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Article
Publication date: 12 July 2021

Muhammad Iqmal Hisham Kamaruddin, Sofiah Md Auzair, Mohd Mohid Rahmat and Nurul Aini Muhamed

The purpose of this study is to examine the role of financial governance practices in influencing both financial management and Islamic work ethic practices to affect…

Abstract

Purpose

The purpose of this study is to examine the role of financial governance practices in influencing both financial management and Islamic work ethic practices to affect Islamic social enterprises (ISEs) accountability.

Design/methodology/approach

Questionnaires were administered to financial officers of 102 Malaysian ISEs. Data was analysed using Smart-PLS to examine the relationships between financial management, Islamic work ethic, financial governance and accountability.

Findings

Results of this study indicate direct relationship only exist between Islamic work ethic and accountability. The relationship between financial management and accountability are indirect through financial governance. Hence, the data proves that financial governance has a mediating role on both the relationships between financial management and Islamic work ethic with the accountability of the ISEs.

Research limitations/implications

The study has highlighted the greater role of financial management, Islamic work ethic and financial governance practices over accountability to achieve public trust, especially for Malaysian ISEs.

Practical implications

ISEs need to have good financial governance practices besides financial management and Islamic work ethic practices to achieve good accountability.

Originality/value

The study contributes to the field of management and social accounting by providing empirical evidence on the ISEs practices specifically on financial management, Islamic work ethic, financial governance and accountability. This framework thus presents amongst the first attempts in studying accountability issues in ISEs.

Details

Social Enterprise Journal, vol. 17 no. 3
Type: Research Article
ISSN: 1750-8614

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Article
Publication date: 8 January 2021

Sara Sofia Gomes Mariano, Javad Izadi and Maurice Pratt

The purpose of this study is to investigate the impact of corporate governance structures on the likelihood of financial distress in UK listed companies. The paper…

Abstract

Purpose

The purpose of this study is to investigate the impact of corporate governance structures on the likelihood of financial distress in UK listed companies. The paper examines the impact of borrowing and corporate governance structures on financial distress likelihood in UK companies.

Design/methodology/approach

The study uses a quantitative approach with financial, governance and borrowing measures and data from 270 firm-observations between 2010 and 2018. The study analyses the impact of borrowing and corporate governance structures to indicate financial distress likelihood in British companies. Corporate governance variables such as ownership concentration, independence indicators, chief executive officer duality, director remuneration and corporate loans are considered, as well as the UK Corporate Governance Code.

Findings

The results indicate that companies with low ownership concentration and a low degree of independence are more likely to incur financial distress. Larger boards and better director remuneration can reduce financial distress likelihood and the existence of corporate loans can increase this likelihood. Empirical consideration of corporate borrowing is a new contribution to the literature.

Originality/value

Variables are highlighted and aggregated that have not otherwise been studied together; the UK Corporate Governance Code’s main ideas are empirically supported; the study is useful for defining corporate governance structure strategies.

Details

International Journal of Accounting & Information Management, vol. 29 no. 2
Type: Research Article
ISSN: 1834-7649

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Article
Publication date: 8 April 2014

Malcolm Prowle and Don Harradine

This research concerns the issue of financial governance within the UK NHS and aims to assess the effectiveness of existing financial governance arrangements in the main…

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1171

Abstract

Purpose

This research concerns the issue of financial governance within the UK NHS and aims to assess the effectiveness of existing financial governance arrangements in the main providers of health services in the UK. Also considered is the importance of good financial governance in a time of financial austerity.

Design/methodology/approach

The primary research for this project was based on the use of a questionnaire to all finance directors in NHSTs in England supported by semi-structured interviews with: finance directors, non-executive directors, executive directors and senior finance staff.

Findings

Among the main findings of the study were: certain financial management systems were not prioritised in line with what is seen as good practice; existing financial management systems were not always seen as adequate for the achievement of good financial governance; there was sometimes a lack of understanding of financial issues by non-executive directors; and the complexity of the NHS funding process often resulted in opaqueness of the financial risks.

Research limitations/implications

The research is limited by the relatively small coverage of NHS trusts but this has been compensated for by a series of in-depth interviews with key stakeholders in the governance process.

Practical implications

Weaknesses in financial governance could result in further scandals which result in loss of life and poor patient care.

Originality/value

There are many papers on the issue of governance in the public sector in general and the NHS in particular. However, there is little published on the issue of financial governance in the NHS. Also of great value is the emphasis on strengthening financial governance in an era of austerity

Details

International Journal of Public Sector Management, vol. 27 no. 3
Type: Research Article
ISSN: 0951-3558

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Article
Publication date: 2 August 2011

Huang Zhizhong, Zhang Juan, Shen Yanzhi and Xie Wenli

The purpose of this paper is to study the impact of corporate governance on financial restatements in China, with a view to providing reference to strengthen the corporate…

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1266

Abstract

Purpose

The purpose of this paper is to study the impact of corporate governance on financial restatements in China, with a view to providing reference to strengthen the corporate governance and improve the quality of financial information.

Design/methodology/approach

The authors investigate associations between financial restatements and corporate governance via a sample of 1,147 listed companies from the period of 2002 to 2006, which includes 880 annual accounting restatements by 465 companies. Logistic model is used to regress restatement dummy variable on not only the equity and board structure, but also the quality of independent auditors. The restatements in this paper are caused by performance‐related accounting errors.

Findings

It was found that accounting misstatements related to performance could be prevented or restrained by strong internal governance, such as a board of higher percentage of outside directors and an audit committee that could oversee the accounting and financial reporting process on behalf of all shareholders, and outside governance, such as a big stockholder and a strong outside auditor from the Big4 accounting firms. However, the matched test shows the effect of audit committee on controlling restatements is endogenous, which relies on the effects of other governance factors.

Originality/value

In China, studies on the impact of corporate governance on financial restatements are few and the existing empirical researches show the selected samples are small, which constitute small part of the revision of accounting errors. In this paper, the data are more accurate and comprehensive than previous research and matched sample method was used to alleviate the impact of endogeneity of some explanatory variables. So, the conclusions are more reliable than in the past.

Details

Nankai Business Review International, vol. 2 no. 3
Type: Research Article
ISSN: 2040-8749

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Article
Publication date: 3 January 2019

Mohamed A. Ayadi, Nesrine Ayadi and Samir Trabelsi

This paper aims to analyze the effects of internal and external governance mechanisms on the performance and risk taking of banks from the Euro zone before and after the…

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1460

Abstract

Purpose

This paper aims to analyze the effects of internal and external governance mechanisms on the performance and risk taking of banks from the Euro zone before and after the 2008 financial crisis.

Design/methodology/approach

To avoid macroeconomic problems and shocks and because of data availability, the authors select some countries of the Euro zone, namely, France, Belgium, Germany and Finland, during the 2004-2009 period. These countries share similar macroeconomic environments (unemployment, inflation and economic growth rates). All the data relating to the banks are manually drawn from the supervising reports submitted to banks and are available on the banks’ websites and/or on that of the AMF website. The banks included in our sample are drawn from the list of European central banks on www.ecb.int

Findings

The empirical results show that banks undertake tradeoffs between different governance mechanisms to alleviate the intensity of the agency conflicts between the shareholders and managers. The findings also confirm that internal mechanisms and capital regulations are complementary and significantly impact bank performance.

Research limitations/implications

This analysis can be extended through studying the interaction between bondholders’ governance and shareholders’ governance and their impact on the 2008 financial crisis.

Practical implications

The changes in banking governance help banks find a useful and necessary way to avoid ill-considered risks that can cause a systemic risk. Therefore, some conditions should be met so that banking governance can contribute to the economic development.

Social implications

Culture and mentality of good banking governance must grow as much as possible through awareness-raising, training, promotion, recognition of performance, enhancing procedure transparency and stability of good banking governance and regulations, strengthening the national capacity to fight against corruption, and preventive mechanisms.

Originality/value

This paper complements previous studies, mainly those of Andres and Vallelado (2008) who examine the impact of the components of the board on banking performance and of Laeven and Levine (2009) who estimate the combined effect of regulatory and ownership structure on the risk-taking of each bank.

Details

Managerial Auditing Journal, vol. 34 no. 3
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 22 February 2013

Vera Ogeh Fiador

The purpose of this paper is to explore financial governance as practiced by NGOs in Ghana and further examines the determinants of the financial governance structures of…

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1459

Abstract

Purpose

The purpose of this paper is to explore financial governance as practiced by NGOs in Ghana and further examines the determinants of the financial governance structures of the NGOs. The study specifically investigates which organizational‐level characteristics exhibit any link whatsoever with governance as it relates to budget preparation, budget execution and internal controls and budget monitoring.

Design/methodology/approach

Using a questionnaire to conduct the survey, a cross‐sectional regression analysis was executed.

Findings

The findings of the study indicate that the most positively influential factor in explaining an NGO's adoption of a governance framework is its size. The other variables, organizational age and independence, are not significant across all three financial governance proxies and when they prove significant, the effect is negative.

Originality/value

The findings hold important policy implications and especially so for countries that attract significant funding via relatively small‐sized NGOs.

Details

International Journal of Sociology and Social Policy, vol. 33 no. 1/2
Type: Research Article
ISSN: 0144-333X

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Article
Publication date: 5 January 2015

Timo Behrens

The purpose of this article is to analyse Mexico’s money laundering governance with a focus on its 2007-2013 reform process. It provides a view of money laundering…

Abstract

Purpose

The purpose of this article is to analyse Mexico’s money laundering governance with a focus on its 2007-2013 reform process. It provides a view of money laundering governance as a politically contested policy area and a reflection on the reach and purpose of the international regime promoted by the Financial Action Task Force (FATF).

Design/methodology/approach

The analysis uses an actor-centred approach on governance structures relating groups of public and private actors with competing policy preferences.

Findings

Three ideal-typical groups of actors are identified. Of these, the Financial Integrity and Criminal Enforcement Groups were central proponents of prevention- and prosecution-based policies, respectively. While criminal enforcement was initially sidelined, its role was strengthened in Mexico since 2007. Despite early signs of success, diverging policy preferences between these groups continue to complicate money laundering governance in Mexico through a complex distribution of tasks between them.

Practical implications

To address wider crime fighting concerns, more emphasis should be put on the role of prosecutorial actors in money laundering governance. Beyond the domestic level, the results raise concerns about the increasing focus of the FATF on money laundering as a threat to financial integrity.

Originality/value

The article adds to a better understanding of money laundering governance in Mexico. Further, the presented systematisation of actors can inform the analyses of money laundering governance and underlying political tensions in other country cases. By focusing on organised crime and prosecution, the case deviates from the international trend to concentrate on issues of market integrity and prevention-orientated policies.

Details

Journal of Money Laundering Control, vol. 18 no. 1
Type: Research Article
ISSN: 1368-5201

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Book part
Publication date: 7 January 2015

This chapter examines corporate governance–related financial reporting issues in the context of globalization. Over the past few decades, the process of globalization has…

Abstract

This chapter examines corporate governance–related financial reporting issues in the context of globalization. Over the past few decades, the process of globalization has substantially altered the fields of corporate governance and accounting. More specifically, Anglo-American models of corporate governance and financial reporting have received increasing momentum in emerging economies, including China. However, a review of relevant studies suggests that there is limited research examining the implementation of Anglo-American concepts in various countries regardless of their growing acceptance. This monograph extends the existing literature by comprehensively investigating the adoption of internationally acceptable principles and standards in China, the largest transitional economy that has different institutional context from Anglo-American countries. In addition, the review has a number of implications for developing the theoretical framework, and determining the research methodology for the monograph.

Details

Adoption of Anglo-American Models of Corporate Governance and Financial Reporting in China
Type: Book
ISBN: 978-1-78350-898-3

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Article
Publication date: 16 August 2021

Flávio Morais, Zélia Serrasqueiro and Joaquim J.S. Ramalho

The purpose of this paper is to investigate whether the effect of country and corporate governance mechanisms on zero leverage is heterogeneous across market- and…

Abstract

Purpose

The purpose of this paper is to investigate whether the effect of country and corporate governance mechanisms on zero leverage is heterogeneous across market- and bank-based financial systems.

Design/methodology/approach

Using logit regression methods and a sample of listed firms from 14 Western European countries for the 2002–2016 period, this study examines the propensity of firms having zero leverage in different financial systems.

Findings

Country governance mechanisms have a heterogeneous effect on zero leverage, with higher quality mechanisms increasing zero-leverage propensity in bank-based countries and decreasing it in market-based countries. Board dimension and independency have no impact on zero leverage. A higher ownership concentration decreases the propensity for zero-leverage policies in bank-based countries.

Research limitations/implications

This study’s findings show the importance of considering both country- and firm-level governance mechanisms when studying the zero-leverage phenomenon and that the effect of those mechanisms vary across financial and legal systems.

Practical implications

For managers, this study suggests that stronger national governance makes difficult (favours) zero-leverage policies in market (bank)-based countries. In bank-based countries, it also suggests that the presence of shareholders that own a large stake makes the adoption of zero-leverage policies difficult. This last implication is also important for small shareholders by suggesting that investing in firms with a concentrated ownership reduces the risk that zero-leverage policies are adopted by entrenched reasons.

Originality/value

To the best of the authors’ knowledge, this is the first study to consider simultaneously the effects of both country- and firm-level governance mechanisms on zero leverage and to allow such effects to vary across financial systems.

Details

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

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Book part
Publication date: 3 September 2018

Wan Nailah Abdullah and Roshima Said

The chapter focuses on the personal characteristics of top executives in companies involved in corporate financial crime as well as the introduction of human governance as…

Abstract

The chapter focuses on the personal characteristics of top executives in companies involved in corporate financial crime as well as the introduction of human governance as one of the mechanisms in preventing corporate misbehaviour. This chapter discusses directors’ and top management teams’ personal characteristics – in the context of corporate governance – that may influence the occurrence of corporate financial crime. The study further proposes the human governance factor as a possible mechanism to improve corporate governance in preventing such misbehaviour. This chapter highlights the personal characteristics of top executives, which may become the indicators of corporate financial crime, as well as human governance, which is shown to be one of the most important mechanisms of corporate governance for corporate financial crime prevention.

Details

Redefining Corporate Social Responsibility
Type: Book
ISBN: 978-1-78756-162-5

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