The recent issue of the journal Corporate Ownership and Control pays attention to issues of global financial crisis, “materialistic” behaviour, risk management, bank’s profitability, free cash flow etc. More detailed issues are given below.
Mridula Sahay tries to establish the importance of effective corporate governance. The paper has traced these failures stemming from the perspective of corporate governance by looking at different reports. It goes on to define a Corporation from the perspective of the stakeholder expectation, and the importance of Governance, it brings out the systemic gaps against this background. It further goes to identify the factors contributing to effective corporate governance, how it could be measured and the challenges involved in the process. Based on this understanding it proposes an approach which can be used to define a framework to measure the effectiveness for Corporate Governance.
Erlina Diamastuti, Ahmad Dahlan Malik, Budi Rofelawaty study the phenomenon of earnings management practices often does companies that resulted in losses for the stakeholders and degrade the quality of financial reporting information. Therefore, this study aims to interpret the behavior of accountants in earnings management practices. As a result, earnings management commentary in the practice of accountants in the study found: 1) Accountants have always considered that the accounting figures are mirrored the progress of the company; 2) Profit Management don’ts home still in the corridor accounting policy rather than to meet the interests unilaterally; 3) The tendency of managers does materialistic behavior in earnings management practices.
Grace O’Farrell, Chunhui Liu describe the relational, entity-relationship (ER), and object-based approaches to modeling financial statements; and discusses the strengths, weaknesses, and user adaptability of these models. The increasing amount of disclosures in the footnotes to the financial statements and the complex compliance requirements of the Sarbanes-Oxley Act suggest that the object-relational model may be appropriate to model both the quantitative and qualitative items in the accounting processes. The object-relational model builds on the strengths of the relational, ER, and object-oriented models and mitigates the weaknesses of these models.
Aaliya Abdoolla, Patsy Govender investigate the demographic influences on work intensification (work-family conflict, work flexibility, managerial/supervisory support, child/elderly care and employee wellness) of office-based employees in a public sector organization. A survey method was adopted for this quantitative study, and a sample of 100 employees was drawn utilizing the simple random sampling technique. The differing responses and findings reveal significant differences with each demographic factor (age, marital status, race, education qualifications, position in organization, length of service and number of children) and at least one construct of work intensification. The study utilizes a self-developed questionnaire which was pilot-tested; and the validity and reliability was determined. An interesting finding in the study is that the volume of workload emerged with significant differences with five of the demographic variables.
Gerhard Philip Maree Grebe examines whether private hospitals managed fraud risk effectively and in a cohesive manner. Failure to manage fraud risk threatens the sustainability of any hospital. Primary data was collected by means of a survey, which involved management staff at head office level and at hospital level. The findings suggested that South African private hospitals appreciate the significance of the management of fraud, but there is room for improvement. It is recommended that private hospitals follow a decentralised business model and decentralising risk ownership in order to manage fraud risk more effectively. Risk management training should be provided to staff members on a regular basis and a King-type regime should be adopted by private hospitals with regard to the management of risks.
Loai Alsaid investigates how investments in corporate social responsibility activities affect firm value. The author use the Egyptian Economic Justice Index (EEJI) as the most representative measure for firms’ CSR activities in Egypt. The author’s findings show that investing in CSR activities consistently and strategically may increase firm’s profitability and firm value. However, firms that sporadically invest in CSR activities show a smaller relationship between unexpected earnings and stock returns than firms that consistently invest in CSR activities.
Mohammad Alhadab, Yasean Tahat examine the usefulness of the unrealized gains and losses on foreign currency exchange and marketable securities, using a sample of UK non-financial FTSE 350 around the recent financial credit crisis. A number of findings are reported by the current study. First, study finds that the unrealized gains and losses on foreign currency exchange and marketable securities matter when making investment decisions and can explain changes in firms’ market value, however, this relationship becomes more negative post-the crisis period indicating that investors attach some value for such information. Second, the study concludes that investors underestimate the value of firms report unrealized gains and losses in the post-crisis period, confirming the view that these items are considered to be one of the major drivers of the credit crisis.
Osama A. El-Ansary, Mohamed I. Megahed investigate factors that affect Egyptian banks’ profitability before and after financial crisis using Generalized Method of Moments (GMM) through Eviews. The sample period covers from 2004 to 2013, return on assets and return on equity were used as proxy for banks’ profitability. The explanatory variables which affect profitability are deposits to total assets ratio, operating income to asset ratio, credit quality, capital adequacy, loans rate, equity growth minus loan growth rate, asset share ratio and Egyptian banks’ total assets to Egyptian gross domestic product (GDP). The empirical findings suggested that Egyptian banks with higher capital strength, asset share, and efficient management exhibit higher profitability level, whilst Egyptian banks with higher credit risk and loans intensity exhibit lower profitability level.
Redhwan Ahmed AL-Dhamari, Ku Nor Izah Ku Ismail, Bakr Ali Al-Gamrh analyse the effect of board diversity in terms of gender and ethnicity on dividend payout policy when a firm has free cash flow agency problem. It also tests whether the probability of diverse boards would minimize free cash flow agency problem through making large dividend payments is more pronounced in firms with high ownership concentration. The results of the research that the role of female and Malay directors in forcing controlling shareholders of firms with substantial free cash flows to cash out the firms’ resources through making higher dividend payments is more prominent when the firms’ ownership structure is concentrated in the hand of largest shareholders.
Shamsul Nahar Abdullah investigates the influence of the structure of the board and its activities on firm performance post MCCG 2007. The study also aims to shed light on the effectiveness of the board of directors since the issuance of MCCG 2000 and of MCCG 2007. It also aims to reveal the preparedness of listed firms in Malaysia to embrace MCCG 2012. Using a population of non-finance listed firms for the 2009, 2010 and 2011 financial years, it was found that board independence, chief executive officer (CEO) duality, directors’ busyness, nomination committee independence, the establishment of a risk management committee (RMC) and board meetings are not associated with firm performance, i.e. Tobin’s q. However, the market appears to be in favour of a larger board size. As for return on assets (ROA), it is not associated with board independence, board size, directors’ busyness and nomination committee independence. On the other hand CEO duality and the establishment of a RMC improve ROA, while board meetings are detrimental to ROA.
To browse the papers from the issue visit this page.