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Global
Governance Practice: The Impact of Measures Taken to Restore
Trust in Corporate Governance Practice Internationally
-- Rolph N S Balgobin
In
the wake of the financial scandals of recent years, such as
Enron, it has been argued that the trust in accountability
processes has been undermined. This paper discusses some of
the measures that have been taken to restore this trust and
considers the possible impact of these measures on corporate
governance practice internationally. It finds that measures
taken to restore trust fall into two broad categories - legislation
(e.g., the Sarbanes-Oxley Act) and revision of codes and voluntary
standards (e.g., Combined Code in 2003 and Organization for
Economic Corporation and Development (OECD) Principles of
Corporate Governance in 2004). The findings suggest that it
is too early to judge the efficacy of either approach. The
legislative route has impacted exchange competitiveness and
poses a threat to the development of common capital market
platforms. It further indicates that a universal definition
of corporate governance will continue to be difficult to arrive
at as long as contextual needs vary as significantly as they
do across nations.
©
2008 IUP . All Rights Reserved.
Banking
Sector Governance: Lessons from Hong Kong Listed Banks—
A Three-Year Perspective
-- Lisa
Barnes
Hong
Kong's financial sector is popular within the banking industry
for the range of services it provides and the service providers
themselves. Using the case study approach, this paper explores
the changes to the Boards of Directors and governance issues
of the 12 listed banks on the Hong Kong Stock Exchange over
a three-year period. It focuses on issues such as the number
of directors on the boards, their qualifications, type of
directors in terms of independence, outside directorships
held, and the auditors of the financial statements from 2004
to 2006. Through the use of archival data over a three-year
period, this paper finds that the overall listed banks in
Hong Kong exhibit good corporate governance, and that this
governance has in fact improved in quality over the years.
The three-year comparison demonstrates that the high level
of corporate governance exhibited by the 12 listed banks in
Hong Kong from 2004 to 2006 provides a possible explanation
to the success of the region as a significant international
financial center due to the factors such as absence of duality
of CEO and chairman, use of the Big Four audit firms, qualifications
of directors, and use of independent non-executive directors
on the boards.
©
2008 IUP . All Rights Reserved.
Family
Firms' Performance and Agency Theory: What's Going on in the
Italian Market?
-- Stefano
Caselli, Alberta Di Giuli and Stefano Gatti
The
data concerning all family firms listed at the Italian Stock
Exchange between 2001 and 2005, show that agency theory prescriptions
and monitoring activities impact differently on family firm
value and profitability. Specifically, non-founder family
firms benefit from a low level of board and inside ownership
to a high level of stockholder and foreign investors ownership,
because they must face high agency costs. On the contrary,
founder family firms benefit from a high level of board and
insider ownership to a low level of stockholder and foreign
investor ownership owing to their context of lower agency
costs.
©
2008 IUP . All Rights Reserved.
Audit
Committee Support and Auditor Independence
-- Zulkarnain Bin Muhamad Sori, Shamsher Mohamad and Siti
Shaharatulfazzah Mohd. Saad
This
study investigates whether an audit committee contributes
towards external auditor independence. An audit committee
is a mandatory internal control mechanism required in all
listed firms to ensure effective enforcement of good corporate
governance. The results indicate that auditor independence
is positively associated with audit committee meetings, audit
committee report in the annual report, roles to approve and
review audit fees, and composition of audit board. These results
are consistent with the spirit of corporate governance code
that was designed, among others, to improve the quality of
financial reporting, and hence, increase confidence in the
information presented in the reports.
©
2008 IUP . All Rights Reserved.
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