Special issue "Risk Management and Corporate Governance in Arab Countries" of the journal “Risk Governance and Control: Financial Markets and Institutions” has been published.
The special issue pays attention to the peculiarities of risk management and corporate governance in Arab countries. More detailed information is given below.
Muhannad Akram Ahmad, Seif Obeid Alshbiel highlight the gender diversity issues in the banking sector taking into consideration their impact on the performance measured by profitability (ROA).The multiple regression analysis shows that the banks with female CEOs underperform their counterparts run by male CEOs. The reason could be due to their harmonious relationships orientation; that is, women do not tend to invest in risky investments. However, female director plays insignificant roles on the performance which supports the evidence of tokenism as argued by the psychological social theory.
Saeed Rabea Baatwah provides an empirical result concerning the quality of audit under a rotation policy in the Gulf Cooperation Council (GCC). Using discretionary accruals and modified audit opinion to proxy financial reporting quality, autor finds that audit firm tenure is not significantly associated with low quality financial reports. It is also found that audit partner tenure is not positively and significantly associated with high discretionary accruals while it is positively and significantly associated with modified audit opinion. This study contains several contributions to audit tenure debates in general and corporate governance practices in GCC in particular.
Perihan Iren examines the relationship between gender diversity in the boardrooms and firm financial performance in a region, where it has never been studied before. Using a sample of 60 firms listed in Abu Dhabi and Dubai Stock Exchanges, first the impact of gender diverse boards on the accounting value of the firms is analyzed. Afterwards, stock price reactions to the announcement of the gender quotas on corporate boards in the UAE are examined. The results do not show a significant impact of female directors on the firm’s both accounting and market value. However, these results should be interpreted carefully since the presence of women in leading positions might affect different aspects of the firm practices.
Bazzi Mehdi, Bennouna Ghita, Chamlal Hasna present a practical approach of selection of the promising projects through the implementation of a highly predictive scoring approach adapted to the specificities of this segment of young micro-entrepreneurs.
Omar Farooq, Khondker Aktaruzzaman document the effect of stock price synchronicity on the value relevance of reported earnings in the MENA region during the period between 2009 and 2013. The results show that the information content of reported earnings increases with increase in stock price synchronicity. The authors document higher impact of earnings on returns for firms with higher stock price synchronicity. They argue that firms with high synchronicity have better information environment. As a result, these firms disclose information that is of high quality. They also show that information conveyed through stock price synchronicity is more important than information conveyed through traditional governance mechanisms.
Bazzi Mehdi, Chhaiba Hassan, Chamlal Hasna suggest in this paper a version of a mathematical model that optimize the allocation of capitals for a credit portfolio of a bank with taking into consideration the Moroccan regulatory environment.
Jamal Agouram, Ghizlane Lakhnati examine Mean-Gini strategy (MG) and Mean-Extended Gini strategy (MEG) for optimum portfolio selection, in terms of the monthly Rate of Return, Standard Deviation, Sharpe Ratio, Treynor Ratio and Jensen’s Alpha. This paper compared different optimum portfolio strategies, based on Moroccan financial market data taken from turbulent market periods between the years 2007 to 2015. Two distinct sub-periods were studied: (1) crisis period: 2007-2009; (2) post-crisis period: 2010-2015. The results show that both strategies were profitable for investors, but that the MEG strategy is the more appropriate and secure strategy for an individual investor.
Denise Sumpf, Salim Araji, Rebecca Crompton suggest that to limit the damage of this downward trend, Arab governments must adopt a 2030 Vision of governance reforms to increase political participation and political freedoms, to ratify and implement international human rights conventions and transitional justice measures, adopt population policies that reflect the region’s changing demographic realities, reduce poverty through economic reform and combat corruption. The 2030 Vision will ensure the region enjoys a new era of inclusive, accountable and effective governance and the consequent benefits for sustainable development.
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