Cross-listing and corporate governance: Bonding or avoiding?

How do suppliers of finance make sure that firm managers enforce credit contracts, or do not invest in bad projects? This approach is missing in corporate governance research. To bridge the gap, we take steps towards developing a stakeholder perspective with the focus on examining the effects of creditor participation in a firm’s top decisions, in relation to board performance. Based on a sample of 154 questionnaire survey responses from Nigerian public firms, after relating all measured items to every construct in the statistical tests of exploratory factor analysis (EFA), we employed the use of confirmatory factor analysis (CFA) in a structural equation modelling (SEM) approach for an in-depth analysis to estimate how well the stakeholder model fits the data. Building upon the construct creditor participation, and based on the proposed theory, we confirmed three dimensions – protect risk projects, protect collateral, and enforce contracts – to be confirmed measures of the latent construct. Significant creditors such as banks interfering in the firm’s board, especially in major board decisions, can reduce the potentials of managers to engage in high-risk projects. This has significant positive effects on the board’s role performance. However, items in the two dimensions – protect collateral and enforce credit contracts show weak measurements after EFA. The consequences are a new research agenda for boards has been set. The agenda will focus on the suppliers of debt finance, as significant to the firms akin with their equity shareholders’ counterparts. This will create knowledge; reduce conflicts of interests, and exploitation; and ensure equitable distribution of firm value. The approach exposes firms to access more inclusive strategic inputs especially on important and less risky projects that will yield better margin and sustainable growth. This may stimulate further debates on other stakeholder researches that are vital to debt financiers and boards, thus becoming actionable for practitioners in decisions on projects.

PurposeThis paper aims to provide more insights into the standard of corporate governance in New Zealand. The study intends to uncover how a small country with a well-developed economy with a good system of law and order, good institutional set up and law enforcements and implements the principles contained in the FMA’s corporate governance guidelines in practice.Design/methodology/approachThe study is a mixed study one where it employs case study content analysis and augmented by conducting interviews. Large companies are selected to ascertain the level of compliance of NZ companies towards their obligations to report on corporate governance practices within the organisation. At the first stage, the study uses content analysis and looks at contents of company annual reports and publications on websites to determine whether they had disclosed as intended by New Zealand’s corporate governance guidelines.FindingsThe study found that a high compliance was recorded in areas such as board composition and board committees and low compliance recorded in areas involving costly implementation or when the issue is sensitive such as disclosures regarding remuneration details of directors and what non-audit work was undertaken and whether it compromises auditor independence. Being a small country, NZ has performed well in attracting foreign investment due to its strong tradition of law enforcement and respect for regulations. With greater awareness of the importance of corporate governance to investors, companies may see the benefit of greater compliance with the corporate governance guidelines. This is in line with the stakeholder theory and resource dependency theory where companies will voluntarily disclose information on corporate governance, social and environmental performance over and above mandatory requirements to appease and manage their stakeholders.Research limitations/implicationsThe sample size of this study represents 3 per cent of total listed companies in New Zealand, but the sample is approximately 10 per cent of local NZ listed companies (i.e. not dual listed in Australia). There are 36 large companies in the New Zealand stock market with market capitalisation of 1 billion and above. In addition, the companies selected for this study are well-known in New Zealand, and it is acknowledged that this can be a source of bias in my analysis.Practical implicationsAs was revealed during the interviews with company’s senior officials, Australian companies have achieved a higher level of compliance with the code of corporate governance. In this regard, New Zealand will have to step up and follow Australia’s lead to ensure greater compliance with the New Zealand corporate governance principles and guidelines. It would be in the best interest of the company’s stakeholders if full compliance is achieved.Originality/valueStudies on the level of compliance by New Zealand companies on their obligations to meet the full extent of disclosures as stipulated by the New Zealand corporate governance guidelines are rare. This study aims to ascertain the standard of corporate governance reporting in New Zealand and the company’s seriousness to comply or attempt to meet the requirements in the seven stipulated principles.

Corporate governance is a mechanism that ensures transparency, accountability, and efficiency in corporate entities, thereby fostering investor confidence and economic growth. This study examines the implementation of corporate governance practices among companies listed on the Lusaka Securities Exchange (LuSE). Despite regulatory frameworks designed to promote good governance, many listed companies in Zambia face challenges in fully implementing these practices. Issues such as weak board oversight, inadequate transparency, and resistance to governance reforms continue to persist. The study aimed to assess the extent of corporate governance implementation, its impact on investor confidence, and the barriers companies face in adopting best governance practices. A mixed-method research approach was employed, with questionnaires administered and interviews conducted with corporate executives, governance experts, and employees of selected listed companies. The collected data was analysed using descriptive statistics and statistical inference via the Statistical Package for the Social Sciences (SPSS V.23). Purposive sampling was utilised in this research. Yamane’s formula was used to determine a sample size of 114, but only 97 questionnaires were completed. The designated study population was 160. Thematic analysis was used to interpret the qualitative data. Key findings indicated that corporate governance practices were being implemented by the listed companies. The study also revealed that corporate governance increased investor confidence through transparency and the disclosure of information by companies. However, it was found that implementation varies across organisations due to factors such as regulatory constraints, lack of expertise, and resource limitations. The results also showed a strong positive perception of the effectiveness of governance structures: 77.3% rated corporate governance practices as highly effective, with a mean score of 3.75 (SD = 0.48). Regarding the transparency of financial reporting, 75.3% of respondents considered disclosures to be very transparent, indicating a high level of information integrity. Importantly, 68% of respondents confirmed that corporate governance significantly increased investor confidence, with only 2.1% remaining uncertain. These findings were supported by financial ratio analysis of award-winning LuSE companies, which demonstrated improved liquidity and profitability indicators, with returns on capital employed averaging 5–14%, confirming the link between governance and financial performance. The research adds to the growing body of knowledge on corporate governance in emerging markets and offers insights for policymakers and corporate leaders seeking to improve governance standards. The study concludes that corporate governance is broadly implemented and positively associated with improved firm performance and increased investor confidence among LuSE-listed companies. It recommends ongoing regulatory oversight, board training programmes, and stakeholder collaboration to strengthen governance practices, ensuring consistency across all listed entities. Enhancing governance frameworks will be crucial in maintaining investor trust and boosting Zambia’s competitiveness as an emerging market.

This thesis investigates whether corporate governance conformance by Malaysian banks improves their financial reporting quality. It is motivated by the controversies surrounding corporate governance reforms and the calls for systematic research on its efficacy in the post-reform period. Malaysian banks have been subject to international standards of corporate governance since before and after the 1997–1998 Asian Financial Crisis. Malaysia’s common-law tradition, greater level of financial and capital market development in the region, predominantly centralised and stable political power and robust regulatory framework are apparent strengths for corporate governance conformance. However, characteristics such as ownership concentration, political links and lack of regulatory enforcement question the ability of any governance reform to enhance the Malaysian banks’ financial reporting quality. This setting, coupled with Malaysian banks' differing business models compared to those of U.S. banks, provides an Asian focus to extant literature. The analyses focus on three specific reforms, namely: (i) the initiation of the Malaysian Code of Corporate Governance (MCCG) in 2000; (ii) the circular issued by Bank Negara Malaysia in 2003 on Guidelines on the Establishment of Board Committees, Minimum Qualification and Training Requirement for Directors, and Definition and Responsibilities of Independent Directors (BNMCIR); and (iii) the revision to Guidelines on Directorship in Banking Institutions in 2005 (REVGP1). The analyses utilise 64 listed bank-year observations from 1996 to 2004 for the MCCG reform; 80 licensed bank-year observations from 1999 to 2007 for the BNMCIR reform; and 56 unlisted bank-year observations from 2001 to 2009 for the REVGP1 reform. The research questions addressed for each reform period are: Have banks’ corporate governance practices changed in response to the reforms? If so, have the changes in corporate governance improved financial reporting quality? This study first identifies governance attributes with significant statistical difference from the pre- to the post-reform period. These attributes are then used to gauge their effectiveness in improving banks’ financial reporting quality in the post-reform period using five proxies: (i) earnings persistence; (ii) earnings predictability; (iii) the relationship between loan-loss provisions and loan charge-offs; (iv) total accruals; and (v) discretionary accruals. From an initial concern of the low quality of financial reporting during the pre-reform period, the empirical results suggest that there was no improvement to the financial reporting quality of listed banks initiating a nominating or remuneration committee and/or complying with committee composition requirements in response to the MCCG reform. A similar situation prevails for licensed banks complying with initiating a nominating, remuneration and risk-management committee and/or complying with composition requirements. The results suggest that neither a voluntary reform approach following the U.K. standards of governance practices (pursuant to MCCG) nor a mandatory reform approach tailoring governance practices to suit local environment (pursuant to BNMCIR) were effective for improving Malaysian banks’ financial reporting quality. In contrast, the empirical results pursuant to REVGP1, show improved earnings persistence and earnings predictability for unlisted banks complying with enhanced board independence, suggesting some benefits from the efforts to enhance financial reporting quality of Malaysian banks.

Corporate Governance in Alternative Investment Market (AIM) Companies: Determinants of Corporate Governance Disclosure

PurposeThe purpose of this study is to investigate simultaneous relations between corporate governance (CG) practice and cash flow right, cash flow leverage (the divergence between control right and cash flow right of controlling shareholders). The two ownership measures reflect alignment and expropriation incentives of controlling shareholders. This study also examines the effect of multiple large shareholders (MLSs) on CG practice.Design/methodology/approachThe study uses publicly listed companies (PLCs) excluding those from the Indonesian finance sector during 2011-2013 as the samples of the study. Two-stages least squares regression models were used to test the simultaneous relations between CG practice and ownership structure variables. The study develops a CG instrument to measure CG practice based on ASEAN CG Scorecard, that comprehensively covers OECD CG principles and that can be used for panel data.FindingsCG practice has a positive influence on cash flow right and has a marginally negative impact on cash flow leverage, while cash flow right and cash flow leverage have a marginally negative impact on CG practice. Further, the existence of large MLS complements CG practice, but as the control right of the second largest shareholders becomes closer to the largest shareholder, the complement relation becomes less important. State- or foreign-controlled PLCs practice better CG than other PLCs.Research limitations/implicationsStudies on CG/ownership structure need to treat CG and ownership structure as endogenous variables in their research design. In addition, the level of rule of law in a country should be taken into account when examining the relation between CG and ownership structure. The interrelation among CG, ownership structure, capital structure and firm performance has been studied in the context of dispersed ownership structure and strong rule of law. Thus, future study needs to examine the interrelation among these four concepts in countries with high concentrated ownership and weak rule of law.Practical implicationsTo minimize the risk of expropriation, investors in the capital market need to select shares of PLCs that practice CG suitable for the ownership structure of PLCs, have high ownership by the largest shareholder and have no divergence between control and ownership right, and or have MLSs. PLCs may need to choose the level of CG mechanism in the context of their ownership structure and consider the benefits and costs implementing them.Social implicationsThe study supports the “one size does not fit all” perspective on CG and, thus, it supports the recently enacted financial service authority (FSA) rule requiring PLCs to follow the “comply or explain” rule on the CG code for PLCs. The FSA needs to enforce the compliance of PLCs with CG rules and encourage PLCs to implement CG in substance, not just in form. To strengthen the positive impact of good CG practice in attracting investments in capital market, the regulator needs to improve investor protection rules and ensure strong rule of law.Originality/valueThe study is the first to examine the simultaneous relation between CG practice and both cash flow right and cash flow leverage of the largest shareholder. It is also the first that investigates the impact of MLS on CG practice. It explores the complement and substitution relation between the two concepts in reducing agency costs. In term of research design, the study develops a CG instrument that is based on OECD CG principles, that can be used for panel data and that uses public information.

The Financial Crisis which began in 2007/2008 remains the most severe since the Great Depression of the 1930s. It exposes the inherent dangers of unregulated markets and highlights the weaknesses of the corporate governance system that has been constructed and determined by the shareholder primacy theory. The crisis sparked and intense debate on the causes and the response needed to correct the largely dysfunctional governance, legal and regulatory regime that has characterised the pre-crisis corporate governance landscape. In response, governments in the United States of America (USA) and United Kingdom (UK) embarked on different governance and regulatory reforms ostensibly to contain the damage and possibly prevent future occurrence. The Thesis argues that corporate governance failures merely triggered the crisis and that the underlying cause of the crisis is the idea that the sole purpose of the corporation is shareholder value maximisation. The reforms merely provide immediate and temporary solutions but leave intact the problem of how to deal with the issue of shareholder primacy in the long-term. Thus, the Thesis contends that the reforms in the US and the UK are at best ad-hoc and cosmetic measures that only treat the symptoms and not the causes of the financial crisis. An original contribution of this Thesis is that it may lead to a reconceptualization of the nature and purpose of the corporation and the emergence of a more long-term governance model. It has wider implications as it will be useful not only for students and researchers but also provides insights for policy makers and business managers to make informed decisions

The purpose of this research is to analyze the effect of law system for investor protection on implementation of corporate governance at company level and degree of convergence of local accounting standards to IFRS (International Financial Reporting Standards). The result shows that investor protection has positive effect on implementation of corporate governance and degree of convergence of local standard to IFRS. The evidence is consistent with the argument that firm can establish law environment well for their own, but the quality of corporate investor protection via implementation of corporate governance mechanisms will depend on efficiency of judicial system of the country where the firm operates; and the quality of accounting standard in one country is a signal of country’s commitment to investor protection in order to provide good protection for its investor; a country will tend to adopt higher quality of accounting standard to ensure financial reporting transparency. This indicates that investor protection can be the key to the quality of other governance mechanisms, both at institutional level such as accounting standards, and also at firm level such as corporate governance implementation.

Rethinking Corporate Governance in Ethiopia

Venture Capital Investments and Financing in Estonia: A Case Study Approach

Cross Listing, Management Earnings Forecasts, and Firm Values

Corporate Governance and Risk Taking

While the recent economic and financial crises in East Asia and elsewhere had a multitude of underlying causes, weak corporate governance has consistently been seen as a major contributor that needs to be addressed to revive investor confidence and decrease the impact and likelihood of future shocks. Good corporate governance is not only about its increasing importance to international investors but also its protection of domestic investors. Unlike international investors who have sophisticated instruments to diversify their overall portfolio risk, domestic investors are often captive to local markets and risk losing their life's savings when transparency is lacking and governance systems are defective. In an environment that does not protect minority shareholders' rights, these investors cannot risk investing in corporations directly, thus limiting their ability and potential to participate in or contribute to their economy's development. As a group, however, they represent a large pool of stable, long-term resources critical to the development process. This report develops a framework for implementing corporate governance reform. The second chapter expands on this framework to discuss specific corporate governance challenges in emerging markets. Chapter 3 proposes an agenda for action by the World Bank Group and its partners.

Corporate governance is the set of rules that modern businesses follow to make sure they are accountable, open, fair, and make decisions that are moral. In a world where economies are becoming more interconnected and globalised, good corporate governance is no longer only about how a company runs its own business. It is now a key factor in economic stability and long-term growth. Corporate governance in India has changed a lot in the last few decades, especially after the economy opened up in the 1990s. The Companies Act of 2013 and the Securities and Exchange Board of India (SEBI) are two examples of laws and regulations that have tried to improve governance standards and bring them in line with best practices around the world. Even with these improvements, ongoing corporate scandals have shown that governance systems still have problems, which makes people worry about how well they work in real life. Failures in corporate governance in India have shown time and time again how systemic problems such as a lack of transparency, poor board monitoring, regulatory failures, and unethical behaviour may cause big financial problems and institutional breakdowns. These mistakes go beyond just losing money right away; they also have a big effect on long-term development. When businesses do things that are dishonest or irresponsible, it hurts sustainable development, which is the balanced combination of economic growth, environmental protection, and social fairness. Corporate scandals undermine investor confidence, disrupt financial markets, diminish public faith in institutions, and frequently lead to detrimental societal outcomes, including unemployment, loss of public funds, and economic instability. This article conducts an extensive socio-legal examination of corporate governance problems in India, emphasising their effects on sustainable development. It critically analyses significant corporate scandals, such as the Satyam Computer Services fraud, the Infrastructure Leasing & Financial Services (IL&FS) crisis, and the Punjab National Bank (PNB) fraud, using them as case studies to expose structural and regulatory deficiencies. The report delineates persistent patterns of governance failure, encompassing the manipulation of financial statements, inadequate internal controls, regulatory arbitrage, and the collapse of independent oversight systems. The research employs a doctrinal methodology, depending on a comprehensive examination of statutory provisions, regulatory frameworks, court decisions, and policy documents. It also uses secondary sources like academic papers, committee reports, and expert analyses to put the concerns in a bigger conversation about governance and sustainability. The paper aims to connect corporate governance theory with its real-world effects by combining legal analysis with socio-economic factors. The study finds that India's legal and regulatory framework for corporate governance is rather strong, but these systems don't always perform well because of inadequate enforcement, a lack of accountability, and a culture of unethical behaviour in businesses. The ongoing failures in governance show how important it is to take a more proactive and integrated strategy that goes beyond just following the rules. In this regard, the paper stresses the need to improve institutional monitoring, give boards and auditors more power and independence, and create a culture of ethical responsibility in businesses. It also stresses the importance of including Environmental, Social, and Governance (ESG) principles in corporate decision-making so that business practices help long-term sustainable development in a meaningful way. KEYWORDS: Corporate Governance; Sustainable Development; Corporate Fraud; Accountability; Transparency; India; CSR; ESG; Regulatory Framework; Corporate Ethics.

For a sample of 31 countries, we document that financial disclosures are more transparent and national accounting standards require timelier (accrual based) reporting in countries with stronger investor protection. These countries also spend more on auditing enforcement and the Big Five accounting firms audit proportionately more companies in these countries. These results indicate that higher quality accounting standards and the enforcement of such standards through higher quality auditing are more likely to exist in corporate governance in countries with strong investor protection. Higher quality accounting and auditing are also positively associated with financial market development in countries whose legal systems are conducive to the protection of investors. However, we are unable to find systematic evidence that higher quality accounting and auditing alone—independent of a country's underlying investor protection regime—affects the development of financial markets. © City University of Hong Kong.