Corporate governance and the African business context: the case of Nigeria

A robust institutional framework is essential to enable firms to function efficiently. The aspect of corporate governance investigated in this paper is the legal and societal principles and process which form the business context within which firms operate. The paper explores the challenges to firms trading in Africa arising from cultural dynamics peculiar to the continent and further explores the historical reasons for the present cultural context to business in Africa. Nigeria is presented as a special case, perhaps even an extreme case, of the challenges to corporate governance in Africa since it is perceived by many to be one of the weaker environments given its perceived levels of corruption. The paper concludes with an assessment of the likelihood of African states successfully tackling corruption in the future as the current approaches unfold over the coming years

The relative performance of mutual and proprietary life insurance companies in the UK: an exploratory study

After discussing the main tenets of stakeholder and agency theory, the paper provides an exploratory empirical study of the relative performance of mutual and proprietary life insurance companies in the UK during the period 1995-96. The mutual companies included in the sample performed well relative to the proprietary companies in terms of their overall financial strength, annual surpluses and investment earnings. While the mutuals had slightly higher expense ratios than the proprietary companies, they were relatively more cost efficient and operated with potential economies of scale. There is also evidence that fund managers in mutuals perform at least as well on average as those in proprietary companies

Best practice in bank corporate governance: The case of Islamic banks

Islamic banks are growing rapidly with annual growth rates of 17.6% between 2009 to 2013 and 19.7% from 2014 to date. This level of growth is projected to continue into the future. Islamic banks now operate in more than 75 countries with a value of approximately $920 trillion of bank assets. Islamic banks are increasingly being seen as good long-term value propositions and are serving both Muslim and non-Muslim customers across international markets. Despite the rapid growth in Islamic finance, the underpinning corporate governance rules and regulations are at an embryonic stage of development with little attention having been paid to them. The purpose of this paper is to help fill that gap by exploring a conceptual model of corporate governance for Islamic banks based on both Islamic finance principles while fused with elements of corporate governance standards from Western theories and codes, primarily the UK, and thereby ensure that good governance is in place in Islamic banks. The paper links the predominant corporate governance theories of Principal/Agent, Stakeholder and Stewardship with practice based corporate governance codes and explores the potential of applying stewardship theory to Islamic banks. Islamic principles emphasis is on real assets rather than debt as is the case in Western Banks and as a consequence this paper offers the conclusion that the more prudent approach to banking used by Islamic banks could be used as a model for Western banks and thereby deliver a more sustainable future and maintain confidence in banks and substitute for the need for taxpayer support, such as the guaranteed deposit scheme, which acts as a backstop under the Western approach

Shareholder Theory/Shareholder Value

Shareholder theory states that the primary objective of management is to maximize shareholder value. This objective ranks in front of the interests of other corporate stakeholders, such as employees, suppliers, customers, and society.Shareholder theory argues that shareholders are the ultimate owners of a corporate’s assets, and thus, the priority for managers and boards is to protect and grow these assets for the benefit of shareholders. Shareholder theory assumes that shareholders value corporate assets with two measurable metrics, dividends and share price. There-fore, management should make decisions that maximize the combined value of dividends and share price increases. However, shareholder theory fails to consider that shareholders and corporates may have other objectives that are not based on financial performance. For example, as early as1932, Berle and Means argued that corporations have a variety of purposes and interests including encouraging entrepreneurship, innovation, and building communities. This wider view is gaining more traction in recent decades as evidenced by an increased interest in ethical investment funds.This suggests that shareholders and potential shareholders are not only interested in financial gains but are also interested in corporates being socially responsible (Kyriakou2018). Therefore shareholder value creation is important; however,it needs to be balanced with other stakeholders’ interests. This is referred to as an enlightened approach to shareholder value maximization

Is Corporate Social Responsibility an Agency Problem? Evidence from CEO Turnovers

We empirically examine two competing claims: first, if a firm’s Corporate Social Responsibility (CSR) activity is driven by its CEO’s private rent extraction (i.e. an agency problem), firms with higher CSR ratings are poorly governed and their managers are less likely to be dismissed for poor financial performance. In contrast, if CSR reflects owners’ preferences, CEOs of firms with higher CSR ratings are more likely to be removed in light of poor financial performance. We find that CEO turnover-financial performance sensitivity increases in firm CSR scores during the last years of both the outgoing CEO as well as his predecessor. Further, firm CSR ratings do not change following CEO turnover suggesting that CSR ratings are a firm characteristic. Our findings are consistent with the view that CSR is driven by shareholder preferences

Edging toward ‘reasonably’ good corporate governance

Over four decades, research and policy have created layers of understandings in the quest for “good” corporate governance. The corporate excesses of the 1970s sparked a search for market mechanisms and disclosure to empower shareholders. The UK-focused problems of the 1990s prompted board-centric, structural approaches, while the fall of Enron and many other companies in the early 2000s heightened emphasis on director independence and professionalism. With the financial crisis of 2007-09, however, came a turn in some policy approaches and in academic literature seeking a different way forward. This paper explores those four phases and the discourse each develops and then links each to assumptions about accountability and cognition. After the financial crisis came pointers n policy and practice away from narrow, rationalist prescriptions and toward what the philosopher Stephen Toulmin calls “reasonableness”. Acknowledging that heightens awareness of complexity and interdependence in corporate governance practice. The paper then articulates a research agenda concerning what “reasonable” corporate governance might entail

Regulation, Governance and Regulatory Collibration: achieving an "holistic" approach

This paper examines the development of the regulation of corporate governance in the UK. It seeks to identify why the boundaries of law and self-regulation exist and whether the regulation of corporate governance should now be viewed as a process of collibration rather than a "homeostatic" process of setting unattainable standards. This paper suggests that regulatory developments in the area of corporate governance have taken a substantial new direction; that the boundaries of regulation are no longer determined by the choice between market-based or state-based regulation, but determined by a process of collibration. Copyright Blackwell Publishing Ltd. 2004.

The relative performance of mutual and proprietary life insurance companies in the UK An exploratory study

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Est in aqua dulci non invidiosa voluptas (in pure water there is a pleasure begrudged by none)

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