Anum Qureshi and Eric Lamarque
This paper aims to examine the influence of risk management (RM) practices on the credit risk of significantly supervised European banks.
Abstract
Purpose
This paper aims to examine the influence of risk management (RM) practices on the credit risk of significantly supervised European banks.
Design/methodology/approach
To avoid regulatory and reporting discrepancies, this paper samples banks that come under the direct supervision of the European Central Bank. Significantly supervised European Banks are selected for the five years from 2013 to 2017. The RM and governance data is manually drawn (from annual reports, registration documents, governance and RM reports), and financial data sets are also used (from Moody’s BankFocus and ORBIS).
Findings
The results indicate that strong risk control and supervision by a powerful chief risk officer (CRO) reduces banks’ credit risk. Banks with sufficiently powerful and independent CROs tend to manage their risks effectively, therefore reporting lower credit risk.
Research limitations/implications
European Union introduced Capital Requirement Directive IV in 2013 and new guidelines on the banks' internal governance in 2017, which were to be implemented in 2018. Thus, this paper limited the sample to five years (from 2013 to 2017) to avoid inconsistencies in the results. Future studies can extend the research and compare banks' credit risk before and after the implementation of regulatory guidelines.
Practical implications
Since the global financial crisis, the regulatory environment has sufficiently changed. Hence, this study reveals that not all RM practices but a few important ones reduce credit risk.
Social implications
Effective risk control and supervision at the bank level can lower credit risk, ultimately enhancing overall financial stability.
Originality/value
Most existing studies focus on classic governance indicators to analyze banks’ credit risk; however, this paper considers risk governance indicators which include RM practices used by European banks. Moreover, existing studies in this line focus on the crisis period of 2007–2008. This paper considered the postfinancial crisis period, specifically after the implementation of the Capital Requirements Directive IV at the European level.
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Keywords
Irfan Saleem, Eric Lamarque and Rashedul Hasan
The purpose of this study is to study the evolution of French corporate governance law in light of collibration approach and bring statistical evidence from French Companies…
Abstract
Purpose
The purpose of this study is to study the evolution of French corporate governance law in light of collibration approach and bring statistical evidence from French Companies Executive Compensation practices.
Design/methodology/approach
The study has used mixed methods. In the first part, the authors analyzed the French laws in the light of collibration. In the second part of the study, the authors used unbalanced panel data to test the hypotheses related to executive remuneration based on the theoretical underpinning of collibration. Data for 173 firms listed in the Euronext Paris Index is collected from the Bloomberg database. Seemingly unrelated regression (SUR) analysis is performed to investigate the impact of collibration on the governance disclosure of French-listed firms.
Findings
SUR results indicate that board size plays a significant role in the governance disclosure before collibration. However, the collibration model is found to be more effective in ensuring the desired level of governance disclosure. Under the collibration approach, executive remuneration, frequency of board meetings, executive directors in the compensation committee and independent directors play a significant role in governance disclosure. Board size, however, does not have a substantial impact on governance disclosure after the adoption of collibration mechanism.
Research limitations/implications
Results provided by this study can allow regulators to improve corporate disclosure regime in France, which could play a vital role in safeguarding the interest of stakeholder.
Originality/value
The authors study the impact of collibration on the extent of governance disclosure in the context of France. Empirical evidence on the implication of collibration as governance mechanisms to enhance stakeholder confidence is rare and allows this study to make a unique contribution to the governance literature.
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There has been a constant evolution over the past two decades in the banking business portfolio, due to economic globalisation, deregulation, and the advent of new technologies…
Abstract
There has been a constant evolution over the past two decades in the banking business portfolio, due to economic globalisation, deregulation, and the advent of new technologies. This trend continues today and is even more marked by the emergence of production businesses which have traditionally been included in the value chain of banking services.
An examination of this phenomenon is made possible by value chain analysis. This concept has been adapted to banking. The notions of organisational competencies and value chain have been linked to detect value-adding activities in the various bank services and identify opportunities for new conditions for value production.
In their paper “Fractals, stories, and the development of coherence in strategic logic,” Janice Black, Frances Fabian, and Kim Hinrichs explore key communication dynamics that…
Abstract
In their paper “Fractals, stories, and the development of coherence in strategic logic,” Janice Black, Frances Fabian, and Kim Hinrichs explore key communication dynamics that drive the emergence of a coherent strategic logic in an organization. Using a longitudinal study of a non-profit organization in the health and caring industry, the authors use “fractals” as a metaphor for organizational processes that help to crystallize a clear, coherent, and well understood statement of an organization’s strategic logic. Their study also suggests how the mathematical rules that govern the iterative generation of fractals in nature can be applied to develop a “mathematics of social systems.” The authors’ analysis of strategy processes in the subject organization shows how the use of storytelling through internal organizational publications can contribute substantially to the emergence of a coherent strategic logic and supporting value system within an organization.
Henri Savall and Véronique Zardet
This paper aims to present a concise history of the main action research (AR) contribution in France. The authors discuss the role of AR in the organizational research field in…
Abstract
Purpose
This paper aims to present a concise history of the main action research (AR) contribution in France. The authors discuss the role of AR in the organizational research field in general and compare it with intervention research (IR) and presented Institute of Socio-Economy of Enterprises and Organizations’s specific contributions and its presence on the international stage through review publications and wider works.
Design/methodology/approach
A narrative approach was used to analyze this history.
Findings
AR is considered as a research family. The authors define and compare AR with other qualitative methods. They analyze AR and IR principles, which include interaction with practitioners, negotiation with them, focusing in the third part on the case of ISEOR research team.
Social implications
AR and IR permit to bridge the gap between researchers and practitioners, to develop useful research. At the same time, they permit to develop new researchers' competencies and to fund research, in a context of reduced public research funds.
Originality/value
This article permits to understand the reality of what is and how to develop an IR, and the difficulties for researchers to insert them in the academic community, although France seems to be more permissive than others’ contexts. It permits also to better know the French IR and AR research in management.