ScienceDirect Citations 1522851638967

Franklin Nakpodia, Emmanuel Adegbite,
Corporate governance and elites,

Accounting Forum,
Volume 42, Issue 1,
2018,
Pages 17-31,
ISSN 0155-9982,
https://doi.org/10.1016/j.accfor.2017.11.002.
(https://www.sciencedirect.com/science/article/pii/S0155998217300881)
Abstract: Using a qualitative methodology (interviews), we examine the relationship
between the effectiveness of corporate governance mechanisms and elitist
interventions. In doing this, we identify three elitist groups – political,
cultural and religious, and investigate how they shape the legitimacy and
effectiveness (or otherwise) of the institutional drivers of corporate governance
in Nigeria. We caution the widely-held notion in the literature which suggests that
institutions act as a check on the behaviour of elites and influence how elites
compete and emerge. Alternatively, we argue that elites, in the presence of
institutional voids, can invent, circumvent and corrupt institutions.
Keywords: Corporate governance; Elites; Institutions; Institutional theory;
Institutional voids; Corruption
Jan Schymik,
Globalization and the evolution of corporate governance,
European Economic Review,
Volume 102,
2018,
Pages 39-61,
ISSN 0014-2921,
https://doi.org/10.1016/j.euroecorev.2017.11.007.
Abstract: How does globalization affect the balance of power between managers and
firm owners? This paper studies the effect of economic integration on governance
practices within firms. I propose a theory of endogenous corporate governance
investments in industry equilibrium with monopolistic competition. Firms can use
investments into better corporate governance as a cheap substitute to performance
compensation to mitigate agency problems. International integration alters the
demand for managers in the economy such that firms may reduce their corporate
governance investments and offer higher performance payments. This globalization-
induced deterioration of corporate governance in the economy diminishes the welfare
gains from globalization. Using data on governance practices in U.S. manufacturing
corporations, I provide empirical evidence that conforms to the model predictions.
Firms in industries that experienced substantial trade liberalization between 1990
and 2006 have changed their governance practices allowing for more managerial slack
and offered higher equity payments to their CEOs. These effects are particularly
large in relatively dynamic industries that are characterized by large exit rates.
Keywords: Agency problems in international trade; Endogenous managerial
entrenchment; Corporate governance and CEO compensation
Kartick Gupta, Chandrasekhar Krishnamurti, Alireza Tourani-Rad,

Financial development, corporate governance and cost of equity capital,
Journal of Contemporary Accounting & Economics,
Volume 14, Issue 1,
2018,
Pages 65-82,
ISSN 1815-5669,
https://doi.org/10.1016/j.jcae.2018.02.001.
Abstract: Existing research suggests that external governance is more relevant than
internal governance in affecting a firm’s value. We contribute to the literature by
explicitly examining the interactive role played by country-level financial
development and legal institutions in influencing the impact of firm-level
governance on the cost of equity capital. Using a comprehensive sample of 7380 firm
years drawn from 22 developed countries, we show that firm-level corporate
governance attributes affect the cost of equity capital primarily in the Common Law
countries with high levels of financial development. Our study is the first to
highlight the complementary effects of legal origin, financial development and
firm-level governance attributes in influencing the cost of equity capital.
Keywords: Corporate governance; Financial development; Legal origin; Implied cost
of equity capital
Shin-ichi Fukuda, Munehisa Kasuya, Jouchi Nakajima,

The role of corporate governance in Japanese unlisted companies,
Japan and the World Economy,
2018,
,
ISSN 0922-1425,
https://doi.org/10.1016/j.japwor.2018.03.006.
Abstract: The purpose of this paper is to examine the effects of corporate
governance on the performance of Japanese unlisted companies from 1997 to 2002,
when the problem of non-performing loans became serious. Using data of unlisted
companies, we examine to what extent the ownership structure has a significant
impact on firm’s performance. When estimating the determinants of Tobin’s q, we
find that the ownership structure has a significant influence on the performance of
each unlisted company. However, the impact was totally different between companies
with good performance and bad performance. In particular, the increase in the
shareholding ratio of a specific individual or a parent company worked positively
for companies with good performance, but it worked negatively for companies with
poor performance. The results suggest that the distorted governance structure in
unlisted companies, which had worked well during the bubble economy, may have
significantly restricted their recovery under prolonged recession in Japan.
Keywords: Corporate governance; Unlisted companies; Tobin’s q
Robert Kieschnick, Rabih Moussawi,

Firm age, corporate governance, and capital structure choices,
Journal of Corporate Finance,
Volume 48,
2018,
Pages 597-614,
ISSN 0929-1199,
https://doi.org/10.1016/j.jcorpfin.2017.12.011.
(https://www.sciencedirect.com/science/article/pii/S092911991730319X)
Abstract: Do the effects of corporate governance on corporate capital structure
choices change as a public firm ages? First, we address the direct effects of firm
age and governance features on both its decisions to use debt and how much debt to
employ. Our analysis reveals a number of novel results. While firm age is
positively correlated with the use of debt, it is negatively correlated with how
much debt a firm uses. We also find that the effects of firm age on how much debt a
firm uses is primarily due to the interaction between firm age and its governance
features. The more power that insiders possess, the less debt that the firm uses as
it ages. We interpret our evidence as implying that over time, managers allow their
risk preferences to dominate their firm capital structure decisions when they are
protected from discipline.
Keywords: Firm age; Corporate governance; Capital structure
Carlos E. Jiménez-Angueira,
The effect of the interplay between corporate governance and external monitoring
regimes on firms' tax avoidance,
Advances in Accounting,
2018,
,
ISSN 0882-6110,
https://doi.org/10.1016/j.adiac.2018.02.004.
Abstract: This study investigates how the interplay between internal corporate
governance and the changes in the tax and corporate governance environment in the
U.S. during the early 2000s affected firms' tax avoidance levels. Analyses use a
panel of U.S. firms for the period 1997–2005 and permanent book-tax difference and
cash effective tax rates as proxies for tax avoidance. Results suggest that,
relative to other firms, firms with weak-governance during the low-regulation
period (years 1997–2000) exhibited lower tax-avoidance levels during the high-
regulation period (years 2003–2005) in response to the tighter external monitoring
regime. The study adds to the corporate tax avoidance literature by providing
evidence regarding the importance of considering external monitoring regimes in the
study of the relationship between corporate governance and tax avoidance.
Keywords: Tax avoidance; Corporate governance; Cash effective tax rates; Book-tax
differences; Tax environment; Regulation
Yin-Hua Yeh,
Corporate governance and family succession: New evidence from Taiwan,
Pacific-Basin Finance Journal,
2017,
,
ISSN 0927-538X,
https://doi.org/10.1016/j.pacfin.2017.09.011.
(https://www.sciencedirect.com/science/article/pii/S0927538X16302463)
Abstract: Succession in family firms has historically been associated with risk.
However, improvements in laws and regulations along with the consequent
improvements in corporate governance can greatly mitigate the potentially negative
impacts on succession performance. This study utilizes a comprehensive data set of
280 cases of succession from Taiwan between the years 1997 and 2012, a period which
coincides with the introduction of a big bang of new domestic laws and regulations.
The results indicate that improvements in the regulatory environment along with the
consequent strengthening of corporate governance reduces the probability of family
succession while at the same time increases firm performance during the succession
period. In many cases the impact of improved corporate governance outweighs the
influence of improved laws and regulations. The implications of these findings
underscore the importance of the government's role in establishing robust internal
and external mechanisms to enhance corporate governance, so that in significant
events such as firm succession, the attendant risks are reduced.
Keywords: Succession; Corporate governance; Laws and regulations
Jordi Paniagua, Rafael Rivelles, Juan Sapena,

Corporate governance and financial performance: The role of ownership and board
structure,
Journal of Business Research,
2018,
,
ISSN 0148-2963,
https://doi.org/10.1016/j.jbusres.2018.01.060.
Abstract: This study examines how corporate governance and ownership structure
relate to the financial performance of firms. We estimated this relationship using
fsQCA. We enhanced our analysis using complementary linear and non-linear multiple
regression analysis. The panel data used in this study covered 1207 companies from
59 countries across 19 sectors for the period 2013 to 2015. The study makes two
main contributions. First, the multiple empirical techniques employed in this study
offer a broader approach to the empirical analysis of financial performance.
Second, the study aids our understanding of the role of corporate governance and
ownership in the financial performance of firms.
Keywords: Firm performance; fsQCA; Corporate governance
Osama Shibani, Cristina De Fuentes,

Differences and similaritites between corporate governance principles in Islamic
banks and Conventional banks,
Research in International Business and Finance,
Volume 42,
2017,
Pages 1005-1010,
ISSN 0275-5319,
https://doi.org/10.1016/j.ribaf.2017.07.036.
Abstract: The purpose of this paper is to present the some differences and
similarities between corporate governance principles in Islamic banks and
conventional banks by paradigmatic diversification. Since Corporate governance in
Islamic banks is a social phenomenon in Islamic societies, the paper uses social
theory paradigms (functionalist, interpretive, radical humanist and radical
structuralist) to compare between corporate governance in Islamic banks and
conventional banks. This paper demonstrates that mainstream corporate corporate
governance theories are not a law of nature but a social construct.
Keywords: Corporate governance; Islamic banks; Conventional banks; Paradigms
Jana Oehmichen,
East meets west—Corporate governance in Asian emerging markets: A literature review
and research agenda,
International Business Review,
Volume 27, Issue 2,
2018,
Pages 465-480,
ISSN 0969-5931,
https://doi.org/10.1016/j.ibusrev.2017.09.013.
Abstract: This review examines how corporate governance mechanisms in the Asian
emerging markets (AEMs) context affect firm-level outcomes. Literature about
characteristics of the main corporate governance actors (boards and owners), their
effects on firm-level outcomes, and contingency factors in AEMs offers interesting
first insights. I synthetize these results and develop a research agenda that
proposes how AEM corporate governance research should extend (but not ignore)
agency theory, how AEM research about firm effects of corporate governance could
take a stakeholder-oriented perspective, and how research could utilize the AEM
institutional context to model contingency factors and extend our theoretical
understanding of corporate governance.
Keywords: Emerging markets; Asia; Institutions; Corporate governance; Ownership
structure; Boards of directors
Boubacar Diallo,
Corporate governance, bank concentration and economic growth,
Emerging Markets Review,
Volume 32,
2017,
Pages 28-37,
ISSN 1566-0141,
https://doi.org/10.1016/j.ememar.2017.05.003.
Abstract: We examine the effects of bank concentration and corporate governance
among firms in terms of economic growth using panel data for 34 countries and 29
manufacturing sectors over the period 1980–2010. We show the following results:
First, bank concentration exerts a negative effect on growth for industries that
are most dependent on external financing. However, for countries with a high level
of corporate governance bank concentration is less harmful to economic growth. Our
results have important policy implications for emerging markets. Most importantly,
they suggest that high corporate governance is a crucial means for promoting growth
and prosperity in developing and emerging economies, in which we commonly observe
under-developed financial sectors and high levels of bank concentration.
Keywords: Corporate governance; Bank concentration; Financial dependence; Growth
Melih Madanoglu, Murat Kizildag, Ozgur Ozdemir,

Which bundles of corporate governance provisions lead to high firm performance
among restaurant firms?,
International Journal of Hospitality Management,
Volume 72,
2018,
Pages 98-108,
ISSN 0278-4319,
https://doi.org/10.1016/j.ijhm.2018.01.006.
Abstract: This study defends the view that the adoption of corporate governance
provisions should not be seen as a detriment to firms’ financial performance. On
the contrary, we contend that some combinations of corporate governance provisions
may indeed lead to higher firm performance among U.S. restaurant firms. Using a
set-theoretic method, such as the Qualitative Comparative Analysis (QCA), our
findings revealed that there are three configurations of governance provisions that
lead to superior financial performance. The presence of poison pills appeared as a
core condition in all solutions. Negated analysis indicates that the inappropriate
bundling of governance provisions leads to poor firm performance.
Keywords: Firm performance; Corporate governance provisions; QCA; Poison pills; E-
index
Naz Sayari, Bill Marcum,

Reducing risk in the emerging markets: Does enhancing corporate governance work?,
BRQ Business Research Quarterly,
2018,
,
ISSN 2340-9436,
https://doi.org/10.1016/j.brq.2018.01.002.
Abstract: This study examines emerging market firms that adopt corporate governance
standards similar to those in the US. The investigation highlights the impact
governance standards may have on corporate risk taking, as measured by stock return
volatility, under varying political and socioeconomic regimes. In a cross-sectional
time-series setting, the analysis reveals that enhanced governance standards are
associated with risk reductions among US domiciled firms, cross-listed American
Depository Receipt companies (ADRs) and non-cross listed emerging market (EM)
firms. The effect of these governance standards on risk taking, however, does not
deviate considerably between cross-listed ADRs that are exposed to Securities and
Exchange Commission (SEC) mandated regulations and non-cross-listed EM firms that
are not subject to the same regulatory constraints. Also, in some respects, Chinese
firms seem to exhibit corporate behavior that is contrary to that of the rest of
the world.
Keywords: Corporate governance; Risk; Emerging markets; American Depository
Receipts (ADRs); Securities and Exchange Commission (SEC) regulations
Ahmed Al-Hadi, Khamis Hamed Al-Yahyaee, Syed Mujahid Hussain, Grantley Taylor,
Market risk disclosures and corporate governance structure: Evidence from GCC
financial firms,
The Quarterly Review of Economics and Finance,
2017,
,
ISSN 1062-9769,
https://doi.org/10.1016/j.qref.2017.11.008.
Abstract: In this study, we examine the relationship between corporate governance
and the disclosure of market risk among financial firms from the Gulf Cooperation
Council (GCC) region between 2007 and 2011. Using a comprehensive measure of the
disclosure of market risk, our regression results suggest that the level of market
risk disclosure is positively and significantly associated with the strength of a
firm’s corporate governance structure. Economically, the regression coefficient
implies that a 3.25% increase in market risk disclosures is associated with a one
standard deviation change in the strength of corporate governance. In addition,
when we decompose our corporate governance index into its constituent items, we
find that directors’ independence and the dual roles of the CEO and chairman of the
board reduce the extent and quality of market risk disclosures. Our results are
robust to alternative specifications and endogeneity tests.
Keywords: Market risk disclosures; Corporate governance; GCC
Benjamin E. Hermalin, Michael S. Weisbach,

Chapter 1 - Introduction: The Study of Corporate Governance✶✶The authors thank John
Lynch for helpful comments on an earlier draft. Hermalin gratefully acknowledges
the financial support of the Thomas & Alison Schneider Distinguished Professorship
in Finance.,
Editor(s): Benjamin E. Hermalin, Michael S. Weisbach,
The Handbook of the Economics of Corporate Governance,
North-Holland,
Volume 1,
2017,
Pages 1-15,
ISSN 2405-4380,
ISBN 9780444635303,
https://doi.org/10.1016/bs.hecg.2017.11.008.
Abstract: Introduction to volume on the Economics of Corporate Governance.
Keywords: Corporate governance
Ameni Tarchouna, Bilel Jarraya, Abdelfettah Bouri,

How to explain non-performing loans by many corporate governance variables
simultaneously? A corporate governance index is built to US commercial banks,
Volume 42,
2017,
Pages 645-657,
ISSN 0275-5319,
Abstract: This paper aims to combine the principal component analysis and GMM
dynamic panel data methods in order to estimate the effect of corporate governance
system on non-performing loans. The first method is meant to construct a corporate
governance index for US commercial banks. The second one allows us to study the
relation between the built index and non-performing loans. The advantage of the
combination of these methods is reducing the number of corporate governance
variables into a single one and ensuring the consistency of GMM estimates, given
that a high number of variables leads to an increase in the number of GMM
instruments, which in turns results in biased estimators. Applying these methods to
US commercial banks, for a period including the financial crisis years, we find
that small banks are characterized by a sound corporate governance system that
reduces their non-performing loans. In opposition, the corporate governance fails
to protect medium and large US commercial banks from excessive risk-taking that
damages their loans’ quality and even leads to enormous losses especially during
the global financial crisis.
Keywords: Global financial crisis; Corporate governance index; Non-performing
loans; GMM dynamic panel data estimator; PCA method
Yves Gendron,
Beyond conventional boundaries: Corporate governance as inspiration for critical
accounting research,
Critical Perspectives on Accounting,
2017,
,
ISSN 1045-2354,
https://doi.org/10.1016/j.cpa.2017.11.004.
Abstract: Drawing on my research (with colleagues) in the corporate governance
area, I reflect on the development of intellectual trajectories within the critical
accounting research project. Recognizing that the boundaries surrounding critical
research are quite hazy and fluctuating, the role of epistemological guidance,
methodological flexibility, chance encounters and theoretical bricolage in the
production of critical accounting inquiries is underlined. Importantly, the studies
that I review demonstrate that corporate governance settings constitute privileged
sites to investigate power and marginalization processes. Focused on the backstage
of corporate governance, these studies bring to the fore two key processes through
which power and marginalization operate at the board level. The first relates to
the constitution and propagation of myths. The second consists of board members
whose reflective skills are kept underdeveloped. From a forward looking
perspective, I especially seek to encourage the future development of critical
research on corporate governance in ways that break the mold of gap-spotting
research. In particular, I maintain that critical academics may benefit
significantly, when elaborating their research endeavors, from considering further
two central questions: corporate governance for whom; and corporate governance for
what?
Keywords: Audit committees and compensation committees; Board of directors; Box-
breaking research; Corporate governance; Critical accounting research;
Marginalization
Hatem Ghouma, Hamdi Ben-Nasr, Ruiqian Yan,

Corporate governance and cost of debt financing: Empirical evidence from Canada,
The Quarterly Review of Economics and Finance,
Volume 67,
2018,
Pages 138-148,
ISSN 1062-9769,
https://doi.org/10.1016/j.qref.2017.06.004.
Abstract: We explore the impact of the Globe and Mail corporate governance index on
bond spreads in a sample of Canadian listed companies. The index is composed of
four sub-indices—board composition/structure, board compensation, shareholder
rights, and disclosure—assessing the quality of the firm’s governance. Our
empirical findings point to a decrease in the bond spreads for an improvement of
the overall quality of the corporate governance index. When we analyze the impact
of each of the sub-indices, only the quality of the board composition/structure as
well as the disclosure quality seems to matter to bondholders. We interpret our
finding within the Canadian “comply or disclose” approach to governance where more
responsibility is put on investors to assess and judge the quality of the
governance practices. In such context, bondholders value stronger boards (in terms
of composition as well structured board can mitigate agency problems), and are also
particularly concerned with the quality of the firms’ disclosure policies (to
reduce information asymmetry). In addition to the Board Composition and the
Disclosure sub-indexes, we also find a significant negative relationship between
shareholder rights sub-index and the cost of debt for issuers headquartered in
Quebec. Only in Quebec, features that protect shareholders from the managers (and
major shareholders)’ potential misbehavior seem to reduce the cost of debt. This
might be due to the lower confidence that bondholders have in the Quebec French-
Common-Law-based jurisdiction even after the adoption of the new Quebec Business
Corporations Act in 2011.
Keywords: G34; G38; F34; Corporate governance; Bond yields; Board of directors;
Globe and Mail governance score
Igor Filatotchev, Annette Poulsen, R. Greg Bell,

Corporate governance of a multinational enterprise: Firm, industry and
institutional perspectives,
2018,
,
ISSN 0929-1199,
Abstract: We introduce the topic of this Special Issue of the Journal of Corporate
Finance on corporate governance of a multinational enterprise with a particular
emphasis on the theoretical and empirical gaps in prior finance and international
business studies associated with corporate governance problems and the
effectiveness of governance solutions in the context of diverse institutional
settings. We integrate analysis of the accepted articles with existing research on
international corporate governance and global strategy. Overall, the work in this
area continues to emphasize the importance of institutions, legal environment and
culture in all aspects of global enterprises. We conclude the article with
suggestions for future research in this rapidly expanding and important area of
global business.
Umawadee Detthamrong, Nongnit Chancharat, Chaiporn Vithessonthi,

Corporate governance, capital structure and firm performance: Evidence from
Thailand,
Volume 42,
2017,
Pages 689-709,
ISSN 0275-5319,
Abstract: We examine the relationship between corporate governance and firm
performance for a panel sample of 493 firms of non-financial firms in Thailand
during the period 2001–2014. We find that for the full sample, corporate governance
is not associated with financial leverage and firm performance. Leverage has a
positive effect on firm performance. When we split firms into small and large firm
subsamples, we observe some influence of corporate governance. The negative effect
of audit committee size on firm performance is evident for large firms while the
effect of audit reputation on firm performance is evident for small firms only.
Furthermore, financial leverage mediates the effect of audit committee size on firm
performance for the large firms.
Keywords: Corporate governance; Financial leverage; Firm performance; Mediator
variable
Xiaoran Huang, Jun-Koo Kang,

Geographic concentration of institutions, corporate governance, and firm value,
Volume 47,
2017,
Pages 191-218,
ISSN 0929-1199,
Abstract: We examine the impact of geographic concentration of institutional
investors on corporate governance and firm value. We find that firms whose large
institutions are closely located to each other experience more shareholder-
coordinated activities before Schedule 13D filings, more concerted proxy votes
against management proposals, higher forced CEO turnover-performance sensitivity,
higher returns around CEO turnover announcements and Schedule 13D filings, and
larger increases in Tobin's q. These results are robust to using the introduction
of new direct airline routes as an exogenous source of variation in proximity. Our
results suggest that geographic concentration of investors increases monitoring
effectiveness.
Keywords: Geographic concentration; Corporate governance; Institutional investors;
Shareholder coordination; CEO turnover; Proxy voting; Free-rider problem
Nor Zalina Mohamad-Yusof, Danture Wickramasinghe, Mahbub Zaman,

Corporate governance, critical junctures and ethnic politics: Ownership and boards
in Malaysia,
2018,
,
ISSN 1045-2354,
Abstract: Quotas and affirmative policies are often implicated in debates on
corporate governance. This paper examines critical junctures and the role of
willful actors in mobilizing their ethnic and political positions to affect
governance reforms in Malaysia since independence. We trace the trajectory of
Bumiputera affirmative policy in shaping equity ownership and composition of boards
of directors using historical institutionalism as a lens. We find ethnic politics
has been an endogenous force resulting in Malay share of equity ownership rising
from negligible levels to over 20 percent and almost half of the boards of
directors of listed companies comprising of Malays. Our analysis shows that
governance is a representation, as well as a manifestation, of how ownership and
board structures are institutionally reproduced rather than a mere response to
global isomorphic pressures.
Keywords: Corporate governance; Ownership; Boards of directors; Critical junctures;
Counterfactuals; Contingencies; Path dependency; Bumiputera
Zhuangxiong Yu, Jie Li, Jian Yang,

Does corporate governance matter in competitive industries? Evidence from China,
Volume 43,
2017,
Pages 238-255,
ISSN 0927-538X,
Abstract: Using the data of Chinese listed firms from 2003 to 2013, this study
examines how product market competition affects the impact of corporate governance
on firm value. In sharp contrast with the overwhelming empirical evidence based on
the US and European developed markets that product market competition acts as a
substitute for corporate governance and good governance matters only in non-
competitive industries, we document that good governance of Chinese firms
significantly increases firm value only in competitive industries, primarily
through less empire building. The evidence is significant particularly after the
recent global financial crisis and far stronger for state-owned firms than for non-
state-owned firms.
Keywords: Product market competition; Corporate governance; Firm value; Emerging
markets
Paul Borochin, Wei Hua Cu,

Alternative corporate governance: Domestic media coverage of mergers and
acquisitions in China,
Journal of Banking & Finance,
Volume 87,
2018,
Pages 1-25,
ISSN 0378-4266,
https://doi.org/10.1016/j.jbankfin.2017.08.020.
Abstract: A text analysis of domestic Chinese newspaper articles covering 797
proposed domestic mergers shows that the media in developing countries is
susceptible to pressure: coverage is more favorable for deals consistent with
government objectives and involving powerful local firms. However, we also find
that coverage can affect the outcome of proposed M&A deals in non-stateowned firms.
We identify this effect using an exogenous shock to market-driven governance from
the Split-Share Structure Reform of 2007. Negotiation coverage predicts long-term
performance, consistent with information dissemination. Despite biased coverage,
domestic media in developing countries can function as an alternative channel for
corporate governance.
Keywords: Mergers and acquisitions; Media bias; Text categorization; Corporate
governance; China
Robert Bartlett, Eric Talley,

Chapter 4 - Law and Corporate Governance✶✶Thanks to Leo Strine for helpful comments
and to Hannah K. Song for valuable research assistance.,
North-Holland,
Volume 1,
2017,
Pages 177-234,
ISSN 2405-4380,
ISBN 9780444635303,
Abstract: Pragmatic and effective research on corporate governance often turns
critically on appreciating the legal institutions surrounding corporate entities—
yet such nuances are often unfamiliar or poorly specified to economists and other
social scientists without legal training. This chapter organizes and discusses key
legal concepts of corporate governance, including statutes, regulations, and
jurisprudential doctrines that “govern governance” in private and public companies,
with concentration on the for-profit corporation. We review the literature
concerning the nature and purpose of the corporation, the objects of fiduciary
obligations, the means for decision making within the firm, as well as the overlay
of state and federal law pertaining to how that decision-making authority is
exercised within publicly traded companies. A core feature of this analysis is that
while the basic structures pertinent to corporate law and governance are familiar
and in some ways predictable, they are also in a constant state of flux, shaping
and being shaped by institutional adaptations of firms, regulators and courts. This
chapter is most appropriate for social science researchers and/or students who are
new to the legal dimensions of firm governance.
Keywords: Corporate governance; Corporate law; Fiduciary duties; Shareholder
activism; Shareholder rights; Majority shareholders; Inter-shareholder conflicts
Raphie Hayat, M. Kabir Hassan,

Does an Islamic label indicate good corporate governance?,
Volume 43,
2017,
Pages 159-174,
ISSN 0929-1199,
Abstract: In this paper we study the effect of an Islamic label on corporate
governance. Listed firms with an Islamic label (Islamic firms) are characterized by
low leverage. Because recent evidence indicates that leverage can act as a
substitute for good governance, it is tempting to expect these Islamic firms to
have better governance than their non-Islamic peers. However, we find no
significant difference in overall governance between Islamic and non-Islamic S&P
500 firms. Also, after controlling for other determinants of governance, we find no
significant effect of an Islamic label. We do find that an Islamic label adds about
2 percentage points of governance quality, as measured by the Bloomberg Governance
Disclosure score. However, this effect is not related to leverage.
Keywords: Islamic finance; Corporate governance; Leverage; Agency problems
Dan Yang, Hao Jiao, Roger Buckland,

The determinants of financial fraud in Chinese firms: Does corporate governance as
an institutional innovation matter?,
Technological Forecasting and Social Change,
Volume 125,
2017,
Pages 309-320,
ISSN 0040-1625,
https://doi.org/10.1016/j.techfore.2017.06.035.
Abstract: China has adopted a gradual and experimental approach to the political
and economic reform process since the late 1970s. The reforms continue to this day
and have produced a unique corporate governance structure in China which can be
viewed as an institutional innovation. This study deals with social changes and
institutional innovations in China. We provide direct evidence on the association
of corporate governance and financial fraud using a sample of Chinese listed firms,
differing from previous studies that focused on western firms. We find that
ownership structure, dual CEO/chairman of the directorate status, external auditors
and regulators' requirements contribute to the likelihood of financial fraud.
Specifically, when firms have less concentrated ownership, dual CEO/chairman of the
directorate status and shorter audit service tenures, as well as when they
experience greater regulation pressure, they tend to engage in financial fraud.
However, we do not find evidence that the percentage of independent directors in
the directorate, the presence of an audit committee or the proportion of shares
owned by the supervisory board members play a role in deterring financial fraud.
The evidence in this study offers insights into whether corporate governance is
effective in the control of financial fraud in China.
Keywords: Corporate governance; Institutional innovation; Social changes; Financial
fraud; People's Republic of China
Philip J. Shrives, Niamh M. Brennan,

Explanations for corporate governance non-compliance: A rhetorical analysis,
Volume 49,
2017,
Pages 31-56,
ISSN 1045-2354,
Abstract: A central element of many corporate governance codes is the ‘comply-or-
explain’ system, whereby companies not complying with corporate governance codes
are required to provide explanations for each item of non-compliance. This paper
develops a typology for examining the rhetorical strategies companies use to
persuade audiences of the need to explain rather than comply. Employing a meaning-
oriented content analysis approach, the typology is applied to analyse explanations
for noncompliance with the UK’s Corporate Governance Code. The sample comprises
non-compliance explanations of UK FTSE 100 companies over two periods (2004/05 and
2011/12). These periods were chosen as they follow substantial changes made in the
UK’s 2003 Code and 2010 Code. There were 63 (43) (2004/05 with 2011/12 in brackets)
companies not complying with one or more provisions of the Code and 146 (71)
explanations for non-compliance. Key rhetorical strategies identified in non-
compliance explanations include ‘minimization of negative feelings’ (the damage is
not too serious), the use of ‘weasel words’ which disguise non-compliance and
‘transcendence’ (ends justify means). The research shows there is increased use of
rhetorical strategies in non-compliance explanations in 2011/12 compared with
2004/05, and the strategies found seem more orientated towards misleading
explanations than meaningful convincing rationales. The use of such strategies may
lead to mistrust by the market or may damage the ‘comply-or-explain’ system itself.
Valid explanations are critical to the working of the ‘comply-or-explain’ system.
Understanding the use of rhetoric can be helpful in assessing those explanations.
Keywords: Corporate governance Code; Comply-or-explain; Non-compliance;
Explanation; Rhetoric; Typology
Bo Sun, Qi Liu,
Managerial manipulation, corporate governance, and limited market participation,
Journal of Economic Dynamics and Control,
Volume 90,
2018,
Pages 98-117,
ISSN 0165-1889,
https://doi.org/10.1016/j.jedc.2017.12.004.
Abstract: The low fraction of U.S. households participating in equity markets,
despite the sizable equity premium, has been referred to as the stock market
participation puzzle. We explore a part of this puzzle by examining the role of
managerial manipulation in accounting for the properties of stock market
participation. We show that when investors have heterogeneous beliefs about
managerial manipulation, investors who are relatively pessimistic about reporting
quality consider stock prices unjustified by the underlying firm value and
rationally withdraw from the stock market, giving rise to limited market
participation in equilibrium. Our model also suggests that tightened accounting
standards have the effect of reducing the dispersion of investor beliefs regarding
financial reporting and thus help encourage stock market participation. Consistent
with this idea, we find that stronger accounting and governance policies are
associated with higher market participation across countries.
Keywords: Managerial manipulation; Corporate Governance; Accounting standards;
Limited stock market participation
J. Thomas Connelly, Piman Limpaphayom, Hien T. Nguyen, Thanh D. Tran,

A tale of two cities: Economic development, corporate governance and firm value in
Vietnam,
Volume 42,
2017,
Pages 102-123,
ISSN 0275-5319,
Abstract: This study examines the moderating effect of financial and economic
development on the relation between corporate governance and firm value in Vietnam,
which has two exchanges, one located in the business center in the South, and the
other located in the center of government in the North. This unique setting allows
an investigation of corporate governance dynamics controlling for legal
jurisdiction. The results show a positive relation between corporate governance and
firm value in Ho Chi Minh City but not in Hanoi. The finding suggests that
financial and economic development play critical roles in enhancing the benefits of
corporate governance in emerging markets.
Keywords: Corporate governance; Financial and economic development; Firm value;
Vietnam
Pankaj C. Patel, Maria João Guedes, Nuno Soares, Vítor da Conceição Gonçalves,
Strength of the association between R&D volatility and firm growth: The roles of
corporate governance and tangible asset volatility,
2017,
,
ISSN 0148-2963,
Abstract: We investigate the complementary roles of corporate governance; property,
plant, and equipment (PPE) volatility; and intangible asset volatility in improving
the returns from R&D volatility. With increasing R&D volatility, corporate
governance can help align divergent goals and heterogeneous resources both
internally and externally. PPE volatility or intangible asset volatility could help
synchronize asset turnover with R&D volatility. The findings show that corporate
governance and PPE volatility complement R&D volatility in improving a firm's
performance.
Keywords: R&D volatility; PPE asset volatility; Corporate governance; Firm growth
Rohmawati Kusumaningtias, Unti Ludigdo, Gugus Irianto, Aji Dedi Mulawarman,

Rethinking of Corporate Governance,
Procedia - Social and Behavioral Sciences,
Volume 219,
2016,
Pages 455-464,
ISSN 1877-0428,
https://doi.org/10.1016/j.sbspro.2016.05.020.
Abstract: Corporate governance is regarded as an acceptable mechanism to prevent
fraud in companies. However, corporation scandals still occur from year to year.
This article tries to describe corporate governance from the emergence, the
implementation and the underlying theories. As a result, the concept of corporate
governance works stably in the framework of capitalism. This article gives
predecessor analysis for further research to insert other fields such as philosophy
and psychology in corporate governance
Keywords: Corporate governance; fraud; capitalism; agency theory; stakeholder
theory.
Souhir Neifar, Anis Jarboui,

Corporate governance and operational risk voluntary disclosure: Evidence from
Islamic banks,
2017,
,
ISSN 0275-5319,
Abstract: The objective of the present paper is to explore the impact of the
mechanisms of corporate governance on the informational content of Operational Risk
(OR) voluntary disclosure. The content analysis method was used to collect data on
the OR disclosure from annual reports of 34 Islamic banks scattered in various
countries and over a period ranging from 2008 to 2014. Using correlation and
multiple regression analyses, our results show that the information disclosed on
OR, especially that of quality, is considered as value-relevant for investors as
they have additional information content in risk assessment of banks. Empirical
results reveal the significant impact of independent directors on the OR voluntary
disclosure reported information. Conversely, the concentration of the chairman and
chief executive officer responsibilities on the same person reduces it. The crucial
presence of monitoring bodies, particularly, the Shariah Supervisory Board and the
external auditor type affect significantly the OR information that listed Islamic
banks disclosure voluntarily in their annual reports.
Keywords: Corporate governance; Risk disclosure; Operational risk
Guadalupe del Carmen Briano-Turrent, Jannine Poletti-Hughes,

Corporate governance compliance of family and non-family listed firms in emerging
markets: Evidence from Latin America,
Journal of Family Business Strategy,
Volume 8, Issue 4,
2017,
Pages 237-247,
ISSN 1877-8585,
https://doi.org/10.1016/j.jfbs.2017.10.001.
Abstract: Based on agency theory, this study analyzes whether family firms are more
compliant with corporate governance recommendations than non-family firms in the
context of emerging markets. Using a unique sample of 826 observations of the
highest ranked companies on the stock exchange indices of Argentina, Brazil, Chile
and Mexico during the period 2004–2010, we hypothesize that family firms may adopt
better corporate governance practices to substitute for the absence or inefficiency
of a regulatory system and to mitigate the agency problem between majority and
minority shareholders. Additionally, we propose a corporate governance compliance
index considering the legal and institutional framework of the region. The
empirical results indicate that family firms report a higher corporate governance
index. We find that board composition (independence, size and COB-CEO duality) does
not moderate corporate governance compliance of family firms but rather such
variables have a direct effect on the corporate governance index.
Keywords: Family firms; Corporate governance; Board composition; Agency theory;
Latin America
Melsa Ararat, Bernard S. Black, B. Burcin Yurtoglu,

The effect of corporate governance on firm value and profitability: Time-series
evidence from Turkey,
Volume 30,
2017,
Pages 113-132,
ISSN 1566-0141,
Abstract: We study the corporate governance practices of Turkish public firms from
2006 to 2012, relying on hand-collected data covering the vast majority of listed
firms. We build a Turkey Corporate Governance Index, TCGI, composed of subindices
for board structure, board procedure, disclosure, ownership, and shareholder
rights. TCGI predicts higher market value (with firm fixed effects) and higher
firm-level profitability with firm random effects. The principal subindex which
predicts higher market value and profitability, and drives the results for TCGI as
a whole, is disclosure subindex. We also study the determinants of firms'
governance and find that most firm-specific factors have little effect on firms'
governance choices.
Keywords: Turkey; Corporate governance; Governance index
Gregorio Sanchez-Marin, Gabriel Lozano-Reina, J. Samuel Baixauli-Soler, Maria

Encarnacion Lucas-Perez,
Say on pay effectiveness, corporate governance mechanisms, and CEO compensation
alignment,
BRQ Business Research Quarterly,
Volume 20, Issue 4,
2017,
Pages 226-239,
ISSN 2340-9436,
https://doi.org/10.1016/j.brq.2017.07.001.
Abstract: Say on pay (SOP) is a relatively new governance mechanism that allows
shareholders to pronounce on the suitability on executives’ compensation. The
literature has mainly examined SOP effects on Anglo Saxon contexts of corporate
governance, reporting mixed results and highlighting the need to deepen our
understanding of its real impact, as well as its interactions with other mechanisms
of governance. Concerning these gaps, the present research analyzes the
effectiveness of SOP as a mechanism for aligning CEO compensation in the context of
Spanish listed companies – a good representative model of continental European
systems of corporate governance–. It also examines the moderating effect of board
monitoring and ownership structure. Using panel data and linear regression
methodologies on a set of companies from 2013 to 2016, the results show that SOP
generally increases the alignment of CEO compensation, although its effectiveness
is reduced in companies with overcompensated CEOs and in owner-managed companies.
Keywords: CEO compensation; Say on pay; Corporate governance; Board monitoring;
Ownership structure
Man Dang, Darren Henry, Xiangkang Yin, Thuy Anh Vo,

Target corporate governance, acquirers' location choices, and partial acquisitions,
2017,
,
ISSN 0927-538X,
Abstract: This paper provides new evidence on the relation between target corporate
governance and acquirers' location planning in the context of partial acquisitions.
Focusing on East and Southeast Asian countries, we find that both performance and
corporate governance aspects are relevant in acquisition planning, with preferences
relating to pre-acquisition performance of acquired firms differing across domestic
and cross-border bidders. We also find that target corporate governance structure
at the time of acquisitions is related to post-acquisition performance outcomes.
Our findings are robust to a set of tests involving alternative control samples,
and any influence of bidder toehold levels. Overall, the paper suggests a role for
firm-level corporate governance as an acquisition motive, and a link between
corporate governance reform and wider disciplinary attributes of acquisition
location decisions.
Keywords: Target firms; Partial acquisitions; Acquisition location; Corporate
governance; Propensity score matching; Difference-in-differences approach; East and
Southeast Asia
Benjamin E. Hermalin,
Biased monitors: Corporate governance when managerial ability is mis-assessed,
Journal of the Japanese and International Economies,
Volume 47,
2018,
Pages 70-80,
ISSN 0889-1583,
https://doi.org/10.1016/j.jjie.2017.10.005.
Abstract: An important aspect of corporate governance is the assessment of
managers. When managers vary in ability, determining who is good and who is not is
vital. Moreover, knowing they will be assessed can lead those being assessed to
behave in ways that make them appear better. Such signal-jamming behavior can be
beneficial (e.g., an executive works harder on behalf of shareholders) or harmful
(e.g., the behavior is myopic, boosting short-term performance at the expense of
long-term success). In standard models of assessment, it is assumed those doing the
assessing behave according to Bayes Theorem. But what if the assessors suffer from
one of many well-documented cognitive biases that makes them less-than-perfect
Bayesians? This paper begins an exploration of that issue by considering the
consequence of one such bias, the base-rate fallacy, for two of the canonical
assessment models: career-concerns and optimal monitoring and replacement. Although
firms can suffer due to the base-rate fallacy, they can also benefit from this
bias.
Keywords: Corporate governance; Career concerns; Learning and assessment; Cognitive
biases
Mario Daniele Amore, Morten Bennedsen,

Corporate governance and green innovation,
Journal of Environmental Economics and Management,
Volume 75,
2016,
Pages 54-72,
ISSN 0095-0696,
https://doi.org/10.1016/j.jeem.2015.11.003.
Abstract: We study the relationship between corporate governance and firms‫׳‬
environmental innovation. Exploiting changes in antitakeover legislation in the US,
we show that worse governed firms generate fewer green patents relative to all
their innovations. This negative effect is greater for firms with a smaller share
of institutional ownership, with a smaller stock of green patents, and with more
binding financial constraints. Investigating regulatory and industry variations, we
also find more pronounced effects for firms operating in states with lower
pollution abatement costs, and in sectors less dependent on energy inputs. Overall,
our results suggest that ineffective corporate governance may constitute a major
obstacle to environmental efficiency.
Keywords: Corporate governance; Environment; Green innovation; Patents
Lili Dai, Renhui Fu, Jun-Koo Kang, Inmoo Lee,

Corporate governance and the profitability of insider trading,
Volume 40,
2016,
Pages 235-253,
ISSN 0929-1199,
Abstract: This paper examines the influence of corporate governance systems on
insiders' ability to profit from their information advantage and the ways through
which corporate governance systems influence such ability. We find that corporate
governance significantly reduces the profitability of insider sales but not that of
insider purchases. Given that sales involve greater legal risk than purchases, the
results suggest that well-governed firms restrict informed insider trading mainly
to reduce legal risk. We also find that better-governed firms reduce the
profitability of insider sales by increasing the likelihood of adopting ex-ante
preventive measures (e.g., voluntary insider trading restriction policies),
implementing such measures more effectively, and taking ex-post disciplinary
actions more actively. These results highlight how better-governed firms are able
to restrict insiders from exploiting private information.
Keywords: Corporate governance; Insider purchases; Insider sales; Profitability of
insider trading; Legal risk
Matthew Dimick, Neel Rao,

Wage-setting institutions and corporate governance,
Journal of Comparative Economics,
Volume 44, Issue 4,
2016,
Pages 854-883,
ISSN 0147-5967,
https://doi.org/10.1016/j.jce.2016.01.004.
Abstract: We present a model in which wage-setting structures explain cross-country
variation in corporate governance. The model predicts a nonmonotonic relationship
between the level of centralization in wage-bargaining institutions and the levels
of firm ownership concentration and investor protection legislation. Low and high
degrees of centralization yield less concentrated ownership and more investor
protection than intermediate degrees. Like recent research, this paper highlights
labor as a key constituent in shaping corporate governance. However, our theory can
resolve an important puzzle this research confronts, namely, why Scandinavian
countries with higher than average labor strength also have higher than average
investor protection legislation.
Keywords: Corporate governance; Bargaining centralization; Wage-setting
institutions; Legal origin; Labor movements
Ruhul Salim, Amir Arjomandi, Juergen Heinz Seufert,

Does corporate governance affect Australian banks' performance?,
Journal of International Financial Markets, Institutions and Money,
Volume 43,
2016,
Pages 113-125,
ISSN 1042-4431,
https://doi.org/10.1016/j.intfin.2016.04.006.
Abstract: Worldwide, recent corporate collapses have added to the insecurity of
financial markets, triggering regulatory responses. This study provides empirical
evidence of the relationship between corporate governance and the efficiency of
Australian banks between 1999 and 2013, using two-stage double-bootstrap data
envelopment analysis. Of the five corporate governance factors considered, we find
board size and committee meetings have robustly significant and positive effects on
efficiency. We also find evidence of improvements in overall industry efficiency
following the 2003 introduction of the Principles of Good Corporate Governance, but
not of any statistically-significant influence of the GFC.
Keywords: Data envelopment analysis; Efficiency; Banking; Corporate governance
Changhong Li, Jialong Li, Mingzhi Liu, Yuan Wang, Zhenyu Wu,
Anti-misconduct policies, corporate governance and capital market responses:
International evidence,
Volume 48,
2017,
Pages 47-60,
ISSN 1042-4431,
Abstract: Using a sample of 5486 observations from 25 countries between 2009 and
2013, we investigate the signaling effects of anti-misconduct policies on market
valuation, and address the roles played by internal corporate governance mechanisms
and external institutional environments. The results show that effective corporate
governance mechanisms lead to higher-quality anti-misconduct policies. Furthermore,
we find that although anti-misconduct policies alone do not affect market valuation
in general, they do improve market valuation in countries with stronger legal and
regulatory environments.
Keywords: Anti-misconduct policies; Corporate governance; Market valuation
Ting Li, Nataliya Zaiats,

Corporate governance and firm value at dual class firms,
Review of Financial Economics,
2017,
,
ISSN 1058-3300,
https://doi.org/10.1016/j.rfe.2017.07.001.
Abstract: This study explores whether corporate governance at dual class firms
differs from that of their single class counterparts and whether firm value at dual
class firms is associated with governance. Employing a sample of 1309 U.S. dual
class firm-year observations for the period 1996–2006, we show evidence that dual
class firms are more likely to employ more shareholder rights provisions while
exhibiting lower board and board committee independence than single class firms.
The results also show that shareholder rights increase while board provisions
decrease in wedge at dual class firms. Further findings underscore that firm value
at dual class firms decreases in wedge, and increases in shareholder rights and in
board-related provisions, particularly in director independence. While strong
board-related governance at dual class firms is significantly positively related to
firm value in a multivariate setting, shareholder rights are significantly
associated with firm value only in instances of the weakest board provisions.
Following unification, firms employ more antitakeover provisions while
strengthening their board and board committee independence.
Keywords: Dual class firms; Corporate governance; Firm value; Unification
Hsin-Yu Liang, I-Ju Chen, Sheng-Syan Chen,

Does corporate governance mitigate bank diversification discount?,
International Review of Economics & Finance,
Volume 45,
2016,
Pages 129-143,
ISSN 1059-0560,
https://doi.org/10.1016/j.iref.2016.05.008.
Abstract: This study investigates the relations between corporate governance
structures, level of diversification, and excess value of the U.S. banks for 2003–
2008. Our analysis produces several major findings. First, diversified banks are
different from specialized banks in their board structure, monitoring function of
audit committee, and the level of antitakeover provisions. Second, governance
mechanisms are associated with bank diversification: as the level of
diversification increases, board independence, institutional ownership, and
managerial entrenchment decrease whereas the ratio of certified inside board
directors significantly increases. Our results show that governance structure—
particularly the leadership structure, the ratio of certified inside directors on
the board, and the level of managerial entrenchment—plays an important role in
determining the excess value of diversified banks. The findings provide some
insights for bank policymakers, including the proper design or regulation of bank
governance structures, which is critical to bank performance because regulation is
no longer a substitute for bank governance.
Keywords: Bank diversification; Banking; Corporate governance
Atul Gupta, Lalatendu Misra, Yilun Shi,

Product-market competitiveness and investor reaction to corporate governance
failures,
International Review of Economics & Finance,
Volume 48,
2017,
Pages 134-147,
ISSN 1059-0560,
https://doi.org/10.1016/j.iref.2016.11.014.
Abstract: Is industry competition a substitute for the quality of corporate
governance? If so, and if self-serving behavior by corporate executives at
presumably well governed firms is a greater surprise to investors, then the price
reaction to the news of governance failure should vary by the degree of competition
prevailing in the firm's industry. For a sample of firms that backdated employee
stock options, we find that firms operating in more competitive industries
experienced significantly larger wealth declines upon revelation of the news of
governance failure (backdating of stock option grants). We interpret our findings
to suggest that the quality of corporate governance is less critical for firms
operating in more competitive product markets since product market competition acts
as an implicit substitute for the performance discipline imposed by high quality of
corporate governance.
Keywords: Industry competition; Corporate governance; Market discipline; Option
backdating
George Emmanuel Iatridis,

Accounting discretion and executive cash compensation: An empirical investigation
of corporate governance, credit ratings and firm value,
2018,
,
ISSN 1042-4431,
Abstract: This study focuses on executive compensation that takes the form of cash.
It examines the association between executive compensation and corporate
governance, income smoothing, discretionary accruals and firm value. It also
investigates the possibility of employing earnings manipulation practices when
current credit ratings differ from their expected ratings. This study shows that
executive cash compensation is negatively associated with corporate governance.
Analyst following, company size and debt are negatively related to executive
compensation. In contrast, a positive association has been reported for high
growth. Executive cash compensation is positively associated with discretionary
accruals and negatively with firm value. Firms that pay cash compensation are
likely to engage in earnings manipulation when their actual credit ratings differ
from their expected ratings. They are also likely to engage in earnings
manipulation with the intent of returning to an expected credit rating when the
current ratings have drifted.
Keywords: Executive cash compensation; Corporate governance; Income smoothing;
Discretionary accruals; Credit ratings; Firm value
Josef C. Brada,
Corporate governance following mass privatization,
Journal of Comparative Economics,
Volume 44, Issue 4,
2016,
Pages 1132-1144,
ISSN 0147-5967,
https://doi.org/10.1016/j.jce.2016.10.003.
Abstract: Using vouchers to privatize state-owned firms was an innovative but
controversial aspect of transition. In the Czech Republic, voucher privatization
created a large group of minority shareholders who coexisted with large
shareholder–managers who controlled firms. Critics allege that the structure of
shareholdings and regulatory failures allowed pervasive theft of corporate assets,
much of it financed by irresponsible bank lending, and led to a financial crisis
and an economic downturn. I argue that neither anecdotal evidence of managerial
malfeasance nor the theories of tunneling and looting provide strong evidence for
this view of corporate governance in the Czech Republic. A lack of small
shareholder protection seems to have imposed small costs on the economy, and it may
have facilitated rather than hampered the restructuring of firms.
Keywords: Corporate restructuring; Privatization; Corporate governance; Tunneling;
Looting; Czech republic
Hideaki Miyajima, Ryo Ogawa, Takuji Saito,

Changes in corporate governance and top executive turnover: The evidence from
Japan,
Journal of the Japanese and International Economies,
Volume 47,
2018,
Pages 17-31,
ISSN 0889-1583,
https://doi.org/10.1016/j.jjie.2017.12.006.
Abstract: We examine the turnover of top executives in Japanese firms throughout
the period 1990–2013. During this time, the presence of a main bank has been
weakened, the ownership of institutional investors has rapidly increased, and
independent outside directors have been introduced in many firms. We find that top
executive turnover sensitivity to corporate performance has not changed despite
skepticism on corporate governance of Japanese firms. On the other hand, there is a
shift from return on assets (ROA) to return on equity (ROE) and stock returns as
performance indicators that turnover is most sensitive to. We also examine possible
sources of this change. We find that foreign institutional investors strengthen the
turnover sensitivity to ROE after banking crisis when their shareholding has
dramatically increased. This result allows us to interpret that they began to play
a disciplinary role. In contrast, we do not find that independent outside directors
have any significant effect of enhancing turnover sensitivity to ROE, unless a firm
appointed independent outside directors more than three. While the scope of the
main bank's authority has substantially contracted, strong ties with main banks
increase turnover sensitivity in the more recent period, indicating that main banks
continue to perform a certain role in disciplining management.
Keywords: Corporate governance; Top executive turnover; Main bank; Institutional
investors; Independent outside directors
Rekha Pillai, Husam-Aldin Nizar Al-Malkawi,

On the relationship between corporate governance and firm performance: Evidence
from GCC countries,
2017,
,
ISSN 0275-5319,
Abstract: Governance is increasingly recognized by the business community,
regulators and capital market authorities as a fundamental driver of corporate
performance. The accelerated interests by the investing fraternity in the Gulf
Cooperation Council (henceforth GCC) equity markets due to the myriad benefits
accruing in the form of laudable trade policies, progressive growth strategies, tax
holidays, guaranteed return on investments and political stability signals a
radical shift in ensuring better surveillance and robust corporate governance. This
study examines the impact of internal mechanisms of corporate governance (CG) on
firm performance (FP) in the GCC countries. The study uses firm level panel data
set of 349 financial and non-financial companies listed in the stock exchanges of
the GCC countries for the period 2005–2012. The paper develops an empirical model
based on thirteen testable research hypotheses. The Generalized Least Squares (GLS)
method is used to estimate the model parameters. The results show that governance
variables such as government shareholdings, audit type, board size, corporate
social responsibility and leverage significantly affect the FP in majority of the
countries in the GCC. These results give rise to certain regulatory and managerial
implications, all of which, calls for more concerted efforts in strategically
implementing prudent governance solutions in order to future proof GCC business.
Keywords: Corporate governance; Firm performance; Internal mechanisms; GCC; Panel
data
I. Abinzano, L. Muga, R. Santamaria,

Bad company. The indirect effect of differences in corporate governance in the
pension plan industry,
International Review of Financial Analysis,
Volume 54,
2017,
Pages 63-75,
ISSN 1057-5219,
https://doi.org/10.1016/j.irfa.2017.09.008.
Abstract: This paper analyses the role played by pension plan governance structure
and how it impacts on plan fees and plan performance. The results clearly show that
fees decrease significantly and performance improves when pension plan governance
structures permit full alignment of interests and allow greater capacity for the
decision-makers to monitor and discipline the managers. It is also observed that
companies managing both employee and individual funds, tend to exploit differences
in the internal corporate governance mechanisms of each type of plan in order to
nurture employer-sponsored plans at the expense of individual plans. These results
suggest that internal corporate governance mechanisms allowing closer alignment
with the interests of participants would be preferable to focusing exclusively on
setting the minimum proportion of independent directors.
Keywords: Pension plan governance; Bargaining power; Fees; Performance
Thiago Avila Marques, Karem Cristina de Sousa Ribeiro, Flavio Barboza,

Corporate governance and debt securities issued in Brazil and India: A multi-case
study,
2017,
,
ISSN 0275-5319,
Abstract: The corporate debt market tends to provide a funding alternative, but
requires improvements in regulation and self-regulation. Therefore, corporate
governance arises as a central element for reducing agency conflicts, and private
debt market development. We analyze the corporate governance structure of debt
issuers from Brazil and India through an index of Economic Commission for Latin
America and the Caribbean (ECLAC). The results showed that the non-defaulted
companies had higher scores and the corporate governance quality of the issuer
tends to contribute to the fulfillment of its obligations.
Keywords: Corporate governance; ECLAC index; Brazil; India
Lorne N. Switzer, Qiao Tu, Jun Wang,

Corporate governance and default risk in financial firms over the post-financial
crisis period: International evidence,
Volume 52,
2018,
Pages 196-210,
ISSN 1042-4431,
Abstract: This paper investigates the relationship between default risk and
corporate governance for financial firms in 28 countries outside of North America
in the post-financial crisis period, where default risk is measured by both credit
default swap (CDS) spreads and estimated by a Merton-type model. Reduced default
risk helps the stock market rebound during the post-crisis period. Both internal
governance variables, including institutional and insider ownership, board
composition and CEO power, and external regulatory factors, are examined and they
show significant effect on default risk. In addition, the impacts of various
governance variables are continent-specific: they have a higher impact on default
risk for Asian firms than for European firms. Regulatory factors are important
moderators of the governance mechanisms for banks: higher Tier 1 capital ratios
reduce both CDS and fundamental default risk; recipients of secret emergency loans
from the US Federal Reserve System (the Fed) exhibit lower CDS spreads post-crisis
but higher fundamental default probabilities.
Keywords: Institutional investors; Default risk; Corporate governance
Deniz Anginer, Asli Demirguc-Kunt, Harry Huizinga, Kebin Ma,

Corporate governance and bank capitalization strategies,
Journal of Financial Intermediation,
Volume 26,
2016,
Pages 1-27,
ISSN 1042-9573,
https://doi.org/10.1016/j.jfi.2015.12.002.
Abstract: Abstract
This paper examines the relationship between banks’ capitalization strategies and
their corporate governance and executive compensation schemes for an international
sample of banks over the 2003–2011 period. Shareholder-friendly corporate
governance, in the form of a separation of the CEO and chairman of the board roles,
intermediate board size, and an absence of anti-takeover provisions, is associated
with lower bank capitalization, consistent with shareholder incentives to shift
risk towards the financial safety net. Higher values of executive option and stock
wealth invested in the bank are associated with higher capitalization as a
potential reflection of executive risk aversion, but the risk-taking incentives
embedded in executive compensation packages are associated with lower
capitalization.
Keywords: Bank capital; Dividend payouts; Corporate governance; Executive
compensation
Tahiru Azaaviele Liedong, Tazeeb Rajwani,

The impact of managerial political ties on corporate governance and debt financing:
Evidence from Ghana,
Long Range Planning,
2017,
,
ISSN 0024-6301,
https://doi.org/10.1016/j.lrp.2017.06.006.
Abstract: In this study, we draw upon insights from agency theory to examine the
impact of managerial political ties on cost of debt and also to explore whether
corporate governance mediates this impact. We hypothesize that political ties
reduce financial reporting quality, disclosure of non-financial information and
board independence, and are therefore associated with higher interest rates. We
also hypothesize that the negative effect of political ties on the cost of debt
will be stronger if firms borrow from privately-owned banks versus government-owned
banks. Using data from Ghana, we find support for our direct and moderation
hypotheses; political ties are associated with high interest rates and poor
corporate governance. However, we do not find evidence of mediation. Altogether,
the findings reveal the dark side of political connections and highlight the cost
of political embeddedness in emerging credit markets.
Keywords: Political ties; Corporate governance; Cost of debt; Mediation; Ghana
Sivathaasan Nadarajah, Searat Ali, Benjamin Liu, Allen Huang,

Stock liquidity, corporate governance and leverage: New panel evidence,
2016,
,
ISSN 0927-538X,
Abstract: We examine the effect of stock liquidity and corporate governance on the
firm's leverage decision in the order-driven stock trading system and less
stringent governance environment of Australia. Using a sample of 1207 non-financial
firms from 2001 to 2013, resulting in 9855 firm-year observations, we find the
posited negative stock liquidity–leverage relation, confirming prior research
observations that firms with more liquid stocks are significantly less leveraged.
We also find a significant and negative relation between corporate governance
quality (CGQ) and leverage, indicating that firms with high CGQ significantly
reduce leverage. In a closer analysis, we find that the significantly negative CGQ–
leverage relation exists only for firms with high stock liquidity and does not
exist for firms with low stock liquidity. Our study is the first to examine such an
interactive relationship among stock liquidity, corporate governance and leverage.
The results, which are robust to a range of alternative proxies and to additional
tests, provide new insights into the determinants of leverage.
Keywords: Stock liquidity; Corporate governance quality; Leverage; Australia
Ruth V. Aguilera, Rafel Crespi-Cladera,

Global corporate governance: On the relevance of firms’ ownership structure,
Journal of World Business,
Volume 51, Issue 1,
2016,
Pages 50-57,
ISSN 1090-9516,
https://doi.org/10.1016/j.jwb.2015.10.003.
Abstract: This article addresses reviews research on corporate governance of the
modern corporation around the world, with particular attention to the key variable
of ownership structure. We first review the evolution of ownership studies from the
early days of the Berle and Means to more contemporary research on how ownership
has defined the various corporate governance systems around the world. We maintain
that concentrated and family ownership structures in emerging economies, the role
of the diverse type of large blockholders, and the evolution to more dispersed
structures can help to inform broader questions around corporate governance and its
relationship to economic development and the role of institutions in these
economies. We propose that future research should draw on micro data on firm
specific ownership structures and their corporate governance practices to better
understand the cross-national diversity of governance and its meanings and
consequences. We close by identifying some fruitful areas of future research.
Keywords: International corporate governance; Ownership; Types of ownership;
Institutions
Reena Aggarwal, Jason D. Schloetzer, Rohan Williamson,

Do corporate governance mandates impact long-term firm value and governance
culture?,
2016,
,
ISSN 0929-1199,
Abstract: Motivated by recent changes to corporate governance standards around the
world, we use a regulatory shock that substantially altered the governance
structure for some firms to shed light on the long-term impact of mandates that are
of global interest. Firms affected by this shock had lower values and non-mandated
governance practices that were less shareholder friendly before the mandates were
in effect when compared to unaffected matched peers. In the post-mandate period, we
document a 48% tightening of the relative value gap, and show that this gap relates
to the continued use of less shareholder friendly non-mandated governance
practices. Our results suggest that governance mandates can tighten, but not
eliminate, the value gap between poorly and well governed firms, and that firms
affected by the shock continue to have less shareholder friendly governance
cultures long after regulatory intervention.
Keywords: Corporate governance; Firm value; Corporate culture; International
regulation
Ani Matei, Ciprian Drumasu,

Corporate Governance and Public Sector Entities,
Procedia Economics and Finance,
Volume 26,
2015,
Pages 495-504,
ISSN 2212-5671,
https://doi.org/10.1016/S2212-5671(15)00879-5.
Abstract: Public entities’ Corporate Governance is a concept that is gaining more
and more field both in specialized literature and in practice. The public bodies’
Corporate Governance as leadership and control method involves a set of clear rules
and principles (integrity, honesty / sincerity, transparency and responsibility),
clear risk management and control mechanisms, elements needed to achieve the
purpose of public entities, which is satisfying public needs. Is Corporate
Governance necessary within public entities? Can it contribute to the efficient use
of public funds, the decrease of expenses or budget deficits, the elimination of
corruption and the increase in performance in public entities? The purpose of the
paper is to achieve an academic analysis of the development process of the
Corporate Governance concept in public entities and of how it is an efficient
governance form. The research methodology was based on consulting specialized
literature, respectively using the historical method for pointing out the
milestones in the Corporate Governance concept evolution and the comparative method
for the analysis of advantages and disadvantages of corporate governance in the
private sector and how this model can be implemented in the public sector.
Keywords: Corporate Governance; public sector; public entities
Bernard S. Black, Antonio Gledson de Carvalho, Joelson Oliveira Sampaio,

The evolution of corporate governance in Brazil,
Volume 20,
2014,
Pages 176-195,
ISSN 1566-0141,
Abstract: We use extensive hand collected surveys reporting governance practices of
Brazilian firms in 2004, 2006, and 2009 to build a broad corporate governance index
and analyze the evolution of corporate governance in Brazil and the association
between governance and firm value. We find that corporate governance practices
improved significantly over this period. This evolution is due to two main factors:
1) growth in Novo Mercado and Level II (NM&L2) listings, mainly through IPOs by new
firms, and 2) improved practices at non-NM&L2 firms, principally through adopting
governance elements required for NM&L2 listing. Governance practices for firms
already listed on NM&L2 were stable. Adoption of the elements of our governance
index that are required for NM&L2 listing predicts higher firm value. In contrast,
adoption of the remaining elements of our index does not predict firm value. Thus,
governance changes appear to respond to investor preferences.
Keywords: Brazil; Corporate governance; Boards of directors; Minority shareholders
Burcin Col, Vihang Errunza,

Corporate governance and state expropriation risk,
Volume 33,
2015,
Pages 71-84,
ISSN 0929-1199,
Abstract: Recent studies show that the transfer of corporate governance structure
across borders has significant valuation consequences. It is equally important to
consider the valuation effect of state expropriation risk as well as its
interaction with quality of corporate governance. Using a sample of cross-border
acquisitions during 1989–2009, we find that targets, which operate under some
degree of state expropriation risk, receive a significantly lower premium. The
target shareholders are not fully rewarded for the improvement in firm governance
since the benefits of improvement are mitigated under predation. Our results
provide evidence for twin-agency theory of Stulz (2005) through cross-border
mergers.
Keywords: Cross-border mergers; Valuation; State expropriation; Corporate
governance
Andrey Zagorchev, Lei Gao,

Corporate governance and performance of financial institutions,
Journal of Economics and Business,
Volume 82,
2015,
Pages 17-41,
ISSN 0148-6195,
https://doi.org/10.1016/j.jeconbus.2015.04.004.
Abstract: We examine how corporate governance affects financial institutions in the
U.S. between 2002 and 2009. First, we find that better governance is negatively
related to excessive risk-taking and positively related to the performance of U.S.
financial institutions. Specifically, sound overall and specific governance
practices are associated with less total non-performing assets, less real estate
non-performing assets, and higher Tobin's Q. Second, we show that better governance
contributes to higher provisions and reserves for loan/asset losses of financial
institutions, supporting the income smoothing hypothesis. Moreover, the results are
similar without the financial crisis period, and different robustness checks
confirm the analysis.
Keywords: Corporate governance; Financial institutions; Performance; Income
smoothing; Financial crisis
Jamshed Iqbal, Sascha Strobl, Sami Vähämaa,

Corporate governance and the systemic risk of financial institutions,
Journal of Economics and Business,
Volume 82,
2015,
Pages 42-61,
ISSN 0148-6195,
https://doi.org/10.1016/j.jeconbus.2015.06.001.
Abstract: This paper studies the relationship between corporate governance and the
systemic risk of financial institutions. Specifically, using a sample of large U.S.
financial institutions from 2005 to 2010, we examine whether the strength of
corporate governance mechanisms can explain the cross-sectional variation in
systemic risk around the recent financial crisis. Our empirical findings indicate
that financial institutions with stronger and more shareholder-focused corporate
governance structures and boards of directors are associated with higher levels of
systemic risk. Thus, our results suggest that good corporate governance may
encourage rather than constrain excessive risk-taking in the financial industry.
Keywords: Corporate governance; Boards; Systemic risk; Bank risk-taking; Financial
crisis
Hedwigis Esti Riwayati, Markonah, Muljanto Siladjaja,

Implementation of Corporate Governance Influence to Earnings Management,
Volume 219,
2016,
Pages 632-638,
ISSN 1877-0428,
Abstract: The purpose of this paper is to test the influences of corporate
governance implementation to earnings management practical. This research used two
stages data analysis. Firstly, this research used asymmetrical information variable
as intervening variable. Secondly it would have increased significant rate in
Structural Equation Modeling those variable used without intervening variable. This
research used primary data, collected by 70 respondents. The respondent are all
experts, manager, decision maker and the owner. They are performers in the
corporate governance. The research has the previous model and method which explain
implementation of corporate governance reduced the bad impact of earnings
management.
Keywords: Corporate Governance; Asymmetrical Information; Earnings Management
Shuang Xue, Yun Hong,

Earnings management, corporate governance and expense stickiness,
China Journal of Accounting Research,
Volume 9, Issue 1,
2016,
Pages 41-58,
ISSN 1755-3091,
https://doi.org/10.1016/j.cjar.2015.02.001.
Abstract: Cost and expense stickiness is an important issue in accounting and
economics research, and the literature has shown that cost stickiness cannot be
separated from managers’ motivations. In this paper, we examine the effects that
earnings management has on expense stickiness. Defining small positive profits or
small earnings increases as earnings management, we observe significant expense
stickiness in the non-earnings-management sub-sample, compared with the earnings-
management sub-sample. When we divide expenses into R&D, advertising and other
general expenses, we find that managers control expenses mainly by decreasing
general expenses. We further examine corporate governance’s effect on expense
stickiness. Using factor analysis, we extract eight main factors and find that good
corporate governance reduces expense stickiness. Finally, we investigate the
interaction effects of earnings management and corporate governance on expense
stickiness. The empirical results show that good corporate governance can further
reduce cost stickiness, although its effect is not as strong as that of earnings
management.
Keywords: Earnings management; Corporate governance; Expense stickiness;
Interaction effect
Benjamin E. Hermalin, Michael S. Weisbach,

Chapter 3 - Assessing Managerial Ability: Implications for Corporate
Governance✶✶The authors thank Vivian Fang, Dongxu Li, Jongha Lim, Yihui Pan, Miriam
Schwartz-Ziv, Berk Sensoy, Léa Stern, Luke Taylor, Ralph Walkling, and Tracy Wang
for helpful comments on an earlier draft, and Shan Ge for excellent research
assistance. Hermalin gratefully acknowledges the financial support of the Thomas &
Alison Schneider Distinguished Professorship in Finance and the hospitality of
Nuffield College, Oxford, where work on this chapter began.,
North-Holland,
Volume 1,
2017,
Pages 93-176,
ISSN 2405-4380,
ISBN 9780444635303,
Abstract: A manager's current and potential future employers are continually
assessing her or his ability. Such assessment is a crucial component of corporate
governance and this chapter provides an overview of the research on that aspect of
governance. In particular, we review how assessment generates incentives (both good
and bad), generates risks that must be faced by both managers and firms, and
affects the contractual relationships between those parties in important ways.
Assessment (or learning) proves a key perspective from which to study, evaluate,
and possibly even regulate corporate governance. Moreover, because learning is a
behavior notoriously subject to systematic biases, this perspective is a natural
avenue through which to introduce behavioral and psychological insights into the
study of corporate governance.
Keywords: Corporate governance; Career concerns; Learning and assessment; Cognitive
biases
Hsiao-Jung Chen, Kuan-Ting Lin,

How do banks make the trade-offs among risks? The role of corporate governance,
Journal of Banking & Finance,
Volume 72, Supplement,
2016,
Pages S39-S69,
ISSN 0378-4266,
https://doi.org/10.1016/j.jbankfin.2016.05.010.
Abstract: This study analyzes the role of corporate governance in the relationship
among credit, interest rate, and liquidity risks encountered by banks. In
particular, the study investigates how banks make the trade-offs among these risks
under the maturity transformation business model. The sample consists of banks in
43 countries over the period of 2002–2010. Results show that credit, interest rate,
and liquidity risks are related to one another, and that the interactions among
them can be reduced by corporate governance and regulations. During the regular
yield curve spread (YCS) period, management-controlled banks take less credit risk
and even less liquidity risk whereas shareholder-controlled banks encounter more
liquidity risk as they pursue more interest rate risk. During the inverted YCS
period, management-controlled banks still opt for less credit risk-taking, but
shareholder-controlled banks are greatly exposed to risks and should thus be
monitored by concerned authorities.
Keywords: Bank; Corporate governance; Credit risk; Interest rate risk; Liquidity
risk
Yogesh Chauhan, K. Rajya Lakshmi, Dipanjan Kumar Dey,

Corporate governance practices, self-dealings, and firm performance: Evidence from
India,
Volume 12, Issue 3,
2016,
Pages 274-289,
ISSN 1815-5669,
Abstract: This paper investigates the effects of firm-level corporate governance
practices on firm performance for publicly traded Indian firms where founder
ownership is concentrated. We develop a comprehensive measure of corporate
governance and show that corporate governance is positively associated with firm
performance. This relationship becomes stronger when founder ownership is high. We
next focus on the specific channel through which governance improves firm
performance, namely self-dealing by controlling owners. We find that better
governance mitigates self-dealing by controlling owners and thereby improves future
firm performance. Overall, our study substantiates the key relationship between the
quality of corporate governance and firm performance in the presence of founder
ownership.
Keywords: Corporate governance index; Self-dealing; Related-party transactions;
Founder ownership; Tunneling
Caspar Rose,
Firm performance and comply or explain disclosure in corporate governance,
European Management Journal,
Volume 34, Issue 3,
2016,
Pages 202-222,
ISSN 0263-2373,
https://doi.org/10.1016/j.emj.2016.03.003.
Abstract: This study investigates the degree of Danish firm adherence to the Danish
Code of Corporate Governance and analyzes if a higher degree of comply or explain
disclosure is related to firm performance. This article formulates a methodology
for quantifying the degree of comply or explain disclosure. The analysis shows that
there is a positive link between ROE/ROA and Danish firm total corporate governance
comply or explain disclosure scores. Specifically, this is also the case when this
level is increased within the following two categories: board composition and
remuneration policy, whereas there is no impact on performance when increasing
compliance with the recommendations on risk management and internal controls. This
article demonstrates that these three areas are the ones where Danish firms show
the lowest degree of comply or explain disclosure, although the overall adherence
to the Danish code's many recommendations is relatively high. This article relates
to the burgeoning literature that deals with listed firm compliance with national
corporate governance codes and how compliance can be appropriately quantified. It
is suggested that compliance is classified into the following four categories:
complies, complies poorly, explains and explains poorly. The article demonstrates
that measuring the degree of compliance cannot be done in a mechanical way.
Instead, it must be customized to the respective national institutional
environment, which suggests country comparisons will be difficult to make. The
article contributes to the ongoing discussion of whether firms consider soft law to
be a “tick the box” exercise or, alternatively, whether firms should work seriously
with the recommendations in order to professionalize and increase competences among
board members. The article's findings suggest that soft law may be an efficient way
of increasing the quality of corporate governance among listed firms. However, in
order to strengthen investor confidence, national code authorities/committees
should be more active in penalizing poor explanations as well as cases where firms
wrongfully state that they comply with a specific recommendation.
Keywords: Corporate governance; Disclosure; Comply or explain; Firm performance
Huseyin Gulen, William J. O'Brien,

Option repricing, corporate governance, and the effect of shareholder empowerment,
Journal of Financial Economics,
Volume 125, Issue 2,
2017,
Pages 389-415,
ISSN 0304-405X,
https://doi.org/10.1016/j.jfineco.2017.05.004.
Abstract: We use the practice of employee option repricing to investigate how
shareholder involvement in firm compensation policies affects the quality of firm
governance. We find that a 2003 reform that empowered shareholders to approve or
reject repricing proposals led to value increases in previous repricers. The
likelihood of repricing becomes less sensitive to poor manager performance, but
remains similarly sensitive to bad luck, after the reform. Average post-repricing
changes in firm performance are positive only after the reform. Overall, our
results suggest that shareholder empowerment improves the governance of repricing
and can transform repricing into a value-creating tool.
Keywords: Shareholder empowerment; Executive compensation; Corporate finance;
Corporate governance; Corporate regulation
Cornelius Schmidt, Rüdiger Fahlenbrach,

Do exogenous changes in passive institutional ownership affect corporate governance
and firm value?,
Journal of Financial Economics,
Volume 124, Issue 2,
2017,
Pages 285-306,
ISSN 0304-405X,
https://doi.org/10.1016/j.jfineco.2017.01.005.
Abstract: We investigate whether corporations and their executives react to an
exogenous change in passive institutional ownership and alter their corporate
governance structure. We find that exogenous increases in passive ownership lead to
increases in CEO power and fewer new independent director appointments. Consistent
with these changes not being beneficial for shareholders, we observe negative
announcement returns to the appointments of new independent directors. We also show
that firms carry out worse mergers and acquisitions after exogenous increases in
passive ownership. These results suggest that the changed ownership structure
causes higher agency costs.
Keywords: Corporate governance; Institutional ownership; Monitoring; Index
reconstitutions
M. Belén Lozano, Beatriz Martínez, Julio Pindado,

Corporate governance, ownership and firm value: Drivers of ownership as a good
corporate governance mechanism,
Volume 25, Issue 6,
2016,
Pages 1333-1343,
ISSN 0969-5931,
Abstract: This study analyses the role of ownership as a good corporate governance
mechanism. We study cross-national differences between companies with different
level of investor protection. In addition, we account for the type of owner (young
family vs. non-young family businesses) and the owner’s relationship with a second
significant shareholder (monitoring vs. collusion). When the main owner has
effective control over the firm (i.e., absolute control or less than absolute
control but without the control of a second significant shareholder), the relation
between ownership concentration and firm value is U-shaped. Our findings also
suggest that the conflicts between majority and minority shareholders are weaker
for companies with higher investor protection and young family-owned businesses.
Keywords: Corporate governance; Young family-owned business; Main owner;
Expropriation; Firm value
Christopher S. Armstrong, Jennifer L. Blouin, Alan D. Jagolinzer, David F. Larcker,

Corporate governance, incentives, and tax avoidance,
Journal of Accounting and Economics,
Volume 60, Issue 1,
2015,
Pages 1-17,
ISSN 0165-4101,
https://doi.org/10.1016/j.jacceco.2015.02.003.
Abstract: We examine the link between corporate governance, managerial incentives,
and corporate tax avoidance. Similar to other investment opportunities that involve
risky expected cash flows, unresolved agency problems may lead managers to engage
in more or less corporate tax avoidance than shareholders would otherwise prefer.
Consistent with the mixed results reported in prior studies, we find no relation
between various corporate governance mechanisms and tax avoidance at the
conditional mean and median of the tax avoidance distribution. However, using
quantile regression, we find a positive relation between board independence and
financial sophistication for low levels of tax avoidance, but a negative relation
for high levels of tax avoidance. These results indicate that these governance
attributes have a stronger relation with more extreme levels of tax avoidance,
which are more likely to be symptomatic of over- and under-investment by managers.
Keywords: Tax aggressiveness; FIN 48; Tax avoidance; CEO incentives; Corporate
governance
Mohammad Badrul Muttakin, Arifur Khan, Ataur Rahman Belal,

Intellectual capital disclosures and corporate governance: An empirical
examination,
Advances in Accounting,
Volume 31, Issue 2,
2015,
Pages 219-227,
ISSN 0882-6110,
https://doi.org/10.1016/j.adiac.2015.09.002.
Abstract: Empirical examinations of the links between corporate governance and
intellectual capital are underresearched, particularly from the context of emerging
economies where corporate governance mechanisms tend to be largely ceremonial due
to family dominance. This study aims to address this gap in the intellectual
capital disclosure (ICD) literature by undertaking an empirical examination of the
relationship between corporate governance and the extent of ICD of Bangladeshi
companies. Inter alia, the key findings of this study suggest that there is a non-
linear relationship between family ownership and the extent of ICD. This research
also found that foreign ownership, board independence, and the presence of audit
committees are positively associated with the extent of ICD. Conversely, family
duality (i.e., where the positions of CEO and chairperson are occupied by two
individuals from the same family) is negatively associated with the extent of ICD.
Keywords: Intellectual capital disclosure; Corporate governance; Agency theory;
Bangladesh
Micah Landon-Lane,
Corporate social responsibility in marine plastic debris governance,
Marine Pollution Bulletin,
Volume 127,
2018,
Pages 310-319,
ISSN 0025-326X,
https://doi.org/10.1016/j.marpolbul.2017.11.054.
Abstract: This paper explores the governance characteristics of marine plastic
debris, some of the factors underpinning its severity, and examines the possibility
of harnessing corporate social responsibility (CSR) to manage plastic use within
the contextual attitudes of a contemporary global society. It argues that
international and domestic law alone are insufficient to resolve the “wicked
problem” of marine plastic debris, and investigates the potential of the private
sector, through the philosophy of CSR, to assist in reducing the amount and impacts
of marine plastic debris. To illustrate how CSR could minimise marine plastic
pollution, an industry-targeted code of conduct was developed. Applying CSR would
be most effective if implemented in conjunction with facilitating governance
frameworks, such as supportive governmental regulation and non-governmental
partnerships. This study maintains that management policies must be inclusive of
all stakeholders if they are to match the scale and severity of the marine plastic
debris issue.
Keywords: Corporate social responsibility; Marine plastic debris; Oceans governance
Xiang Liu, Chen Zhang,

Corporate governance, social responsibility information disclosure, and enterprise
value in China,
Journal of Cleaner Production,
Volume 142, Part 2,
2017,
Pages 1075-1084,
ISSN 0959-6526,
https://doi.org/10.1016/j.jclepro.2016.09.102.
Abstract: Social responsibility information disclosure relates to the long-term
development of enterprises. All social layers pay increasing attention to social
responsibility of enterprises, especially those in heavy-pollution industries that
are listed on stock exchanges. This study takes Chinese companies in heavy-
pollution industries that were listed during 2008–2014 as objects of study to test
the relationships among corporate governance, social responsibility information
disclosure, and enterprise value. The study finds that there is a declining level
of social responsibility information disclosure of listed enterprises in heavy-
pollution industries. In addition, different corporate governance factors affect
the social responsibility information disclosure of listed companies in heavy-
pollution industries to a certain extent. Furthermore, we find that social
responsibility information disclosure is not beneficial for the short-term profit
of an enterprise but can increase its long-term value. Generally, a high level of
corporate governance is favorable for legitimacy management as well as disclosure
of social responsibility information.
Keywords: Corporate governance; Heavy-pollution industry; Social responsibility
information disclosure; Enterprise value
Limei Cao, Wanfu Li, Limin Zhang,

Audit mode change, corporate governance and audit effort,
China Journal of Accounting Research,
Volume 8, Issue 4,
2015,
Pages 315-335,
ISSN 1755-3091,
https://doi.org/10.1016/j.cjar.2015.05.002.
Abstract: This study investigates changes in audit strategy in China following the
introduction of risk-based auditing standards rather than an internal control-based
audit mode. Specifically, we examine whether auditors are implementing the risk-
based audit mode to evaluate corporate governance before distributing audit
resources. The results show that under the internal control-based audit mode, the
relationship between audit effort and corporate governance was weak. However,
implementation of the risk-based mode required by the new auditing standards has
significantly enhanced the relationship between audit effort and corporate
governance. Since the change in audit mode, the Big Ten have demonstrated a
significantly better grasp of governance risk and allocated their audit effort
accordingly, relative to smaller firms. The empirical evidence indicates that
auditors have adjusted their audit strategy to meet the regulations, risk-based
auditing is being achieved to a degree, reasonable and effective corporate
governance helps to optimize audit resource allocation, and smaller auditing firms
in particular should urgently strengthen their risk-based auditing capability.
Overall, our findings imply that the mandatory switch to risk-based auditing has
optimized audit effort in China.
Keywords: Audit effort; Risk-based audit mode; Corporate governance
Emmanuel Adegbite,
Good corporate governance in Nigeria: Antecedents, propositions and peculiarities,
Volume 24, Issue 2,
2015,
Pages 319-330,
ISSN 0969-5931,
Abstract: Relying on an alternative theoretical framework (i.e. institutional
theory), rather than the dominant agency theory, this paper examines the
connections between corporate governance mechanisms and good practices, as informed
by an empirical and contextual analysis. On the basis of research methods
triangulation, this study presents nine specific antecedents of good corporate
governance in weak institutional settings (Nigeria). The study proposes how each of
these antecedents must be understood, articulated and harnessed, on the basis of
relevant institutional peculiarities, in order to address contextual governance
challenges. This study adds to the institutional theorising of good corporate
governance, by paying attention to the context (African), efficiency
(instrumentality) and legitimacy (symbolic) in explaining the firm-level drivers of
good governance practices in an international business environment.
Keywords: Africa; Agency Theory; Good Corporate Governance; Institutional Theory;
International Business; International Corporate Governance; Nigeria
Prem Sikka, John Stittle,

Debunking the myth of shareholder ownership of companies: Some implications for
corporate governance and financial reporting,
2017,
,
ISSN 1045-2354,
Abstract: The shareholder primacy model is dominant in Anglo-Saxon corporate
governance and financial reporting even though it is considered to be dysfunctional
and a source of crisis. The possibilities of reforms are routinely stymied with the
claims that shareholders are the owners of large corporations and management should
promote their interests. This paper seeks to debunk such claims. It shows that a
corporation is a distinct legal person and cannot be owned by its shareholders. It
argues that shareholders in contemporary corporations are owners of ‘fictitious’
capital which is very distinct from ‘real’ capital. The systemic pressures require
the holders of fictitious capital to constantly buy/sell shares in pursuit of
short-term gains. The paper further shows that in a globalised economy, the
shareholding duration in major UK companies has shrunk and shareholders are more
dispersed than ever before. They are not in any position to control or direct
corporations for the benefit of other stakeholders and society generally. The paper
calls for abandonment of the shareholder model of governance and calls for
empowerment of stakeholders with a long-term interest in the wellbeing of
corporations.
Keywords: Corporate governance; Share ownership; Fictitious capital; Financial
reporting
Iulia Lupu,
The Indirect Relation between Corporate Governance and Financial Stability,
Volume 22,
2015,
Pages 538-543,
ISSN 2212-5671,
https://doi.org/10.1016/S2212-5671(15)00254-3.
Abstract: In the wake of last crises, there is an increased awareness regarding the
role of a sound corporate governance framework for enhancing the financial
stability. We believe, however, that the relationship between corporate governance
and financial stability is an indirect one; companies are not obliged to pursue
financial stability unless specific legislation or regulations require it.
Interestingly, having such targets, large firms, especially those operating in the
financial system, can lead to systemic risks, supporting financial contagion.
Classical problems of corporate governance such as top management compensation,
board composition, and independence of the director, agent theory or the correct
valuation are problems envisaged to be analyzed when assessing how they affect
financial stability.
Keywords: corporate governance; financial stability; ECB
K. Batu Tunay, Serhat Yüksel,

The relationship between corporate governance and foreign ownership of the banks in
developing countries,
Contaduría y Administración,
Volume 62, Issue 5,
2017,
Pages 1627-1642,
ISSN 0186-1042,
https://doi.org/10.1016/j.cya.2017.05.007.
Abstract: The aim of this paper is to determine the effect of corporate governance
on foreign ownership of the banks. Within this context, annual data of 65
developing countries for the periods between 2004 and 2013 was analyzed. In
addition to this situation, 7 explanatory variables were used in this study in
order to achieve this objective. As a result of the analysis, it was identified
that there is a strong relationship between operations of foreign banks and
governance levels of the countries. In this regard, it was determined that the
factors of corruption, political stability, rule of law and flexibility in legal
regulations affect foreign bank operations. Moreover, it was also analyzed that
foreign bank operations are stronger in the countries that have low poverty, high
political stability and efficient legal infrastructure. On the other hand, it was
defined that strict legal regulation affects foreign bank operations negatively
which shows that foreign banks prefer to enter into the countries that have
flexible legal regulations. This study gives essential information to developing
countries about the factors that affect the decisions of foreign banks in order to
enter into a developing country. Therefore, by considering the results of this
study, the authorities of these countries can have a chance to take necessary
actions so as to attract foreign banks.
Resumen
El objetivo de este trabajo es determinar el efecto del gobierno corporativo sobre
la propiedad extranjera de los bancos. En este contexto, se analizaron los datos
anuales de 65 países en desarrollo de los períodos comprendidos entre 2004 y 2013.
Además de esta situación, se utilizaron 7 variables explicativas para alcanzar este
objetivo. Como resultado del análisis, se identificó que existe una relación fuerte
entre las operaciones de los bancos extranjeros y los niveles de gobierno de los
países. A este respecto, se determinó que los factores de corrupción, estabilidad
política, estado de derecho y flexibilidad en las regulaciones legales afectan a
las operaciones de los bancos extranjeros. Además, se analizó que las operaciones
de bancos extranjeros son más fuertes en los países que tienen baja pobreza, alta
estabilidad política y una eficiente infraestructura jurídica. Por otra parte, se
definió que una estricta regulación legal afecta negativamente a las operaciones de
los bancos extranjeros, lo que muestra que los bancos extranjeros prefieren entrar
en los países que tienen regulaciones legales flexibles. Este estudio proporciona
información esencial a los países en desarrollo sobre los factores que afectan las
decisiones de los bancos extranjeros antes de entrar en un país en desarrollo. Por
consiguiente, al considerar los resultados de este estudio, las autoridades de
estos países pueden tener la oportunidad de adoptar las medidas necesarias para que
atraigan bancos extranjeros.
Keywords: Banking; Corporate governance; Foreign banks; Banca; Gobierno
corporativo; Bancos extranjeros
Robert C. Bird, Paul A. Borochin, John D. Knopf,

The role of the chief legal officer in corporate governance,
Volume 34,
2015,
Pages 1-22,
ISSN 0929-1199,
Abstract: The CLO shapes and enforces corporate governance, but is faced with a
dual-role paradox that requires her to act as both monitor of corporate governance
and executive of the firm. We study the role of the CLO under environments that are
most likely to impact governance and pressure the firm to either emphasize or
marginalize the CLO's role as monitor or facilitator. Using the financial shock of
a securities class action lawsuit on large corporations, we measure changes in CLO
value through the metrics of total and relative compensation of the CLO and other
C-suite members. After controlling for relevant variables such as growth and total
assets, we find that when firms have more insiders on their board of directors, the
CLO's compensation declines when the preceding year's Tobin's Q is high. CLO
compensation increases under conditions of high opacity, but that compensation
partially erodes in high Tobin's Q environments. We also find that a lawsuit
increases CFO and CEO turnover but not the CLO's. Our results have implications for
corporate governance, the dual and potentially conflicting role of CLO as
gatekeeper and monitor, executive compensation, and agency costs.
Keywords: Corporate governance; Internal governance; Executive compensation;
Securities class actions
Byung S. Min, Russell Smyth,

Corporate governance, globalization and firm productivity,
Journal of World Business,
Volume 49, Issue 3,
2014,
Pages 372-385,
ISSN 1090-9516,
https://doi.org/10.1016/j.jwb.2013.07.004.
Abstract: We examine the relationship between globalization, corporate governance
and firm productivity. The results, using longitudinal data from Korea, indicate
that the positive effect of liberalising equity ownership on firms’ total factor
productivity (TFP) was reinforced by indirect managerial effects when a firm
improved its corporate governance. Our findings also confirm that the interaction
of the managerial effect with increased foreign equity ownership is more
significant than interaction with exports, suggesting that liberalising foreign
investment in the host market is more effective in capitalising on the potential
benefits of corporate governance reform than increasing exports to overseas
markets, reflected in learning by exporting.
Keywords: Corporate governance reform; Globalization; Productivity; Korea
Chin-Jung Luan, Ying-Yu Chen, Hsiu-Ying Huang, Kai-Shiuan Wang,

CEO succession decision in family businesses – A corporate governance perspective,
Asia Pacific Management Review,
2017,
,
ISSN 1029-3132,
https://doi.org/10.1016/j.apmrv.2017.03.003.
Abstract: Using a comprehensive database of Taiwanese family-owned business, this
study investigates chief executive officer (CEO) selection decisions in family-
owned businesses. Our data sample is composed of 129 listed family businesses from
1998 to 2008. By employing theories of family-owned business succession and
corporate governance, the study examines the influence of chairman of the board
(COB) and CEO duality, current CEO/family relations, and shareholding ratio of
outside directors on CEO-selection decisions in family-owned businesses. The
results demonstrate that a family-owned business is more likely to select an intra-
firm member as the new CEO when the incumbent CEO is a family member. Moreover, a
family-owned businesses are prone to selecting new CEOs from external sources when
the shareholding ratio of outside directors is greater. Based on the findings, the
study can contribute to CEO succession research and family-business research in
emerging economies.
Keywords: Family-owned business; Succession planning; Corporate governance
Wai-Kwong Chu, Nien-Tzu Yang, Sheng-Yung Yang,
Corporate governance’ impact on research and development,
Volume 69, Issue 6,
2016,
Pages 2239-2243,
ISSN 0148-2963,
Abstract: This study examines the effects of legal and investor protection
mechanisms on the efficiency of R&D. This study makes two contributions to the
literature. First, when a company lists shares in a common law country or one with
higher investor protection (i.e., a company has better country-level corporate
governance), the R&D investments of companies create more value. Second, companies
that issue ADRs generate higher value from their R&D investments than those that do
not issue ADRs. For some companies without ADR issues, their R&D investments
decrease the market value of the company. The issuance of ADR strengthens the level
of supervision, reducing the agency problem and inducing a higher value of their
R&D investment. To the best of our knowledge, no previous studies have examined
this phenomenon.
Keywords: R&D; ADRs; Supervision; LLSV; Corporate governance; fsQCA
A.M.I. Lakshan, W.M.H.N. Wijekoon,

Corporate Governance and Corporate Failure,
Volume 2,
2012,
Pages 191-198,
ISSN 2212-5671,
https://doi.org/10.1016/S2212-5671(12)00079-2.
Abstract: The purpose of this research is to examine the influence of corporate
governance characteristics on the corporate failure of listed companies in Sri
Lanka. This study utilized publicly available data from annual reports of a sample
of 70 failed firms and a sample of matched 70 non failed firms listed on Colombo
stock market for a period covering the 2002 to 2008 financial years with logistic
regression analysis. Corporate governance characteristics comprises with board
size, CEO duality, outside directors, outsiders’ ownership, audit opinion, presence
of an audit committee and remuneration of board members. Outside director ratio,
presence of an audit committee and remuneration of board members turn out to be
negatively associated with the probability of corporate failure, While CEO duality
is positively related with the likelihood of corporate failure. Board size,
auditor's opinion and outside ownership do not appear to be significant
determinants. The paper offers evidence on the extent to which corporate failure
associated with corporate governance. It would be educational to investors,
financial analysts, accounting professionals, management and be helpful for
regulatory authorities in making decisions, evaluations and policies.
Keywords: Corporate governance ;Corporate failure ;Logistic regression
Yuan George Shan,

Value relevance, earnings management and corporate governance in China,
Volume 23,
2015,
Pages 186-207,
ISSN 1566-0141,
Abstract: This study investigates whether earnings management reduces the level of
value relevance and whether good corporate governance restrains earnings
management. Using hand-collected data comprising 1012 firm-year observations from
all companies listed on the Shanghai SSE 180 and the Shenzhen SSE 100, the results
show that the negative impact of value relevance for the companies engaged in
earnings management is greater than the companies that have not engaged in earnings
management engagement. Furthermore, the companies with good corporate governance
practices are more likely to constrain earnings management than those without.
Keywords: China; Corporate governance; Earnings management; Value relevance
Isabelle Ducassy, Alexis Guyot,

Complex ownership structures, corporate governance and firm performance: The French
context.,
Volume 39, Part A,
2017,
Pages 291-306,
ISSN 0275-5319,
Abstract: This study seeks to understand the leading role played by the
blockholders and their true governance mechanism, in the French context,
characterised by complex ownership structures. We focus on the role that second-
tier shareholders can play in the optimal governance of companies and in their
capacity to solve both principal/agent and principal/principal agency conflicts.
Using a sample of 2118 observations between 2000 and 2009, we find that second-tier
shareholders exercise effective additional monitoring when power is contestable but
increase principal/principal agency costs in the presence of a controlling owner.
We also show that shareholder homogeneity reduces agency conflicts. Our results
demonstrate that the level of control contestability is essential in the
understanding of governance mechanisms. Such contestability is to be found
simultaneously at institutional level, at the level of the balance of power between
blockholders, and according to the nature of the shareholders. Thus, the usual
agency theory conclusions are debateable when the legal framework offers little
protection of minority shareholders, and when ownership structure is complex and
heterogeneous in nature. The study of corporate governance must therefore encompass
a twofold analytical perspective, namely, an institutional and a socio-
organisational one. The analysis and findings could be particularly useful in
assessing corporate governance in the context of several European countries with a
similar self-dealing legal environment to the French one, including Italy and
Greece.
Keywords: Corporate governance; Shareholder value; Complex ownership; Private
enforcement
Meijun Qian, Bernard Y. Yeung,

Bank financing and corporate governance,
Volume 32,
2015,
Pages 258-270,
ISSN 0929-1199,
Abstract: Extant literature suggests that bank monitoring improves corporate
governance. This paper demonstrates that inefficiency in banking can also
significantly reduce the equity capital markets' disciplinary power. Specifically,
we show that in an environment in which the banking system is dominated by
inefficient state-owned banks, controlling shareholders' tunneling activity is
positively associated with firms' bank loan access. This relation is particularly
strong in firms with high borrowing capacity, as measured by tangibility, and in
regions where the banking industry is severely inefficient. As firms with high
tunneling can continue to receive new loans with interest cost compatible to
others, equity capital market disciplinary forces do not apply to them. Indeed, we
further show that through tunneling, bank financing is negatively associated with
future firm performance. These results suggest that, for an economy to develop
mature capital markets, it is imperative to improve banking efficiency because its
inefficiency dilutes the monitoring role of the market.
Keywords: Bank financing; Corporate governance; Tunneling; Loan pricing
Burcin Col, Kaustav Sen,

The role of corporate governance for acquisitions by the emerging market
multinationals: Evidence from India,
2017,
,
ISSN 0929-1199,
Abstract: Acquisitions by emerging market firms of targets located in developed
markets have increased drastically over the recent years. We use this setting to
test Coffee's (1999) bonding hypothesis in a cross-border M&A context by examining
whether acquirers adopt the corporate governance practices prevalent in the
target's country. Using firm-level data spanning 2001–2010, we find that (i)
ownership and board characteristics of Indian firms change significantly after
acquiring developed market targets, (ii) the change in firm governance is more
pronounced when the target countries have better investor protection and (iii)
acquirers that exhibit changes in firm governance are associated with higher
valuation after these transactions. These findings suggest that emerging market
firms bond to higher corporate governance standards of the developed markets
through cross-border acquisitions.
Basil Al-Najjar, Ephraim Clark,

Corporate governance and cash holdings in MENA: Evidence from internal and external
governance practices,
Volume 39, Part A,
2017,
Pages 1-12,
ISSN 0275-5319,
Abstract: This paper explores the impact of internal and external corporate
governance practices on the decision to hold cash in MENA countries. Using430 non-
financial firms in the MENA region for the period from 2000 to 2009, we find that
both types of governance practices are important. We report a negative relationship
between board size and cash holdings, evidence that firms hold less cash to reduce
agency conflicts. Also, we detect that external governance activities are important
in cash holding decisions, since we report that firms belonging to countries with
international standards of securities law and bank supervision hold less cash. For
our sub-sample of 85 firms, we report evidence that institutional owners are seen
to be self-opportunistic and that they aim to maximize their own private benefits.
Keywords: External governance; Board size; Board independence; Institutional
ownership; MENA; Cash holdings
Victoria Stanciu, Maria Alina Caratas,

Which is the Pulse of Romanian Corporate Governance? – An Empirical Study,
Volume 20,
2015,
Pages 586-594,
ISSN 2212-5671,
https://doi.org/10.1016/S2212-5671(15)00112-4.
Abstract: This paper aims to emphasize the state of corporate governance in
Romanian regulatory framework and the quality of corporate governance culture in
Romanian organizations. The authors performed an analysis of the manner in which
the OECD principles and other governance settlements are respected in some of the
top Romanian banks. The research emphasized some gaps in the Romanian regulation
and the need to improve corporate governance implementations. The authors’
contribution consists in highlighting those regulatory requirements that should be
improved in order to increase the effectiveness of corporate governance in Romanian
financial institutions.
Keywords: Corporate governance; Bucharest Stock Exchange code; governance models;
banks; listed companies.
Abd Rahman Hj Ali, Mustaffa Mohamed Zain, Zubaidah Zainal Abidin, Roslani Embi,
The Level of Knowledge of Corporate Governance in Federal Statutory Bodies in
Malaysia,
Volume 28,
2015,
Pages 170-175,
ISSN 2212-5671,
https://doi.org/10.1016/S2212-5671(15)01097-7.
Abstract: This research examines the level of knowledge of corporate governance in
Malaysian Federal Statutory Bodies (FSB). Questionnaire survey was used to test and
to acquire sincere admission regarding respondents‟ knowledge on concept,
principles and practices of corporate governance. The results demonstrate that the
population of FSB is at below average level of knowledge of corporate governance,
while their sincere admission is at good level of knowledge of corporate
governance. There is a tendency for population to admit that they are more
knowledgeable than they really are. At the same time, they place high rating on
training in order to update their knowledge and practices of governance in public
sector.
Keywords: Corporate Governance; Level of knowledge of Corporate Governance; Federal
Statutory Bodies; Malaysia
Guadalupe del Carmen Briano-Turrent, Lázaro Rodríguez-Ariza,

Corporate governance ratings on listed companies: An institutional perspective in
Latin America,
European Journal of Management and Business Economics,
Volume 25, Issue 2,
2016,
Pages 63-75,
ISSN 2444-8451,
https://doi.org/10.1016/j.redeen.2016.01.001.
Abstract: The aim of this paper is to analyse whether institutional factors
determine the level of corporate governance compliance among major listed companies
in emerging markets of Latin America, a region characterized by a poor legal
system, highly concentrated ownership structures, and capital markets relatively
less developed. The paper used an unbalanced panel data consisting of 826
observations of the highest ranked companies on the stock exchange indices of
Argentina, Brazil, Chile and Mexico during the period 2004–2010. The results
provide strong empirical evidence that board independence, ownership concentration
and stakeholder orientation affect positively corporate governance ratings, while
board size decreases corporate governance compliance in Latin American countries.
The study fills a gap in the Latin American literature, providing useful
information for determining policies on corporate governance and, in general, for
managers and investors of listed companies in Latin America.
Keywords: Corporate governance; Ratings; Institutional theory; Emerging markets;
Latin America
Marinela-Daniela Manea,
Corporate Governance within the Romanian Bank Sistem,
Volume 27,
2015,
Pages 454-459,
ISSN 2212-5671,
https://doi.org/10.1016/S2212-5671(15)01020-5.
Abstract: By using the model of the score function (Spătăcean, I.O. and Ghiorghiţă,
L., 2012), the current research work aims to identify the degree to which the
concepts, principles and techniques typical to Corporate Governance are spread, by
taking 14 Romanian credit institutions as reference.
Keywords: Corporate governance; ethical code; credit institution; score function;
Romania.
Abed Al-Nasser Abdallah, Ahmad K. Ismail,

Corporate governance practices, ownership structure, and corporate performance in
the GCC countries,
Volume 46,
2017,
Pages 98-115,
ISSN 1042-4431,
Abstract: This study is motivated by highly concentrated ownership, the relatively
large government stake in listed firms in the GCC (Gulf Cooperative Council)
region, and the rapid stock market development and developing investor protection
environment. The results point to heterogeneity in governance quality across
exchanges. For the first time, we find that the positive relationship between
governance quality and firm performance is maintained and is stronger at low levels
of concentrated ownership. More interestingly, we find that the relationship
between governance and firm performance is an increasing function of dispersed
ownership and that the value addition of good governance is not necessarily
maintained at high levels of ownership concentration. Furthermore, such a
relationship reaches its highest level when the government or local corporations
are the firm’s major shareholders.
Keywords: Corporate governance; Performance; Ownership structure; Transparency;
Financial disclosure
Humayun Kabir, Asheq Rahman,

The role of corporate governance in accounting discretion under IFRS: Goodwill
impairment in Australia,
Volume 12, Issue 3,
2016,
Pages 290-308,
ISSN 1815-5669,
Abstract: A major concern with the adoption of International Financial Reporting
Standards (IFRS) is the accounting discretion allowed under the IFRS, and its
potential opportunistic use by managers. We examine the role of corporate
governance in the accounting discretion inherent in goodwill impairment decisions
under the IFRS. More specifically, we investigate whether, in Australia, stronger
governance strengthens associations between economic factors and goodwill
impairment loss but weakens associations between contracting incentives and
goodwill impairment loss. Using data from 2007 to 2012, we find evidence consistent
with the notion that stronger governance enhances the associations between economic
factors and goodwill impairment loss. However, we find that strong governance
cannot completely eliminate the opportunistic use of discretion in an impairment
decision, especially when pre-impairment income is negative, and when the
impairment occurs in the first year of a CEO's tenure. Our results are robust with
regard to alternative measures of the dependent variable, firm performance
variables, and the governance variable, even after controlling for potential self-
selection biases.
Keywords: Goodwill impairment; IFRS; Corporate governance; Accounting discretion;
Australia
Zhihong Wang, Joseph Sarkis,

Corporate social responsibility governance, outcomes, and financial performance,
Journal of Cleaner Production,
Volume 162,
2017,
Pages 1607-1616,
ISSN 0959-6526,
https://doi.org/10.1016/j.jclepro.2017.06.142.
Abstract: Prior research has shown mixed results for the relationship between
corporate social responsibility (CSR) and corporate financial performance. Call for
investigations on mediators and moderators have been put on notice to provide
further explanations of previous mixed findings. This study responds to the calls
for research by investigating the mediation effect of CSR outcomes, on the
relationship between CSR governance and financial performance. We extract CSR
governance and outcomes data from the Bloomberg environmental, social and
governance (ESG) database and financial performance data from the COMPUSTAT
database. Using a sample of 1980 firm-year observations from the top 500 Green
companies in the United States for the years 2009 through 2013, we find that CSR
outcomes mediate the relationships between CSR governance and financial
performance. The results suggest that whether companies implement CSR governance
successfully to generate good CSR outcomes plays an important role influencing
companies’ financial performance. The results of our study contribute to the CSR
literature by providing an explanation of the mediation effects of actual CSR
outcomes to the previous heterogeneous findings on CSR-financial return
relationships.
Keywords: Corporate social responsibility; Environmental; Social; Performance;
Mediation; Greenwashing
S. Buvanendra, P. Sridharan, S. Thiyagarajan,

Firm characteristics, corporate governance and capital structure adjustments: A
comparative study of listed firms in Sri Lanka and India,
IIMB Management Review,
Volume 29, Issue 4,
2017,
Pages 245-258,
ISSN 0970-3896,
https://doi.org/10.1016/j.iimb.2017.10.002.
Abstract: This study explores the most important determinants of speed of
adjustment (SOA) towards optimum/target capital structure of listed firms in Sri
Lanka and India for the period 2003/04 to 2012/13. Ten independent variables
comprising both firm specific and corporate governance factors have been tested
using dynamic adjustment model. We find that firms in both countries partly adjust
to an optimum capital structure over time. Furthermore, there are international
differences existing in the significant determinants of capital structure
adjustments between Sri Lanka and India.
Keywords: Capital structure dynamics; Speed of adjustment; GMM; Corporate
governance; Listed firms in Sri Lanka and India
Cosmin Sandu Badele, Daniela Fundeanu,

Policy's Beneficiaries of Corporate Governance and Diversification Strategy,
Volume 124,
2014,
Pages 468-477,
ISSN 1877-0428,
Abstract: The present study is highly important because, when used properly, it can
lead to an immediate positive impact on organizational management. Therefore it
offers the chance to cumulate the interests of all stakeholders of a company,
leading it upward. The study pays special attention to prospects for
management/diversification/corporate governance in an attempt to provide an
objective perspective on the system, highlighting those weaknesses that require
intervention. Governance started in Romania, in conceptual terms and regulations,
in the early 2000s. The delay is explained by the fact that the political, legal,
economic and social realms were developed slowly and difficultly. Recently however,
the context of corporate governance in Romania has changed. Accountability and
transparency have become key factors not only for shareholders, but also for
investors, lenders, suppliers and other parties involved. Good corporate governance
adds value and helps reducing the cost of capital, providing effective financing
capital from bidders. In this context, it is worth analyzing, based on statistical
data, the degree of development of corporate governance in Romania. Indicators are
tied to the board's attributes, in particular board structure, size, independence,
frequency of meetings and other factors. The source is the official data published
by companies listed on the Bucharest Stock Exchange (BVB). The results will be
compared with results of other studies conducted in the case of emerging countries
and the European average. The relationships between public managers and owners of
financial or non-financial interests must be built on the corporate governance
principles.
Keywords: corporate governance; emerging indicators of corporate governance;
disclosure; level of compliance entities

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