Jan'22
The IUP Journal of Corporate Governance
Focus
The first paper, "The Effect of Board Structure on the Human Resource Disclosure Practices of the Indian Corporate", by Kirti Aggarwal, examines the factors that influence the Human Resource Disclosure Practices. To measure the same, the author has constructed a Human Resource Disclosure Index (HRDI). The motivation for the study has come from the fact that there is inadequacy in disclosure, and associated decisions are taken on the basis of insufficient information shared. Indian companies from BSE-100 Index have been considered for the study for a seven-year period (2012-13 to 2018-19). The study excludes banking and financial sectors. To achieve the proposed research objective, the study has employed Pearson's correlations matrix and OLS regression model. The study reveals that on an average the selected companies disclose 47.13% HR. The results show that board meetings, audit committee and CEO duality have significant positive effect on HRDI.
The second paper, "Corporate Governance, Audit Committee Characteristics and Firm Performance: Evidence from India", by Shikha Mittal Shrivastav, investigates the relationship between variables such as audit committee characteristics and firm performance of companies. The motivation for the study comes from the ineffective implementation of corporate governance measures, which has resulted in several corporate mishappenings and inadequate organizational performance. The proposed relationship is backed by literature, which led to the development of the hypothesis. Independent variables considered for the study are Number of Board Level Committees (Comm), Audit Committee Size (ACS), Audit Committee Independence (ACI) and Audit Committee Meetings (ACM). The panel data of 178 non-financial companies, for a period of 8 years from 2008 to 2015, have been considered. The study recommends that audit committee should comprise many directors based on the regulations of The Companies Act.
The third paper, "Efficacy of Corporate Governance Performance in Regulating Related Party Transactions: An Analysis of Indian Listed Companies", by Ajaz Ul Islam, examines the impact of corporate governance practices on Related Party Transactions (RPTs). To achieve the research objective, the author has chosen the impact of independence of the board, board size, active/passive board, Key Management Persons' (KMPs) remunerations and auditor's remuneration as variables. The author has substantiated the proposed hypothesis with adequate literature evidence. The non-financial companies listed on Bombay Stock Exchange (BSE) have been considered. The author has considered six-year data starting from FY2013-14 to FY2018-19. The study reemphasizes the importance of independent directors and suggests nominating one of them as chairman of the audit committee.
The last paper, "Does Corporate Governance Impact Firm Performance and Firm Risk? Empirical Evidence from India", by Harsh Raj Pathak, Vijaya Lakshmi S and Sonali Narbariya investigates the concerns raised in research that corporate governance practices are compromised. The authors also explore the possible relationship between CG and firm risk. The authors have made use of multiple regression model in the study. The results obtained suggest considering two major premises, board composition and audit committee, which have a positive impact on firm performance.
Consulting Editor
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| Article | Price (₹) | ||
| The Effect of Board Structure on the Human Resource Disclosure Practices of the Indian Corporate |
100
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| Corporate Governance, Audit Committee Characteristics and Firm Performance: Evidence from India |
100
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| Efficacy of Corporate Governance Performance in Regulating Related Party Transactions: An Analysis of Indian Listed Companies |
100
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| Does Corporate Governance Impact Firm Performance and Firm Risk? Empirical Evidence from India |
100
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The Effect of Board Structure on the Human Resource Disclosure Practices of the Indian Corporate
The present study investigates the effect of board structure on Human Resource Disclosure Index (HRDI) in Indian corporates. Indian companies from BSE-100 Index were selected for the study and the final sample consisted of 64 Indian listed companies. The data of dependent variable (HRDI) and independent variables (board structure) were gathered from the annual reports of the sample companies for a seven-year period, 2012-13 to 2018-19. To measure the level of HR disclosure, a human resource disclosure index was constructed. For analysis, descriptive statistics, Pearson's correlations matrix and OLS regression model were used. The findings of the study show that on an average, the selected companies disclose 47.13% HR information in their annual reports. Further, the regression results show that board meeting, audit committee and CEO duality have significant positive effect on HRDI. And, the rest of the variables (board size and board independence) have insignificant but positive effect on HRDI.
Corporate Governance, Audit Committee Characteristics and Firm Performance: Evidence from India
The present study aims at finding a relationship between audit committee characteristics and firm performance of companies listed on the Indian Stock Exchange. Fixed Effect Panel Data Regression was employed on the data of 178 companies for a period of eight years. The results found that the audit committee characteristics (size, independence, and number of meetings) are in significant positive relationship with Tobin's Q, a market-based performance measure. However, only the impact of audit committee size is found to have a positive and significant impact on Return on Equity (ROE). The number of board level committee meetings has a positive and significant impact on Tobin's Q and negative and significant impact on ROE. The results of the present study can be used by policymakers and regulators who are involved directly or indirectly in pondering corporate governance reforms. The results are also beneficial for the managers, investors, and minority shareholders as they are concerned with the performance of the firms. .
Efficacy of Corporate Governance Performance in Regulating Related Party Transactions: An Analysis of Indian Listed Companies
This study investigates the impact of corporate governance practices on Related Party Transactions (RPTs) for a sample of BSE 500 companies in India. The findings of this study advance the earlier understanding that good corporate governance practices inhibit RPTs. Further, the study suggests that the composition of board with active independent directors and compensation structure of Key Management Persons (KMPs) mainly contributes towards inhibiting RPTs. In addition, contrary to earlier studies, auditor compensation and frequency of board meetings were found not to significantly impact RPTs. Finally, deviation of board size from average industry level board size was found to promote RPTs. The implication for stakeholders is also discussed.
Does Corporate Governance Impact Firm Performance and Firm Risk? Empirical Evidence from India
In the light of the growing importance of Corporate Governance (CG) in academic and industrial research, the present paper aims to answer the question: Does corporate governance impact Firm Performance and Firm Risk? Multivariate regression analysis was conducted on three models to answer the question, with firm performance and firm risk being the dependent variables. Different CG mechanisms (Board Composition, Board Size, Frequency of Meetings and Audit Committee) were considered as independent variables. The results of the regression analysis postulate that board composition, frequency of meetings and audit committee significantly impact the firm performance i.e., Return on Assets (ROA) and Profit Margin (PM). Board composition was also found to have a significant impact on firm risk where we used Beta as a proxy measure. Overall, the objective of the study was met, as all the three models showcase significant results. The present study provides important insights into fair CG practice, with scope for future research.