Apr'20
The IUP Journal of Corporate Governance
Focus
For corporate governance to be effective, the role of the board, management and shareholders should be clearly defined. The regulatory burdens have further added costs overseeing the corporations' business, certainly posing challenges to operations, regulations and compliance. From the investors' standpoint, they seek greater role in company's strategy formulations, capital allocations and corporate social responsibility aspects, as opposed to the traditional way of vesting control solely in the board and the management.
The first paper, "Board Characteristics, Ownership Structure and Corporate Social Responsibility Disclosures: Evidence from ADX-Listed Companies", by Mohamed Chakib Kolsi and Riham Muqattash, examines the relationship between disclosures and corporate governance by laying emphasis on the ownership structure and characteristics of board of directors. They have reiterated the fact that strong mechanisms of corporate governance will have significant influence upon social and environmental disclosures. The authors have concluded that managerial ownership, independent directors, governmental ownership, audit committee size and firm size impacted the CSR disclosures. On the contrary, CEO duality, block-holders and the proportion of capital owned negatively impacted the CSR disclosures. On similar lines, board size, gender diversity, foreign listing did not have any effect on the extent of CSR disclosure.
The second paper, "Corporate Governance, Capital Structure and Financial Performance:
An Analysis of Indian Automobile Industry", by Neeti Mathur, Payal Khandelwal, Satish Chandra Tiwari and Radha Mohan Chebolu, has made an attempt to identify the importance of the corporate governance practices. The authors have expressed concerns about the growing influence of these practices on the firm's financial performance. The study was limited to the automobile industry, and listed Indian companies were considered. To test the influence/proposed hypotheses, the authors have employed multiple regression analysis. The independent variables considered for the study are composition of board, independent director, qualified and independent audit committee, board of directors, remuneration of the directors and CEO duality. The results and their significance are discussed.
The third paper, "Do Different Types of Related Party Transactions Impact Firm Performance Differently? Evidence from Emerging Markets", by Nitya Nand Tripathi, Sudhakara Reddy Syamala and Kavita Wadhwa, empirically examines the influence of various Related Party Transactions (RPTs) on firms' performance. The data is captured for the period 2003-2016. The authors conclude that there is a two-way impact of RPTs, positive as well as negative, on firms' performance. There are various perspectives and theories that back the authors' stance, and the results and associated implications are discussed.
Consulting Editor
| Article | Price (₹) | ||
| Board Characteristics, Ownership Structure and Corporate Social Responsibility Disclosures: Evidence from ADX-Listed Companies |
100
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| Corporate Governance, Capital Structure and Financial Performance: An Analysis of Indian Automobile Industry |
100
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| Do Different Types of Related Party Transactions Impact Firm Performance Differently? Evidence from Emerging Markets |
100
|
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Board Characteristics, Ownership Structure and Corporate Social Responsibility Disclosures: Evidence from ADX-Listed Companies
Corporate Social Responsibility (CSR) concept has gained great attention both in the media and academic community in the last few decades. This paper sheds light on the relationship between social disclosures and corporate governance mechanisms, mainly ownership structure and board of directors characteristics. The results derived, using a sample of sixty-one firms listed on ADX for the period 2010-2014 and computing an eight-item index, viz., Environment (ENV), Human Resources (HR), Customer-Supplier relationship (CS), Product-Service quality (PS), Community Services (COMS), Corporate Governance (CG), Energy saving (ENG), Finance and Investment (FI) disclosures, are conclusive and show that corporate governance mechanisms have significant impact on CSR disclosures. Mainly, managerial ownership, independent directors, governmental ownership, audit committee size, firm size and leverage positively impact the level of CSR disclosures. In contrast, CEO duality, block holders and the proportion of capital owned by the first shareholder negatively impact the extent of CSR disclosures. Finally, board size, board gender diversity, foreign and listing status and firm profitability have no significant impact on the extent of CSR disclosures. The results remain unchanged to additional robustness checks such as alternative estimation method and CSR disclosure proxy. The findings help in guiding regulators in issuing new standards on social and environmental disclosures.
Corporate Governance, Capital Structure and Financial Performance: An Analysis of Indian Automobile Industry
Corporate governance ensures transparency, accountability, responsibility, and fairness of the firms. If the company demonstrates a high level of corporate governance, then the stakeholders of the company trust it. Corporate governance is essential for corporate growth and success. Raising capital, maintaining investors' interest and positive impact on share price, and creating brand loyalty and brand image take care of all the stakeholders of the business. In this paper, an attempt is made to explore the significance of corporate governance practices and their impact on the financial performance of listed Indian companies. The data is collected for Indian automobile companies listed on NSE top 500 for the period 2014 to 2018. The relationship between corporate governance parameters and financial performance parameters and corporate governance and capital structure is explored. Descriptive statistics, correlation and multiple regression analysis have been used to study the influence of independent variables such as composition of board, independent directors, qualified and independent audit committee, board of directors, remuneration of the directors and CEO duality. The dependent variables are financial performance and capital structure represented by ROE and total debt/total asset.
Do Different Types of Related Party Transactions Impact Firm Performance Differently? Evidence from Emerging Markets
This paper is a study of the effectiveness of different types of Related Party Transactions (RPTs) on firm performance in the Indian context. The corporate governance mechanism of India has changed evolutionarily after the implementation of Clause 49 the Listing Agreements. According to Clause 49, the Listing Agreements of RPTs are approved by the audit committee, a mechanism which is unique and different from other developed and emerging countries. Hence, this paper intends to investigate the impact and behavior of various RPTs on firm performance and whether the pre-approval mechanism helps to mitigate the management's opportunistic behavior of transferring the resources from the company through RPTs or whether it has no impact. The paper empirically examines the effect of RPTs on firm performance for the period 2003-2016. It uses 9,140 firm-years for the empirical analysis and also uses firm and fixed effect as part of the research methodology. The study finds that there are positive as well as negative impact of different types of RPTs on firm performance.