Corporate governance and family firm performance during the Global Financial Crisis

We investigate the impact of corporate governance on accounting and market performance relationships of family firms during the Global Financial Crisis (GFC). We expect the monitoring aspects of corporate governance to complement the long-term orientation of family firms, improving the value relevance of accounting and market performance during times of exogenous financial shocks such as the GFC. We find that the family-firm value is more sensitive to book value than earnings changes. We also find better corporate governance, irrespective of whether it is a family firm or non-family firm, is associated with better accounting and market performance during the GFC

Determinants and value relevance of UK CEO pay slice

This paper studies the CEO pay slice (CPS) of UK listed firms during the period 2003 to 2009. We investigate the determinants of CPS. We study the links between CPS and measures of firm performance. We find that firms with higher levels of corporate governance ratings and those with more independent boards tend to have higher CPS. In addition, we find that CEOs are more likely to receive lower compensation when they chair the board and when they work in firms with large board size. We also find that higher CPS is positively associated with firm performance after controlling for the firm-specific characteristics and corporate governance variables. We get compatible results when we examine the association between equity-based CPS and firm performance. Our results remain robust to alternative accounting measures of firm performance. Our results suggest that high UK CPS levels do indeed reflect top managerial talent rather than managerial power

Governance disclosure quality and market valuation of firms

This study develops a ‘comply or explain’ index which captures compliance and quality of explanations given for non-compliance with the corporate governance codes in UK and Germany. In particular, we explain, how compliance and quality of explanations provided in non-compliance disclosures, and various other internal corporate governance mechanisms, affect the market valuation of firms in the two countries. A dynamic generalised method of moments (GMM) estimator is employed as the research technique for our analysis, which enabled us to control for the potential effects of endogeneity in our models. The findings of our content analysis suggest that firms exhibit significant differences in compliance, board independence and ownership structure in both countries. The ‘comply or explain’ index is positively associated with the market valuation of UK firms suggesting that compliance and quality governance disclosure is value relevant in the UK. Institutional blockholders’ ownership is however, negatively associated with the market value of firms, which raises questions about the monitoring role of institutional shareholders in both countries. We argue that both compliance and explanations given for non-compliance are equally important, as long as valid reasons and justifications for non-compliance are provided by the reporting companies. These findings thus imply that the ‘comply or explain’ principle is working well and that UK and German companies could benefit from the flexibility offered by this principle. With respect to the role of board size, board independence, ownership structure, and institutional ownership of firms, this study offers policy implications

Governance tools for board members : adapting strategy maps and balanced scorecards for directorial action

The accountability of members of the board of directors of publicly traded companies has increased over years. Corresponding to these developments, there has been an inadequate advancement of tools and frameworks to help directorial functioning. This paper provides an argument for design of the Balanced Scorecard and Strategy Maps made available to the directors as a means of influencing, monitoring, controlling and assisting managerial action. This paper examines how the Balanced Scorecard and Strategy Maps could be modified and used for this purpose. The paper suggests incorporating Balanced Scorecards in the Internal Process perspective, ‘internal’ implying here not just ‘internal to the firm’, but also ‘internal to the inter-organizational system’. We recommend that other such factors be introduced separately under a new ‘perspective’ depending upon what the board wants to emphasize without creating any unwieldy proliferation of measures. Tracking the Strategy Map over time by the board of directors is a way for the board to take responsibility for the firm’s performance. The paper makes a distinction between action variables and monitoring variables. Monitoring variables are further divided on the basis of two considerations: a) whether results have been met or not and b) whether causative factors have met the expected levels of performance or not. Based on directorial responsibilities and accountability, we take another look at how the variables could be specified more completely and accurately with directorial recommendations for executives

Resilience in education: An example from primary school in Fiji and technical vocational education and training

In the Pacific, the capacity of curriculum writers for integrating the content of climate change into their curricula and/or taught Resilience [Climate Change Adaptation (CCA) & Disaster Risk Reduction (DRR)] in education is limited. This paper described the findings of a 2018 study on the integration of climate change into primary and secondary schools’ curricula and taught resilience in education in TVET. It involves teachers (n = 30) from Kadavu and Levuka islands, curriculum writers and editors from the Ministry of Education, GIZ, SPC, and USP—in Fiji. An exploratory design was used to explore the curricula for Fiji and the EU PacTVET project at SPC. Information was collected from workshops and training events, interviews and project documents. Using BEKA (Benchmarking, Evidencing, Knowing, Applying) and the concept of ako (e.g. to study or educate), a model of climate change and resilience in education was designed as part of this research to help Pacific schools with their curricula. These results indicate how behavioural changes may shape Resilience, thus placing them in a better position to achieve the UNFCCC, the SDGs, the Sendai Framework and the Framework for Resilient Development in the Pacific (FRDP) targets and objectives by 2030 and beyond

ERP systems introduction and internal auditing legitimacy: An institutional analysis

In this paper, the authors examine how the internal audit function (IAF) maintains its legitimacy when enterprise resource planning (ERP) systems are introduced. This work centers on an in-depth case study of a multinational bank and finds that ERP systems impose an institutional logic of control based on interlinked assumptions. These assumptions motivate changes in the practice and structure of the IAF to become an integrated and comprehensive function to maintain its legitimacy

Liberal conservatism, ‘boardization’ and the government of civil servants

Drawing inspiration from the loosely coupled genre of studies of governmentality, this article explores the emergence in Britain during the early years of the millennium of a distinctive liberal conservative scheme for the government of civil servants. The term ‘boardization’ has been used to characterize the trend to reproduce the technology of the board of directors in central government. Conservatives currently assign a distinctive role to the work of departmental ‘boards’ in the effective management of the Civil Service. Intimating the costs and risks of the Conservatives’ programme, we explore the role of diverse governmental forces in the emergence of the boards of the Civil Service as an object for action and intervention during the early years of the new millennium. We explore a mutation in the application of practices and techniques drawn from the domain of the business enterprise to the organization of the Civil Service. </jats:p

Self or other: Directors’ attitudes towards policy initiatives for external board evaluation

Recurrent crises in corporate governance have board practice and created policy pressure to assess the effectiveness of boards. Since the 1990s boards have faced calls to undertake regular, formal evaluation. Since 2010, the UK Corporate Governance Code has urged large corporations to engage outside parties to conduct them at least every three years, a move that other jurisdictions have copied. Despite this policy importance, little research has been conducted into processes or outcomes of board evaluation. This study explores the attitudes of directors on evaluation, whether self-administered or facilitated by others. We find acceptance of the principle but reservations about the value and even honesty in questionnaire-based approaches. We find scepticism about, but also acknowledgement of, the benefits of using outside facilitators, especially for their objectivity and because their interviewing elicits insights into board dynamics. As this practice expands beyond listed companies to non-listed ones, charities, and even governance branches of government, our findings point to a need to professionalise outside facilitation