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.
Eyes on Hands off, The Ambiguous Role of Non-Executive Directors in Corporate...Ken Low
This paper investigates the relationship between non-executive directors (NEDs) and firm performance in top Malaysian companies. The study examines the relationship between firm performance and several corporate governance factors, including board size, proportion of NEDs, and NED remuneration. However, the study did not find significant correlations between these governance structures and firm performance. The inconclusive results suggest more analysis is needed to understand how corporate governance impacts performance in developing countries.
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.
Corporate governance and banking performance a comparative study between priv...Alexander Decker
This document summarizes a study that examined the relationship between corporate governance and banking performance in Sri Lanka. The study analyzed four dimensions of corporate governance - board size, board diversity, percentage of outside directors, and board meeting frequency. Banking performance was measured by return on equity and return on assets. The results showed that most corporate governance variables were positively correlated with return on equity in state banks and private banks. Similarly, most variables had a negative relationship with return on assets in state banks and private banks. Overall, the study found that corporate governance had a moderate impact on performance in both private and state banks in Sri Lanka.
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.
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
Corporate governance in a multinational corporation (MNC) consists of two tiers: parent-level governance and subsidiary-level governance. At the parent level, governance determines how responsibilities and oversight are divided. At the subsidiary level, foreign subsidiaries have their own boards to integrate with the parent company while answering to local stakeholders. Subsidiary governance structures can vary depending on whether the subsidiary is publicly listed or established privately to meet legal/strategic needs of the parent. Effective corporate governance in MNCs coordinates strategy globally through balancing integration and local responsiveness.
This study aims at examining the impact of the ownership structure on the overall performance of listed companies in Pakistan to specify how different ownership structures and corporate governance culture differ from each other and thus explores the effects of different ownership structures and corporate governance on the performance of companies’ productivity. In order to compare Returns on Investment (ROI) and Returns on Equity (ROE) of the five (5) listed food companies in Pakistan were calculated using secondary data from the audited financial reports of such companies based on their annual reports between 2007 and 2016. During this research for the analysis of gathered data, regression model was used with the assistance of EViews in order to examine the relationship between the corporate governance mechanism including board is size, board composition, and audit committee and the performance variables including Net Profit Ratio (NPR) and Rate of Return (RoR). The findings of the our study are consistent with the reviewed literature, as the performance of firms (in terms of return on assent and net profit ratio) does not seem to be dependent on the board size, composition, and audit committee composition of firms.
This paper examines how information asymmetry affects the relationship between board independence and firm value in Korean firms between 1999-2006. It finds that independent outside directors, who have no business or professional ties to the firm, are positively correlated with firm value, while "gray" outside directors are not. Additionally, the positive impact of independent outside directors on firm value is more pronounced when the firm has lower information transaction costs, as measured by market microstructure models and other proxies. The results suggest that higher information asymmetry weakens the monitoring role of independent directors.
Eyes on Hands off, The Ambiguous Role of Non-Executive Directors in Corporate...Ken Low
This paper investigates the relationship between non-executive directors (NEDs) and firm performance in top Malaysian companies. The study examines the relationship between firm performance and several corporate governance factors, including board size, proportion of NEDs, and NED remuneration. However, the study did not find significant correlations between these governance structures and firm performance. The inconclusive results suggest more analysis is needed to understand how corporate governance impacts performance in developing countries.
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.
Corporate governance and banking performance a comparative study between priv...Alexander Decker
This document summarizes a study that examined the relationship between corporate governance and banking performance in Sri Lanka. The study analyzed four dimensions of corporate governance - board size, board diversity, percentage of outside directors, and board meeting frequency. Banking performance was measured by return on equity and return on assets. The results showed that most corporate governance variables were positively correlated with return on equity in state banks and private banks. Similarly, most variables had a negative relationship with return on assets in state banks and private banks. Overall, the study found that corporate governance had a moderate impact on performance in both private and state banks in Sri Lanka.
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.
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
Corporate governance in a multinational corporation (MNC) consists of two tiers: parent-level governance and subsidiary-level governance. At the parent level, governance determines how responsibilities and oversight are divided. At the subsidiary level, foreign subsidiaries have their own boards to integrate with the parent company while answering to local stakeholders. Subsidiary governance structures can vary depending on whether the subsidiary is publicly listed or established privately to meet legal/strategic needs of the parent. Effective corporate governance in MNCs coordinates strategy globally through balancing integration and local responsiveness.
This study aims at examining the impact of the ownership structure on the overall performance of listed companies in Pakistan to specify how different ownership structures and corporate governance culture differ from each other and thus explores the effects of different ownership structures and corporate governance on the performance of companies’ productivity. In order to compare Returns on Investment (ROI) and Returns on Equity (ROE) of the five (5) listed food companies in Pakistan were calculated using secondary data from the audited financial reports of such companies based on their annual reports between 2007 and 2016. During this research for the analysis of gathered data, regression model was used with the assistance of EViews in order to examine the relationship between the corporate governance mechanism including board is size, board composition, and audit committee and the performance variables including Net Profit Ratio (NPR) and Rate of Return (RoR). The findings of the our study are consistent with the reviewed literature, as the performance of firms (in terms of return on assent and net profit ratio) does not seem to be dependent on the board size, composition, and audit committee composition of firms.
This paper examines how information asymmetry affects the relationship between board independence and firm value in Korean firms between 1999-2006. It finds that independent outside directors, who have no business or professional ties to the firm, are positively correlated with firm value, while "gray" outside directors are not. Additionally, the positive impact of independent outside directors on firm value is more pronounced when the firm has lower information transaction costs, as measured by market microstructure models and other proxies. The results suggest that higher information asymmetry weakens the monitoring role of independent directors.
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 a research paper that examines the relationship between transparency and disclosure and firm performance in the banking sector of Pakistan. It constructs a transparency and disclosure index for 30 Pakistani banks from 2007-2011 based on proxies for board structure, ownership structure, and financial transparency. An empirical analysis using regression models finds that financial performance is positively related to the transparency index and its sub-indexes for board structure and financial transparency, but negatively related to the ownership structure sub-index. On average, the transparency and disclosure level in Pakistani banks is above average. The research aims to improve corporate governance and reduce information asymmetry in the banking sector through policy recommendations.
This document discusses multilevel corporate governance in multinational corporations (MNCs). It defines multilevel governance and describes three types of subsidiary board structures: boards of listed subsidiaries, boards required by host country law, and boards established for the parent's strategic reasons. It also summarizes research on how Japanese and Swedish MNCs view the advantages of active subsidiary boards. Finally, it examines how corporate strategies like multi-domestic, global, and transnational strategies affect the design of an MNC's corporate governance system.
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
Article: The Impact of Selected Corporate Governance Variables in Mitigating ...McRey Banderlipe II
This study attempts to explain the role of selected corporate governance variables related to a company's board of directors in mitigating earnings management in the country. The findings revealed that the holding of multiple directorial positions by the independent directors, and the managerial ownership of the board are significant enough to limit the incentives for earnings management.
“The Ethics of Corporate Governance: Bangladesh Perspective”Anamika Hore
This Assignment is about the ethics of corporate governance of Bangladesh. Here in this assignment some common Corporate Governance theories are also evaluated. In Bangladesh what ethics are followed rigidly by the corporations of Bangladesh are also focused.
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 comparative study of the corporate governance codes of a developing economy...Alexander Decker
This document summarizes and compares corporate governance codes between developing and developed economies. It begins with an abstract describing how corporate governance codes aim to prevent corporate collapses by regulating corporate executives and financial practices. The document then provides details on two case studies of corporate collapses in Nigeria's banking sector to analyze the effectiveness of Nigeria's corporate governance codes. It evaluates Nigeria's codes in light of codes from the UK and US to identify weaknesses. The research method of qualitative analysis through case studies and secondary sources is described as most appropriate.
Impact of corporate governance on firm performance publishedMuhammad Usman
In the light of corporate financial scandals, there is an increasing attention on corporate governance issues. The investors look for emerging economies to diversify their investment portfolios to exhaust the possibilities of returns. This paper examines the impact of corporate governance variables on firms’ performance. This Research found that there is a direct positive relationship between profitability measured either by Earnings per share (EPS) or Return on assets (ROA) and corporate governance, also have a positive direct relationship between each of liquidity, dividend per share, and the size of the company with corporate governance, finally the study found a positive direct relationship between corporate governance and corporate performance. Various studies have been conducted in developing countries including Pakistan to investigate the relationship among corporate governance and firm performance. This study indicates that corporate governance can be measured through the following elements.
(1) board size (2) Female Member (3) CEO duality (4) Education of Directors (5) Board working experience(6) independent directors (7) board compensation (8) Board ownership (9) Audit committee (10) Board composition(11)Leadership Structure
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 document discusses corporate governance in subsidiary companies. It begins with an abstract and introduction on the topic. It then outlines 4 models for subsidiary governance: 1) Direct Control, 2) Dual Reporting, 3) Advisory Board, and 4) Local Board. For each model, it describes the governance structure and highlights advantages and disadvantages. Common governance problems in groups are also outlined. The document concludes with recommendations for leading-edge practices in subsidiary governance, such as identifying all subsidiaries, clarifying duties of subsidiary boards, and balancing strategic objectives of parents and autonomy of subsidiaries.
This document summarizes a study that investigated the relationship between corporate governance and financial performance of insurance companies in Ghana. The study found that large board size, board skill, management skill, longer serving CEOs, independent audit committees, foreign ownership, institutional ownership, dividend policy, and annual general meetings were positively associated with financial performance. The findings suggest that insurance companies should adopt good corporate governance practices to improve performance and protect shareholder interests. Regulatory authorities must also ensure compliance with governance standards and enforce sanctions for non-compliance to support industry growth.
Using panel data from firms listed on the Nairobi Securities Exchange during the period
2004-2014, this paper examines the effect of board diversity and firm performance. Specifically the study investigates the effect of independent directors, board size, gender and financial expertise of directors and firm performance. The study finds, steadily with trends in most countries, the representation of women on the corporate board remains low. Regression results indicate that board independence has a negative and significant relationship on firm performance. The study also finds that gender diverse boards perform better as measured by Return on Assets (ROA).
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.
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.
Internal corporate governance mechanisms and agency co evidence from large ks...Alexander Decker
This document summarizes a study that analyzed the relationship between various internal corporate governance mechanisms and agency costs in large firms listed on the Karachi Stock Exchange from 2003-2010. The study used two proxies for measuring agency costs - asset utilization ratio and asset liquidity ratio. Several independent variables thought to influence agency costs were examined, including board/committee activities, board size, CEO tenure, block ownership percentage, largest investor percentage, and CEO/chairman duality. The results found that agency costs decreased with more frequent board/committee meetings and lower block ownership. Higher agency costs were associated with larger board size, longer CEO tenure, and CEO/chairman duality.
A critical analysis of equity ownership structure on firm’s performanceAlexander Decker
This document summarizes a research study on the relationship between equity ownership structure and firm performance of publicly listed companies in Kenya. It discusses how ownership concentration and identity can influence corporate governance and potentially affect performance. The study is based on agency, stewardship, and stakeholder theories. It reviews literature showing mixed results on the effects of state ownership, institutional ownership, and other ownership types on firm value and performance. The objective is to analyze how controlling shareholder identity influences performance of listed Kenyan companies.
This document provides an introduction and literature review on corporate governance practices in India. It discusses how weak corporate governance has led to corporate fraud cases. It then summarizes the regulatory efforts in India to improve transparency and accountability, including the implementation of Clause 49. The literature review highlights various studies that have evaluated corporate governance practices around the world and identified factors that help or hinder effective corporate governance. These include board independence, ownership structure, national culture, and regulatory enforcement. The document aims to assess adherence to corporate governance regulations among the largest Indian companies.
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.
Duality role of chief executive officer (ceo) in corporate governance and per...Alexander Decker
This document summarizes a research journal article that examines the practice of CEO duality in Nigerian companies and its implications for corporate governance and performance. The study uses financial data from 30 Nigerian companies over 5 years to compare the return on equity (ROE) of companies with dual CEO/chairman roles versus those without. The findings show a statistically significant difference between the two groups, with companies having CEO duality performing lower on average. The authors recommend minimizing CEO duality to strengthen governance and enhance corporate performance.
A critical analysis of equity ownership structure on firm’s performanceAlexander Decker
This document summarizes research on the relationship between equity ownership structure and firm performance. It discusses how ownership concentration, identity of owners (e.g. state, institutional, foreign), and dispersed ownership can influence agency problems and firm performance. The literature review found mixed results, with some studies indicating ownership structure only affects accounting performance and not market value, while others found no systematic relationship between ownership structure and performance. The document also discusses measures of firm performance like return on assets, return on equity, and price-earnings ratio.
Corporate governance and bank performance: Empirical evidence from Nepalese f...Rajesh Gupta
This paper examines the effects of corporate governance on bank performance in the context of Nepal. Return on assets (ROA) and return on equity (ROE) are dependent variables for bank performance, and board size, female board members, financial institutions, CEO duality, independent directors, firm size, firm age, earnings per share, and the capital adequacy ratio are independent variables for corporate governance.
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 a research paper that examines the relationship between transparency and disclosure and firm performance in the banking sector of Pakistan. It constructs a transparency and disclosure index for 30 Pakistani banks from 2007-2011 based on proxies for board structure, ownership structure, and financial transparency. An empirical analysis using regression models finds that financial performance is positively related to the transparency index and its sub-indexes for board structure and financial transparency, but negatively related to the ownership structure sub-index. On average, the transparency and disclosure level in Pakistani banks is above average. The research aims to improve corporate governance and reduce information asymmetry in the banking sector through policy recommendations.
This document discusses multilevel corporate governance in multinational corporations (MNCs). It defines multilevel governance and describes three types of subsidiary board structures: boards of listed subsidiaries, boards required by host country law, and boards established for the parent's strategic reasons. It also summarizes research on how Japanese and Swedish MNCs view the advantages of active subsidiary boards. Finally, it examines how corporate strategies like multi-domestic, global, and transnational strategies affect the design of an MNC's corporate governance system.
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
Article: The Impact of Selected Corporate Governance Variables in Mitigating ...McRey Banderlipe II
This study attempts to explain the role of selected corporate governance variables related to a company's board of directors in mitigating earnings management in the country. The findings revealed that the holding of multiple directorial positions by the independent directors, and the managerial ownership of the board are significant enough to limit the incentives for earnings management.
“The Ethics of Corporate Governance: Bangladesh Perspective”Anamika Hore
This Assignment is about the ethics of corporate governance of Bangladesh. Here in this assignment some common Corporate Governance theories are also evaluated. In Bangladesh what ethics are followed rigidly by the corporations of Bangladesh are also focused.
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 comparative study of the corporate governance codes of a developing economy...Alexander Decker
This document summarizes and compares corporate governance codes between developing and developed economies. It begins with an abstract describing how corporate governance codes aim to prevent corporate collapses by regulating corporate executives and financial practices. The document then provides details on two case studies of corporate collapses in Nigeria's banking sector to analyze the effectiveness of Nigeria's corporate governance codes. It evaluates Nigeria's codes in light of codes from the UK and US to identify weaknesses. The research method of qualitative analysis through case studies and secondary sources is described as most appropriate.
Impact of corporate governance on firm performance publishedMuhammad Usman
In the light of corporate financial scandals, there is an increasing attention on corporate governance issues. The investors look for emerging economies to diversify their investment portfolios to exhaust the possibilities of returns. This paper examines the impact of corporate governance variables on firms’ performance. This Research found that there is a direct positive relationship between profitability measured either by Earnings per share (EPS) or Return on assets (ROA) and corporate governance, also have a positive direct relationship between each of liquidity, dividend per share, and the size of the company with corporate governance, finally the study found a positive direct relationship between corporate governance and corporate performance. Various studies have been conducted in developing countries including Pakistan to investigate the relationship among corporate governance and firm performance. This study indicates that corporate governance can be measured through the following elements.
(1) board size (2) Female Member (3) CEO duality (4) Education of Directors (5) Board working experience(6) independent directors (7) board compensation (8) Board ownership (9) Audit committee (10) Board composition(11)Leadership Structure
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 document discusses corporate governance in subsidiary companies. It begins with an abstract and introduction on the topic. It then outlines 4 models for subsidiary governance: 1) Direct Control, 2) Dual Reporting, 3) Advisory Board, and 4) Local Board. For each model, it describes the governance structure and highlights advantages and disadvantages. Common governance problems in groups are also outlined. The document concludes with recommendations for leading-edge practices in subsidiary governance, such as identifying all subsidiaries, clarifying duties of subsidiary boards, and balancing strategic objectives of parents and autonomy of subsidiaries.
This document summarizes a study that investigated the relationship between corporate governance and financial performance of insurance companies in Ghana. The study found that large board size, board skill, management skill, longer serving CEOs, independent audit committees, foreign ownership, institutional ownership, dividend policy, and annual general meetings were positively associated with financial performance. The findings suggest that insurance companies should adopt good corporate governance practices to improve performance and protect shareholder interests. Regulatory authorities must also ensure compliance with governance standards and enforce sanctions for non-compliance to support industry growth.
Using panel data from firms listed on the Nairobi Securities Exchange during the period
2004-2014, this paper examines the effect of board diversity and firm performance. Specifically the study investigates the effect of independent directors, board size, gender and financial expertise of directors and firm performance. The study finds, steadily with trends in most countries, the representation of women on the corporate board remains low. Regression results indicate that board independence has a negative and significant relationship on firm performance. The study also finds that gender diverse boards perform better as measured by Return on Assets (ROA).
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.
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.
Internal corporate governance mechanisms and agency co evidence from large ks...Alexander Decker
This document summarizes a study that analyzed the relationship between various internal corporate governance mechanisms and agency costs in large firms listed on the Karachi Stock Exchange from 2003-2010. The study used two proxies for measuring agency costs - asset utilization ratio and asset liquidity ratio. Several independent variables thought to influence agency costs were examined, including board/committee activities, board size, CEO tenure, block ownership percentage, largest investor percentage, and CEO/chairman duality. The results found that agency costs decreased with more frequent board/committee meetings and lower block ownership. Higher agency costs were associated with larger board size, longer CEO tenure, and CEO/chairman duality.
A critical analysis of equity ownership structure on firm’s performanceAlexander Decker
This document summarizes a research study on the relationship between equity ownership structure and firm performance of publicly listed companies in Kenya. It discusses how ownership concentration and identity can influence corporate governance and potentially affect performance. The study is based on agency, stewardship, and stakeholder theories. It reviews literature showing mixed results on the effects of state ownership, institutional ownership, and other ownership types on firm value and performance. The objective is to analyze how controlling shareholder identity influences performance of listed Kenyan companies.
This document provides an introduction and literature review on corporate governance practices in India. It discusses how weak corporate governance has led to corporate fraud cases. It then summarizes the regulatory efforts in India to improve transparency and accountability, including the implementation of Clause 49. The literature review highlights various studies that have evaluated corporate governance practices around the world and identified factors that help or hinder effective corporate governance. These include board independence, ownership structure, national culture, and regulatory enforcement. The document aims to assess adherence to corporate governance regulations among the largest Indian companies.
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.
Duality role of chief executive officer (ceo) in corporate governance and per...Alexander Decker
This document summarizes a research journal article that examines the practice of CEO duality in Nigerian companies and its implications for corporate governance and performance. The study uses financial data from 30 Nigerian companies over 5 years to compare the return on equity (ROE) of companies with dual CEO/chairman roles versus those without. The findings show a statistically significant difference between the two groups, with companies having CEO duality performing lower on average. The authors recommend minimizing CEO duality to strengthen governance and enhance corporate performance.
A critical analysis of equity ownership structure on firm’s performanceAlexander Decker
This document summarizes research on the relationship between equity ownership structure and firm performance. It discusses how ownership concentration, identity of owners (e.g. state, institutional, foreign), and dispersed ownership can influence agency problems and firm performance. The literature review found mixed results, with some studies indicating ownership structure only affects accounting performance and not market value, while others found no systematic relationship between ownership structure and performance. The document also discusses measures of firm performance like return on assets, return on equity, and price-earnings ratio.
Corporate governance and bank performance: Empirical evidence from Nepalese f...Rajesh Gupta
This paper examines the effects of corporate governance on bank performance in the context of Nepal. Return on assets (ROA) and return on equity (ROE) are dependent variables for bank performance, and board size, female board members, financial institutions, CEO duality, independent directors, firm size, firm age, earnings per share, and the capital adequacy ratio are independent variables for corporate governance.
Corporate governance practices and its impact on working capital management...Alexander Decker
The document summarizes a study that examined the impact of corporate governance practices on working capital management among listed manufacturing firms in Sri Lanka from 2007 to 2011. The study found that:
1) There was a significant impact of corporate governance practices on current liabilities to total assets, but not on cash conversion cycle or current assets to total assets.
2) Corporate governance practices, including board leadership structure, board size, board committees, and board meetings, were used as independent variables to measure their impact on working capital management measures like cash conversion cycle, current assets to total assets, and current liabilities to total assets.
3) Regression analysis revealed that only current liabilities to total assets were significantly influenced by corporate
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
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.
Corporate Governance and Its Impact on Financial Performance in Nepalese Comm...IJMREMJournal
This document summarizes a study on the impact of corporate governance on the financial performance of commercial banks in Nepal. The study found that corporate governance practices were moderately implemented across the banks studied. All banks emphasized discipline, but accountability was the weakest dimension. Descriptive analysis showed discipline received the highest ratings, while accountability received the lowest. The study aimed to determine if stronger corporate governance was associated with better financial performance as measured by return on assets and return on equity.
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.
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.
This document discusses theories of corporate governance, including agency theory, stakeholder theory, and stewardship theory. Agency theory focuses on the relationship between principals (shareholders) and agents (managers), and how separation of ownership and control can lead to issues. Stakeholder theory considers a wider group beyond just shareholders. Stewardship theory views managers as stewards aiming to achieve high performance. The document argues the best approach combines aspects of stakeholder and stewardship theories.
Corporate Governance and Firm Performance: The Role of Transparency & Disclos...Muhammad Arslan
Purpose: This purpose of this paper is to empirically examine the relationship between transparency and disclosure and firm performance. Highlighting the importance of corporate governance in banking sector, the paper has focused in depth over its role, level and its impact on performance in banking industry of Pakistan. Design/methodology/approach: The paper access this purpose by constructing transparency and disclosure index for the past five year 2007-2011, using proxies for three sub-categories which are board and management structure disclosure, ownership structure disclosure and financial transparency disclosure. The paper also investigated structural changes of T&D Index and its effect on bank financial performance over the sample of 30 banks operating in Pakistan. Findings: Empirical analysis results by using ordinary least square regression model, reveals that financial performance is positively related to the transparency and disclosure and their sub levels except ownership structure disclosure which has negative relation with both ROA and ROE. Furthermore the average T&D level in Pakistani banking sector is above average. Practical implications: The current research paper aims for important policy implementation to reduce information asymmetry and improve corporate governance and firm performance in banking sector of Pakistan.
This document provides a sample code of best practices for corporate governance in Kenya. It discusses key principles such as the authority and duties of shareholders, composition of the board, and monitoring of management performance. Shareholders have the duty to ensure competent leadership, strategic direction, and compliance with legal requirements. The board should include a balance of executive and non-executive directors, including independent directors, and separate the roles of board chair and CEO. The board is responsible for oversight, receiving regular reports, and annually evaluating its own performance.
This study examines the impact of corporate governance and investor confidence on earnings management of firms listed on the Stock Exchange of Thailand. It uses annual data from 2015 for a sample of 408 Thai listed companies, excluding financial firms. Structural equation modeling is used to analyze the direct and indirect relationships between variables. Corporate governance factors examined include the largest shareholder, CEO duality, institutional ownership, board size, and auditor (Big 4 firm). Earnings management is measured using discretionary accruals. Investor confidence is represented by return on equity. The results found that the largest shareholder influences earnings management and investor confidence the most. Institutional ownership influences both earnings management and investor confidence. Having a Big 4 auditor influences investor confidence. However,
This document summarizes a research paper on the relationship between corporate governance and bank performance in Bangladesh. The paper aims to determine which corporate governance factors influence bank performance the most. It measures bank performance using Tobin's Q ratio and uses variables like board independence, board size, institutional ownership, audit committee size, foreign board members, and number of board meetings to represent corporate governance. The study found that institutional ownership, audit committee size, and foreign board members have a positive influence on performance, while board size, board independence, and number of board meetings have a negative influence. The paper reviews other literature on how corporate governance mechanisms like transparency and board structure can impact firm value and financial performance.
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.
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.
Impact of Corporate Governance on Firms’ Financial Performance: Textile Secto...inventionjournals
Purpose: The basic standard of this article is to find out the outcome of corporate governance on firm’s profitability in textile sector of listed companies in Pakistan. Methodology: The data are collected from respective textile sector annual reports from 2005 to 2014.The results of different variables arise by using different techniques like descriptive, correlation and regression in using software of E-views in this study. Findings: These results of study explain that corporate governance and firm’s financial performance shows positive relationship between each other. This indicates that in textile sectors adopting corporate governance and plays a significant role in textile sectors. Research limitations: This study restricts by fewer digit of determinantslinked corporategovernance and data gathered from 2005 to 2014 were addressed, which restrictions the overview of the result. Further research can be conduct by using more variables and more years for finding more in future. Originality: This study shows that the firm’s performance has increased by using corporate governance in textile sector firms.
Impact of Corporate Governance on Firms’ Financial Performance: Textile Secto...inventionjournals
Purpose: The basic standard of this article is to find out the outcome of corporate governance on firm’s profitability in textile sector of listed companies in Pakistan. Methodology: The data are collected from respective textile sector annual reports from 2005 to 2014.The results of different variables arise by using different techniques like descriptive, correlation and regression in using software of E-views in this study. Findings: These results of study explain that corporate governance and firm’s financial performance shows positive relationship between each other. This indicates that in textile sectors adopting corporate governance and plays a significant role in textile sectors. Research limitations: This study restricts by fewer digit of determinantslinked corporategovernance and data gathered from 2005 to 2014 were addressed, which restrictions the overview of the result. Further research can be conduct by using more variables and more years for finding more in future. Originality: This study shows that the firm’s performance has increased by using corporate governance in textile sector firms.
Similar to Ownership and control in corporate organisations in developing countries evidence from a transition economy (20)
Abnormalities of hormones and inflammatory cytokines in women affected with p...Alexander Decker
Women with polycystic ovary syndrome (PCOS) have elevated levels of hormones like luteinizing hormone and testosterone, as well as higher levels of insulin and insulin resistance compared to healthy women. They also have increased levels of inflammatory markers like C-reactive protein, interleukin-6, and leptin. This study found these abnormalities in the hormones and inflammatory cytokines of women with PCOS ages 23-40, indicating that hormone imbalances associated with insulin resistance and elevated inflammatory markers may worsen infertility in women with PCOS.
A usability evaluation framework for b2 c e commerce websitesAlexander Decker
This document presents a framework for evaluating the usability of B2C e-commerce websites. It involves user testing methods like usability testing and interviews to identify usability problems in areas like navigation, design, purchasing processes, and customer service. The framework specifies goals for the evaluation, determines which website aspects to evaluate, and identifies target users. It then describes collecting data through user testing and analyzing the results to identify usability problems and suggest improvements.
A universal model for managing the marketing executives in nigerian banksAlexander Decker
This document discusses a study that aimed to synthesize motivation theories into a universal model for managing marketing executives in Nigerian banks. The study was guided by Maslow and McGregor's theories. A sample of 303 marketing executives was used. The results showed that managers will be most effective at motivating marketing executives if they consider individual needs and create challenging but attainable goals. The emerged model suggests managers should provide job satisfaction by tailoring assignments to abilities and monitoring performance with feedback. This addresses confusion faced by Nigerian bank managers in determining effective motivation strategies.
A unique common fixed point theorems in generalized dAlexander Decker
This document presents definitions and properties related to generalized D*-metric spaces and establishes some common fixed point theorems for contractive type mappings in these spaces. It begins by introducing D*-metric spaces and generalized D*-metric spaces, defines concepts like convergence and Cauchy sequences. It presents lemmas showing the uniqueness of limits in these spaces and the equivalence of different definitions of convergence. The goal of the paper is then stated as obtaining a unique common fixed point theorem for generalized D*-metric spaces.
A trends of salmonella and antibiotic resistanceAlexander Decker
This document provides a review of trends in Salmonella and antibiotic resistance. It begins with an introduction to Salmonella as a facultative anaerobe that causes nontyphoidal salmonellosis. The emergence of antimicrobial-resistant Salmonella is then discussed. The document proceeds to cover the historical perspective and classification of Salmonella, definitions of antimicrobials and antibiotic resistance, and mechanisms of antibiotic resistance in Salmonella including modification or destruction of antimicrobial agents, efflux pumps, modification of antibiotic targets, and decreased membrane permeability. Specific resistance mechanisms are discussed for several classes of antimicrobials.
A transformational generative approach towards understanding al-istifhamAlexander Decker
This document discusses a transformational-generative approach to understanding Al-Istifham, which refers to interrogative sentences in Arabic. It begins with an introduction to the origin and development of Arabic grammar. The paper then explains the theoretical framework of transformational-generative grammar that is used. Basic linguistic concepts and terms related to Arabic grammar are defined. The document analyzes how interrogative sentences in Arabic can be derived and transformed via tools from transformational-generative grammar, categorizing Al-Istifham into linguistic and literary questions.
A time series analysis of the determinants of savings in namibiaAlexander Decker
This document summarizes a study on the determinants of savings in Namibia from 1991 to 2012. It reviews previous literature on savings determinants in developing countries. The study uses time series analysis including unit root tests, cointegration, and error correction models to analyze the relationship between savings and variables like income, inflation, population growth, deposit rates, and financial deepening in Namibia. The results found inflation and income have a positive impact on savings, while population growth negatively impacts savings. Deposit rates and financial deepening were found to have no significant impact. The study reinforces previous work and emphasizes the importance of improving income levels to achieve higher savings rates in Namibia.
A therapy for physical and mental fitness of school childrenAlexander Decker
This document summarizes a study on the importance of exercise in maintaining physical and mental fitness for school children. It discusses how physical and mental fitness are developed through participation in regular physical exercises and cannot be achieved solely through classroom learning. The document outlines different types and components of fitness and argues that developing fitness should be a key objective of education systems. It recommends that schools ensure pupils engage in graded physical activities and exercises to support their overall development.
A theory of efficiency for managing the marketing executives in nigerian banksAlexander Decker
This document summarizes a study examining efficiency in managing marketing executives in Nigerian banks. The study was examined through the lenses of Kaizen theory (continuous improvement) and efficiency theory. A survey of 303 marketing executives from Nigerian banks found that management plays a key role in identifying and implementing efficiency improvements. The document recommends adopting a "3H grand strategy" to improve the heads, hearts, and hands of management and marketing executives by enhancing their knowledge, attitudes, and tools.
This document discusses evaluating the link budget for effective 900MHz GSM communication. It describes the basic parameters needed for a high-level link budget calculation, including transmitter power, antenna gains, path loss, and propagation models. Common propagation models for 900MHz that are described include Okumura model for urban areas and Hata model for urban, suburban, and open areas. Rain attenuation is also incorporated using the updated ITU model to improve communication during rainfall.
A synthetic review of contraceptive supplies in punjabAlexander Decker
This document discusses contraceptive use in Punjab, Pakistan. It begins by providing background on the benefits of family planning and contraceptive use for maternal and child health. It then analyzes contraceptive commodity data from Punjab, finding that use is still low despite efforts to improve access. The document concludes by emphasizing the need for strategies to bridge gaps and meet the unmet need for effective and affordable contraceptive methods and supplies in Punjab in order to improve health outcomes.
A synthesis of taylor’s and fayol’s management approaches for managing market...Alexander Decker
1) The document discusses synthesizing Taylor's scientific management approach and Fayol's process management approach to identify an effective way to manage marketing executives in Nigerian banks.
2) It reviews Taylor's emphasis on efficiency and breaking tasks into small parts, and Fayol's focus on developing general management principles.
3) The study administered a survey to 303 marketing executives in Nigerian banks to test if combining elements of Taylor and Fayol's approaches would help manage their performance through clear roles, accountability, and motivation. Statistical analysis supported combining the two approaches.
A survey paper on sequence pattern mining with incrementalAlexander Decker
This document summarizes four algorithms for sequential pattern mining: GSP, ISM, FreeSpan, and PrefixSpan. GSP is an Apriori-based algorithm that incorporates time constraints. ISM extends SPADE to incrementally update patterns after database changes. FreeSpan uses frequent items to recursively project databases and grow subsequences. PrefixSpan also uses projection but claims to not require candidate generation. It recursively projects databases based on short prefix patterns. The document concludes by stating the goal was to find an efficient scheme for extracting sequential patterns from transactional datasets.
A survey on live virtual machine migrations and its techniquesAlexander Decker
This document summarizes several techniques for live virtual machine migration in cloud computing. It discusses works that have proposed affinity-aware migration models to improve resource utilization, energy efficient migration approaches using storage migration and live VM migration, and a dynamic consolidation technique using migration control to avoid unnecessary migrations. The document also summarizes works that have designed methods to minimize migration downtime and network traffic, proposed a resource reservation framework for efficient migration of multiple VMs, and addressed real-time issues in live migration. Finally, it provides a table summarizing the techniques, tools used, and potential future work or gaps identified for each discussed work.
A survey on data mining and analysis in hadoop and mongo dbAlexander Decker
This document discusses data mining of big data using Hadoop and MongoDB. It provides an overview of Hadoop and MongoDB and their uses in big data analysis. Specifically, it proposes using Hadoop for distributed processing and MongoDB for data storage and input. The document reviews several related works that discuss big data analysis using these tools, as well as their capabilities for scalable data storage and mining. It aims to improve computational time and fault tolerance for big data analysis by mining data stored in Hadoop using MongoDB and MapReduce.
1. The document discusses several challenges for integrating media with cloud computing including media content convergence, scalability and expandability, finding appropriate applications, and reliability.
2. Media content convergence challenges include dealing with the heterogeneity of media types, services, networks, devices, and quality of service requirements as well as integrating technologies used by media providers and consumers.
3. Scalability and expandability challenges involve adapting to the increasing volume of media content and being able to support new media formats and outlets over time.
This document surveys trust architectures that leverage provenance in wireless sensor networks. It begins with background on provenance, which refers to the documented history or derivation of data. Provenance can be used to assess trust by providing metadata about how data was processed. The document then discusses challenges for using provenance to establish trust in wireless sensor networks, which have constraints on energy and computation. Finally, it provides background on trust, which is the subjective probability that a node will behave dependably. Trust architectures need to be lightweight to account for the constraints of wireless sensor networks.
This document discusses private equity investments in Kenya. It provides background on private equity and discusses trends in various regions. The objectives of the study discussed are to establish the extent of private equity adoption in Kenya, identify common forms of private equity utilized, and determine typical exit strategies. Private equity can involve venture capital, leveraged buyouts, or mezzanine financing. Exits allow recycling of capital into new opportunities. The document provides context on private equity globally and in developing markets like Africa to frame the goals of the study.
This document discusses a study that analyzes the financial health of the Indian logistics industry from 2005-2012 using Altman's Z-score model. The study finds that the average Z-score for selected logistics firms was in the healthy to very healthy range during the study period. The average Z-score increased from 2006 to 2010 when the Indian economy was hit by the global recession, indicating the overall performance of the Indian logistics industry was good. The document reviews previous literature on measuring financial performance and distress using ratios and Z-scores, and outlines the objectives and methodology used in the current study.
Presentation by Herman Kienhuis (Curiosity VC) on Investing in AI for ABS Alu...Herman Kienhuis
Presentation by Herman Kienhuis (Curiosity VC) on developments in AI, the venture capital investment landscape and Curiosity VC's approach to investing, at the alumni event of Amsterdam Business School (University of Amsterdam) on June 13, 2024 in Amsterdam.
Ellen Burstyn: From Detroit Dreamer to Hollywood Legend | CIO Women MagazineCIOWomenMagazine
In this article, we will dive into the extraordinary life of Ellen Burstyn, where the curtains rise on a story that's far more attractive than any script.
High-Quality IPTV Monthly Subscription for $15advik4387
Experience high-quality entertainment with our IPTV monthly subscription for just $15. Access a vast array of live TV channels, movies, and on-demand shows with crystal-clear streaming. Our reliable service ensures smooth, uninterrupted viewing at an unbeatable price. Perfect for those seeking premium content without breaking the bank. Start streaming today!
https://rb.gy/f409dk
SATTA MATKA DPBOSS KALYAN MATKA RESULTS KALYAN MATKA MATKA RESULT KALYAN MATKA TIPS SATTA MATKA MATKA COM MATKA PANA JODI TODAY BATTA SATKA MATKA PATTI JODI NUMBER MATKA RESULTS MATKA CHART MATKA JODI SATTA COM INDIA SATTA MATKA MATKA TIPS MATKA WAPKA ALL MATKA RESULT LIVE ONLINE MATKA RESULT KALYAN MATKA RESULT DPBOSS MATKA 143 MAIN MATKA KALYAN MATKA RESULTS KALYAN CHART KALYAN CHART
❼❷⓿❺❻❷❽❷❼❽ Dpboss Matka Result Satta Matka Guessing Satta Fix jodi Kalyan Final ank Satta Matka Dpbos Final ank Satta Matta Matka 143 Kalyan Matka Guessing Final Matka Final ank Today Matka 420 Satta Batta Satta 143 Kalyan Chart Main Bazar Chart vip Matka Guessing Dpboss 143 Guessing Kalyan night
The report *State of D2C in India: A Logistics Update* talks about the evolving dynamics of the d2C landscape with a particular focus on how brands navigate the complexities of logistics. Third Party Logistics enablers emerge indispensable partners in facilitating the growth journey of D2C brands, offering cost-effective solutions tailored to their specific needs. As D2C brands continue to expand, they encounter heightened operational complexities with logistics standing out as a significant challenge. Logistics not only represents a substantial cost component for the brands but also directly influences the customer experience. Establishing efficient logistics operations while keeping costs low is therefore a crucial objective for brands. The report highlights how 3PLs are meeting the rising demands of D2C brands, supporting their expansion both online and offline, and paving the way for sustainable, scalable growth in this fast-paced market.
AI Transformation Playbook: Thinking AI-First for Your BusinessArijit Dutta
I dive into how businesses can stay competitive by integrating AI into their core processes. From identifying the right approach to building collaborative teams and recognizing common pitfalls, this guide has got you covered. AI transformation is a journey, and this playbook is here to help you navigate it successfully.
NIMA2024 | De toegevoegde waarde van DEI en ESG in campagnes | Nathalie Lam |...BBPMedia1
Nathalie zal delen hoe DEI en ESG een fundamentele rol kunnen spelen in je merkstrategie en je de juiste aansluiting kan creëren met je doelgroep. Door middel van voorbeelden en simpele handvatten toont ze hoe dit in jouw organisatie toegepast kan worden.
Enhancing Adoption of AI in Agri-food: IntroductionCor Verdouw
Introduction to the Panel on: Pathways and Challenges: AI-Driven Technology in Agri-Food, AI4Food, University of Guelph
“Enhancing Adoption of AI in Agri-food: a Path Forward”, 18 June 2024
The Steadfast and Reliable Bull: Taurus Zodiac Signmy Pandit
Explore the steadfast and reliable nature of the Taurus Zodiac Sign. Discover the personality traits, key dates, and horoscope insights that define the determined and practical Taurus, and learn how their grounded nature makes them the anchor of the zodiac.
Discover the Beauty and Functionality of The Expert Remodeling Serviceobriengroupinc04
Unlock your kitchen's true potential with expert remodeling services from O'Brien Group Inc. Transform your space into a functional, modern, and luxurious haven with their experienced professionals. From layout reconfiguration to high-end upgrades, they deliver stunning results tailored to your style and needs. Visit obriengroupinc.com to elevate your kitchen's beauty and functionality today.
Prescriptive analytics BA4206 Anna University PPTFreelance
Business analysis - Prescriptive analytics Introduction to Prescriptive analytics
Prescriptive Modeling
Non Linear Optimization
Demonstrating Business Performance Improvement
Ownership and control in corporate organisations in developing countries evidence from a transition economy
1. European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.5, No.20, 2013
136
Ownership and Control in Corporate Organisations in Developing
Countries: Evidence from a Transition Economy
Otuo Serebour Agyemang1
, Emmanuel Aboagye2
1. Department of Economics and Management, University of Ferrara, via Voltapaletto 11Ferrara, Italy
2. University of Oslo, Oslo, Norway.
Email of the corresponding author: otuo.serebour .agyemang@gmail.com
Abstract
This study examines how internal governance structures in corporate organisations function in ensuring good
corporate governance. It contributes to the extant art of knowledge by shedding light on how ownership and board
control structures in corporate organisations operate to achieving good corporate governance in developing
countries. Using interviews, observations and archival records, catholic and significant data is collected from four
large quoted corporate organisations on the Ghana Stock Exchange for the analysis of the study. By linking the
data to the theoretical propositions, the study reveals that these four corporate organisations are characterised by
the presence of large shareholders and as a result, they tend to wield extensive control over the activities of the
companies through their involvement in the decision-making processes. This sort of involvement by large
shareholders in the decision-making processes of the companies is as a result of the incessant flow of information
from the companies’ management to them. However, whilst the presence of large shareholders has the tendency
to solving the principal-agent problem, it poses challenges in regards to minority shareholders’ interests in these
corporate organisations. Small equity holders of the companies only rely on the minimum statutory disclosures in
the annual reports of the companies and are always relegated to the background in times of information sharing.
The study also highlights that boards of directors tend to exercise control over corporate organisations when
majority shareholders stop interfering in their dealings. This implies that when major shareholders fully partake in
corporate decision-making processes of companies, boards of directors seem to be sheer advisory bodies to
management.
Keywords: Ownership control, Board control, Board of directors, Ownership structure, Corporate Governance,
Ghana.
1. Introduction
Corporate governance has recently become a well-deliberated and disputatious subject matter in press (Larcker
& Tayan, 2011) and management sciences. Accounting manipulations, unwarranted compensation packages,
insider trading and other identified corporate let-downs that are generally considered as consequences of
managerial wrongdoings in corporate organisations are virtually reported every day by the media. These
managerial wrongdoings have largely occurred in developed economies-such as the United Kingdom, the United
States, Japan and other Continental European countries-and for that matter it is incumbent on developing and
transition economies to strive to ensure good corporate governance practices in their countries to obviate falling
perniciously into such managerial catastrophe. In so doing, studies in regards to corporate governance practices
in these economies are considered necessary and highly desirable in the sense that they can contribute
immensely to the socio-economic development of these countries (McGee, 2009).
Studies on corporate governance in developing and transition economies form a minute proportion of studies in
the management sciences across the length and breadth of the globe. But it is worth considering that corporate
governance in recent times is gaining grounds in developing and transition economies. Boards of directors,
shareholders, managers of corporate organisations, governments and other stakeholders in these economies have
begun realizing the germaneness of having effective corporate governance system (McGee, 2009). Recent
studies that have concentrated on developing and transition economies include researches of Shukeri, Shin and
Shaari (2012), Ghabayen (2012), Amaral-Baptista, Klotzle and Campelo de Melo (2011), and Babatunde and
Olaniran (2009). However, these studies have largely concentrated on developing and transition economies in
Southern America and Asia, with insignificant amount focusing on African economies. For instance, Shukeri et
al. (2012) study was conducted on 300 publicly-traded corporate organisations in Malaysia. Ghabayen (2012)
study also concentrated on 102 firms in corporate organisations in Saudi Arabia. Amaral-Baptista et al. (2011)
work focused on 121 publicly-quoted firms on the Sao Paulo Stock Exchange (BOVESPA), Brazil. With this
concentration of substantial amount of studies on corporate governance in these continents and how good
corporate governance practices can help increase stock price and make it quite easier for corporate entities in
Africa to secure low-cost capital, there is indisputable rationalisation for carrying out corporate governance
works in an African context.
2. European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.5, No.20, 2013
137
Possessing the characteristics of other developing and transition economies, studies on corporate governance
practice in Ghana are scanty, and aspects pertaining to how internal governance mechanisms in corporate
organisations work have not, to the best of our knowledge, been appropriately dealt with. It is against this
backdrop that this paper aims at filling this research lacuna by examining how shareholder and board control
systems within corporate organisations function to ensuring effective corporate governance. The paper’s research
questions are twofold: 1) how does shareholder control lead to effective corporate governance; and 2) how does
board control system within a corporate organisation lead to effective corporate governance.
The remainder of the paper is structured as follows: Section 2 addresses the paper’s literature review and
propositions. The study’s methodology is presented in section 3. Section 4 highlights the findings of the cases.
Finally, section 5 concludes the study.
2. Literature review and propositions
2.1 Ownership structure and shareholder control
Bebchuk (1999) contends that corporate systems that are characterised or not characterised by a controlling
shareholder are distinctively critical in some ways. In corporate entities where ownership is fragmented,
shareholder control leads to a struggle for superiority or victory between rivals in that a rival can seek to usurp
control forcefully from the incumbent contrary to its (incumbent) will. Contrariwise, in corporations where
ownership is concentrated, control is not contestable but instead it is ‘fixed’ in the sense that it is confined and
cannot be obtained contrary to the will of the incumbent but through only negotiation with the incumbent
(Bebchuck, 1999). There are arguments that the presence of controlling shareholders will permit minority
shareholders to play a lesser role on how the corporate organisation is governed (Okpara, 2010). For instance, if
a person holds 10 percent of the total stocks of a corporate organisation and the remainders are highly dispersed,
it is pretty probable that he/she could exercise a certain level of influence in the corporate organisation. However,
if the remaining equity holders of the corporate organisation include two block holders of 40 per cent each, then
with their collusion, the 10 percent he/she holds would not possibly give him/her the kind of influence he/she
desires. It is also expected that small shareholders’ interests will be violated because of their role in the company.
Berglof and Claessens (2004) in their study on corporate governance in developing economies found that large
equity holders, with their control rights, are inclined to abuse minority equity holders in that there is a presence
of weak legal protection to safeguard the interests of minority equity holders. However, with the role of large
shareholders in controlling corporate organisations, all shareholders irrespective of their holdings, benefit. This
is because shareholder control over the corporation’s management induces corporate managers to gear corporate
decision-making processes towards shareholder wealth maximisation. Although the presence of large
shareholders in corporate organisations exposes minority shareholders to some disadvantages as mentioned
above, minority shareholders also reap some advantages when corporate decision-making processes are geared
towards shareholder value maximisation. Carlsson (2003) argues that when large chunks of stocks fall in the
hands of a single individual or a small group of equity holders, there is an incentive on the part of these equity
holders to monitor and control management painstakingly and enhance corporate efficiency. If the ownership
structure at the initial stages is widely fragmented, the rise of a large equity holder will perhaps overcome the
free-rider problem in monitoring and controlling management, and the rights of the largest equity holder can
minimise its urge for expropriation and maximise incentives to pay out corporate dividends (Jensen & Meckling,
1976). Okpara (2010) also posits that equity holders who hold large number of stocks thus limit agency problem
by having a sufficient number of stake to take a more active and effective interest in the corporate body. The
implication is that these large equity holders have sufficient influence and ownership in dealing with their
monitoring and controlling activities in corporate organisations that will eventually serve shareholder interest.
Therefore, we propose that:
Proposition 1: Shareholders with large shareholdings exert shareholder control in a corporate body.
2.2 Board of directors and board Control
Bebchuk (1999) suggest that it is time that academics and business practitioners breathe life into the notion of
the equity holder-controlled public corporate entities. But in a sharp contrast, Stout (2007) argues that since
board control has both costs and benefits, the astuteness of Bebchuk’s proposal to make it easy for equity holders
to oust board of directors must be evidence-based. The author continues that empirical evidence strongly
supports the claim that equity holders themselves usually prefer corporate entities with a very pungent and robust
board control. And if that is the case, why then do observers still believe that there should be shareholder control
at the expense of board control?
Stout (2007) argues that the expressive appeal of equity holder control can be traced to three main sources: a
common but deceptive metaphor that considers equity holders as the owners of corporate entities; the
opportunistic calls of activist equity holders in quest of leverage over board of directors for selfish gains; and a
3. European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.5, No.20, 2013
138
strong but a slur sense that something ought to be done in the wake of current corporate scandals. There are a lot
of reasons why equity holders in public firms do have little to control boards and for that matter, corporations.
Firstly, the activities of board of directors benefit equity holders by carrying out a significant economic function.
Perhaps, the most palpable is the promotion of a more efficient and well-informed business decision making.
The reason is that it is difficult and more cumbersome to bring together thousands of dispersed equity holders to
put forth their views on how to run the corporate entity. Also, given the illogical apathy most equity holders
bring to the forth, should we anticipate that equity holder control will probably produce first-class outcomes?
Corollary to this, most experts agree that board control offers significant advantages with regards to efficient and
well-informed decision making in a firm.
Furthermore, the power of boards without a doubt serves equity holder interests by safeguarding them (equity
holders) from each other. Stout (2007) contends that the risk that equity holders with large stocks might attempt
to manipulate corporate decisions in a selfish way that harms other equity holders is rampant in closely held
corporate entities. Harris and Raviv (2007) in examining equity holder control found out that some equity
holders have different agendas other than value maximisation. More often than not, it has been claimed that large
equity holders sometimes want to use corporate resources to promote a social or political agenda at the expense
of value maximisation.
Therefore, equity holders can be exploited not only by corporate managers and board of directors, but also their
fellow equity holders. Stout (2007) argues that equity holders face the risk of being exploited because stock is,
counter-intuitively, and illiquid venture. If shareholders control corporate entities, at a lesser extent, some may
try to use their influence in an opportunistic manner at the expense of other stakeholders. This is as a result of the
capabilities on the part of equity holders to threaten other stakeholders’ interests of the company. For instance,
equity holders can raise earnings by demanding that, long-term employees should allow their health benefits to
be reduced or risk being fired, or by requiring customers to buy additional software to make sure that they get
continued customer assistance.
The discussion so far has pointed to the assertion that shareholders should not be the controlling force in a
corporate entity and that it is incumbent on the board to ensure that it (board) exercises the full control function
as proposed by Stout (2007). But one should bear in mind that not all boards are capable of ensuring effective
and efficient board control to the benefit of its shareholders and other stakeholders. Castellini and Agyemang
(2012) suggest four major ideas that would assist boards to effectively and efficiently exercise their control
function: instituting audit committee (with well-qualified independent Non-Executive Directors), the
establishment of remuneration committee (with well-qualified independent Non-Executive Directors), the non-
duality structure, and effective and efficient board meetings.
Recent corporate scandals and frauds have necessitated the establishment of board audit committees in corporate
organisations to help boards in accomplishing their fiduciary duties. With audit committees, boards of corporate
organisations would be able to appraise the satisfactoriness of the resources for both internal and external audit
functions and insure that their work strategies offer a satisfactory exposure of possible risk areas (Arguden,
2009). The membership of the audit committee must consist of individuals who have both the alacrity and
capability to savvy complex concepts in accounting and auditing. Apart from such characteristics, board audit
committee member-composition has become important issue in corporate governance debate. There is an
argument that the inclusion of insiders on board audit committees does help audit committees in regards to their
functionality.
Conger (2009) argues that the inclusion of insiders on audit committees offer an in-depth perspective on the
corporate organisation. He further argues that insiders also offer a better source of information about corporate
organisations, their operations as well as the environments in which they operate. Contrary to this argument, in
their work on shareholder and board control systems, Agyemang and Castellini (2013) argue that the
involvement of insiders on the audit committee would swing the balance of power between the board and
management in support of the latter, resulting in management control over the activities of the board audit
committee and degrading the aptitude of the audit committee to effectively and efficiently perform its functions.
This implies that the membership composition of audit committees must only be made up of Non-executive
directors who are independent of management. It is therefore expected that, instituting board audit committee
with well qualified independent non-executive directors as its members would ensure board effectiveness and
consequently result in board control. We therefore, propose that:
Proposition 2a. Instituting an audit committee with well-qualified independent Non-Executive Directors, leads to
an extensive board control in a corporate entity
The board remuneration committee is argued to be one of the cornerstone committees of the board. This
committee is required to examine the overall remuneration structure of the corporate organisation to establish
suitable incentive packages for corporate managers and employees alike. Many codes and principles of corporate
governance around the globe suggest that there should be board remuneration committees in corporate
4. European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.5, No.20, 2013
139
organisations to insure that independent CEO evaluation and remuneration take place (OECD, 1999; 2004;
CACG, 1999; Securities and Exchange Commission of Ghana’s guidelines, 2010). Nevertheless, like the audit
committee, the membership composition of this committee has also received attention in the current corporate
governance debate. In Ghana, the 2010 Securities and Exchange Commission (SEC) Guidelines of Corporate
Governance suggests that the remuneration committee should entirely consist of independent non-executive
directors. The rationale behind this recommendation is that if executive directors become members of the
committee, they may be biased towards the CEO, resulting in incentive packages that would one-sidedly enrich
management to the detriment of equity holders (Agyemang & Castellini, 2013). Therefore, it is expected that,
establishing a board remuneration committee with well-informed independent non-executive directors as its
members would insure board effectiveness, which will finally lead to board control. We thus propose that:
Proposition 2b. Establishing a remuneration committee with well-qualified independent Non-Executive
Directors, leads to an Extensive board control in a company.
The idea of a dual leadership structure was among the initial applications of the principal-agent theory. The
emergence of leadership structure on boards has influenced how well boards are able to demonstrate their
monitoring, sleuthing and controlling functions over corporate managers and corporate organisations (Lorsch,
2009). There is an argument that the non-duality structure produces a new stratum of agency cost and raises
information transfer cost from the CEO to the Chairperson (Brickley, Coles & Jarrell, 1994). As long as the CEO
controls the quality, quantity and timing of available information to directors, it is quite difficult for directors to
be sure of getting what they really need for true independent supervision. Baliga, Moyer and Rao (1996), and
Daily and Dalton (1997) argue that there is no dissimilarities in the financial performance between corporations
with and without combined positions, describing them as either ‘fussing about’ or ‘much ado about nothing’.
Dalton and Dalton (2009) contend that the separation of these two roles does not necessarily indicate
independence of the leadership structure. Their argument stems from the assertion that in most cases the person
who is the ‘separate’ board chairperson is the former CEO of the firm. In some cases too this separate board
chairperson is either the founder of the firm or former CEO of acquired or merged companies. The authors
further argue that a single voice directing the company at the board level is the most efficient and effective form
of leadership. In this situation, “there will be no parties and constituencies-internal and external- who will
question who is in charge and who is accountable” (p. 83). The fundamental idea is that any subordinate or
minor must be supervised by a single and clear-cut authority. For instance Mathew 6:24 state “no one can be a
subordinate to two masters…..” (Good News Bible, 2007).
However, there are also arguments that the principal-agent problem is intensified when an individual performs
these two roles-CEO and board chairperson roles. The 2010 SEC Guidelines of Corporate Governance of Ghana
and other corporate governance observers (Jensen, 1993; Millstein & McAvoy, 2003; Pease & McMillan, 1993;
Castellini & Agyemang, 2012; Agyemang & Castellini, 2013) have argued that the roles of the chief executive
officer and board chairperson - the two most important roles in corporate organisations-should be performed by
different persons. The chairperson of a corporate organisation cannot serve as the chief executive officer since
the CEO is the leader of the company’s management and the chairperson is the principal overseer of the board,
which includes the chief executive officer. Iskander and Chamlou (2000) argue that the combination of the two
roles will definitely lead to moral hazard. Also, if the chairperson is the chief executive officer, there can be the
presence of real conflict “when the tie-breaking vote is cast” (Iskander & Chamlou, 2000, p.103). In Ghana, the
2010 SEC Guidelines of Corporate Governance considers the non-duality structure as a conduit of enhancing
board effectiveness in regards to board control, which eventually leads to good corporate governance. It is
expected that the non-duality structure leads to board effectiveness in Ghana. Therefore, we propose that:
Proposition 2c. The non-duality structure leads to board control in a company.
Board meetings vary across corporate organisations. The number of board meetings in corporate organisations
becomes higher in times of crises than in normal settings. Huse (2007) contends that the time-span of board
meetings is considered as one of the principal constraints of board effectiveness. He argues further that longer
meetings may allow board of directors to deliberate and rummage strategic issues of corporate organisations.
Also, frequent meetings will possibly aid board members to get abreast with emerging issues in corporate
organisations. Nevertheless, these meetings have to be effective and efficient in a manner that will inform
directors about the emerging issues of the corporate organisation and how they are to be addressed (Agyemang
& Castellini, 2013). Meeting times have to be properly and efficiently utilised to offer the required and suitable
information, to permit in-depth discussions. Agyemang and Castellini (2013) argue that for board members to
effectively perform their fiduciary duties and responsibilities to the benefit of the corporate organisation, they
should be fully informed about all the major developments in the organisation. The authors continue that when
board members are furnished with the right information at the right time, they would be able to play their roles
effectively, which will eventually result in board effectiveness. The principles of corporate governance of the
OECD (1999; 2004) and the 2010 SEC Guidelines of Corporate Governance of Ghana stress on the significance
5. European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.5, No.20, 2013
140
of providing information to directors when the need arises. This implies that timeliness and adequacy of
information to board of directors can help them to effectively and efficiently deliberate on strategic issues of the
corporate organisation. It is therefore reasonable that effective and efficient board meetings would enhance board
effectiveness and thus lead to board control. Thus we propose that:
Proposition 2d. Effective and efficient board meetings lead to an extensive board control in a firm.
3. Methodology
The study employed a qualitative case study research approach to gather data from the four corporate
organisations and was steered by a case study protocol. Following Rowley (2002) the case study protocol
encompassed the study’s overview, clarification of the aim of the research and field procedures such as the
application of diverse sources of data and how they were accessed. It also specified other data sources -such as
the companies’ yearly reports, observations at the annual general meetings of the companies- and procedures for
ensuring research quality. The protocol assisted the researchers to spell out in detail how the study’s questions
were to be answered. In all, 42 individuals were interviewed to elicit catholic and substantial information on how
internal governance structures function in the corporations. The study’s respondents included chief executive
officers, board chairpersons, non-executive directors, corporate secretaries, officials of Ghana Stock Exchange
(GSE) and Securities and Exchange Commission of Ghana, institutional representatives, shareholders, and past
executives and non-executives of the corporate organisations. The inclusion of past executives and non-
executives in this research was to get hold of additional insight into how the internal governance structures in
these companies worked in the past.
The various interviews were tape recorded and transcribed immediately after each session. Following Miles and
Huberman (1994) as well as Ravasi and Zattoni (2006), transcriptions were supported by contact summary
sheets and interview notes. Although interviews were substantially carried out in English language, some were
also carried out in Akan language (one of the local languages in Ghana). However, during the writing stage, the
quotations from the interviews in the Akan language were translated into English. In order to ensure uniformity
in the data collection procedure across all levels, all interviews were conducted by the researchers. In addition,
textual data in the form of prospectuses, extracts from internal files, annual reports and circular to shareholders
aided the researchers in narrating historical backgrounds of the companies. Direct observation was employed to
help the researchers to have direct experience with how the companies organized their annual meetings. It aided
the researchers to ascertain how votes were conducted during annual meetings, how decisions were taken, how
minority equity holders were permitted to ask questions, how directors were elected, how directors reacted to
questions from minority equity holders vis-à-vis questions from majority equity holders and other gamut of
actions. The multi-approach data collection was used to enhance data credibility, offer triangulation among the
techniques and maximize the sequence of available information to the researchers (Yin, 2009).
Case study analysis, more often than not, entails in-depth case write-ups for each case (Eisenhardt, 1989). These
detailed write-ups are normally pure descriptions but they are vital to the development of the capacity of
individuals to establish the true nature of a situation (Gersick cited in Eisenhardt, 1989). McNulty, Zattoni and
Douglas (2013, p. 188) suggest that “corporate governance is a complex multi-level phenomenon and research
can be developed along different levels of analyzes”. Accordingly, this study relied on the constructed theoretical
propositions and the development of a case description for its analyses. With this strategy, there was a
descriptive framework for organizing the case study while following the propositions. In order to ensure
anonymity, the names of the corporate organisations used in this study were pseudonyms to enhance easy
reading.
4. Results
Case A: Quality Commercial Bank (QCB)
The ownership structure of the company
QCB was established in 1953 and was first recognised as the Bank of the Gold Coast. After the country’s
independence in 1957, it was renamed, Quality Commercial Bank. The bank was solely owned by the state until
1996 when under the privatisation programme, the then government decided to divest some of the state’s
holdings. Currently, the holdings of the state stand at 21.36%, while individuals and institutional holdings add up
to 78.6%. Social Security and Insurance Trust (SSNIT) holds 29.81% of the entire shares of the company. But it
is interesting to note that although SSNIT’s holdings are supposed to be independent of the state, the
appointments of top management officials by the government have made the state to interfere and control the
holdings of SSNIT. Therefore, with the combination of the state’s holdings and that of SSNIT, the state becomes
the majority shareholder with 51.17% of the total shares of the company. The listing of the company on the GSE
has made it to issue 265,000,000 shares to 96,805 individual shareholders. Other current minority shareholders
are: BBGN Northern Trust COAVFC 6314B (6.68%), Daniel Ofori (3.32%), SCBN/ PICTET Africa Non Tax
6. European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.5, No.20, 2013
141
6275J (1.65%) and GCB Staff Provident Fund (1.13%). As at 2011, the bank’s market capitalisation stood at
GH₵ 72,000,000 (equivalent to 32,000,000 USD).
Shareholder control
Essentially, there are two noteworthy structures upon which shareholders of QCB exercise their controlling
prowess over the firm. These are annual general meetings and the incessant influence over decision-making
processes of the company by the state (ie. the majority shareholder). With the merger of the holdings of the
Ministry of Finance and Economic Planning and that of SSNIT’s, the state becomes majority stockholder of
QCB. Consequently, the state has been wielding control over the firm through its appointment of key individuals
of the company. The state also has direct contact with these important people (ie. the Managing director/Chief
Executive Officer and the Board Chairman). Influence over decision-making processes or procedures including
voting control, effortless access to information as well as direct involvement in the management of the company,
are pertinent ways of control available to the state. The government does not wait for decisions to be taken at the
annual general meetings of the company or the minimum disclosures obligated by law to exert its control or
influence over the company. This is because; it can depend on the incessant delivery of information by the
management of QCB to it (ie. the government). These provisions have created a platform that makes the
government/state to have access to all relevant information and decisions that arise at QCB. The participation of
the state in the operations combines QCB’s governance system with its management duties. The minority
shareholders, unlike the state, have access to defined information, which are available in the minimum statutory
disclosures required by law.
Board of Directors
GCB has thirteen members on its board. Out of this, nine are non-executive directors. The company’s directors
consist of current and retired senior officers and academics. The board chairman is an academic with extensive
experience in economic policy analysis and economic reform mechanisms. Other members include former
Director and Head of Human Resource Department of the central bank of Ghana, a business executive, Deputy
Minister of Finance and Economic Planning, Investment banker, a lawyer, the current Director for Regulatory
Administration Division of the National Communication Authority (NCA), a chartered accountant by profession,
the managing director of the company, the company’s secretary and two deputy managing directors in charge of
operations and finance. The positions of the board chairperson and the managing director of the company have
been separated. In regards to appointment, directors are selected through a process that is politically motivated.
This implies that the government, which functions as majority shareholder, virtually appoints its party apologists
to the board. This leaves no room for minority shareholders to have a say in the appointment of directors to the
company’s board. This was manifested during the company’s annual meeting in 2012, when minority
shareholders raised an issue about the criterion upon which the Deputy Minister of Finance and Economic
Planning was nominated for approval. This issue created tension in the sense that the board chairperson had to
come in to convince these aggrieved minority shareholders, but in the end, he was not able to give proper
explanation to them. However, at the end of the annual general meeting, the board was able to maneuver its way
to get the Minister approved. The board is required by the governance regulations of the company to meet four
times in a year, but can be increased when circumstances demand. For instance, in 2010, the board met 73 times.
The board is appropriately furnished with all relatable information of the company before board discussions.
With respect to board committees, the board of QCB has instituted two important board committees-the audit
and remuneration board committees. These committees are chaired by non-executive directors as required by law.
The committees are required to meet quarterly, but in peculiar situations, they can meet more than what is
specified. For example, the audit committee met ten times in 2010.
Board Control
The board of QCB does not have the right to hire or dismiss the managing director without prior approval by the
government. The company’s board can only offer advice to the government if it holds the notion that the
managing director is not up to task. Although the board remuneration committee of the company sets the
remuneration package of the managing director, this package has to be approved by the government prior to its
implementation. This implies that the government wields all the controlling activities of the board thus leaving
the board to play an advisory role in the company. Even though the board has established some mechanisms to
evaluate the performance of the managing director, such mechanism has been found as unnecessary in the sense
that the government through its own evaluation mechanism conducts its own assessment on the basis of the
unremitting information sent to it by the management of QCB. The only control activity that the board
undertakes is by discussing and approving corporate strategies of the company. However, during the interview, it
was revealed that even after the approval of these strategies, the board still has to seek the consent of the
government before they are executed.
CASE B: QT BANK (QT)
7. European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.5, No.20, 2013
142
The ownership structure of QT
QT bank was established as a financial organisation in 1997 under the name QT financial services. It was
formerly called QT financial services limited. It was listed on the Ghana Stock Exchange in 2008. Currently, the
company has issued 456,310,181 shares to 9,858 shareholders. QT holdings limited is the majority shareholder
with 61.1% of the entire shares of the company. Other equity holders of the bank include JPMC Africa
Capitalization Fund Ltd (10.14%), International Finance Corporation (10.14%), Investec Premier Funds Pcc Ltd.
Africa Fund (3.73%), Investec Assets MGT PTY (2.11%), Duet Africa Opportunities Fund IC (1.47%), Kura
Africa Fund (1.37%) and so on. As at 2011, the company’s market capitalisation stood at GH₵85,275,000
(which is equivalent to 42,637,500 USD).
Ownership control
Unlike the previous case where the majority shareholder is able to absolutely wield control over the company,
the rules and regulations governing the very existence of QT bank have set a limit to the extent to which a single
equity holder can exercise control over the company through the board of directors. The company has ensured
that every shareholder who holds at least 5% of the entire shares of the company is entitled to be a board member
or select a representative to the board. However, the majority shareholder of the company has the propensity to
exercise a certain degree of influence over the company’s decision-making processes as compared to other
shareholders who have representatives on the board. This became evident when the CEO of the company
revealed such kind of influence the company’s largest shareholder wields in the decision-making processes of
the company during an interview session. Inasmuch as QT holdings limited (which is the majority shareholder)
has a certain degree of influence over the decision-making processes of the bank, it normally gets access to
vitally important information about the operations of the bank. This implies that QT holdings limited always gets
hold of relevant information about the company before they are disseminated to other shareholders. With the
exception of other shareholders who are represented on the board, the bank’s minority shareholders, more often
than not, rely on the company’s annual general meetings to access information about the company since they
cannot directly get them from the board of directors of the bank.
Board of directors
Currently, QT bank has six board directors of whom four (4) are non-executive directors. The executive directors
include the company’s chief executive officer and his deputy. The company’s directors are made up of business
professionals in fields such as insurance, accountancy, management, investment and so on. The company’s
founding fathers also sit on the board. These two individuals are on the board not because of the role they played
in the company’s establishment, but by virtue of their equity capital holdings in the company. The rules and
regulations governing the company itemizes that any shareholder who holds at least 5% of the total equity capital
of the company does qualify to be a board member or to appoint a representative on the board. The roles of the
chief executive officer and the board chairperson of the company have been split. However, this schism of roles
in this corporate entity is considered as power-sharing between the two founders of the company, as opposed to
considering it as an attempt to initiate checks and balances. In regards to board meetings, the board of the bank
meets four times in a year as required by the company’s rules and regulations, but can be increased when there is
a need. For instance, in 2011, the board met six times. Aside the various reports that management of the
company makes available to board members, the agenda for board meetings are sent to members twenty-one
days prior to board meetings. The amount of information that board members receive from the company’s
management provide a source for board members to wield control over the decision-making processes of the
company. One of the non-executive directors in an interview had the following to say:
The various reports I have been receiving from the company’s management
are more detailed and informative, a situation that is different when I was
serving as a board member in a company, I reserve to mention. With these
reports, I always get the opportunity to painstakingly scrutinise them, which
then help me make sound and proactive suggestions during board meetings.
The board has established audit and remuneration committees. These committees are entirely made up of non-
executive directors. Both committees are made up of three non-executive directors. They are supposed to meet
quarterly as stipulated by the company’s code of business ethics, but can be increased if situations call for it.
Board control
The board of directors of QT bank performs all activities that are related to the control functions of the board. It
has the authority to replace or dismiss the CEO for non-performance. The board always determines the sort of
information it needs from management to carry out its functions in an appropriate manner. Through the
remuneration committee, the board decides and approves the remuneration packages of the CEO and other top
management officials of the bank. In terms of the bank’s corporate strategies, the board discusses and approves
every strategy of the bank. Furthermore, the board’s remuneration committee has established formal evaluation
mechanisms to evaluate the activities of the CEO, individual board members and the board in general. The audit
8. European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.5, No.20, 2013
143
committee through its work helps the board to make sure that the company complies with the existing laws (for
instance, the generally accepted accounting and auditing principles that are spelt out by the Institute of Chartered
Accountants, Ghana) regarding the operations of the company.
CASE C: KINGS BREWERY LIMITED (KBL)
The ownership structure of KBL
Kings Brewery Limited (KBL) is the oldest brewing company in West Africa. It was formally called overseas
breweries limited. In 1975, the state-controlled locally registered company called Kings Brewery limited
acquired the assets of overseas brewery limited. Twenty-years later, the state decided to sell out its stocks in the
company as a result of the privatisation programme the then government undertook. Consequently, SABMiller
plc purchased the majority of the company’s shares thus making SABMiller plc the majority shareholder with
69.20% of the entire stocks of the company. Other shareholders of the company are Social Security and
National Insurance Trust (SSNIT) (11.13%), Ziga Investment Company (1.23%), StarLife Assurance Company
Ltd. (0.77%), Accra Brewery Ltd. Employees Trust (0.76%), Epack Investment Fund (0.59%), Databank
Brokerage Ltd. (0.56%), HOTZ (0.15%), Merban Stockbrokers Portfolio (0.12%), Kwaku Okyere and Company
Ltd. (0.08%). Star Assurance Company Ltd. (0.07%), Unique Trust Financial Services (0.07%) and the general
public (5.67%).
Shareholder control
Through the majority holdings of the entire shares of KBL, SABMiller plc exercises shareholder control over the
operations of the company. SABMiller’s easy access to vital information, its influence over decision-making
processes and direct participation in the administration and operations of the company allow it to exercise
extensive control over the company. SABMiller plc does not depend on the minimum disclosures required by
law or the company’s annual meetings to get access to important governance information in the company. It
always relies on the available information the management of the company makes available to it upon request.
The reports from company’s management to SABMiller plc involve germane operational matters such as cash
positions, product quality, and sale targets. These reports are provided to SABMiller on a daily, weekly, monthly
and yearly basis. This implies that KBL annual general meetings are mere statutory requirement and perhaps,
serve more as a platform for other shareholders to get hold of what actually is going on in their company. The
participation of SABMiller plc in the operations of the company combines KBL governance system with its
management duties. Other shareholders, unlike the SABMiller plc, have access to defined information, which are
available in the minimum mandatory information required by law.
Board of directors
The board of directors of KBL is made up of four (4) directors. The composition of the board mirrors the
ownership structure of the corporate entity. Three of the directors are non-executive directors with vast
experience in the brewing industry as well as in their areas of specialty. In regards to director appointment,
members of KBL’s board are selected through a procedure designed by SABMiller plc. This implies that
individuals who serve on KBL’s board are appointed by SABMiller plc. The leadership structure of the board
takes the form of the non-duality structure. This means that the position of the board chairperson has been
separated from the position of the managing director of the company. Board meetings are required to be held
four times per annum but it can be increased when circumstances demand. For instance meetings can be
increased to deal with issues that are urgent without waiting for formal meetings. For formal meetings, members
of the board are informed twenty-one days prior to their commencements. Board members are also served with
information about the management and operations of the company at least a week before board meetings. In
terms of committees, the board has only established an audit committee to appraise both the operational and
financial activities of the corporate entity. The board’s audit committee is made up of four members of whom
three are non-executive directors. This committee is chaired by an executive of SABMiller plc. This implies that
the activities of the committee are influenced by SABMiller through the chairperson of the committee.
Board control
The decision to hire or fire KBL’s managing director cannot be carried out by the company’s board. The only
thing the board can do is to offer an advice to the management of SABMiller plc if it holds the notion that the
managing director is not performing as expected of him. The remuneration packages of the managing director
and other top management officials of the company are not determined by the board but SABMiller plc. More so,
there are no explicit evaluation measures that have been instituted by the board to evaluate the performances of
the managing director, individual directors and the board as a whole. However, such evaluations are also
conducted by SABMiller plc on the basis of the regular reports that are provided by the management of the
company to it. In conclusion, SABMiller plc performs all the control activities within the company thus leaving
the board as an advisory body to the management of the company.
CASE D: CHARTERED INSURANCE COMPANY (CIC)
9. European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.5, No.20, 2013
144
The ownership structure of CIC
Chartered Insurance Company (CIC) is among the non-life insurance corporate entities that are in operation in
Ghana. It was established in 1955 and was first called Gold Coast Insurance Company. In 1957, its name was
changed to Ghana Insurance Company. The company was incorporated by an Executive Instrument (E.I) No. 17
as Chartered Insurance Corporation in February, 1962. In 1995, under the government’s privatisation programme,
the company became a limited liability entity. Consequently, individuals and institutional capital providers
acquired equity capital of the company. Currently, the government/state holds 40% of the entire shares of the
company. Interestingly, SSNIT, which is a state-controlled institution, also holds 11.291% of the company’s
shares. The common deduction that can be drawn with regards to the holdings of SSNIT is that since it is a state-
controlled institution, the government has control over its holdings in CIC. Therefore, the combination of the
shares of SSNIT and that of the government makes the state/government, the majority shareholder with 51.291%
of the entire equity capital of CIC. Other shareholders of CIC are STD Nom. TVL (Pty) Ltd. /Standard Bank Plc
clients A/C (3.592%), Ghana Reinsurance Company Limited (3.408%), SIC Life Company Limited (1.704%),
BBGN/BBH Cust DZ Bank Int. S.A. Lux-Silk FD-African Lion FD GH (1.647%), BBGN/Barclays Maur. Re.
Deut Africa Opportunity Fund (1.621%), SIC- FSL/SIC Provident Fund (1.608%), BBGN/Barclays Maur. Re.
Renaissance African Master Fund (1.442%), BBGN/JP Morgan Chase Onshore 6178C (1.124%),
BBGN/PICTET Africa Non Tax 6257J (1.048%), Ghana Commercial Bank Limited (1.022%), Teachers’ Fund
(0.852%), Dr. Kofi Amoah (0.767%), STD Nom. TVL (Pty) Ltd./Standard Bank Plc clients A/C (0.559%),
BBGN/Barclays Maur. Re. AIG Sub-Sah. Africa Master Fund (0.511%), BBGN/Barclays Maur. Re.
Renaissance African Market Fund (0.434%), Ghana Cocoa Company Limited (0.421%), STD Nom. TVL (Pty)
Ltd./Metlife Classic Fund (0.314%) and the general populace consisting of about 80,00 who owns small numbers
of shares (26.14%). As at 2011, the market capitalization of CIC stood at GH₵2,500,000 (which is equivalent to
1,250,000 USD).
Shareholder control
The government exercises absolute control in the affairs of the company. Anytime the government requires any
form of information about the company, the company’s management does not hesitate to provide. Monthly,
quarterly and yearly reports are made available to the government upon request. Usually, the management of
CIC requires government’s approval before major decisions can be made in the company. More so, the
government always has access to key individuals-such as the board’s chairperson and the managing director-of
the company. The government has the discretionary power to summon the board chairperson and the managing
director to ponder on matters in relation to the company’s performance and the way forward. The government,
through its council of state/advisory group selects these key people within the company. For example, in 2009,
the present government, with its greater influence, reconstituted the board with its political apologists. The
methods in which agendas are set and how annual meetings are held minimize the influence of minority
shareholders over the company’s affairs. The company’s annual general meeting in 2011 raised some criticisms
from the minority shareholders. One minority shareholder in an interview said that:
The manner in which the agenda for the meeting has been prepared is such
that a number of essential elements have been mislaid in order not to allow
us [shareholders] to get hold of important issues within the company. This is
to furnish management the necessary platform to cover up information.
This assertion implies that minority shareholders of the company can only be furnished with the required
information they need if and only if the management of the company so wishes.
Board of directors
Presently, CIC has nine board members of whom eight are non-executive directors. The only executive member
on the board is the managing director of the company. Members of the board are made up of business magnates,
a chartered accountant, an actuary, an economist, a financial analyst, an engineer, a lawyer and a medical
practitioner. The government through the council of state/advisory body selects the members who constitute the
company’s board. This implies that the company’s board is largely, if not entirely, made up of the loyalists of the
government. Even though the composition of the board is political, the government through the council of state
appoints well-qualified and competent individuals to the company’s board. This appointment procedure makes
the board independent of the company’s management. The positions of the board chairperson and that of the
managing director of the company have been divided. More so, the board meets quarterly and this can be
increased as and when the need arises. Members are always furnished with the necessary and sufficient
information about the firm four weeks prior to board meetings by the company’s management. This then gives
members sufficient time to scrutinise and examine those reports before board meetings. With respect to
committees, the board has only instituted an audit committee, which functions as a monitoring mechanism to
financial and accounting issues in the company. It meets four times a year but it can be increased if
10. European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.5, No.20, 2013
145
circumstances require. The audit committee of CIC constitutes four (4) non-executive directors and it is required
that at any given period, at least two (2) of these members must be financially inclined.
Board control
The power to hire or dismiss the company’s managing director is vested in the government. The company’s
board can only advice the government to either fire or boot out the managing director when the board finds out
that the managing director is not performing satisfactorily. A typical example occurred in 2012 where the
managing director was asked by the government to step aside from an advice given to it (ie. the government) by
the board. The reason behind this decision was no properly communicated to other shareholders of the company
thus making them to get disappointed. The other shareholders exhibited their displeasure during the company’s
annual general meeting in 2012. They needed an explanation from the company’s board as to why the
company’s managing director was relieved of his post. However, the board was reluctant to give the required
explanation to them in regards to the action the government took. This unwillingness of the board to furnish the
other shareholders the needed explanation, made some of them to walk out of the meeting. The simple
explanation that was given to the researchers by one of those shareholders who walked out of the meeting was
that:
I walked out of the meeting with an idea that, the board would be compelled to give an
explanation, but as you witnessed, the board was still hesitant. ……I do not consider
our board as a credible or dependable board. A board, which does not want minority
shareholders to know exactly what goes on in the company in which they have a stake
in….Oh my God!! I have regretted investing in such a company. Today this, tomorrow
that. What at all do they [board members] do? Perhaps it is not their fault since there is a
big hand [the government] that instructs them to serve its interest. What I mean is, all of
them [board members] are government appointees and they are being compelled to
serve the government’s interest. Everything is political….. There is something fishy
somewhere and we [minority shareholders] need to know.
The above statement by the minority shareholder demonstrates that the board of CIC does not possess the power
to dismiss or fire the company’s managing director unless it is given the ‘green light’ by the government to do so.
Although the board determines the remuneration package of the managing director, it has to be always assented
by the government. The implication is that without the government’s approval, there is no way the board can
implement such plan. Moreover, the board through its audit committee has put in place some mechanisms to
assess the performances of the managing director, board members and the board. However, such evaluation is
not effective in the sense that the government implicitly evaluates the performances of the managing director,
individual directors and the board through the frequent reports made available to it by the company’s
management.
4.1Recapitulation of the findings
This paper laid out how both the ownership and board control systems work in four publicly-quoted corporate
organisations in Ghana. Table 1 below sets out a compendium of the observable facts that were highlighted in
this paper.
11. European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.5, No.20, 2013
146
Table 1: The governance practice and observable facts of the study
Governance practice The observable facts
Ownership Structure The government holds 51.17% and 51.291% of the shares of QCB and CIC
respectively. These holdings by the government in these companies make it the
majority shareholder. With respect to QT bank, QT holdings limited holds 61.1%
of the company’s total shares thus making it the majority shareholder.
SABMiller plc holds 61.1% of the entire equity capital of KBL therefore,
making it the majority equity holder.
Shareholder control Large shareholders of these four companies wield extensive control over their
management. In the case of QCB, KBL and CIC, their majority shareholders
appoint key individuals such as the board chairperson and the chief executive
officer. As a result of these appointments, majority shareholders have access to
these key individuals in these companies. In regards to QT, even though the
majority shareholder does not appoint such individuals, it still has access to these
key personalities in the company. With the exception of QT where the majority
shareholder cannot fire or replace the CEO, majority shareholders of the other
three companies have the power to fire or replace their CEOs. In all four
companies, majority shareholders always get hold of important information
about their companies before they are provided to other shareholders. Other
shareholders of these companies always have to rely on the annual general
meetings of the companies and the minimum disclosures mandated by law to get
access to information.
Board of directors
Board control
In all four companies, non-executive directors constitute the majority of their
boards. Also, the positions of the chief executives and the board chairmen have
been split. Board meetings are organized as recommended by law and the
companies’ rules and regulations. Members get hold of required information in
time prior to board meetings. Furthermore, all the companies have audit
committees. With the exception of KBL, all the members of the audit
committees are non-executive directors. QCB and QT have established board
remuneration committees with non-executive directors as their members. KBL
and CIC have not established board remuneration committees.
With the exception of QT where its board performs all the controlling activities
(ie. hiring and firing the CEO, and setting up the CEO’s remuneration package),
the boards of the other three organisations only function as advisory bodies to the
company. The three boards function as agents of their controlling equity holders.
Also, in these three organisations, the appointment and replacement of their chief
executive officers are done by the controlling shareholders. The controlling
shareholders in these three organisations play decisive role in setting up the
remuneration packages of the CEOs.
5. Confirmation of propositions
The findings reveal that, all four organisations investigated have large controlling shareholders. These
controlling shareholders are important mechanisms in driving good governance in these organisations. This
means that Proposition 1, which states that: Shareholders with larger shares exert shareholder control in a
company is verified in all four corporate organisations.
In terms of a formal audit committee, the findings indicate that all four organisations have established a board
audit committees with non-executive directors as their members. However, the observable facts also reveal that,
there is a relationship between a board audit committee and board control in only one organisation. This means
that Proposition 2a, which states: Instituting a board audit committee with independent directors, leads to board
control in an organisation is verified in one organisation and not verified in the other three.
The findings of a board remuneration committee show that two of the four organisations investigated have
established a remuneration committee. In spite of this, a relationship between a board remuneration committee
and board control does exist in only one of these two organisations. This implies that, Proposition 2b, which
12. European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.5, No.20, 2013
147
states: Setting up a board remuneration committee with independent directors, leads to board control is
confirmed in one organisation and not confirmed in the other three.
With regards to the leadership structure, the observable facts depict that the positions of the Chief Executive
Officer and that of the Chairperson have been separated in all four organisations. However, the relationship
between this separation and board control was not realised. This means that, Proposition 2c, which states: The
non-duality structure with independent chairperson results in board control is not confirmed in all four
corporate organisations.
With respect to board meetings, the observable facts depict that, elements of effective and efficient board
meetings are in existence in all four organisations. However, the connection between effective and efficient
board meetings, and board control was only realised in one organisation. This implies that, Proposition 2d, which
states: An effective and efficient board meetings result in an extensive board control is verified in one
organisation and not verified in the other three.
6. Discussion
From the study’s analyses, it can be deduced that there is a presence of ownership concentration in all four
companies. Each company has a single equity holder that holds more than 50% of its total shares. This ownership
concentration reflects the historical developments that keep shaping corporate governance practice in Ghana. The
ownership structures of KBL, QCB and CIC reflect the country’s privatisation policy in the 1990s. The QT bank
was established after the reforms and its ownership structure reflects the sources of fund used for its establishment.
Its establishment was funded by QT holdings, which is now the majority shareholder of the bank. This ownership
characteristic is not limited to these four organisations, but to most companies that are listed on the Ghana Stock
Exchange (Agyemang & Castellini, 2013). This is consistent with the findings of Berglof and Claessens (2004)
that most companies in the developing and transition economies are characterized by ownership concentration.
As a result of the presence of ownership concentration in all four companies, large shareholders tend to wield
control over the activities of the companies through their participation in the decision-making processes. This
kind of participation is only made possible through the incessant flow of information from the management of the
companies to them (ie. large shareholders). For instance, whilst small or minority shareholders always depend on
the minimum statutory disclosure in the companies’ audited annual reports and unaudited reports, large
shareholders of these companies get access to information upon request. These large shareholders have access to
key individuals (such as the CEOs and the board chairmen) in these companies. This level of accessibility makes
these large shareholders to have influence on these key individuals and the companies in general. The influential
role of the large shareholders in these organisations comes to light during the annual general meetings of the
companies. For instance, when major decisions that need stockholders’ approval are to be subject to voting, large
shareholders usually determine the voting outcome.
The extensive control these large shareholders have on the activities of these organisations has been considered
and positively regarded by the regulatory bodies of Ghana (ie. the SEC and GSE). This is as a result of the poor
enforcement of rules and regulations in regards to corporate governance practice in Ghana thus allowing large
shareholders to safeguard their investments. This implies that large shareholders serve as a substitute for legal
protection by ensuring investor protection in Ghana. This finding is supported by the assertion of La Porta, Lopez-
de-Silanes, Shleifer and Vishny (1997) that the presence of ownership concentration serves as a substitute for
legal protection for economies that are characterized by weak investor-protection. In an interview with an official
of the SEC, this was what he said:
Since companies in developed countries are well-supervised, they have the tendency
to perform well. This situation is different from developing contries’ experience.
This is because, our companies are poorly supervised. And for that matter, it is
incumbent on these controlling shareholders to supervise their companies in order to
put them on track so that they can perform well. Until we started enforcing our laws,
we should not attempt to oppose this kind of occurrence.
This submission is in line with the assertion that in times of unpredictable or weak enforcement of legal and
regulatory framework, shareholders do not anticipate that their interests will be safeguarded through lawful
channels and hence they do take a more direct involvement in governance oversight, either via better rights
offered through charters and bylaws, or via direct representation on companies’ boards (Larcker & Tayan, 2011).
The study’s analyses also portray that in the case of QT bank, board members/directors carry out all activities in
relation to the control function of the board: taking decisions in terms of hiring and disciplining the CEO;
replacing the CEO in case of mismanagement; discussing and approving the company’s strategies, determining
the type of information they need from management; and setting up the CEOs compensation package. In the
other three cases of QCB, CIC and KBL, board members have limited control over the activities of the
organisations. The only control activity that members carry out is to discuss and approve corporate strategies in
13. European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.5, No.20, 2013
148
these three organisations. But these discussions of corporate strategies are not for the purpose of exerting board
control over the activities of management. They rather provide board members the opportunity to offer advice to
management on how the set goals can be realised. This result is consistent with the findings of Coles, Daniel and
Naveen (2008), Adams and Ferreira (2007), Adam and Mehran (2003), and Agrawal and Knoeber (2001).
With respect to a formal assessment of the activities of the chief executive officer, the board and individual
board members, it was observed that, directors of QCB, CIC and KBL perform an implicit assessment of their
chief executive officers/ Managing directors. The levels of assessment of boards of directors of GCB, SIC and
ABL differ from that of QT bank in that, directors of QCB, CIC and KBL do conduct such assessments only
when they are discussing and approving corporate strategies of these organisations. In the case of QT bank, the
board performs its controlling function without any interference from the controlling shareholders.
In QCB, CIC and KBL, the control function of directors has been replaced by the controlling prowess of their
controlling shareholders. This is in line with the assertion of Roe (2003) that, when a controlling shareholder
exerts an extensive control over the activities of management, it leaves little room for the board to exercise its
control function. Although the controlling shareholders of QCB, CIC and KBL exercise control over the activities
of the company, they (ie. the controlling shareholders) leave room for directors to exert a certain level of control
as witnessed through their involvement in discussing and approving of corporate strategies.
7. Conclusion
The paper examined how shareholder and board control systems work within corporate organisations to ensuring
effective corporate governance. A defensible qualitative case study approach was applied to gather the required
information needed for the study’s analyses. The use of interviews, observations and archival records to gather
data from four corporate organisations listed on the Ghana Stock Exchange offered the study catholic and
significant information for its analyses. The study reveals that shareholders with significant amounts of shares in
companies wield panoptic control over the companies. This implies that shareholder control is vital determining
factor to ensuring effective corporate governance in Ghana. Although the presence of these major shareholders
has the tendency to solving the agency problems in these companies, it creates problem in relation to minority
shareholders’ interests. Also, the findings illuminate that boards of directors tend to wield control over corporate
organisations when majority shareholders stop interfering in their dealings. This implies that when major
shareholders fully partake in corporate decision-making processes of companies, boards of directors seem to be
sheer advisory bodies to management.
On the basis of these findings, the study recommends the following: Firstly, minority shareholders have to be
protected. And this essentially requires that the implementation of the existing rules and regulations regarding
corporate governance in Ghana should be fully realised. It also requires a simultaneous execution of other
strategies such as the gaining of greater access to corporate information by minority shareholders, constant
revision of the extant regulatory framework of corporate governance and educating minority stockholders. The
availability of important governance information to minority shareholders will enable them to challenge
corporate managers and major shareholders which will eventually obviate a potential diversion of corporate
assets. Secondly, since gender diversity has recently become an important issue in corporate governance
discourse; corporate organisations should critically look at it. Although this study did not take into consideration
the number of women who sit on boards of corporate organisations in Ghana, in the course of the study, it was
evidenced that women were significantly under-represented on boards of all four cases investigated. It is argued
that since managerial talent is consistently fragmented across men and women, limiting boards to predominantly
include men-if not them only-gets rid of an equally qualified talented group in our societies (Larcker & Tayan,
2011). This means that the representation of women on corporate boards might positively influence board
activities thus leading to board control. For instance, women representation on corporate boards can improve
board independence by minimizing social differences that can compromise boards’ independence. Also, women
would probably demonstrate higher levels of credibility and teamwork than their counterparts, hence enhancing
boardroom discussions. As a result of the benefits that corporations can possibly derive from women
representation on their boards, future studies can focus on how women-participation on boards of corporate
organisations can help improve board activities.
References
Adams, R. & Ferreira, D. (2007), A theory of friendly boards. Journal of Finance 62, 217–250.
Adams, R. & Mehran, H., (2003). Board structure and banking firm performance. Federal Reserve Bank of New
York Economic Policy Review 9, 123–142.
Agrawal, A. & Knoeber, C. (2001). Do some outside directors play a political role? Journal of Law and
Economics, 44 (1):179–198.
14. European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.5, No.20, 2013
149
Agyemang, O.S. & Castellini, M. (2013), Shareholder Control vs. Board Control: Evidence from a Sub-Saharan
African Economy, Global Journal of Strategies and Governance, 19(4): 109-134.
Amaral-Baptista, M. A., Klotzle, M.C. & Campelo de Melo, M.A. (2011). CEO Duality and Firm Performance
in Brazil: Evidence from 2008, Pensamento Contemporaneo em Administracao, 5(1): 11-27.
Arguden, Y. (2009). Boardroom Secrets: corporate governance for quality of life. New York: Palgrave
MacMillan.
Babatunde, M. A. & Olaniran, O. (2009). The Effects of Internal and External Mechanism on Corporate
Governance and Performance of Corporate firms in Nigeria. Corporate Ownership & Control, 7(2): 330-343.
Baliga, R. B., Moyer, R. C. & Rao, R. S. (1996) CEO Duality and Firm Performance: What’s the Fuss? Strategic
Management Journal, 17(1):41-53
Bebchuk, L. A., & Roe, M. J. (1999). A theory of path dependence in corporate governance and ownership.
Working Paper 13, Columbia Law School, Center for law and economic studies.
Berglof, E. & Claessens, S. (2004). Enforcement and Corporate Governance. Draft discussion paper.
http://www.gcgf.org, accessed on February, 2011.
Brickley, J. A., Jeffrey C., & Jarrell, G. A. (1994). Corporate leadership structure: On the separation of the
CEO and chairman positions. Working paper, University of Rochester.
Carlsson, R. H. (2003). The benefits of active ownership. Corporate Governance, 3 (2): 6-31
Castellini, M. & Agyemang, O.S. (2012), Ownership and Board Structures to Ensuring Effective Corporate
Governance through Ownership and Board Control Systems, Corporate Ownership and Control, 9,
(2):336-343.
Coles, J. L., Daniel, N. D., & Naveen, L. (2008), Boards: Does one size fit all?, Journal of Financial Economics,
87 (2): 329–356.
Conger J A (2009), Board Room Realities: Building Leaders Across Your Board, San Francisco: John Wiley &
Sons Inc.
Daily, C. & Dalton, D. (1997). CEO and Board Chairperson Roles Held Jointly or Separately: Much Ado About
Nothing, Academy of Management Executive, 11(3): 11–20.
Dalton, R.D. & Dalton, C.M. (2009). The Joint CEO/Chairperson Leadership Issue in Sharp Relief. In Conger, J.
A. (Ed), Board Room Realities: Building Leaders Across Your Board, San Francisco: John Wiley & Sons Inc.
Eisenhardt, K.M. (1989), Building Theories from Case Study Research. Academy of Management Review, 14(4):
532-550.
Ghabayen, M.A. (2012). Board Characteristics and Firm Performance: Case of Saudi Arabia, International
Journal of Accounting and Financial Reporting, 2(2):168-200.
Ghana Securities and Exchange Commission (2010). Companies Code 1963 (Act 179).
Available,http/www.secghana.org. accessed 1 January, 2011.
Good News Bible (2007) Ghana Edition, Accra: Bible Society of Ghana.
Harris M & Raviv A (2008). A Theory of Board Control and Size, The Review of Financial Studies, 21 (4):
1797-1832.
Huse, M. (2007). Boards, Governance and Value Creation: The Human Side of Corporate Governance. New
York: Cambridge University Press.
Iskander, M.R. & Chamlou, N. (2000). Corporate Governance: A Framework for Implementation, Washington:
The World Bank
Jensen, M. C. (1993). The modern industrial revolution, exit, and the failure of internal control systems. Journal
of Finance, 48 (3): 831-880.
Jensen, M. C. & Meckling, W.H (1976). Theory of the Firm: Managerial Behavior; Agency Costs and
Ownership Structure, Journal of Financial Economics, 3(4): 305-360.
Larcker, D & Tayan, B. (2011), Corporate Governance Matters: A Closer Look at Organizational Choices and
Consequences, Pearson Education, Inc.: New Jersey.
La Porta, R., Lopez-de-Silanes, F., Shleifer, A. & Vishny, R. (1998). Agency problems and dividend policies
around the world. NBER Working Paper Availabable at http://mba.tuck.dartmouth.
edu/pages/faculty/rafael.laporta/publications/LaPorta%20PDF%20Papers-ALL/Agency%20Problems.pdf.
Accessed on 1 February, 2011
Lorsch, J.W. (2009), Leadership: The Key to Effective Boards. In Conger, J. A. (Ed), Board Room Realities:
Building Leaders Across Your Board, San Francisco: John Wiley & Sons Inc.
McGee, R.W (2010), “Corporate governance in transition economies and developing economies: A case study of
Ghana’, working paper, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1665083, accessed February, 2013.
McNulty, T., Zattoni, A. & Douglas, T. (2013), Developing Corporate Governance Research through Qualitative
methods: A review of previews Studies, Corporate Governance: An international review, 21(2):183-198.
Miles, M., & Huberman, A.M. (1994), Qualitative Data Analysis, Thousand Oaks, CA:Sage Publications.
15. European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.5, No.20, 2013
150
Millstein, I.R. & McAvoy, P.W. (2003). The Recurrent Crisis in Corporate Governance, New York: Palgrave
MacMillan.
OECD. (2004). The OECD principles of corporate governance. http://www.oecd.org, accessed February, 2011.
OECD (1999). Principles of Corporate Governance. Available http://www. oecd. org/ corporate/ oecdprinciples
of corporategovernance. htm, accessed 1 February, 2011.
Okpara, O. J. (2010). Perspectives on Corporate Governance Challenges in a Sub-Saharan African
Economy’, Journal of Business & Policy Research, 5, 1:110-122.
Pease, G., & McMillan, K. (1993). The Independent Non-Executive Director, Australia: Longman Professional.
Melbourne.
Ravasi, D. & Zattoni, A. (2006). Exploring the political side of board involvement in strategy: A study of mixed-
ownership institutions. Journal of Management Studies, 43(8): 1671–1702.
Roe, M. J. (2003). Political Determinants of Corporate Governance: Political Context, Corporate Impact.
Oxford: Oxford University Press.
Rowley, J. (2002). Using case studies in research. Management Research News, 25(1): 16-27.
Shleifer, A and Vishny, R. W. (1997). A survey of corporate governance. Journal of Finance, 52(2): 737-783.
Shukeri, S., Shin, O.W. & Shaari, M.S. (2012). Does Board of Director’s Characteristics Affect Firm
Performance? Evidence from Malaysian Public Listed Companies. International Business Research, 5(9):120-
127.
Stout, L.A. (2007). The Mythical Benefits of Shareholder Control, Regulation, 30(1): 42-47.
16. This academic article was published by The International Institute for Science,
Technology and Education (IISTE). The IISTE is a pioneer in the Open Access
Publishing service based in the U.S. and Europe. The aim of the institute is
Accelerating Global Knowledge Sharing.
More information about the publisher can be found in the IISTE’s homepage:
http://www.iiste.org
CALL FOR JOURNAL PAPERS
The IISTE is currently hosting more than 30 peer-reviewed academic journals and
collaborating with academic institutions around the world. There’s no deadline for
submission. Prospective authors of IISTE journals can find the submission
instruction on the following page: http://www.iiste.org/journals/ The IISTE
editorial team promises to the review and publish all the qualified submissions in a
fast manner. All the journals articles are available online to the readers all over the
world without financial, legal, or technical barriers other than those inseparable from
gaining access to the internet itself. Printed version of the journals is also available
upon request of readers and authors.
MORE RESOURCES
Book publication information: http://www.iiste.org/book/
Recent conferences: http://www.iiste.org/conference/
IISTE Knowledge Sharing Partners
EBSCO, Index Copernicus, Ulrich's Periodicals Directory, JournalTOCS, PKP Open
Archives Harvester, Bielefeld Academic Search Engine, Elektronische
Zeitschriftenbibliothek EZB, Open J-Gate, OCLC WorldCat, Universe Digtial
Library , NewJour, Google Scholar