Evaluating the Effect of Top Management Attributes on the Probability of Default

A few studies have focussed on the relationship between the top management team and probability of firm default. This research aims to evaluate the effect of CEO and CFO attributes, as top management, on the firm's probability of default. The research adopts a quantitative research methodology, of 642 companies on the FTSE all Share index. The findings show that as remuneration and tenure increased the probability of default decreased. This research proposes a regression model that ascertains the causal effect of an increase in the tenure and compensation of the Top Management Team on the Probability of default of a firm over a 3-year period. The findings will have a direct implication on management tenure and remuneration for firms to reduce their probability of default. This research can be developed further by undertaking a time series analysis of the data to see how the changes over time would affect the relationships. Keywords: Top Management Team, Probability of Default, CEO, CFO, KM

Top Management Team attributes and the probability of firm default

This PhD research investigates the effects of the key top management team (TMT) attributes on the probability of a firm’s default. Specifically, the study pursues motivation, loyalty and effectiveness as the key characteristics to analyse. Synthesising the Behavioural theory of the firm, Upper Echelons theory, Resource Based View, Agency theory and Seasons of tenure alongside other key TMT theories this research develops a theoretical model. The literature on TMT and financial distress has focused mostly on the role of the CEO or different definitions of the TMT, however, the role of the CFO is very rarely studied. This research argues that the role of the CFO is extremely important when a firm faces financial difficulties and is key to the definition of TMT that influence the financing decisions of the firm. In addition, this research uses both accounting based measures and market based measures for predicting the likelihood of default while a majority of the literature in this field has used either accounting based measures or market based measures. This research uses multilevel modelling on a hierarchical dataset to address some of the limitations of previous research by modelling for the variability of regression intercepts and slopes and addressing the violation of the independence assumption. Using a sample of UK listed companies, on the FTSE 100 index for the period 2013 to 2016, this research uses OLS regression, Polynomial regression, Random Intercept model and Random Intercept and Random slope models as robustness checks to test the theoretical model developed. The study concludes that there is a relationship between key TMT attributes and the likelihood of default. The effect of the attributes varies for the short-term, long-term and accounting measures of the probability of firm financial distress. The study provides models that will be key to future governance ensuring a financially healthier corporate environment

Evaluating the Efficiency of Vietnamese Commercial Banks using Data Envelopment Analysis

This study uses Data Envelopment Analysis (DEA) method to estimate the technical efficiency and scale efficiency of Vietnamese commercial banks. The overall technical efficiency was measured by CCR model and the technical efficiency in terms of managerial skills was evaluated by BCC model. The findings indicate larger banks functioned better than smaller banks in terms of management skills, but there was not much difference among the groups in terms of average overall technical efficiency. State-owned and listed banks obtained higher efficiency levels than non-state-owned and unlisted banks. Finally, M&A activities also showed some interesting results. The study provides strong discussion points for consideration in future policy development by practitioners and academics aiming to improve the efficiency of the banking system. A recommendation for further research is to use a different range of inputs/outputs and analyse the data using a combination of parametric and non-parametric tools. Keywords: Banking Efficiency, Commercial Banks, DEA, Financial Sector, Vietna

Financial shenanigans: The importance of anti-fraud education

Fraud, financial distress and liquidation, audit failures, hubris and narcissism, are all genuine and serious issues in today’s business environment. Challenges exist for organisations in many different guises as they strive to achieve their goals. This often results in a balancing act between the right course of action and action which could be seen to be ethically immoral or even illegal. Recently many organisations have encountered financial distress for different reasons, at a high cost to employees, pensioners, and other stakeholders. How can organisations ensure that legal and ethical decisions and actions are taken? Through a review of literature, recent case studies, and the incidence of relevant courses in universities, this paper examines the importance of education in the fight against corporate fraud. Evidence indicates that employees can be effective corporate watchdogs in the fight against financial deception and unethical decisions; increasing the number of people in a firm with enhanced fraud awareness and knowledge through education should, therefore, be one of the essential requirements for our future business managers and leaders. We indicate why anti-fraud education is important in the fight against financial shenanigans, and why it should be more widely adopted for the benefit of all stakeholders

Impact of corporate governance diversity on carbon emission under environmental policy via the mandatory nonfinancial reporting regulation

This study builds on the expanding literature on the interplay of corporate governance and corporate environment behaviour following the introduction of the carbon reporting directives of the UK Companies Act in 2013. We specifically focus on seeking clarity on the relationship between gender diversity, board independence, and board size with corporate environmental performance. The study examines these relationships under a mandatory nonfinancial reporting (NFR) requirement and tests the impact of regulatory shocks on board composition and channels affecting carbon emission. The findings confirm that board gender diversity and independence improve a firm's environmental performance. And while larger board sizes lead to larger environmental investments, the study finds that larger board sizes leads to poor environmental performance for the firm. The findings contribute to developments in countries, such as the United States, where there is an ongoing debate on the adoption of a mandatory NFR of carbon and the response of corporate boards

Impact of corporate governance diversity on carbon emission under environmental policy via the mandatory nonfinancial reporting regulation

AbstractThis study builds on the expanding literature on the interplay of corporate governance and corporate environment behaviour following the introduction of the carbon reporting directives of the UK Companies Act in 2013. We specifically focus on seeking clarity on the relationship between gender diversity, board independence, and board size with corporate environmental performance. The study examines these relationships under a mandatory nonfinancial reporting (NFR) requirement and tests the impact of regulatory shocks on board composition and channels affecting carbon emission. The findings confirm that board gender diversity and independence improve a firm's environmental performance. And while larger board sizes lead to larger environmental investments, the study finds that larger board sizes leads to poor environmental performance for the firm. The findings contribute to developments in countries, such as the United States, where there is an ongoing debate on the adoption of a mandatory NFR of carbon and the response of corporate boards.</jats:p