Developmental papers
Trust: The Critical Factor In Theory And Practice, From Banks To Cakes (376)
Author/s: Nigel Garrow Nigel Somerset Ifedapo Francis Awolowo Murray Clark
Track: Corporate Governance
Paper Type: Developmental Papers
Keywords: Corporate Governance, Leadership Behaviour, Forensic Accounting, Financial Crisis, Audit
Abstract: This paper suggests that due to the incidence of leadership behaviours that are detrimental to many organisational stakeholders', more should be done in terms of corporate governance and auditing to address this. For stakeholders (such as pensioners, staff, and creditors) their relationship with organisational leaders is built on implicit trust. Any damage to that trust can have catastrophic repercussions for many stakeholders, be it emotional through stress or financial. Agency Theory provides a rationale for a basis on which trust can be broken. Rebuilding trust can be a herculean task, so it is important to seek ways in which any potential risk to trust can be avoided. Good governance practice is essential in the quest to maintain trust and protect stakeholders. Tighter guidelines for the content of Annual Reports, more insightful information on the skills, background, and behaviours of organisation leaders, and the use of forensic accounting techniques in the preparation of Audit reports will all facilitate maintaining trust and avoiding risks.
The ETHICS RASCI Governance Landscape Model (444)
Author/s: Nigel Brown
Track: Corporate Governance
Paper Type: Developmental Papers
Keywords: ethics, governance, internal, external, model
Abstract: A proposed framework specific to the areas of governance ethics to help individuals, organisations and governments describe and understand a complex network of entities which make up an organisations internal and external governance landscape.
An Analysis of Bank Efficiency and Corporate Governance Using Random Forest Regression for Second Stage DEA (483)
Author/s: Keyur Thaker Vincent Charles Abhay Pant
Track: Corporate Governance
Paper Type: Developmental Papers
Keywords: Machine Learning, Data Science, Random Forest Regression, Data Envelopment Analysis, Performance, Banking, Corporate Governance
Abstract: Using the DEA at the first stage, our study examines the Indian bank's technical, cost and profit efficiency across public and private ownership groups for the 2008-16 time period. In the second stage, we examine impact of corporate governance in terms of board characteristics on bank efficiency. We first use the conventional OLS and Fractional regression and then demonstrate the use of methodological superior Random forest regression. We found that the average Technical efficiency was very high (0.957) while cost efficiency was marginally lower (0.947) and profit efficiency was much lower (0.790) for all the banks. Interestingly largest number of banks were on the frontier of profit efficiency. In the second stage, we find Board independence to be stronger predictor of cost efficiency; and all variables namely board size, meetings, gender diversity, board independence has been stronger predictors of profit efficiency. Furthermore, we observe that the RF model explained the highest variance for Profit Efficiency and tuning lead to further improvement. Our study also pointed out the limitations of the conventional OLS and fractional regressions and demonstrated the use of methodological superior random forest regression. Thus our study has important policy and well methodological implications. Ours is a pioneering study using the Random Forest to examine determinants of bank efficiency and exploring corporate governance in India, and its impact on three different types of bank efficiency.
The Challenges Affecting Tax Collection in Nigerian Informal Economy (510)
Author/s: Nobert Osemeke Robert Okere David Nzekwu
Track: Corporate Governance
Paper Type: Developmental Papers
Keywords: Informal economy, informal sector, tax collection, Nigeria
Abstract: Despite government efforts, tax compliance in Anambra State has remained low. Despite the introduction of Anambra Social Security ID (ANSSID) in Anambra State, taxpayers are not willing to pay tax. This study identified why employees and traders in the IE in Nigeria are not willing to pay tax. Semi-structured interviews were used and 35 business owners, managers, accountants, and employees from different industries were interviewed in Anambra State. The reason for using Anambra state is that in the past few years, the state government has been looking for strategic ways to increase revenue in the informal economy, including tax reforms with the introduction of Anambra State Social Service Identity (ANSSID) number which the state has adopted as part of his strategies to pull all taxable adult into the tax-net. This research contributes and offers guidance to policy makers on how to improve tax revenue in the state.
This study found that lack of provision of amenities and infrastructural development are among the reasons traders and employees do not pay taxes, as they have to bear the burden for the provision of such amenities themselves. Lack of accountability, embezzlement, poor accounting records, lack of empowerment programs and lack of awareness are the reasons why IE do not pay tax. Recommendations were made to help policy makers improve their tax revenue.
Corporate Leaders Values and the 2030 Agenda for Sustainable Development (763)
Author/s: Lisanne J Veter Harry R Commandeur Jatinder S Sidhu Henk W Volberda
Track: Corporate Governance
Paper Type: Developmental Papers
Keywords: Governance, Values, Social Class, Political Orientation, Sustainable Development Goals
Abstract: This paper studies the influence of social class and political ideology on Dutch board
directors preferences regarding the United Nations Sustainable Development Goals SDGs. Social class relates to one's position in society, with the associated opportunities and experiences affecting ones worldview. Political ideology is a manifestation of underlying values, as it considers how one wants society to be and often considers how this should be achieved. A survey will be held that measures social class, political ideology, and SDG preferences. This research contributes to the existing literature by jointly studying social class and political ideology, by studying political ideology in a multi-party context outside of the U.S and by researching SDG preferences of directors specifically.
Japanese Corporate Governance in the Age of Investor Stewardship (787)
Author/s: Christoph Frederic Biehl
Track: Corporate Governance
Paper Type: Developmental Papers
Keywords: Japan, Corporate Governance, Institutional Investors, Active Ownership, Stewardship Code
Abstract: Responsible investment has grown globally over the last two decades, with a movement from screening strategies towards active ownership. In the UK this development was accelerated by the launch of the Stewardship Code. Not part of the global development, however, was Japan. The Japanese financial market was the only developed financial market globally that did not see a surge in assets under management invested in responsible investment products. In 2014, the Financial Service Authority (FSA) Japan launched the Japanese version of the Stewardship Code, the Principles for Responsible Institutional Investors (PRII) in order to boost responsible investment, focusing especially on active ownership and therefore an increase in accountability. This paper analyses the changes to corporate governance and its underpinning accountability through active ownership. The paper is based on semi-structured in-depth interviews with experts in the Japanese market. Findings include a renaissance of the Japanese network approach to corporate governance and accountability with long-term stable investors taking over corporate governance functions formerly fulfilled by the house bank.
Corporate Governance and Firms Financial Decisions The Role of Managerial Heuristics and Biases (791)
Author/s: Muhammad Sajid
Track: Corporate Governance
Paper Type: Developmental Papers
Keywords: Corporate Governance, Corporate Financial Decisions, Heuristics-and-Biases, Moderator variable.
Abstract: Corporate governance in relation to firm capital structure choices is well documented in corporate finance literature. Less known is that managerial heuristics and biases, such as availability and illusion of control, also relates to financing structures. Research show that business managers that are overconfident optimistic of their companies future are likely to choose more levered financing structures, which may result in higher prospects of financial distress and higher costs of capital. Thus, the aims of this study are 1 to investigate the influence of firm level corporate governance practices on firms financing structure pattern, to examine the effects of a large number of well known heuristics and biases on the executives choice of financing debt or equity, and to test the relationship between firm level corporate governance mechanisms and corporate financial structure in the presence of well known managerial heuristics and biases. This research contributes to behavioural corporate finance literature: by illuminating the effects of a large number of wellknown heuristicsand biases on managers financing choices from an emerging market perspective, Pakistan, and by illuminating the significant links between firm level corporate governance attributes and debtequity choices of firms in the presence of managerial heuristics and biases in Pakistan.
Corporate Governance and CEO Gender on the Relation between Innovation and Firm Performance in the UK financial sector (957)
Author/s: Amina Ouarda Senoussi Wafi Al-Karaghouli
Track: Corporate Governance
Paper Type: Developmental Papers
Keywords: Corporate Governance, Gender, CEO, Innovation, Financial performance
Abstract: Corporate Governance was a matter of focus of many studies during the last decade, especially after the financial crisis in 2007. With a particular emphasis on whether the quality of Corporate Governance practices does impact a companies innovative investments and performance. In the same context, This Study will focus on gender diversity within a corporation, due to its relation to corporate choices which has seen light in recent years, by scholars arguing of a positive relation between female board representation and firm performance.
However, the effect of both corporate Governance and CEO gender on the relation between Innovation and firm performance remains unclear. The current study will investigate the roles of these two variables on the relation between innovation and firm performance in the period of pre and post financial crisis of 2007, to explore whether there is a difference in their effect based on the environment in which the company operates.
The Relationship between Board Structure, Innovation and Firm Efficiency: Empirical Evidence from the Chinese Listed Firms (1071)
Author/s: Xihui Chen Kienpin Tee
Track: Corporate Governance
Paper Type: Developmental Papers
Keywords: Corporate governance, Innovation, Firm Efficiency, Chinese listed firms, Moderating effects
Abstract: Abstract
This study explores the relationship between board structure, innovation and firm efficiency amongst Chinese listed firms. Particularly, whether board structure moderates the relationship between innovation and firm efficiency. Drawing from a multi-theoretical approach, this empirical study is based on a panel data analysis of 9,768 firm-year observations (2007-2017). We are currently organising the data and aiming to have the results discussed in April 2019.
Investigating the Effects of Managerial Compensation Incentives on Investment and Financing Decisions (1077)
Author/s: Emmanuel Adu-Ameyaw Cynthia Akwei
Track: Corporate Governance
Paper Type: Developmental Papers
Keywords: Managerial compensation incentives, Investment, Financing decisions
Abstract: Primarily the agency concern has long been shared by both academics and non academics alike as a fundamental causative element affecting the way corporate managers conduct business operational activities on behalf of their principals. Such divergence of interests among managers and shareholders widely held by corporations may consequently affect corporate value maximisation via poor investment selections and inappropriate financing choices. This study aims to investigate how executives compensation influence investment activities, and, the extent to which inefficient compensation excess pay induces investment distortions, financial leverage and the extent to which compensation excess affect sub optimal financing decision.
The role of Ethics in Executive Compensation and its impact on Sustainable Development (1105)
Author/s: Cynthia Akwei
Track: Corporate Governance
Paper Type: Developmental Papers
Keywords: N/A
Abstract: Board of directors compensation of executives has been around a long time however, it has attracted significant attention in recent times. With factors such as the recession, non performance of companies and ethics of compensation have prompted the rise in debates about excessive executive pay, which could have numerous impacts on directors at present, and in the near future. Employing a qualitative research approach, this study explores the possible impacts of executive compensation and the role ethics plays in addressing some of these contemporary issues of executive compensation.
Effect of Mood Variables on Investors Decision Making: An Exploration (1176)
Author/s: Nada El bijri
Track: Corporate Governance
Paper Type: Developmental Papers
Keywords: Decision Making, Morocco, Mood, Behavioral Finance
Abstract: This paper is produced to elaborate a study on the relation of the effects of life on the mood of the investors. More specifically, we are trying to understand according to investors what are the factors that impact their mood and therefore impact their decision to buy or sell in the stock market.