Top PDF Risk disclosure, corporate governance, and cost of capital of Saudi listed firms

Risk disclosure, corporate governance, and cost of capital of Saudi listed firms

Risk disclosure, corporate governance, and cost of capital of Saudi listed firms

The recent financial crisis of 2009 and corporate failures have highlighted the importance of monitoring risk-taking within corporations, raising the attention of practitioners and researchers to corporate risk disclosures. This thesis provides a comprehensive analysis, which aims to examine corporate risk disclosure practices, determinants, and implications on the cost of capital. To this end, this study employs a sample consisting of all non-financial listed firms in Saudi Arabia to investigate risk disclosure practices. All data for the study were manually collected from the annual reports of sample firms over four years (from 2012 to 2015) using content analysis. The descriptive findings show that Saudi firms disclose 24 risk-related sentences on average. Operational and financial risks appear to be the most frequent disclosed risks while strategic risks are significantly lower. Most disclosed risks in the Saudi context are positive, forward-looking, and qualitative. This study further examines the determinants of corporate risk disclosure in Saudi public firms, with particular emphasis on corporate governance mechanisms, ownership structure, Islamic values, and the Loss-Making Firms Procedures (LMFPs). The findings indicate that board size, government ownership, and inside ownership are negatively and significantly related to risk disclosure. Independent and non-executive directors are positively and significantly related to risk disclosure. However, auditor type, board education, risk management committee, institutional ownership, block ownership, and Islamic values have no statistically significant relationships with risk reporting. Using a difference-in-difference model, the results show that risk disclosure for loss-making firms has increased significantly after the introduction of the Loss-Making Firms Procedures. The evidence presented thus far supports the positive impact of corporate governance on risk disclosure by examining an exogenous shock. The results also show that risk disclosure is negatively and significantly associated with the cost of capital. These results are robust to a battery of robustness tests.
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Corporate governance, risk disclosure and cost of equity capital in the Malaysian public listed firms

Corporate governance, risk disclosure and cost of equity capital in the Malaysian public listed firms

The debate on the relationship between disclosure and cost of equity capital continues unabated. Theory has provided a strong support for the negative association between these two variables (Diamond and Verrecchia, 1991; Easley and O'hara, 2004). Some theorists such as capital need theory and signaling theory argue that more disclosure will result in lowered cost of equity capital due to the reduced estimates of risks and transaction costs (Armitage and Marston, 2007; Botosan, 1997; Chen and Gao, 2010). Many empirical studies have been conducted since 1997 to try and support the theory. At the onset, the literature provided evidence of works that highlighted how voluntary disclosure was associated with cost of equity capital particularly in developed markets such as the USA (Botosan, 1997), Canada (Richardson and Welker, 2001), Switzerland (Botosan and Plumlee, 2002; Hail, 2002) and the UK (Gietzmann and Ireland, 2005). Not so long ago, emergent markets and civil law countries have also shown much interest in this topic, Zhang and Ding (2006) in China; Espinosa and Trombetta (2007) in Spain; Kristandl and Bontis (2007) in Austria, Germany, Sweden; Déjean and Martinez (2009) in France; (Embong et al., 2012) in Malaysia, Lopes and de Alencar (2010) in Brazil and Miihkinen (2013) in Finland). Despite all the work done, substantial empirical evidence is still lacking and the many inconclusive and varying results leave the question of the association between corporate disclosure and cost of equity capital still unanswered.
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The effect of Islamic values on voluntary corporate governance disclosure: The case of Saudi listed firms

The effect of Islamic values on voluntary corporate governance disclosure: The case of Saudi listed firms

3. Although there are slight differences in these Islamic corporate/financing forms, the central tenet is mutual profit-and- loss sharing (PLS) underpinned by Islamic values that require business dealings and transactions to be ethical, fair, just and moral (Dekmejian, 1994; Chong and Liu, 2009). For example, ‘musharakah’ contracts operate primarily like joint- ventures in which a bank and an entrepreneur make joint contributions of capital and management expertise to a business project. Any profit and loss emanating from the project is shared in a pre-determined ratio (Archer et al., 1998; Chong and Liu, 2009). By contrast, ‘mudarabah’ contracts are profit-sharing agreements, in which the whole capital required to finance a project is provided by a bank, whilst the borrower provides the managerial expertise and labour. Any profit from the project is shared by both parties in a pre-determined ratio, but any losses are borne solely by the bank (Karim, 2001; Chong and Liu, 2009). Further, and although most theoretical forms of Islamic banking/financing are modeled around the ‘musharakah’ and/or ‘mudarabah’ concepts of PLS (Archer et al., 2010; Boytsun et al., 2011), there are other financing forms that ‘Shariah’ does not prohibit, but may not be necessarily PLS in nature, such as ‘murabaha’ (cost plus), ‘ijarah’ (leasing), ‘bai muajjal’ (deferred payment sale), ‘bai salam’ (forward sale), and ‘istisna’ (contract manufacturing) (see Chong amd Liu, 2009, p.129 for a detailed overview of these Islamic financing forms). 4. We note that although a considerable number of past studies have explored accounting, CG and disclosure from an
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Impact of Corporate Governance Quality on the Cost of Equity Capital: Evidence from Palestinian Firms

Impact of Corporate Governance Quality on the Cost of Equity Capital: Evidence from Palestinian Firms

The governance structure for financial regulation and supervision in Palestine falls under the Jurisdiction of two Authorities: the Palestine monetary Authority and Palestine capital Market Authority , PMA was established in 1995 as independent public institution to assist in maintaining the stability and effectiveness of Palestinian financial system through prudential regulation and supervision in line with international best practices. The Palestine capital Market Authority was established in 2005 as regulator for the non banking financial sector . the Palestine Capital Market Authority overseas and regulate the securities Market , insurance companies and real- estate institution. In 2009, each Authority issued its own code of good Corporate Governance in Palestine applies to all firms with securities listed on the Palestine Exchange , the Palestine Monetary Authorities corporate governance code for Banks applies to the banking sector the two codes are largely based on international standards. Both codes contain mandatory requirements that firms must adhere to long with additional guidelines representing good practices that are encouraged but not required . the Palestine capital Market Authority code only (Hassan & Hijazi,2015).
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Institutional Investors, Board Size and Capital Structure Decisions: Empirical Evidence from Non-Financial Firms in Nigeria

Institutional Investors, Board Size and Capital Structure Decisions: Empirical Evidence from Non-Financial Firms in Nigeria

Abor (2007) analyzed the link between corporate governance and capital structure for listed firms on the Ghana Stock Exchange and find statistically significant relationship between board size, CEO duality and a higher percentage of non-executive directors and capital structure. The findings generally indicate that firms’ with CEO duality pursue higher debt policies since the CEO also acting as the director concentrates decision making. While a larger board size which is more entrenched as a result of superior monitoring may seek higher financial leverage to increase the value of the firm. Also, higher percentage of external directors may seek for higher leverage. In the same vein, Ganiyu & Abiodun (2012) who find that board size, board skills and CEO duality have significant impact in determining debt to equity ratio for the companies under survey in the food and beverage industry in Nigeria. They conclude that larger board sizes and higher profitability may make firms more prone to taking risk and seek external sources of finance for expansion and aggressive exploitation of investment opportunities. Elucidating that larger board sizes may weaken corporate governance practices as a product of conflicts emanating from the failure of the board to reach a consensus in decision making thereby leading to high leverage (Jensen,1986; Berger, et.al. 1997). Also, Abor et al (2008) find board skill and board size significantly positive to the leverage position of oil and gas firms in Nigeria. Agyei& Owusu (2014) explore the relationship between corporate governance and capital structure of listed manufacturing companies in the Ghanaian Stock Exchange. The study covered 8 firm level data for the sample period of 2007-2011. The results show that board size, board composition and ownership structure are positively correlated to the firms’ debt to equity ratio, which depicts the importance of corporate governance practices in capital structure mix. In a similar study by, Kajananthan (2012) six corporate governance mechanisms driving capital structure decisions were employed from 28 manufacturing firms listed on the Colombo Stock Exchange as a sample for the periods 2009- 2011 in a multivariate framework. The results show corporate governance practices influence a firm’s financing mix decisions.
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Relationship between Corporate Governance Practices and Firms Performance of Indian Context

Relationship between Corporate Governance Practices and Firms Performance of Indian Context

India has a range of business forms, including public limited companies which are listed on stock exchange, domestic private companies and foreign companies. Foreign portfolio investment was permitted since 1992 and foreign institutional investors also began to play an important role in the institutionalisation of the market. The securities market was transformed as disclosure requirements were brought in to help protects shareholders interest. In recent scenario, corporate has been initiated by the protection of the shareholder interest for looking forward focusing of the corporate governance initiatives also very crucial. The SEBI report emphasise the importance of corporate governance to future growth of the capital market and the economy which is three key aspects underlying as accountability, transparency and equality of treatment for all stakeholders. Corporate governance can be viewed as a mechanism that ensures external investors receive proper returns on their investments. Effective corporate governance provides an assurance on the safety of the invested funds and the returns on investment (Shleifer and Vishny, 1997). The corporate governance framework should ensure that timely and accurate disclosure is made of all material matters regarding the corporation, including the financial situation, performance, ownership, and governance of the company (OECD, 2004).
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Corporate governance attributes, firm characteristics and the level of corporate disclosure: Evidence from the Indian listed firms

Corporate governance attributes, firm characteristics and the level of corporate disclosure: Evidence from the Indian listed firms

The level of a firm’s disclosure may be influenced by its age, i.e. stage of development and growth (Owusu-Ansah, 1998; Aktharuddin, 2005). Owusu-Ansah (1998) has pointed out three factors that may contribute to this phenomenon. Firstly, younger companies may suffer from competition. Secondly, the cost as well as the complexity and hazards of gathering and processing the required information may be a contributory factor, and finally, younger companies may lack an attractive track record to report. Newer firms may have some problems like lack of capital, brand name and reputation compared to the older firms. It is, therefore, expected that, the long-established firms may disclose more information or be more compliant than the newly-established firms. The age variable has been used in some earlier research studies (Aktharuddin, 2005; Hossain, 2008). But no significant association has been reported by both the studies. In the present study, however, a positive association is expected in the Indian context and accordingly, following hypothesis is proposed and tested:
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Corporate governance mechanisms and the cost of capital: evidence from Canadian firms

Corporate governance mechanisms and the cost of capital: evidence from Canadian firms

of the firm’s cost of capital. The WACC separates the total capital into common equity, preferred equity, long-term debt, and short-term debt. The weights of each financing resource are calculated by dividing each amount by total capital. The weighted average cost of capital is meaningful to firms. The cost of capital reflects the minimum required rate of return on a project in order to make it worthwhile. It also provide the necessary return to the providers of capital, which is based on the risk of the firm’s current operations. Management must efficiently allocate capital within the company to meet the WACC. If the WACC is set too high, the firm has to reject valuable opportunities leading to demolishing shareholder value. Strong governance practice can lower the WACC by reducing monitoring costs through aligned interests between top management and shareholders. A sample of 121 Canadian firms listed on Toronto Stock Exchange from 2010 to 2014 is used to analyze the relationship between the cost of capital and corporate governance controlling for the differences in industry and region. The results are robust to the effects of heteroscedasticity and truncated estimation effects, as well as for firm fixed-effects to account for any unobserved firm heterogeneity.
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Corporate Boards and Ownership Structure as Antecedents of Corporate Governance Disclosure in Saudi Arabian Publicly Listed Corporations

Corporate Boards and Ownership Structure as Antecedents of Corporate Governance Disclosure in Saudi Arabian Publicly Listed Corporations

With respect to CG, and although legislation regulating the behavior of corporations, their directors, and officers has long existed in Saudi Arabia in the form of the 1965 Companies Act (Al-Razeen & Karbhari, 2004; Hussainey & Al-Nodel, 2008), there is a consensus that in a narrow sense, CG in Saudi Arabia was formally institutionalized by the publication of the Saudi CG Code in November 2006 (Al-Moataz & Hussainey, in press; Al-Nodel & Hussainey, 2010; CMA, 2006; Soliman, 2013a, 2013b). In fact, attempts at pursuing CG reforms to enhance CG standards in Saudi public corporations began in earnest in 2003, but early rapid growth in the stock market diverted the attention of the CMA and the relevant stakeholders from it (Alshehri & Solomon, 2012; SFG, 2009). However, a sudden fall of about 25% in value of listed stocks in February 2006 alone, and an overall fall of 53% by the end of 2006, wiping over US$480 billion off the market’s value highlighted the need to improve CG standards in Saudi publicly listed corporations (SFG, 2009). As a result, academics, investors, and practitioners placed pressure on the CMA to urgently improve CG standards by (a) deepening the market, including increasing its size (e.g., number of listed firms) and allowing direct foreign/institutional investor participation 2 ; (b) improving disclosure and
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The influence of internal corporate governance mechanisms on capital structure decisions of Chinese listed firms

The influence of internal corporate governance mechanisms on capital structure decisions of Chinese listed firms

It is documented that concentrated ownership has a palpable impact on a firm’s financing decisions (Jensen and Meckling, 1976). It is argued that ownership concentration leads to efficient monitoring (Jensen and Meckling, 1976). The effect of ownership concentration on a firm’s financial decisions is premised on the fact that higher concentration gives large shareholders stronger incentives and greater power to monitor management at a lower cost. This argument is consistent with the view of Grossman and Hart (1986) who contend that shareholders with a large stake in the company show more willingness to play an active role in corporate decision-making because they partially internalize the benefits of their monitoring efforts. Shleifer and Vishny (1997) suggest that ownership concentration helps in disciplining managers and improves firm value, even in the presence of insufficient legal protections. Efficient monitoring may reduce managerial entrenchment and cause managers to reduce leverage as entrenched managers tend to borrow more than optimal amount of debt in order to inflate their voting power to reduce possibility of takeover attempts (Harris and Raviv, 1988). Wen et al. (2002) in the study of 60 Chinese listed firms tentatively concluded that managers seek lower leverage when faced with stronger monitoring. In light of the argument, we hypothesised that:
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Do Corporate Governance Disclosures Matter for Bank Cost of Capital? Empirical Evidence from Accounting Statements of Egyptian Banks

Do Corporate Governance Disclosures Matter for Bank Cost of Capital? Empirical Evidence from Accounting Statements of Egyptian Banks

This result in particular is important because it means that cost of equity of Egyptian banks is not just related to accounting-based financial performance and risk but also related to how well a bank is run. Moreover, evidence shows that beta, bank size, loan growth opportunities, accounting-based financial performance (ROA), and listing on the stock exchange are significant determinants of cost of equity capital. In particular, large banks with small Beta, high growth opportunities, high performance (ROA) and listed on the stock exchange have lower cost of equity capital. Larger banks can obtain cheaper finance from different sources; these results are in line with results suggested by Easton (2004) and Cheng et al. (2006). Again, large Beta means high risk and high cost of capital, which support the prior research that reports positive relation between firm Beta and cost of capital (e.g. Botosan, 1997; Gode and Mohanram, 2003). Few growth opportunities will cause increase in cost of equity capital, similarly as documented by Easton (2004) and Huang et al. (2009). High ROA means better performance and stream of future cash flow that will be reflected in low cost of equity capital, while listing on the stock exchange indicates more monitoring and regulations that decrease cost of equity.
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Corporate disclosure in the capital market: the role of the governance system

Corporate disclosure in the capital market: the role of the governance system

disclosure in the capital market? In the unravelling result setting managers disclose all their private information, but when one (or more than one) condition of the unravelling result does not hold, less than full disclosure is likely to occur. However, this does not necessarily imply that disclosure regulation is desirable (Beyer et al., 2010). Indeed voluntary disclosure is always associated with some firm-specific benefits in terms of liquidity, cost of capital, and firm valuation other than the costs. As a result, firms are expected to voluntarily provide information as long as the benefits of disclosure overcome its costs, because they ultimately bear the costs of withholding information. According to Leuz & Wysocki (2008) a complete justification of mandatory disclosure has to show that the “market equilibrium” is unlikely to produce a level of disclosure that is desirable for the society as a whole, while a “regulatory solution” would achieve a better outcome (Leuz & Wysocki, 2008:15). This literature has, therefore, identified four main rationales to explain disclosure regulations, other than the failure of the “unravelling result” argument. The most investigated are (a) externalities (b) economies of scale (c) agency costs 20 . (a) Externalities. The first condition is related to the existence of several disclosure (positive or negative) externalities that lead to private under- (over-) production of information. There exist financial externalities when a firm’s disclosure is informative not only about its own financial position but also about other firms. Moreover, a firm’s disclosure may also create some real externalities by affecting other firms’ real decision (Kanodia et al., 2000). Disclosure regulation might mitigate such externalities and improve the social welfare (Dye, 1990; Adamati & Pfleiderer, 2000).
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The Mediating Effect of Strategy Implementation on the Relationship Between Corporate Governance and Performance of Firms Listed on the Nairobi Securities Exchange

The Mediating Effect of Strategy Implementation on the Relationship Between Corporate Governance and Performance of Firms Listed on the Nairobi Securities Exchange

The purpose of the study was to establish the effect of strategy implementation on the relationship between corporate governance and performance of firms listed on the Nairobi Securities Exchange (NSE) The study developed a corporate governance index as a proxy for corporate governance based on the seven provisions of the recently revised Capital Markets Authority (CMA) draft code of corporate governance practices for public listed companies in Kenya, namely; board operations and control, rights of shareholders, stakeholder relations, ethics and social responsibilities, accountability, risk management and internal audit, transparency and disclosure and supervision and enforcement. The survey questionnaire was the main tool of data collection and was distributed to 56 CEOs and corporation secretaries. The response rate was 87.5%. The study found that strategy implementation mediates the relationship between corporate governance and non-financial performance of firms listed on the Nairobi Securities Exchange. The results have diverse implications for policy, practice and research. Keywords: Corporate Governance, Mediation, CGI_ Score, Strategy Implementation, Firm Performance
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Impact of Corporate Governance Attributes on Intellectual Capital Disclosure: Evidence from Listed Banking Companies in Bangladesh

Impact of Corporate Governance Attributes on Intellectual Capital Disclosure: Evidence from Listed Banking Companies in Bangladesh

However, traditional financial reporting, based mostly on regulatory requirement, often proved inadequate for disclosing information about critical success factors, related performance indicators (Mouritsen, Larsen, & Bukh, 2001) and those value creation drivers not represented in financial statements (Lev & Zarowin, 1999). More specifically, traditional accounting reports do not have enough potential to show the true value established by intangibles in firms not to cover the gap between market and book value in many of today’s companies (Canibano, Garcia-Auyso, & Sanchez, 2000; Maditinos, Chatzoudes, Tsairidis, & Theriou, 2011). Undoubtedly, emergence of knowledge based society and economy has shifted organizational value driver from tangible assets to intangibles, which is termed as intellectual capital (IC). A discourse then emerges, expressing an urgency to measure and manage these intangible and knowledge assets (Mouritsen & Roslender, 2009). In a consequence, companies are urged to improve their disclosure on intangible assets (Sriram, 2008; Vandemaele, Vergauwen, & Smits, 2005) and also explain the roles these assets play in their value- creation strategies (Bismuth & Tojo, 2008).
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Voluntary corporate governance disclosure, firm valuation and dividend payout: evidence from Hong Kong listed firms

Voluntary corporate governance disclosure, firm valuation and dividend payout: evidence from Hong Kong listed firms

Similarly, the legal origin, legal framework, capital market structure, and the presence/absence of various external CG mechanisms (as discussed in Chapter 2) would also affect the level of voluntary disclosure. All the sample firms in this study, being constituent firms of the Hang Seng HK Composite Index, are subject to the same regulatory environment and financial reporting standards. For instance, all listed firms on the HKEx are subject to the same set of Companies Ordinance, Securities and Futures Ordinance, and the listing rules of the Hong Kong Stock Exchange. Prior to the implementation of Appendix 13 of the HKEx Listing Rules in January 2005, all the listed firms were encouraged to disclose their corporate governance practices since 2002 (after the SCCLR report 2001 as has been discussed in Chapter 5 of this thesis). However, there was no penalty for non-disclosure prior to 2005, the year Appendix 13 came to full enforcement. As such, some firms chose not to disclose their CG information as much as desired by the regulators, even though they were kept informed about the forthcoming CG disclosure requirements. Variations in levels of disclosure were therefore expected. Apart from those structure-related or performance-related variables as suggested by Haniffa and Cooke (2002), the variations in voluntary CG disclosure would most likely be caused by other managerial quality variables, depending on the management’s initiatives, intention, willingness, efforts, and commitment in reducing the information asymmetry between insiders and outsiders. These differences in disclosure contents are expected to be perceived, recognised, and valued differently by outside investors because investors would feel more comfortable to leave their investments in the hands of good quality managers, who will look after their interests with the vigilance they deserve.
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Corporate governance and tax strategies in Chinese listed firms

Corporate governance and tax strategies in Chinese listed firms

information asymmetry in the real world, the objective of maximization of after-tax return should encompass not only explicit taxes, but also implicit taxes as well as other non-tax costs, in order to ensure that tax minimization is not entirely offset by implicit and non-tax costs. The theory of effective tax planning therefore encourages firms to tradeoff the tax benefits against non-tax costs in their choice of financing, investment and compensation decisions. Beyond the necessary resource allocation costs (that opportunity costs where resources are spent on tax management that could have gone to capital expenditures or R&Ds), there are additional costs associated with tax management such as political costs, disclosure costs, agency costs and financing costs, these implementation costs include legal costs, planning advice and risk (Minnick & Noga, 2010). Take the agency costs, for example, given the fact that shareholders act as principals and managers act as agents in terms of the design and implementation of corporate tax strategies, an information asymmetry between managers and shareholders in terms of tax planning can facilitate managers' pursuit of their own interests. It is argued the lack of transparency associated with taxplanning provides managers with a 'screen' to hide self-interested actions, which facilitates moral hazard (Desai & Dharmapala, 2006; Wahab & Holland, 2012). A decline in reported earnings may affect managers' compensation and other interests, potentially leading to inconsistencies between interests of managers and those of shareholders and therefore increase agency costs. Similarly, Hanlon & Slemrod (2009) suggest political and financial costs are associated with tax aggressiveness. A well-known example of political cost with tax management is the board of directors of Stanley Works, Inc. reversing a decision to move its headquarters offshore to save tax dollars after being attacked by local politicians and media for the move (Minnick & Noga, 2010). Desai and Dharmapala (2009) suggest that earnings manipulation can be facilitated when managers undertake efforts to reduce corporate tax obligations via their study of the link between tax sheltering and various types of managerial opportunism.
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Corporate Governance Mechanisms and Voluntary Disclosure in Saudi Arabia

Corporate Governance Mechanisms and Voluntary Disclosure in Saudi Arabia

The Gulf Corporation Council (GCC) consists of six countries (Saudi Arabia, Bahrain, Kuwait, Qatar, Oman and the United Arab Emirates), which share the same culture, religion, language and economic characteristics including their high dependence on oil revenue. Furthermore, according to Ameinfo (2006), as quoted by the Magazine of the FTSE Global Markets (2006), the GCC stock markets had a combined total of 528 listed companies at the end of 2005 with a capitalization of 1.16 trillion US dollars. Saudi Arabia has the largest capital market among other GCC countries with 685.3 billion US dollars. Thus, the study consists of 87 Saudi listed companies. The study used the annual reports to collect the data on voluntary disclosure for the years 2006 and 2007. The study uses the two years as the available years after publishing the corporate governance code in 2006. 4.2 Voluntary Disclosure Measurement (Dependent Variable)
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Corporate governance and capital structure: evidence from listed firms in Nigeria stock exchange

Corporate governance and capital structure: evidence from listed firms in Nigeria stock exchange

Also, findings for the second hypothesis show that there is a significant negative relationship between management ownership (proxied by DEI) and the capital structure of listed firms in Nigeria. This is evident in the probability and t-values of 0.038 and -2.16 respectively. This result is in line with the findings of (Berger et al., 1997; Brailsfors et al., 2002; Fosberg, 2004; Baum et al., 2007) where management ownership was observed to have a negative impact on firms’ long- term debt. Nevertheless, this outcome empirically suggests that high managerial discretion limits long-term debt. That is, as the level of managerial ownership increases, firm control passes from external shareholders to the managers and after a certain period of managerial ownership, managerial entrenchment leads to debt avoidance. Moreover, when managers invest larger amounts of their personal wealth in a business they became risk-averse and are reluctant to adopt high debt policies because of the risk of bankruptcy.
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Corporate Governance and Risk Disclosure: Evidence from Saudi Arabia

Corporate Governance and Risk Disclosure: Evidence from Saudi Arabia

This investigation found that ownership structure has a significant effect on voluntary risk disclosure. These findings are in line with prior empirical results that indicate banks with lower insider ownership (proxied by CHS) are not inclined to provide higher voluntary risk disclosure, whereas banks with higher outsider ownership (proxied by NOSH-Factor) are more prone to provide considerably higher levels of voluntary risk disclosure (Elshandidy et al., 2013; Abraham and Cox, 2007). Also, these results are in line with both agency theory and signalling theory, which propose that directors are only driven to offer higher levels of voluntary risk disclosure when there is a widely dispersed ownership structure to mitigate information asymmetries owing to external pressure (Mohobbot, 2005; Owusu-Ansah, 1998), implying that H1 and 2 are empirically supported. Also, the coefficient on audit committee meetings is .012 and is significant at .05 significance level. These findings show that banks with more frequent audit committee meetings are more motivated to disclose more risk information. These results are consistent with prior empirical findings (Karamanou and Vafeas 2005; Allegrini and Greco, 2013). Also, this outcome is consistent with agency theory, whereby internal and external monitoring practices complement each other in reducing agency conflicts and information asymmetry between different types of stockholders, implying that H8 is empirically supported. However, our results show that there is a negatively significant association between board size and voluntary risk disclosure, with a coefficient value at -.032 and significance at the .01 percent level. This is in line with some preceding research (Jia et al., 2009; Guest, 2009; Coles et al., 2008) as well as being concurrent with agency theory, which suggests that bigger boards are bad and corrupt (Jensen and Meckling, 1976) owing to free rider problems, such as expanded decision making time, raised costs, poor communication and monitoring practices, which impact negatively on board performance in general and risk disclosure in particular. Therefore, we reject H3. Yet, the other corporate governance variables (CHS, INDEP, NON, ACINDEP and ACSIZE) are found to have an insignificant correlation with voluntary risk disclosure in Saudi listed banks.
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Sustainability of Banking Sectors in Bangladesh: A Study Based on Emerging Role of Corporate Governance, Corporate Social Responsibility and Intellectual Capital Disclosure

Sustainability of Banking Sectors in Bangladesh: A Study Based on Emerging Role of Corporate Governance, Corporate Social Responsibility and Intellectual Capital Disclosure

The modern concept of corporate governance, the two buzz words have been commonly used in the English-speaking world since the 1990s due to the series of failures of big corporate houses in western world as a top concern both for the international business community and financial institutions. The issue of corporate governance arises from the agency theory that clearly defines the possession of a corporate body is alienated from its administration and power (Berle & Means, 1932). Corporate governance is the structure of rules, practices and procedures by which an organization is intended for and controlled. Corporate governance fundamentally grips harmonizing the interests of the various stakeholders in an organization - these comprise its shareholders, executives, customers, vendors, financier, government and the community. A corporate governance structure should defend shareholders' right, such as voting right, right to choose board associate, right to get pertinent information, cooperate and commune with the management, evenhanded treatment of all shareholders (Tricker, 1984). Banking industry is highly regulated businesses and oversight by the government and supervisory body. Banks are the vital factors of monetary reforms and growth of the country (Alexander, 2004); reported that finest corporate governance exercises will allow banks to get trouble-free access in the capital marketplace and reduce the cost of capital and defend the rights of minority shareholders including overseas shareholders. A research has disagreed that an entity is exaggerated by the association among the participants in the structure of governance (Kharouf, 2000). Controlling shareholders can radically influence corporate activities. However, all shareholders should able to obtain effective redress for infringement of their rights and forbids insider trading and obnoxious dealing in their own interests. Destitute corporate governance of banks can compel the market to lose self-confidence in the aptitude of a bank then it leads to financial crisis in a country and persuade systemic risk (Marco & Fernández, 2008). In contrast, good corporate governance reinforces possessions rights; reduce transaction cost and the cost of capital, and directs to capital market growth (Claessens & Fan, 2002). Corporate Governance aims to reduce the likelihood of deception, malpractices, monetary frauds and delinquency of management (Ubha, 2007).
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