensive scope for academics to
turn their attention to other sectors and contexts.
While there has been some governance research into private companies (family
businesses and small and medium enterprises), subsidiaries (especially multinational
subsidiaries), public sector bodies, voluntary bodies and charities, these have not
necessarily focussed on accountability aspects of governance. The charity, public and
voluntary sectors provide a rich source of data and a wide variety of mechanisms of
accountability which require research and researchers are starting to turn their
attention in this direction (e.g. Fitzgerald, 2001; ACEVO, 2003 for emerging work in
these areas). Research examining the suitability of private sector models of
governance applied to the public sector is emerging (e.g. Clatworthy et al., 2000),
with the governance needs of non-private sector models differing from traditional
models (e.g. Vermeer et al., 2006). Also, Jenkins et al., (2008) represents an
interesting new sector – audit firms – for governance research.
15
18. While there has been some prior governance and accountability research on corporate
governance failures and fraud, there are many more one-off corporate events such as
firms going public, privatization, demutualization, takeovers, mergers or acquisitions,
factory closures, strikes etc that might add insights into our understanding of
governance and accountability. Mizruchi (2004:18, fn 73) suggested that boards are
passive when there is satisfactory performance and in boom times. There are therefore
advantages in examining boards and accountability in more unique non-routine
contexts when boards might behave in different ways. Filatotchev et al., (2006) also
pointed to changes in governance systems occur during firm life-cycles and suggested
a conceptual framework that rejects the notion of a universal governance template.
3.5 Broadening Globalisation and Time horizon in corporate governance research
There has been a growing body of literature investigating the agenda for corporate
governance reform in individual countries (see, Solomon 2007 for a 'Reference
Dictionary' of corporate governance in different countries). These country studies
tended to focus initially on major developed economies such as Japan, Germany,
Australia and Canada. However, researchers are now turning their attention to
corporate governance in developing economies, as more established models of
governance, applied and tested in developed economies, are starting to be
implemented in countries with emerging stock markets. This work on ways of
improving corporate governance in developing economies represents research which
is pushing forward the boundaries of corporate governance, as it considers how
existing models can be reinterpreted and redesigned, so they are suitable for
developing economies. For example, the development of 'new agency theory', which
16
19. examines the role of non-executive directors as mediators between traditional
founding family owner-managers and external shareholder groups represents an
extension of corporate governance along the dimension of theoretical paradigm. There
are plentiful opportunities for research into developing economy corporate
governance. Insights may also be gained from more comparative analysis of
governance and accountability systems in different countries. An under-researched
aspect of governance in a global context is the issue of culture. Patel (2003), for
example, conducted an interesting study on the influence of culture on whisteblowing
as an internal control mechanism.
Much of the traditional corporate governance research is cross-sectional, based on
large datasets, and is often conducted in response to major governance failures or their
consequent regulatory changes. In relation to time horizon, there is an emerging
realisation that research into corporate governance does not have to start with the
Cadbury Report (1992), Enron, or the Sarbanes Oxley legislation. Corporate
governance (i.e., the way in which companies are directed and controlled), is as old as
companies and stock markets. There are, clearly, exceptions, especially in the
theoretical literature, where researchers have considered the development of
theoretical paradigms over time and the historical roots of corporate governance
systems in countries around the world. Filatotchev et al., (2006) referred to the
absence of longitudinal data restricting sensitivity to corporate governance changes
over the life cycles of firms.
This section has discussed the frame of analysis adopted in this paper, and how
research is taking a broader approach in relation to the six elements of the framework.
17
20. Section 4 discusses the contribution of the seven papers in this Accounting, Auditing
and Accountability Journal special issue, illustrating how each one extends the
boundaries in the analytical framework.
4. Pushing the Frontiers of Corporate Governance Research
This section shows how each paper within this Accounting, Auditing and
Accountability Journal special issue is located along one or more of the dimensions
identified in the frame of reference (see Figure 1). Figure 2 interprets the contribution
made by the authors in this special issue according to the frame of reference presented
in the previous section. The ways in which each paper pushes at the frontiers of
research in corporate governance is identified, according to the six dimensions along
which corporate governance is starting to broaden away from the traditional mould.
18
21. In relation to the framework presented in Figure 2, each paper is presented according
to order in which it appears in this special issue, identifying the ways in which it
extends the prior literature. Gupta, Otley and Young's (2008) paper is to some extent
couched in the traditional mould of corporate governance research. They adopt a
shareholder-oriented view of corporate governance, by focusing on the relationship
between outside director appointments and financial performance. From a
methodological perspective, they are also consistent with the majority of finance
research in adopting an essentially positive approach. However, the paper makes a
significant contribution to existing work in the area of outside directors on a number
of levels. First, the authors recognise, for the first time, the heterogeneity of outside
board appointments, and attempt to proxy for the quality of appointments. They
construct an index of directorship quality using a series of observable firm-specific
characteristics to proxy for three latent aspects of quality (as it is not directly
observable), namely, prestige, reputational risk and compensation. This is a novel
approach. Also, although this paper is compatible with the traditional agency theory
approach, the authors expand their concluding discussion to consider how their work
may potentially have accountability implications not just for shareholders but also for
non-shareholding stakeholders. Although Gupta et al., (2008: p. O/S) opine that ‘the
benefits of a positive link between shareholder-based measures of executives’ own
firm performance and the quality of additional outside board appointments remain
unclear for those concerned about board accountability to non-shareholder groups’,
they consider that there may be two potential outcomes. The first outcome would be
negative for non-shareholding stakeholders in the sense that directors would be pre-
occupied with maximising the value of their own human capital rather than
concerning themselves with broader stakeholder issues which could threaten short-
19
22. term financial performance. The second alternative outcome suggested by the authors
is that there is likely to be some coincidence between the needs of shareholders and
other non-shareholding stakeholders, because factors affecting corporate profitability
would affect all groups. This consideration of stakeholder accountability represents a
relatively novel departure in finance research.
Collier (2008) also extends the frontiers of corporate governance research along
several dimensions. In terms of theoretical paradigm and accountability, the paper
adopts a stakeholder accountability approach. Collier focuses on three stakeholder
groups, namely the regulator in social housing, lenders and tenants. This paper also
broadens the context of corporate governance and accountability by examining
governance in the public sector, namely governance within a social housing
organisation. This allows Collier to examine different mechanisms of accountability,
such as the complicated relationships between the parent board and subsidiary boards.
A third dimension which is relevant in Collier's work is that of methodology, as he
moves away from orthodox econometric modelling by employing a longitudinal field
study via participant observation.
The paper by Sikka (2008) focuses on the ‘who’ of accountability and corporate
governance. The paper contributes significantly to the consideration of stakeholder
accountability in corporate governance research by focusing entirely on the role and
importance of 'workers' within systems of corporate governance. Sikka (2008) starts
from the premise that this essential group of stakeholders have been effectively
ignored both in the academic research and in corporate governance practice. He
focuses on empirical evidence relating to severe income inequalities, thereby
20
23. highlighting accountability to stakeholders as an essential role for corporate
governance. This paper extends corporate governance research along the dimension of
accountability. Sikka also broadens the application of theoretical paradigm by
adopting a political economy perspective on his research question. Further, there is a
departure in terms of technique, as the paper provides detailed analysis of publicly
available statistics, an unusual approach in academic research in the area.
Regulation is a mechanism of governance, and is usually studied at the level of
country (e.g., La Porta et al., 1997, 1998) or the firm. Dewing and Russell (2008)
examine corporate governance regulation from a different perspective, the object of
the regulation (i.e., the individual regulated). They use Beck's risk society thesis (that
risks largely "manufactured" by-products of an industrial machine controlled by
politics), and the knock-on effects and consequences for individuals, as their
analytical framework. In this way, the authors extend corporate governance research
along the dimension of theoretical paradigm. They examine the Financial Services
Authority (FSA) approved persons’ regime in the UK. Three methodologies are
adopted: content analysis of FSA documents, interviews with high-level individuals in
the financial services industry and finally, by way of illustration, they analyse the
outcome of FSA enforcement actions against individuals. Their analysis contributes to
the field by showing how regulators “make” corporate governance through regulation.
While quite a different paper, Stein’s (2008) work resonates with that of Dewing and
Russell (2008) in that Stein examines the impact of government, governmental
techniques, and regulatory reform to “normalise” the behaviour of managers and
accountants. The regulations examined are those of Sarbanes-Oxley (SOX). A socio-
21
24. political perspective is adopted, characterising the power relationships of government,
and the social construction of corporate governance and reforms through autonomous
agents, including managers and accountants. Stein adopts neo-liberalism to present
SOX as governmental form of thinking to ensure the security of existing neo-liberal
techniques, practices and thought encompassed in the state rather than to protect
investors.
Drawing on Weberian notions of traditionalism and rationality, Uddin and Choudhury
(2008) use semi-structured interviews to study corporate governance in Bangladesh.
The authors' choice of qualitative methodology demonstrates the way in which
corporate governance research in the accounting and finance discipline is starting to
broaden along the dimension of methodological approach, away from the traditional
quantitative, positivist stance. They show how traditional local cultures and values are
in conflict with the rational ideas imported from a different setting. Their work
illustrates a broadening of the corporate governance mechanisms analysed, as they
examine accounting reports, shareholder ownership, directors and auditors. They find
that families have a dominant presence in all aspects of corporate governance and that
they effectively subvert and weaken the state’s power in enforcing governance
regulations. By investigating structures within Bangladeshi corporate governance, the
authors push the frontiers of context and global reach in corporate governance research.
By exploring mechanisms of accountability and governance in mediaeval England,
Jones (2008) extends the extant work in corporate governance by considering
corporate governance mechanisms which long pre-date the establishment of the
limited company. The paper makes a significant contribution by focusing the attention
22
25. of researchers on early forms of governance. This paper also extends existing research
along the dimension of sector, by examining governance and mechanisms of
accountability in the governmental sector. Jones broadens corporate governance
research with respect to the methodological dimension, as he employs historical
archival evidence from medieval sources. Further, the paper studies a variety of
medieval mechanisms of accountability, such as the exchequer, the use of tallies, and
the ultimate sanction, death.
5. Concluding Comments
The initial call for papers for this special issue invited submissions which focused on
corporate governance from an accountability perspective. Papers adopting
methodologies, techniques and approaches which departed from the orthodox,
positivist, quantitative and shareholder-centric approach to corporate governance were
particularly welcomed. Work which sought to break new ground by investigating
corporate governance issues in novel contexts or through different lens from previous
work were of special interest. A substantial number of submissions were received for
the special issue, all of which represented high quality research. Following a rigorous
review process, the seven papers included in this special issue represent, in our view,
corporate governance research which pushes at the frontiers of the discipline. Indeed,
using our diagrammatic framework, we have identified the various ways in which
each paper may be located on the frontiers of corporate governance research.
Throughout this paper we have sought to distinguish between the traditional mould of
corporate governance research and the way which research into corporate governance
is expanding along the six dimensions identified in Figure 1. It is important to draw
this distinction between the orthodox approach to researching corporate governance in
23
26. the accounting and finance discipline in order to open up new paths for research and
establish new research agendas.
This special issue devoted to "Corporate Governance, Accountability and
Mechanisms of Accountability", contributes to the existing body of corporate
governance research within the accounting and finance field by:
• summarising the extant literature;
• identifying the ways in which the corporate governance literature is expanding;
• providing a diagrammatic frame of reference to identify the frontiers of the
literature according to six dimensions, along which corporate governance research
is expanding, namely: theoretical framework, mechanisms of accountability,
methodological approach and techniques applied, sectors and context,
globalisation and time horizon;
• positioning the contributions included in this special issue on the frontiers of
research.
The overriding theme of this special issue is to identify and push forward the frontiers
of corporate governance research. As well as showcasing seven outstanding examples
of research which push at these frontiers, the special issue provides a 'roadmap' for
researchers in the accounting and finance discipline. This roadmap should help
researchers to navigate their way through the existing body of work so as to ensure
their new research contributes to the extant literature according to the dimensions and
frontiers identified in our frame of reference. The framework should help researchers
to locate their research questions, research ideas and to develop their methodologies
in ways which add to existing work and which lead to new, novel approaches to the
24
27. subject. We hope that our image of corporate governance research portrayed in this
paper and in the contributions to this special issue will inspire researchers'
imaginations so that they will take the discipline into new territory, experimenting
with novel methodological approaches, techniques, contexts, timeframes and
geographical locations. We also hope that this special issue will inspire researchers in
their quest for new theoretical lens through which corporate governance may be
viewed and analysed.
There are policy implications which may be drawn from the content and focus of this
special issue. The main issue for corporate governance policymakers seems to be a
need for revised codes and principles of best practice in corporate governance to
adopt a more stakeholder-oriented focus. Traditionally, codes have adopted a
predominantly agency theory perspective, with the primary focus on ways of
reconciling the conflicting aims and objectives of company management and the
company's shareholders. The framework, and the papers in this special issue,
demonstrate a shift away from such a shareholder-centric approach to corporate
governance. Accountability to shareholders can no longer represent the sole aim and
objective of corporate governance policy and reform. Stakeholder accountability and
social responsibility are now acknowledged both in the practitioner and academic
environments as key ingredients for business success, as well as crucial elements for
enhancing social welfare. This special issue leads the way for both academics and
practitioners to pursue joint goals of shareholder wealth maximisation and stakeholder
accountability. Policy makers are encouraged to adopt a more long-term view of
corporate governance in their attitude to reform. Instead of reacting to corporate
governance events as they arise, and using the Cadbury Report as a starting point, it
25
28. would be useful for practitioners as well as academics to look backwards, analyse
models, evolutions and practice from the past in order to inform the present and the
future of policy making.
26
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