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Article
Publication date: 29 September 2021

Andani Thakhathi, Derick De Jongh and Phumzile Langeni

A recent contribution entitled Global Responsibility and the King Reports was made to the literature that represents a significant advancement in the understanding of how…

Abstract

Purpose

A recent contribution entitled Global Responsibility and the King Reports was made to the literature that represents a significant advancement in the understanding of how standards of good governance are practised. The corpus revealed key insights about macro-institutional governance regimes, yet, extraordinarily little about meso-organisational and even less so, micro-individual corporate governance practice. This study aims to shed light on the micro-individual level of corporate governance practice which has remained obscured by drawing pragmatic insights from the landmark South African King Code experience that may be applied to other governance jurisdictions for global organisational responsibility.

Design/methodology/approach

To unearth micro-individual corporate governance code practices, a phenomenological exploration of corporate governance practitioners’ (CGPs) perceptions was conducted. Qualitative semi-structured interviews with senior board members of securities-exchange listed companies were conducted with 10 directors of leading multinational South African corporations listed on Africa’s largest formal financial market; the Johannesburg Stock Exchange. Recursive analysis of the qualitative data revealed key attributes that render a corporate governance code “fulfilling” as a consequence of being perceived as subjectively valuable by practitioners who are the ultimate end-users of the King Codes for advancing good corporate governance practice in each of their respective companies.

Findings

Two categories of fulfilling micro-perceived value attributes (MPVAs) of corporate governance codes emerged, namely, internal and external MPVAs. The three internal MPVAs are, namely, (I1) Meaningful innovation, (I2) Ethical pragmatism and (I3) Cultural transformation. The three external MPVAs are, namely, (E1) Governance legitimacy, (E2) Societal licencing and (E3) Risk mitigation. From these six attributes, two testable corporate governance code development propositions are advanced, namely, (P1) a corporate governance code with a higher constitution of MPVAs will fulfil CGPs more than one with less. (P2) A more fulfilling corporate governance code will enjoy higher adoption, application and/or compliance rates.

Originality/value

Illumining the subjective experiential perceptions that constitute the fulfilment of a corporate governance code deepens the pragmatic understanding of the “demand-side” or consumption of such codes in practice. Knowing these fulfilling MPVAs may also result in the development of codes that enjoy wider adoption and compliance rates thereby enhancing global corporate responsibility pragmatism through enhanced good governance. This study sheds light on the nexus where normative corporate governance principles and the enactment thereof meet at the coalface of organisational activity with an emphasis on those attributes that render them valuable to practitioners.

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Book part
Publication date: 1 January 2008

Teerooven Soobaroyen and Jyoti Devi Mahadeo

Purpose of this paper – This study investigates compliance with the corporate governance code in an African developing economy (Mauritius).Methodology/approach – We…

Abstract

Purpose of this paper – This study investigates compliance with the corporate governance code in an African developing economy (Mauritius).

Methodology/approach – We examine the annual reports of 41 listed companies to assess the extent of compliance with the code and to analyze the wording of compliance statements. We also carry out in-depth semi-structured interviews with selected company directors to understand the reasons for compliance (or non-compliance).

Findings – Initial findings indicate a reasonable level of compliance with the more visible requirements of the code but noteworthy non-compliance also emerges, particularly in relation to the low number of company boards being chaired by independent directors, to uncertainties on the actual operation of board committees, and to the widespread non-disclosure of directors’ remuneration. Furthermore, compliance statements were found to be vague, ambiguous, or even inconsistent with the extent of compliance disclosed in the reports. We believe these are indications that many of the companies are adhering selectively with the code to project an image of symbolic compliance. Our in-depth follow-up interviews with directors largely confirm this behaviour of selective compliance.

Research implications – We suggest that the pursuit of legitimacy as an operational resource – rather than efficiency-led rationales – emerges as a potential theoretical explanation for the adoption of the corporate governance code in Mauritius.

Originality /value of paper – We bring evidence on how the corporate governance code is being understood and rationalized in a developing economy. We rely on a combination of annual report disclosures, compliance statements, and interview data to investigate corporate governance compliance.

Details

Corporate Governance in Less Developed and Emerging Economies
Type: Book
ISBN: 978-1-84855-252-4

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Book part
Publication date: 19 July 2018

Elisa Baraibar-Diez, María D. Odriozola and José Luis Fernández Sánchez

This chapter analyses how corporate governance codes in Europe approach CSR, devoting specific guidelines or recommendations or specifying the responsibility of…

Abstract

Purpose

This chapter analyses how corporate governance codes in Europe approach CSR, devoting specific guidelines or recommendations or specifying the responsibility of implementing and disclosing CSR in the company.

Design/methodology/approach

Content analysis have been used in a sample of 27 corporate governance codes of 27 European countries, issued in the European Union (EU) and United Kingdom (UK), issued by governments (seven codes), national stock exchange (eight codes), industrial associations (six codes) and composites (six codes).

Findings

Only five out of 27 codes make and explicit reference to the term Corporate Social Responsibility (CSR). Two of them reflect the importance of a CSR Report (Slovenia and Spain), whereas the Spanish Code was the only code which devoted a section to the implementation of a CSR policy.

Social implications

Although corporate governance codes could represent an opportunity to shift the focus from an implicit CSR approach to an explicit CSR approach in Europe, the truth is that content related to the issue and its level of specificity does not reflect that change yet.

Originality/value

Previous literature has not focused on the analysis of corporate governance codes from a CSR perspective, so the chapter is relevant for policy makers when it comes to updating corporate governance codes.

Details

The Critical State of Corporate Social Responsibility in Europe
Type: Book
ISBN: 978-1-78756-149-6

Keywords

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Book part
Publication date: 6 November 2012

Jyoti D. Mahadeo and Teerooven Soobaroyen

Purpose – The objective of this paper is to examine how state-owned entities (SOEs) engage with the requirements of the corporate governance code in an African developing…

Abstract

Purpose – The objective of this paper is to examine how state-owned entities (SOEs) engage with the requirements of the corporate governance code in an African developing economy (Mauritius).

Approach – A content analysis of the annual reports of SOEs and National Audit Office (NAO) reports is undertaken. This is supplemented by semi-structured interviews with relevant directors and regulatory bodies.

Findings – We report a substantial non-implementation of the code and identify several impediments to the transposing of the corporate governance model to the state-owned entities. The salient issues relate to the inadequate definition of SOEs in the code, the different conceptualisations of ownership and accountability, the influence of political rivalries and the low level of financial accountability in SOEs. We also consider our findings in relation to the theoretical perspectives of ‘efficiency gains’ and ‘social legitimation’.

Originality/value – Very few studies have looked into the applicability of codes of corporate governance in SOEs. In spite of the prominence of SOEs in many African developing countries, empirical evidence on corporate governance implementation in such entities has been scant.

Recommendations/implications – The findings are of relevance to policy-makers and regulators who seek to rely on mainstream corporate governance principles and practices to enhance the accountability and transparency of SOEs. Key enabling conditions for corporate governance implementation involve a depoliticisation of board appointments and a redefinition of the accountability relationships between SOEs and their ultimate owner (i.e. elected representatives and taxpayers).

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Article
Publication date: 1 June 2015

Nermeen F. Shehata

– This paper aims to discuss and compare the corporate governance codes in Gulf Cooperation Council (GCC) countries.

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Abstract

Purpose

This paper aims to discuss and compare the corporate governance codes in Gulf Cooperation Council (GCC) countries.

Design/methodology/approach

The development of corporate governance codes in the GCC is considered using an analytical approach.

Findings

Efforts and initiatives are underway in the GCC towards improving the corporate governance environment and coping with international developments. Although most GCC codes are comprehensive compared to those of other Middle East North Africa (MENA) countries, and are similar to international codes, as with almost all countries in the region, there is room for development. Updated codes that address the unique nature of these countries could enhance corporate governance.

Research limitations/implications

This comparison between GCC corporate governance codes provides opportunities to empirically compare the corporate governance status in these countries through indices or checklists based on the current comparison.

Practical implications

The research facilitates future evaluations of corporate governance in Gulf countries. In other words, different stakeholders, including investors and analysts, can utilise this paper during decision-making. Moreover, comparing GCC codes to others in the MENA region would help to assess the GCC’s position in the region regarding these codes, and also alert firms to corporate governance reforms occurring in the region.

Originality/value

The paper analyses the corporate governance codes issued in the GCC, which represents a group of countries with similar characteristics that are thus studied separately from other MENA countries, and compares the corporate governance codes issued for non-financial listed companies.

Details

Corporate Governance, vol. 15 no. 3
Type: Research Article
ISSN: 1472-0701

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Article
Publication date: 20 July 2012

Peter Franck and Stefan Sundgren

The purpose of this paper is to assess whether ownership concentration, leverage and demand for equity financing is associated with internal corporate governance quality…

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2033

Abstract

Purpose

The purpose of this paper is to assess whether ownership concentration, leverage and demand for equity financing is associated with internal corporate governance quality. The paper focuses on dimensions of governance quality that are related to financial reporting quality.

Design/methodology/approach

The authors measure internal governance quality by an indicator variable that takes on higher values depending on whether a company has an audit committee, has a sufficient number of audit committee meetings during the year, has financial expertise on the audit committee, has an internal auditing function, a risk management function, a code of conduct and whistle blower provisions in the code of conduct. The sample consists of 91 Swedish listed companies of which 39 companies had to follow the Swedish Corporate Governance Code. The development of hypotheses is based on agency theory. Ordered logistic regressions are used to test the hypotheses.

Findings

The paper finds a strong negative association between leverage and the internal governance quality score for companies that do not have to follow the Corporate Governance Code. The paper also finds a positive association between the governance quality score and dispersed ownership among companies that have to follow the code.

Research limitations/implications

The negative association between leverage and governance quality is opposite to the typical agency theory prediction. A number of other studies have also documented negative or insignificant associations with leverage in related settings. The research suggests there is a demand to develop theories related to leverage and the implementation of governance characteristics beyond the typical agency theory based predictions.

Practical implications

The results raise the question whether lenders more actively directly or indirectly should influence the governance quality of borrowers.

Originality/value

Based on the conjecture that governance quality increases with the number of governance elements, the paper studies a governance score that is built up by several elements of good corporate governance. Furthermore, the authors study a setting dominated by voluntary choices of governance quality, which makes it possible to study supply effects.

Details

Managerial Auditing Journal, vol. 27 no. 7
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 27 May 2014

Abdifatah Ahmed Haji

This paper examines the impact of corporate governance attributes and ownership structure patterns on corporate performance of Malaysian listed companies following the…

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1829

Abstract

Purpose

This paper examines the impact of corporate governance attributes and ownership structure patterns on corporate performance of Malaysian listed companies following the revised code on corporate governance in 2007. To provide an insightful assessment on the revised code's implications on firm performance, data before (2006) and after (2009) the revised code in 2007 were analyzed.

Design/methodology/approach

The study involves analyses of 170 observations in a two-year period, 2006 and 2009. The sample of the study was selected on the basis of a stratified random sampling procedure to allow a representative sample of the various sectors listed on Bursa Malaysia. Based on data extracted from the annual reports of 2006 and 2009, corporate performance was captured using accounting performance indicators (return on assets and return on equity). In addition to descriptive analyses, multiple regression analysis was used to assess the influence of the governance and ownership structure attributes on firm performance.

Findings

The findings revealed a decreasing trend of the financial performance of the sample companies over the two-year period which this study attributes to the recent global financial meltdown. In terms of corporate governance compliance, the results showed that there were cases of non-compliance of the basic requirements of the corporate governance code in Malaysia even after the revised code in 2007. In addition, the multiple regression results showed that only board meetings had significant negative association with firm performance following the revised code. None of the other variables had significant impact on firm performance before and after the revised code. Firm size and leverage, as control variables, however, showed significant association with firm performance.

Practical implications

Given the lack of non-compliance by some of the sample companies in Malaysia to some basic requirements such as the required percentage of independent directors on corporate boards and the insignificance of governance attributes in enhancing performance, this study suggests that the revised code needs reinforcement, at best, or even an overhaul change to suit more to the Malaysian business environment.

Originality/value

In distinction from most prior studies, this study provides ex-ante and ex-post examination of the relationship between corporate governance and firm performance, following changes in the regulatory environment. Such analysis is expected to have some practical implications in indicating whether recent regulatory changes are practiced in the corporate environment. This study draws evidence from Malaysia in adding to our understanding on whether changes in regulatory frameworks enhance firm performance.

Details

International Journal of Commerce and Management, vol. 24 no. 2
Type: Research Article
ISSN: 1056-9219

Keywords

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Article
Publication date: 7 August 2017

Mirgul Nizaeva and Ali Uyar

The purpose of this paper is to comparatively analyze the corporate governance codes of transition economies, particularly five Eurasian Economic Union (EAEU) members…

Abstract

Purpose

The purpose of this paper is to comparatively analyze the corporate governance codes of transition economies, particularly five Eurasian Economic Union (EAEU) members (i.e. Russia, Belarus, Kazakhstan, Kyrgyzstan and Armenia). Specifically, the convergence or divergence of these countries’ corporate governance codes among themselves as well as relative to the best practices of the UK Corporate Governance Code (UK Code) and the OECD Principles of Corporate Governance are investigated.

Design/methodology/approach

Initially, the existing literature on corporate governance with special focus on transition countries is reviewed. Afterwards, benchmarking the international best practices, based on main chapters and contents, the corporate governance codes of all countries in the sample are analyzed.

Findings

The paper finds that even though some principles of the corporate governance codes of the countries in the sample differ in some aspects, they do converge to some extent. However, high misalignments between the UK Code and the OECD Principles and the codes of selected countries in some aspects were found.

Research limitations/implications

The conclusion and implications of the study characterize the corporate governance of selected developing countries; thus, they might not be generalizable to other countries.

Practical implications

The codes of the countries in the sample should be revised, and more specifications regarding the stakeholder, board structure, its subcommittees, independence, diversity and transparency issues need to be addressed.

Originality/value

The paper comprehensively analyzes the contents of corporate governance codes of transition countries; from both practical and academic point of view, it was important gap that needed to be fulfilled.

Details

Corporate Governance: The International Journal of Business in Society, vol. 17 no. 4
Type: Research Article
ISSN: 1472-0701

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Article
Publication date: 5 October 2012

Andreas G. Koutoupis

This study focuses on the evaluation of the introduction of international corporate governance codes such as Combined Code (UK) and King Report III (SA) in the Greek…

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617

Abstract

Purpose

This study focuses on the evaluation of the introduction of international corporate governance codes such as Combined Code (UK) and King Report III (SA) in the Greek publicly listed enterprises. This research is based on a case study analysis of six publicly listed enterprises (three of them are traded in the high capitalization index and another three in the medium‐low capitalization index of the Athens Stock Exchange). The main purpose of this paper is to examine the extent of international corporate governance codes impact in the relevant local laws and regulations, as well as the adopted best practices.

Design/methodology/approach

Qualitative research is carried out to address the research topic, using primary and secondary data. The primary source of this study is the professional experience of the author in the field of corporate governance within publicly listed enterprises, whereas secondary sources are the international corporate governance codes, Greek corporate governance laws, regulations and best practices, books, working papers and published articles.

Findings

Although certain parts of international governance codes requirements have been applied by a number of Greek publicly listed enterprises, there is a long way to go to achieve best practice. The reason for this is the typical, however not substantial application of international governance codes requirements.

Originality/value

Research is proved to be very useful as it describes a gap analysis in the application of international governance codes in the areas of corporate governance, internal and external auditing, as well as the regulators therefore making it easier to identify potential areas for improvement.

Details

International Journal of Organizational Analysis, vol. 20 no. 4
Type: Research Article
ISSN: 1934-8835

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Article
Publication date: 11 September 2009

Fidelis Ogbuozobe

This paper (which is Part 1 of 2) seeks to explore the development and implementation of good corporate governance in the financial services industry in Nigeria.

Abstract

Purpose

This paper (which is Part 1 of 2) seeks to explore the development and implementation of good corporate governance in the financial services industry in Nigeria.

Design/methodology/approach

The paper reflects upon the identification of current problems and official legislative responses in Nigeria and tests the policy and theory against actual responses and practices.

Findings

With the collapse of such mega companies as Enron in the USA and the near‐collapse symptoms observed in such a relatively big company as Cadbury Nigeria, such research as this, on the issue of compliance or otherwise with corporate governance practices by organizations, could not have been undertaken at a more appropriate time than now. Considering the ever‐increasing scope and complexity of the subject, which cannot be covered by a single project, the particular focus here is on the impact of the Companies and Allied Matters Act (1990) and the Insurance Act (2003) on the Boards of insurance companies in Nigeria. In other words, do the said statutes contain sufficient provisions and sanctions to ensure effective performance by Boards of insurance companies in Nigeria?

Originality/value

While this research paper may not claim to fill this gap completely, it is hoped that it will create sufficient awareness to serve as a springboard for effective entrenchment and enforcement of corporate governance practices in the Nigerian financial services industry (including insurance) in particular and the economy in general.

Details

International Journal of Law and Management, vol. 51 no. 5
Type: Research Article
ISSN: 1754-243X

Keywords

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