Corporate Governance and Firm Performance: An Analysis of Family and Non-family Controlled Firms

The aim of this study is to scrutinise the impact of corporate governance mechanism on on the performance of family and non-family controlled firms in Pakistan. It has been found that a corporate governance structure influences the performance of both family and non-family controlled companies significantly. However all corporate governance mechanisms are not significant as the significant variables differ between family and non-family controlled companies. Thus, regulators need to be cautious in setting codes for different companies. JEL classification: G34, L21, L25 Keywords: Corporate Governance, Firm Performanc

An Overview of Board Performance Evaluation: At Dusk Threaten

To improve overall governance, everyday practices and the dynamics in the boardroom, it is necessary to invest in an assessment process of the board of directors deeper than compliance requirements. Evaluation processes have become common in the boardroom; it appears that 94% of S&P 500 companies regularly conduct an evaluation as found in the PwC’s 2011 Annual Corporate Directors Study. According to PwC’s 2013 survey in Russia, 65% of boards (among listed companies - over 70% of boards) carry out their performance evaluation annually, while 7% do this once every two to three years, and another 7% do this even less frequently. Yet, 22% of boards have never conducted board performance evaluations, versus 6% of UK companies and 2% of S&P 500 companies. Moreover, 43% of companies disclose the results of the board evaluation in their annual report and 34% disclose the results at their general meeting of shareholders. According to the BoardSource Nonprofit Governance Index 2010, boards that have conducted a self-assessment are rated more effective by their chief executives than those that have not (66 percent vs 42 percent). The global economy is going through a difficult period and good governance requires that the performance of the board is evaluated at least once a year. The evaluation process is a constructive mechanism for improving board effectiveness, maximizing strengths and tackling weaknesses. At times of such challenge, it is even more critical than normal, that boards of directors can plan effectively and take tough and strategic decisions are required proper board procedures in place, with all directors fully understanding their role and having the special skills that directors need. Independent directors are now confronted with complex oversight, accountability, corporate performance and they might also have to endure greater personal risks and liability. Investors, regulators, stakeholders and the society at large are increasingly demanding that boards demonstrate leadership, control and deliver on their responsibilities and their company’s results so the expectation of the board is to go beyond compliance. Besides, large institutional investors are becoming far more demanding in the growing belief that good governance enhances corporate outcomes

Directors’ Training Program - ClassyBoard is a Necessity, Not an Option

This article talks about need of Directors Training as well as it summarizes what the law requires in different jurisdictions,and at the end it distinguishes for each country whether these requirements are mandatory or voluntary. In a world of instant communication and ever changingbusiness models, the traditional task of the Professionals in business is evolving. The mounting drift focus on: Increased governance requirementsMore regulations More emphasis on documentationMore intervention from government

Implications of Ownership Identity and Insider's Supermacy on the Economic Performance of the Liste Companies

We adopt a multi-theoretic approach to investigate a previously unexplored phenomenon in extant literature, namely the differential impact of ownership identity and director dominate shareholding on the performance of emerging market firms. The main research question addressed is, whether the impact of this relationship is conditional on the identity of the block investor. First, the relationship between overall block ownership and firm performance is tested by employing multiple regressions on 500 firm-year observations for the period from 2007 to 2011. Then, the block ownership is classified as the state, individuals, insiders, financial institutions, corporate and foreign investors and the influence of these identities on firm performance is examined. It was found that only the ownership categories such as the government, institutions and foreign ownership have positive influence on the firm performance. The results also indicate that high level of insider ownership also negatively associated with the firm performance. The main contribution of this paper is the examination of the relationship between block ownership and firm performance from the perspective of the identity of investors

The impact of CEO duality attributes on earnings management in the East

Purpose – This study aims to examine an important, yet understudied, relationship between board leadership structure and earning management. With conflicting theoretical and empirical evidence underpinning the debate the practice has fluctuated, investor perception of board leadership structure has altered, international regulation has reacted, scholarly conceptualizations of duality have become overly complex and the need to understand duality and conclude the debate has increased. Design/methodology/approach – This study examines the relationship between board leadership structure, firm financial performance and financial reporting quality of Australian, Malaysian and Pakistani publicly listed companies by using a sample of three years from 2011 to 2013. Findings – Results based on data collected from Australia, Malaysia and Pakistan indicate that the board leadership structure is not associated with firm performance and financial reporting quality. However, the female chief executive impacts negatively on firm performance in Malaysia and Pakistan. Further analyses reveal that the firm size is negatively related, while the grown firms in Australia having strong financial reporting quality. Research limitations/implications – The study is based on Australian Stock Exchange-20, Kuala Lumpur Stock Exchange-30 and Karachi Stock Exchange-30 companies from 2011 to 2013; however, a large sample from other emerging economies is required. Practical implications – The paper provides empirical evidence that unitary or dual leadership structure has no impact on public listed companies and would be of interest to regulatory bodies, business practitioners and academic researchers. Originality/value – This paper contributes to the literature on corporate governance and firm performance by introducing a framework for identifying and analyzing moderating variables that affect the relationship between board leadership structure and firm financial reporting quality

Implications of Ownership Identity and Insider's Supermacy on the Economic Performance of the Liste Companies

We adopt a multi-theoretic approach to investigate a previously unexplored phenomenon in extant literature, namely the differential impact of ownership identity and director dominate shareholding on the performance of emerging market firms. The main research question addressed is, whether the impact of this relationship is conditional on the identity of the block investor. First, the relationship between overall block ownership and firm performance is tested by employing multiple regressions on 500 firm-year observations for the period from 2007 to 2011. Then, the block ownership is classified as the state, individuals, insiders, financial institutions, corporate and foreign investors and the influence of these identities on firm performance is examined. It was found that only the ownership categories such as the government, institutions and foreign ownership have positive influence on the firm performance. The results also indicate that high level of insider ownership also negatively associated with the firm performance. The main contribution of this paper is the examination of the relationship between block ownership and firm performance from the perspective of the identity of investors

Effects of ownership concentration on firm performance: Pakistani evidence

Purpose – This paper aims to present an analysis of the association between five categories of concentrated ownership and firm performance in Pakistan. The connection between high ownership concentration and firm performance has attracted much attention, especially in emerging market, yet yielded many inconsistent empirical results. Design/methodology/approach – Karachi Stock Exchange (KSE)-100 Indexed companies listed in KSE from 2007 to 2011 were selected as the sample, and correlation coefficient and regression model were used to inspect the relationship between ownership concentration degree and corporate performance. Findings – It was found that there is no significant association with ownership concentration and accounting-based performance, market-based performance measures and economic profit, in general. Originality/value – The first demonstration that the shareholding proportion of the single largest shareholder is the only variable having positive association with market-based performance measures

Forecasting investment and consumption behavior of economic agents through dynamic computable general equilibrium model

Much research has been devoted to examination of the financial easing policy of the European Central Bank (ECB). However, this study is one of the first to use a dynamic micro-founded model to investigate empirically the impact of the ECB\u2019s Quantitative Easing (QE) policy on consumption and investment by economic agents in Italy (households, government, firms, and the rest of the world). For this purpose, we constructed a Financial Social Accounting Matrix (FSAM) for the Italian economy for the year 2009 to calibrate a dynamic computable general equilibrium model (DCGE). This model allowed us to evaluate the direct and indirect impact of money flow on the behavior of consumption and investment. The findings of the study confirmed the positive impact of the ECB\u2019s monetary policy on the level of investment and consumption

Corporate governance and firm performance in Pakistan: The case of Karachi Stock Exchange (KSE)-30

This paper examine the relationship between four important corporate governance mechanisms (board size, board composition, CEO/chairman duality and audit committee) and two firm performance measures (return on equity, ROE, and profit margin, PM), for a sample of 30 Pakistani listed firms between 2008 and 2009. The results provide evidence of a positive significant relationship between ROE and PM and three corporate governance mechanisms (board size, board composition and audit committee). The implication of this is that, the board size should be limited to a sizeable limit and board must be a right mixture of executive and non-executive directors. The study, however, could not provide a significant relationship between the two performance measures (ROE and PM) and CEO/Chairman duality. These results are consistent with prior empirical studies

Impact of board structure on firm performance: evidence from an emerging economy

Purpose: The aim of this paper is to examine the association between board demographics and firm financial performance of Karachi Stock Exchange companies and describe the attributes of these firms and their boards. The connection between board structure and firm performance has attracted much attention, especially in emerging economies, yet yielded many inconsistent empirical results. Design/methodology/approach: This study examines the relationship between board structure and the performance of Pakistani public listed companies by using a sample of Karachi Stock Exchange 100 (KSE-100) indexed companies. This study exploits the corporate performance by accounting-based measures (return on assets), market-based measures (Tobin’s Q), and economic profit (economic value added). Findings: The outcome of the study shows the positive relationship between the board size, minority representation in board, and family director’s in-board and firm performance. The authors also find that, instead of adding value, independent directors in Pakistan are negatively associated with firm value. Research limitations/implications: The study is based on KSE-100 indexed companies from 2009 to 2013; however, a large sample and multiple years’ data are required. Practical implications: The paper provides empirical evidence that board independence is not necessary for public-listed companies in Pakistan and would be of interest to regulatory bodies, business practitioners, and academic researchers. Originality/value: The paper contributes to the literature on corporate governance and firm performance by introducing a framework for identifying and analyzing moderating variables that affect the relationship between board structure and firm performance. © 2017, © Emerald Publishing Limited