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Article
Publication date: 6 March 2017

Richard Bozec and Mohamed Dia

The aim of this paper is to revisit the board independence–audit fees (BI–AF) relationship while taking into account the ownership structure of the firm. Two effects are unfolding…

803

Abstract

Purpose

The aim of this paper is to revisit the board independence–audit fees (BI–AF) relationship while taking into account the ownership structure of the firm. Two effects are unfolding along the ownership concentration spectrum: separation of ownership and control (principal–agent problems) and separation of voting and cash flow rights (principal–principal problems).

Design/methodology/approach

The study is conducted over a seven-year period (2002-2008) using panel regressions on a sample of Canadian publicly traded companies. The authors use a moderated regression analysis incorporating two-way interactive terms (ownership × BI) and a sub-group analysis.

Findings

The results show a positive and significant relationship between BI and AF when ownership is concentrated in the hands of a dominant/controlling shareholder. The higher the gap between voting and cash flow rights of the ultimate owner, the stronger the relationship between BI and AF. Overall, evidence supports both the demand-based perspective on AF and the expropriation effect argument.

Practical implications

Results support a one-size-fits-all approach to governance despite growing concerns from academics and interest groups about the appropriateness of pursuing such strategy when ownership is concentrated in the hands of a dominant/controlling shareholder.

Originality/value

By taking the excess voting rights into account (difference between voting rights and cash-flow rights of the ultimate owner), the authors propose a refined classification of the sample firms along the ownership concentration spectrum.

Details

International Journal of Accounting & Information Management, vol. 25 no. 1
Type: Research Article
ISSN: 1834-7649

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Article
Publication date: 28 September 2010

Yves Bozec, Richard Bozec and Mohamed Dia

The objective of this study is to investigate further the interplay between corporate governance and firm performance with special focus on a situation expected to bring larger…

1568

Abstract

Purpose

The objective of this study is to investigate further the interplay between corporate governance and firm performance with special focus on a situation expected to bring larger agency costs to the firm, that is, when voting rights of the dominant shareholder exceed his/her cash flow rights.

Design/methodology/approach

The research is conducted in Canada over a four‐year period from 2002 to 2005 and uses a balanced sample of 130 firms or 520 firm‐year observations. Corporate governance is measured based on the ROB corporate governance index published by The Globe and Mail.

Findings

The results clearly show a positive and significant relationship between the ROB governance scores and Tobin's Q, when there is a separation between voting and cash flow rights. In the absence of any excess voting rights, no significant relation is found between governance and performance.

Practical implications

The findings suggest that regulators need to exercise caution before deciding whether or not to recommend or impose corporate governance rules for all firms, since the benefits of these rules may vary among the firms.

Originality/value

The study contributes to explaining mixed international evidence on the governance‐performance relationship, while directing attention to the moderating effect of the deviation from the one share‐one vote principle. To the best of the authors' knowledge, no other study using corporate governance indices has taken into account the impact of excess voting rights despite the widespread use of that practice outside the USA.

Details

International Journal of Managerial Finance, vol. 6 no. 4
Type: Research Article
ISSN: 1743-9132

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Article
Publication date: 6 April 2012

Richard Bozec and Mohamed Dia

The objective of the study is to analyze corporate governance practices of Canadian companies in the post‐Enron period. The attempt is to investigate whether the convergence

2372

Abstract

Purpose

The objective of the study is to analyze corporate governance practices of Canadian companies in the post‐Enron period. The attempt is to investigate whether the convergence phenomenon evidenced in prior studies is limited to the minimum mandatory requirements imposed by regulators or reflects a real behavioral transformation.

Design/methodology/approach

Changing governance structure might be slow except in times of financial crisis, increased public scrutiny and reforms. These conditions are met in the post‐Enron period (2002 to 2005) where major reforms have been launched including the Sarbanes‐Oxley Act (SOX) in the USA and Bill 198 in Canada. The authors expect changes in corporate governance to be more important during this period, therefore, enhancing the robustness and reliability of their results. They measure corporate governance on a global scale, relying on the ROB index published by the Globe and Mail. The index distinguishes between four blocks of corporate governance, namely, board composition, compensation, shareholder rights, and disclosure.

Findings

The present results show signs of convergence. However, Canadian companies improved their corporate governance practices in the post‐Enron period mainly in areas mandated by regulation. This includes provisions related to the composition, attributes and working of the board of directors and board committees. No significant improvement is found in non‐regulated governance best practices.

Research limitations/implications

Overall, the findings suggest a lack of real behavioral change in corporate leaders. Instead, convergence in corporate governance appears to be the result of a box‐checking exercise.

Practical implications

If corporate governance is about ethical conduct and stems from the culture and mindset of management, these results show that corporate governance cannot be regulated by legislation alone.

Originality/value

This study goes beyond the minimum mandatory requirements and looks into compliance of non‐regulated provisions as well. Examining the evolution of corporate governance practices on these two fronts helps to further investigate the extent and nature of convergence.

Details

Corporate Governance: The international journal of business in society, vol. 12 no. 2
Type: Research Article
ISSN: 1472-0701

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Article
Publication date: 1 February 2003

Richard Bozec and Gaétan Breton

State‐owned enterprises (SOEs) have been described as being inefficient and losing money. The theories pretend that private property rights will solve the problem. In practice…

1936

Abstract

State‐owned enterprises (SOEs) have been described as being inefficient and losing money. The theories pretend that private property rights will solve the problem. In practice, SOEs are reorganized to follow the model of the private firm, a period known as the public sector corporatization. One critical element of this reform is an important modification of the mission of the firm away from social and toward profitability goals. Most SOEs become profit‐seeking organizations. The objective of this study is to examine the impact of the corporatization process on the financial performance of SOEs. From the Financial Post 500, we selected the largest SOEs in Canada. For each firm, the critical year of the mandate revision has been set as the beginning of the corporatization period. We covered the years between 1976 and 1996. The performance is measured from a multi‐criteria approach including measures of profitability and productivity. The results suggest that the financial performance of SOEs improves significantly when firms are corporatized. Therefore, the main difference in the financial performance is caused by the difference in the objectives of the firm, not the property or some dubious political activities.

Details

International Journal of Public Sector Management, vol. 16 no. 1
Type: Research Article
ISSN: 0951-3558

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Available. Content available
Book part
Publication date: 10 December 2018

Gaétan Breton

Free Access. Free Access

Abstract

Details

A Postmodern Accounting Theory
Type: Book
ISBN: 978-1-78769-794-2

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Article
Publication date: 10 July 2017

Mbako Mbo and Charles Adjasi

The purpose of this paper is to investigate fundamental performance drivers in a state-owned enterprise (SOE) in the context of organizational theories.

861

Abstract

Purpose

The purpose of this paper is to investigate fundamental performance drivers in a state-owned enterprise (SOE) in the context of organizational theories.

Design/methodology/approach

This paper is based on a case analysis investigating how several factors, considered in the context of organizational theories, have combined to influence sustained performance at the Botswana Telecommunications Corporation (BTC). The study analyses both quantitative and qualitative data pertaining to an 18-year period from 1995 to 2012.

Findings

The paper supports the widely held view that agency and resource-based theories explain good performance, but challenges the popular view that political influence is always self-interest driven. A concept of positive public choice, under which such influence is driven by stakeholder interests and sustainability emerges. The case reveals that a selective approach to stakeholders defined how BTC crafted its good performance in a politically conducive environment.

Practical implications

Based on the research findings, a framework unifying political intervention with stakeholder interests needs to be developed and formalized with a link to SOE objectives. The framework would have clear performance measures linked to it, adequately monitored under a governance structure constituted from well-incentivized boards and managers with adequate strategic corporate resources under their control. The paper proposes such a framework.

Originality/value

The paper reveals an unexplored area of potential research, i.e. a positive public choice perspective under which societal interests are modeled with enterprise sustainability through political processes often blamed for poor performance.

Details

International Journal of Social Economics, vol. 44 no. 7
Type: Research Article
ISSN: 0306-8293

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Article
Publication date: 8 December 2020

Anupama Prashar and Parul Gupta

Corporation's board (CB) is viewed as a vital internal corporate governance (CG) mechanism, playing a critical role in mitigating the agency problems and enhancing firm…

784

Abstract

Purpose

Corporation's board (CB) is viewed as a vital internal corporate governance (CG) mechanism, playing a critical role in mitigating the agency problems and enhancing firm performance. Considering the mixed nature of extant CG literature on CB-firm performance link, this study aims to examine the impact of specific CB attributes on firm performance studied in varied contextual settings and investigates the moderating effects of three contextual factors, i.e. legal origin, industry type and firm type on CB-performance relationships.

Design/methodology/approach

Meta-analysis technique suggested by Hedges and Olkin (1985) was used to analyse a sample of 330 effect sizes reported in 148 studies published between 2000 and 2020 in 85 peer-viewed journals, studying CB-performance associations across 31 countries. The analyses were conducted in two stages: first, the authors assessed the main effect of CB attributes on firm performance and tested the heterogeneity in effect size across the primary studies. In the next stage, the authors investigated the moderating variables accounting for this heterogeneity in the CB-firm performance relationship.

Findings

Board independence, board diversity, board size and role duality are the CB attributes, which significantly and positively impact firm performance. Further, the homogeneity tests revealed variability in effect size for all CB attributes except for board committees. Subgroup meta-analyses revealed that the contextual factors related to industry-type and firm-type are substantial explanatory source of heterogeneity in CB-performance association, though legal origin of firm also partially explains the heterogeneity in this relationship.

Research limitations/implications

Only empirical research reporting Pearson product-moment correlation coefficients(r), as the effect size, were considered for this study. Some of the other CB attributes such as board composition, compensation structure of board members, performance evaluation and appointment process of board members were not included due to limited empirical research on these attributes.

Practical implications

The paper includes implications for managers and policy makers for the development of effective corporate boards and CG mechanisms.

Originality/value

This paper integrates diverse empirical evidence on the associations of CB attributes with firm performance and systematically assesses the moderating factors that contributes to heterogeneity in these relationships.

Details

International Journal of Emerging Markets, vol. 16 no. 7
Type: Research Article
ISSN: 1746-8809

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Book part
Publication date: 3 July 2018

Gissur Ó. Erlingsson, Anna Thomasson and Richard Öhrvall

Our purpose is to critically discuss the quality of governability and scrutiny of, as well as insight in, enterprises owned by local government. Our analysis is empirically…

Abstract

Our purpose is to critically discuss the quality of governability and scrutiny of, as well as insight in, enterprises owned by local government. Our analysis is empirically grounded in an in-depth case study of one of Sweden’s 10 largest municipalities. The ambition is to highlight troublesome areas and danger zones when it comes to public owning of corporations. We have consulted diverse types of material: conducted document studies, as well as semi-structured in-depth interviews. In addition, we have conducted a survey directed to 156 individuals (which is the total population of councillors and members of municipal corporation boards in the municipality we have studied).

From an in-depth study of Sweden, we show that corporatising parts of local governments’ operations have serious implications for accountability. Our study therefore adds to the knowledge about hybrid organisations and the challenges dual logics of the private and public sector imposes on political governance as well as management. The result of this study is based on one single case study in one specific hybrid context. No empirical generalisation is aspired to. Instead the aim has been to – by way of an explorative approach – make an analytical contribution to our knowledge about hybrid organisations. Further studies are thus necessary in order to deepen our understanding of the hybrid context and the situations under which hybrid organisations operate and develop.

This study increases our knowledge regarding the challenges of governing hybrid organisations in general and enterprises owned by local government in particular. Therefore, the findings of this study are considered to be of support to politicians as well as civil servants involved in and responsible for the governance of hybrid organisations. We argue that it is important to carefully supervise this development in local government. As corporations owned and operated by local governments have increased in numbers, they are responsible for large values and services that are crucial for the modern society (water, waste management, energy, IT). Consequently, they are becoming ever more important players in their respective local economies. At the same time, concerns have been raised regarding how to govern hybrid organisations in order to secure accountability and to protect public sector values.

Details

Hybridity in the Governance and Delivery of Public Services
Type: Book
ISBN: 978-1-78743-769-2

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Article
Publication date: 1 July 1976

MEW requirements for transporting heavy loads in power plant construction, transferring ship cargoes to the shore and providing economic, quiet and energy conservative inter‐city…

29

Abstract

MEW requirements for transporting heavy loads in power plant construction, transferring ship cargoes to the shore and providing economic, quiet and energy conservative inter‐city transportation are reviving interest in lighter‐than‐air vehicles throughout the world. Military planners, too, are taking another look at the use of airships for some military missions for which they seem to be particularly well‐adapted.

Details

Aircraft Engineering and Aerospace Technology, vol. 48 no. 7
Type: Research Article
ISSN: 0002-2667

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Article
Publication date: 1 November 2018

Renée M. Thompson, Philmore Alleyne and Wayne Charles-Soverall

The purpose of this paper is to examine corporate governance (CG) issues among boards of directors (BODs) in Barbados’ state-owned enterprises (SOEs) by utilizing agency and…

692

Abstract

Purpose

The purpose of this paper is to examine corporate governance (CG) issues among boards of directors (BODs) in Barbados’ state-owned enterprises (SOEs) by utilizing agency and institutional theories as the theoretical framework.

Design/methodology/approach

This research adopts a mixed methods approach using quantitative and qualitative methods. Data are collected in five stages including data initially from a governance workshop attended by BODs. The findings are presented and feedback obtained in subsequent stages including several seminars attended by BODs, government officials, regulators and other stakeholders.

Findings

BODs perceive that they perform their roles and responsibilities in an effective and efficient manner, influence decision making, exercise control in SOEs and conduct well-organized meetings. However, respondents from the various stages report that there is lack of accountability and transparency, inadequate disclosure, lengthy board meetings resulting in excessive delays in decision making, unclear accounting and auditing guidelines, and a lack of training in financial and CG matters. Political interference, board appointment and composition are also cited as major concerns.

Research limitations/implications

Suggestions include reduced political interference, increased training, following OECD (2005) best practices and greater accountability.

Originality/value

The paper extends the literature on CG in BODs in SOEs in emerging economies. This study utilizes the agency and institutional frameworks to understand the phenomenon.

Details

International Journal of Public Sector Management, vol. 32 no. 3
Type: Research Article
ISSN: 0951-3558

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