Corporate governance and financing decisions by Saudi companies

This paper aims to contribute to the corporate governance literature in emerging economies by examining the effect of some corporate governance mechanisms on financing decisions in Saudi Arabian listed companies. A multiple regression model is used to examine the association between financing decisions and corporate governance mechanisms for a sample of 37 listed Saudi companies. In particular, we examine the effect of board size, ownership concentration and corporate governance reporting on the debt-to-equity ratio. Corporate governance reporting is measured by the content analysis approach. After controlling for companies＇ profitability and their growth opportunities, we found that both board size and ownership concentration are positively associated with debt-to-equity ratio. We limit our analysis to a small sample of firms that use the internet to communicate corporate governance information between October 2005 and January 2006. The findings suggest that managers are likely to choose higher financial leverage when they have stronger corporate governance （large number of directors on the board and higher ownership concentration）. However, we did not find any statistical association between corporate governance disclosure and debt-to-equity ratio. This suggests that firm＇s asymmetric information is not an important driver of the financing decision of Saudi Arabian companies. This might be due to the nature of the Saudi business environment. We strongly believe that this paper provides a novel contribution to the existing literature as we are the first to examine this issue in Saudi Arabia.     

Do Company Directors Underestimate the Adoption of Corporate Governance Provisions？ A Survey Approach

This paper examines whether company directors underestimate the adoption of corporate governance provisions within Ghanaian listed firms. Using a survey approach, the respondents, who were company executives and non-executive directors with knowledge of the Ghanaian Code and its provisions, regard the code as a benchmark for good corporate governance practices within Ghanaian listed firms. They also report some improvement in the standard of corporate governance in their companies since the introduction of the Code. Many of the company directors indicated their preparedness to comply with further corporate governance requirements, such as the adoption of a formal nomination committee something not been currently included in the Ghanaian Code. However, the directors noted that they receive inadequate support from the regulatory and institutional bodies for the implementation of the Ghanaian Code provisions. Many of the directors also supported the review of the Ghanaian Code by an independent committee. With regard to the adoption of the Ghanaian Code and its influence on firm performance, the respondents indicated that the adoption of the specific governance provisions in the area of chief executive officer （CEO）/chairman roles separation, having a balance of executive and non-executive directors on the board, the establishment of audit and remuneration committees, and the full adoption of the Ghanaian Code provisions were all influential in determining firm performance. They, however, did not support the adoption of the board size provision as influential to firm performance. This raises questions about the usefulness of the range of board size as recommended by the Ghanaian Code.     

Positional statement of companies＇ corporate governance rating reports： Evidence from Turkey

The Organisation for Economic Cooperation and Development （OECD） defines corporate governance as, ＂the way in which boards oversee the running of a company by its managers, and how board members are in turn accountable to shareholders and the company.＂ In recent years the issue of corporate governance and committees related to it and their impacts on corporate performance have continued to gain widespread prominence in the capital market economy. Corporate Governance Rating is meant to indicate the relative level to which an organisation accepts and follows the codes and guidelines of corporate governance practices. The purpose of the paper is to examine the rating reports of 27 companies which have obtained the corporate governance rating by rating agencies. The study highlights that the ＂stakeholders＂ sections of the reports are the most powerful part of the reports whereas the ＂board of directors＂ sections are the weakest. Potential areas for improvements are also identified.     

Board Characterstics and Capital Structure： An Empirical Study on China＇s Private Listed Companies

Board of directors is one of the important parts of the corporate internal governance mechanism. Using panel data from 144 China＇s private listed companies during 2001-2003, this paper empirically studies the relationship between board characteristics and capital structure with the methods of pooled OLS, first-order difference model and fixed ,effect model.     

Corporate Governance and the Financial Value of Financially Distressed Listed Companies

The article combines the background of Chinese system, theoretically derivates the relationship between corporate governance and their financial value, selects a sample of loss listed companies from 2003 to 2009, and studies how the level of corporate governance affects the value of listed company losses. Research results show that, among corporate governance factors, the largest shareholder and the market for corporate control have obvious positive effects on the financial value of loss listed companies; the proportion of state-owned shares, the type of audit opinion, and corporate govemance factors have obvious negative effects on the financial value of loss listed companies; and managerial ownership, the proportion of independent directors, and the size of the board have no obvious driving effect on the financial value of loss listed companies.     

Does a deviation between the rights and obligations of the board and controlling shareholders affect firm value？

This study examines the association between firm value and ownership structure, when board and controlling stockholders＇ voting rights deviate from obligations. The measurement of the corporate governance variables is different from prior research. The author further investigates whether monitoring mechanisms can alleviate the agency problem due to percentage of outside directors. The empirical results show that the higher board voting rights-obligations is deviated, which means the weaker relation with the firm value. The author also finds the monitoring from outside directors can reduce the agency problems from board＇s deviation and thus can improve firm value. But the results of the controlling stockholders＇ deviation are mixed or insignificant. This research has implications for Taiwan＇s regulators who are striving to improve the information, transparency, and corporate governance of board and controlling shareholders＇ voting rights-obligations deviation.     

Board independence, ownership structure, audit quality and income smoothing activities： A study on Malaysian market

The 1997 economic crisis faced by many East Asian economies has generated a substantial amount of debate largely focused on issues such as the roles and functions of good corporate governance （CG）. Lack of transparency has been singled out as the major culprit of the crisis and it has been alleged to cause management to indulge themselves in unhealthy activities such as income smoothing （IS） act. The paper extends Nasuhiyah, Hian, Sob and WEI （1994） by incorporating contextual variables that proxy for CG, ownership structure and audit quality. The empirical analysis is conducted on a sample of Bursa Malaysia listed companies for a period between 1991 and 2000. The main intention of taking this time span is to observe to what extend has previous business operations inculcated the feature of CG in the running of their companies＇ activities despite not being obligatory for them to uphold. The results showed that the existence of non-executive directors and the presence of brand name auditors to be significant in hindering the management from indulging in IS. The study opens the way for a richer understanding of the links among CG, ownership structure, audit quality and IS in Malaysia.     

Perfection solutions of supervisory audit in Chinese listed companies

Operational mechanism of supervisory audit in Chinese listed companies is not ideal, the supervisory effect of the listed company rely on features of supervisors＇ board and member of the supervisors＇ board. Based on the comparison of supervisory audit in Britain, Germany, France and Japan, and the empirical research on 100 listed companies in a share market, the paper analyses supervisory audit in Chinese listed companies, and proposes some perfection solutions to strengthen supervisory audit.     

The web-based financial reporting adopted by the listed companies in the Athens Stock Exchange

Web-based corporate reporting is the provision of financial information through the Internet. Other companies prefer to disclose their financial information in order to satisfy their investors and to attract new ones while others prefer to provide as less information as possible. The purpose of this paper is twofold： first it provides a critical examination of the main reporting criteria followed by the Greek listed companies, in order to point out how many of these companies present these criteria. Second, it considers how the industry sector of the listed companies or their capitalization category is related with their disclosure degree of financial reporting.     

Corporate governance mechanisms and performance： Analysis of Malaysian family and non-family controlled companies

Most study concentrating on family and non-family companies is conducted overseas with little research carried out in Malaysia. This study examined the impact of corporate governance mechanisms on family and non-family controlled companies＇ performance. The sample size of this study is 730 companies listed on Bursa Malaysia from 2003 to 2007. The findings reveal that corporate governance mechanisms influence the family and non-family controlled companies＇ performance. But not all corporate governance mechanisms are significant. The significant variables differ between family and non-family controlled companies. Thus, regulators need to be vigilant that family and non-family controlled companies practise differently and to set different code needed for each type of families.     

Association Between Independent Auditor Fees and Firm Value： A Study of Brazilian Public Companies

This article investigates the relationship between fees for audit and non-audit services with Tobin＇s Q. Using a sample of Brazilian public companies in the period from 2009 to 2011, we estimate the association between Tobin＇s Q and the auditors＇ remuneration scaled by total assets. Additionally, to strengthen the conclusions, we present a second model with the remuneration of the auditors in absolute terms. The results suggest a significant relationship between Tobin＇s Q and audit and non-audit fees, positive and negative, respectively. Specifically, increases in audit fees and non-audit fees respectively increase and decrease the Tobin＇s Q of the audited company. The results of this study have important implications for those interested in good corporate governance practices. Managers and board members concerned with value carefully evaluate the remuneration and nature of services creation, when engaging independent auditors, should provided.     

Auditor Switching and Investors＇ Reliance on Earnings： Evidence From Bursa Malaysia

This study provides some insights of investors＇ view on auditor independence focusing on auditor switching. Hence, the purpose of this study is to examine the effect of appointing a new auditor on investors＇ reliability on reported earnings in financial accounts. Analyses are based on a matched-pair sample of 162 listed companies in the Bursa Malaysia for the year 2011. The results of the ordinary least squares （OLS） regression show that earnings response coefficients for auditor switching companies are significantly higher than for non-auditor switching companies. The results provide support for the contention that investors place greater reliability on the financial accounts audited by newly appointed auditors. This finding is consistent with the Malaysian audit market where long audit tenure is a common practice and auditor switching is considered rare. Findings provide support for the long discussed issue of the importance of auditor rotation in maintaining auditor independence.     

Case analysis on earnings management action based on issue right：Evidence from Chinese listed companies

The study in the past shows that the listed companies in China have the actions of manipulating profit to cater for the requirement of the Chinese Securities Regulatory Commission, manage earnings by means of dealings or managing the accrued profit items, so as to acquire the competence of rights issue, or lessen the risk of being suspended or canceled of trading. In this paper, the case analysis on earnings management based on rights issue right of listed companies is carded out with the samples of data from the listed companies of A-share from 1996 to 2001 and by means of earnings distributing, so as to prove the listed companies＇ response to the policies of rights issue and the existence of earnings management conducted by the rights issue companies for the purpose of rights issue, and observe the effectiveness of the securities market in China.     

Empirical Analysis of the Market Effects of China＇s Listed—— Company＇s Dividend Policy ——Empirical Evidences from Shanghai Stock Exchange from 2004 to 2005

Dividend policy is one of the three core contents of financial management in listed companies. On one hand, it is the extension of financial and investment activities; on the other hand, appropriate dividend policy can not only set up a good company reputation, but also arouse enthusiasm of many investors to continue invest in this company, consequently acquire long and stable development opportunities and conditions. In this paper, the author has put forward some suggestions in order to solve the problems which existing in Chinese listed companies＇ dividend policies based on the result of positive test. Firstly, optimize the structure of equity title and perfect the corporate governance. Secondly, to establish wholesome shareholder protection mechanism, and also it is important measure for investors, especially medium and small investors to protect their rights and interests. According to the present situation of Chinese stock market, the authors consider we can protect the shareholder＇s benefits by carrying out cumulative vote system, establishing hortative derive lawsuit system, perfecting civil compensation system and establishing shareholder voting removing system and so on. Thirdly, the establishment of listed companies＇ dividend policy and the release of message should be standardized for the sake of good relationship of melon-cutting and corporation＇s refinancing plan. Finally, listed companies＇ dividend policy can be optimized by modifying and perfecting stock dividend distribution mode of accounting management, perfecting exit mechanism of listed companies.     

Corporate Reporting： An Integrated Approach to Legitimacy Claims

With the increasing pressure on companies to engage in corporate social responsibility （CSR）, it is paramount for businesses and organizations to gain social legitimacy through building trust and credibility towards their stakeholders. Corporate reporting is a major tool whereby they can demonstrate their transparency and their will to contribute to society. However, reporting is often addressed as a narrow and restricted discipline based on specific areas of communication like financial and CSR communication, which potentially can lead to ＂disconnected reporting＂. The aim of this paper is to address reporting within a framework of corporate communication, introducing the concept of corporate reporting as ＂an issue of integration＂ and to discuss the opportunities and challenges of corporate reporting as a driver for gaining social legitimacy. Recent research in corporate reporting and the development of standards by distinguished reporting agencies （e.g., Klynveld Peat Marwick Goerdeler （KPMG）, A4S, PricewaterhouseCoopers （PwC）） seem to support this position, arguing that integrated reporting is ＂the way forward＂. Accordingly, the authors conclude that there is a need to include a broader range of aspects in the corporate reporting literature applying a strategic integrated approach by which corporate reporting may more explicitly help businesses and organizations gain social legitimacy towards their internal and external stakeholders.     

Good Corporate Governance （GCG） Mechanism and Audit Delay： An Empirical Study on Companies Listed on the Indonesia Stock Exchange （IDX） in the Period of 2009-2011

Audit delay is a delay in reporting audit to the Indonesia Stock Exchange （IDX） after the allotted time of 90 days after closing the book. Delay to publish audit report will affect the value of infromation, causing a bad sign for the company. As good corporate governance （GCG） is one way to solve the different interests, practices, and culture, companies implement GCG in an attempt to get more value. This study aims to measure the impact of corporate governance mechanisms on audit delay in companies listed on the IDX in the period of 2009-2011. Variables of GCG mechanism consist of institutional ownership, number of audit committee members, and the percentage of independent commissioners. Purposive sampling method is used in sample selection procedure. Samples comprise 42 companies listed on the IDX. The simultaneous test results show that all the variables have a significant influence on audit delay. By the partial test, number of audit committee members has significantly affected audit delay, while institutional ownership and independent commissioners have no significant effect on audit delay. This study is limited to use only three variables to study their influence on audit delay in the reseach period of only three years.     

Audit Committee Attributes on Audit Fees： The Impact of Malaysian Code of Corporate Governance （MCCG） 2007

The evolution of corporate governance has created a competitive environment among the companies to catch the attention of investor＇s confidence. This paper aims to examine the relationship between the audit committee attributes and the audit fees. Specifically, this paper aims to examine the effects of audit committee expertise （number of financial-related director＇s trainings and experience） on audit fees. The data are obtained from annual reports of the population of Bursa Malaysia listed companies for both Main and Ace markets in year 2008. The results show that audit committee size is significant and has a positive association with audit fees. However, audit committee＇s financial related training is significant and has a negative association with audit fees. These results suggest that financial training of audit committee could have an impact on the lower audit fees. However, audit committee expertise is significant and has a positive association with audit fees. This suggests that financial-related training is needed in order to enhance the expertise of audit committee members.     

Market value management＇s effects on listed companies

The reformation of equity-split on April 29th, 2005, has promoted market value management and created the necessary conditions for market value management. With the purpose of stabilizing and enhancing corporate market value and realizing stockholders＇ wealth maximization, the market value management becomes especially important for all listed companies. This paper begins with the general introduction of market value management including its definition, contents and performance evaluation systems, appraises the best 10 market value management listed companies during 2007-2008. Then analyzes the benefits of the market value management on the Guizhou Maotai which has gained great achievements on market value management, and finally draw conclusions about market value management＇s general effects on listed companies.