...for implementing effective corporate governance Mayanja MK and Van der Poll HM Department of Management Accounting, Unisa, Pretoria, 0003 South Africa. Accepted 28 September, 2011 Management accounting is not given sufficient emphasis, at the board level, as a provider of timely and relevant information to facilitate the execution of good corporate governance. Without management accounting information corporations in Botswana may find it difficult to create sustainable corporate governance. A qualitative approach using questionnaires and interviews were used to establish the extent to which management accounting tools are applied by the directors in the target companies. The research was carried out amongst listed companies on the stock exchange and the parastatal companies in Botswana. Furthermore documentation, for instance annual financial statements from the companies were reviewed. Most directors in the companies do not fully utilise the tools of management accounting in decision making. Management accountants have also failed to provide the relevant information to the board. To execute their duties efficiently, directors may need to call for the management accounting reports from the senior management level up to the board level and regularly use these reports to facilitate decision making. Key words: Management accounting, corporate governance. INTRODUCTION Management accounting, which was traditionally intended for internal use in companies has through its ability...
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...ARTICLE IN PRESS Journal of Financial Economics 73 (2004) 497–524 Who is in whose pocket? Director compensation, board independence, and barriers to effective monitoring$ Harley E. Ryan Jr.a,*, Roy A. Wiggins IIIb a Department of Finance, E. J. Ourso College of Business Administration, Louisiana State University, Baton Rouge, LA 70803, USA b Department of Finance, Bentley College, Waltham, MA 02452, USA Received 8 October 2003; accepted 18 November 2003 Available online 9 June 2004 Abstract We use a bargaining framework to examine empirically the relations between director compensation and board-of-director independence. Our evidence suggests that independent directors have a bargaining advantage over the CEO that results in compensation more closely aligned with shareholders’ objectives. Firms with more outsiders on their boards award directors more equity-based compensation. When the CEO’s power over the board increases, compensation provides weaker incentives to monitor. Firms with more inside directors and with entrenched CEOs use less equity-based pay. Furthermore, firms with entrenched CEOs and CEOs who also chair the board are less likely to replace cash pay with equity. r 2004 Elsevier B.V. All rights reserved. JEL classification: G30; G34; G38 Keywords: Board of Directors; Compensation; Bargaining power; Agency theory; Regulation $ We thank Tom Arnold, George Baker, Lucian Bebchuk, Alex Butler, Sudip Datta, Mai IskandarDatta, Melissa Frye, Stuart Gillan...
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...Research Question Why do directors serve on board? The article explores and tries to understand why top executives agree to serve on board and what factors influences their decisions whether to stay or leave. Theoretical Background The author explores the reasons why directors choose to stay or leave boards. He identifies that a combination of two factors that affect director decision, intrinsic and extrinsic motivating factors. These two formulate self-determination theory in which the author relies on and start building arguments explaining why directors serve on board. On the other hand, the author challenge the assumption that major reason for directors exit is involuntary while instead its completely voluntary.(Boivie, Graffin and Pollock, 2012). The author identifies key motivational and de-motivational factors and developed five hypotheses that he explored and tested. 1- Prestige hypothesis that is key motivational factor that affects directors’ decision, since company prestige is generated from company performance, media visibility, and firm size contributed to directors’ self-esteem. 2- The author continues to explore the second motivational hypothesis that is related to directors’ contribution to the firm which gives them the ultimate pride to be part of something big. (Boivie, Graffin and Pollock, 2012). The remaining three hypotheses identify de-motivational factors. 3- Busyness hypothesis is one of these factors since the required time, effort and commitment...
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...current/former executives The good Board of Directors should be independent from current/former executives to commit to high standards of corporate governance. There should have different Boards including the Board of Executives which is responsible for day-to-day activities and Board of Directors elected by the shareholders for supervising the Board of Executives. The Board of Directors holds the highest authority in the management of the corporation. The Executive Boards are responsible for operating business activities, managing staffs and developing business plan in collaboration with the Boards of Directors for the future of the organization. In B&O, the executives should design, develop and implement strategic plan for their project in a cost-effective and time-efficient manner. The Executive Board should discuss the planning with the Engineer Boards and Audit Committee in implementing and controlling the construction process. The Executive Board manages the reports on construction progress and on operations. The Executive Director plays a leadership role for an organization and also fulfills a motivational role in addition to office-based works. The Board of Directors may not be good at leadership or encourage staffs to perform daily works but Board of Directors is able to work with Board of Executives on strategic plans and evaluate the Executive Board’s performance. The Executive Director will make report to the Board of Directors so the Board of Directors should be independent from...
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...Professionalising SOE Board of Directors MALAYSIA World Bank I’nal Conference on Corporate Governance Practices in SOEs Ankara Turkey 10 June 2014 Presenter: Aziz Bakar CEO, Malaysian Directors Academy (MINDA) 1 AGENDA 1. Background & Intro 2. Enhancing Directors Effectiveness 3. Enhancing Board Effectiveness 4. Malaysian Directors Academy (MINDA) 2 INVEST MALAYSIA FORUM • The Government is committed to ensure Government Linked Companies Transformation (GLCT) Programme continues to be implemented, if anything with greater urgency and focus • Government Linked Investment / Companies (GLIC/GLCs) must aspire to greater heights, whether best in class or emerging as future regional, if not global champions Source: Prime Minister’s Keynote Address at Invest Malaysia Forum 2012 3 HISTORY AND EVOLUTION OF GLCs 1969 Maybank becomes government owned 1972 LTAT established 1979 Sime Darby is Malaysianised 1957 1987 Jabatan Telekom Corporatised 1992 Malaysian Airport and Postal Department provatised 1997 Industrialisation and moving up the value chain 1951 EPF established 1983 Rapid economic growth and privatisation 1962 LTH established 1978 PNB established 1970 Launch of New Economic Policy (NEP) Malaysianised GLCs Value adding to Malaysia’s Natural resources 1985 Proton launch first model 1981 Launch of Heavy Industrialisation Programme ...
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...DETERMINANTS OF CEO COMPENSATION: EVIDENCE FROM MALAYSIAN BANKING INDUSTRY CHONG KOK CHIEK (AC082799) MUHAMMAD AZWAN BIN MOHD ARIFFIN (AC082868) SITI SUHANNA BINTI ABDUL GHANI (AC083010) BACHELOR OF ACCOUNTING (HONS.) COLLEGE OF BUSINESS MANAGEMENT AND ACCOUNTING UNIVERSITI TENAGA NASIONAL 2012 DECLARATION We hereby declare that this project is our original work except for quotations and citations which have been duly acknowledged and that it has not been previously and/or concurrently submitted for any other degree at Universiti Tenaga Nasional and/or other institutions. CHONG KOK CHIEK AC 082799 MUHAMMAD AZWAN MOHD ARIFFIN AC 082868 SITI SUHANNA ABDUL GHANI AC 083010 Date of submission: 13th August 2012 i ACKNOWLEGDEMENT We would like to express our sincere gratitude to our project supervisor, Mr. Wan Mohammad Taufik bin Wan Abdullah, lecturer of Department of Accounting of Universiti Tenaga Nasional, for his valuable advices and continuous guidance throughout the research process. Mr. Taufik spent a lot of time enlightening us on various issues, giving us a comprehensive view in the academic aspect via our meetings within his busy working schedule. It is our pleasure to have him as our project supervisor. Without his unconditional support and care, our project could not be finished effectively. He let us try different approaches with confidence in the process, assisting us to solve a lot of problems especially at the time when we did...
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...The effect of the board of directors’ characteristics on corporate social responsibility disclosure by Islamic banks: evidence from Gulf Cooperation Council countries Abdullah Awadh Bukair and Azhar Abdul Rahman Abstract Corporate social activities have become major subjects because of their effects on the quality life of citizens, in particular, and on the society at large. Therefore, today, there is an increase awareness of social responsibility due to the challenges meeting the financial institutions (particularly, Islamic banking) around the world. This paper examines the influence of the board of directors’ characteristics, consisting of board size, board composition, and the separation roles of CEO and chairman, on corporate social responsibility (CSR) disclosure in 53 annual reports of Islamic banks of Gulf Cooperation Council (GCC) countries after controlling of bank size, financial performance and relevant public. Based on the framework of legitimacy theory, the findings show that CSR disclosure has a negative and insignificant relationship with board composition. On contrast, the study found insignificantly and positive association between CSR disclosure and other characteristics of board of directors (board size and the separation roles of CEO and chairman). With regards control variables, the study indicates that bank size and financial performance have a positive and significant influence on CSR disclosure, while relevant public has no effect. Therefore, the results...
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...Diversity: Scorecard Why Board Diversity Equals Success Alicia Yi Managing Director, Strategic Client Services Korn/Ferry International Women vs. Men’s Tertiary Education * The score above show the proportion of women to every 100 men. ** Source: MasterCard Worldwide Index of Women’s Advancement Asia’s Growth Model is Shifting… MARKET SHIFT ASIA 1.0 (1985 – 2005) THE IMPETUS FOR CHANGE — Reduced Western Consumer Spending — Emerging Consumerism in Asia — Shifting R&D investments — Asia’s drive to innovate — Asia’s need to move up the value chain — Unemployment in the west — Western companies Asianizing — Asian companies globalizing ASIA 2.0 (2006 – 2020) CONSUMER SHIFT MADE IN ASIA MADE FOR ASIA INNOVATION SHIFT THE WORLD’S FACTORY and BACK OFFICE THE WORLD’S LABORATORY and KNOWLEDGE OFFICE JOBS SHIFT CHEAP and PRODUCTIVE WORKFORCE CREATIVE and INNOVATIVE TALENT Asia Advancing - Innovation Tata Nano : the $3,000 car was conceived and developed in India LG LX9500 : the world’s first 3D LED TV Mac 400 : a hand-held cardiogram ($800) developed by GE in India Kaohsiung Stadium : World’s first solar powered stadium – in Taiwan The USB Credit Card : developed by Shinhan Card in Korea Eko Hybrid: World’s first hybrid 2-wheeler ($500) – in Bangalore F1 Night Race : World’s first night race in Singapore Harmony Express: World’s fastest train (394 kmph) in China Four Leadership Styles Leaders most likely...
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...growing intra-Asian air express market. With an array of landing rights in the Asia Pacific region, FCB was in the idea niche position to offer express air services to international integrators, freight forwarders and major airlines within the Asian region. It managed to secure major landing rights in various countries in Asia including China, Japan, Thailand, Singapore, India, Indonesia, Taiwan, Sri Lanka, Philippines, Korea, Myanmar and Cambodia. Up to 2005, FCB secured agreements with well-established companies such as Worldwide Express, United Parcel Services (UPS), Nationwide Express, Citylink, Bax Global and Nippon Express. The composition of the Board of Directors was in adherence to the Malaysian Code of Corporate Governance. The chairman of FCB was Dato’ Ibrahim Samad who was also an independent non-executive director of the company. In 2005, FCB’s counter was ranked 4th in terms of capital gains and dividends to shareholders. Its share price at 31 December 2001 had been RM 1.89, but by end of 2005, the share price surged to RM10.60 per share. Turnover for 2005 was RM550 million, which is more than 1 ½ times than that for 2004. Analysts were expecting FCB’s revenue to increase for...
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...New York, NY 10016 USA t: +1 212 686 7400 f: +1 212 686 2626 e: usinfo@datamonitor.com Datamonitor Germany Kastor & Pollux Platz der Einheit 1 60327 Frankfurt Deutschland t: +49 69 97503 119 f: +49 69 97503 320 e: deinfo@datamonitor.com Datamonitor Asia-Pacific Room 2413-18, 24/F Shui On Centre 6-8 Harbour Road Hong Kong t: +852 2520 1177 f: +852 2520 1165 e: hkinfo@datamonitor.com Datamonitor Japan Aoyama Palacio Tower 11F 3-6-7 Kita Aoyama Minato-ku Tokyo 107 0061 Japan t: +813 5778 7532 f: +813 5778 7537 e: jpinfo@datamonitor.com ABOUT DATAMONITOR Datamonitor plc is a premium business information company specializing in industry analysis. We help our clients, 5000 of the world's leading companies, to address complex strategic issues. Through our proprietary databases and wealth of expertise, we provide clients with unbiased expert analysis and in-depth forecasts for six industry sectors: Automotive, Consumer Markets, Energy, Financial Services, Healthcare and Technology. Datamonitor maintains its headquarters in London and has regional offices in New York, Frankfurt, Hong Kong and Japan. Datamonitor's premium reports are based on primary research with industry panels and consumers. We gather information on market segmentation, market growth and pricing, competitors and products. Our experts then interpret this data to produce detailed forecasts and actionable recommendations, helping you create new business opportunities and ideas. Our series of company, industry and country...
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...Gonçalves Góis Senior Lecture Instituto Superior de Contabilidade e Administração de Coimbra Instituto Politécnico de Coimbra Área temática: C) Dirección y Organización Palabras clave: gobierno corporativo; la calidad contable; información financiera; 1 FINANCIAL REPORTING QUALITY AND CORPORATE GOVERNANCE: THE PORTUGUESE COMPANIES EVIDENCE. ABSTRACT The main objective of this paper is to analyze the relationship between the composition and characteristics of corporate governance on the financial reporting quality of Portuguese companies. The major reference case studies on the relationship between corporate governance and the financial reporting quality are not validated by the results obtained. The results show that the board composition changes and its degree of independence do not produce any influence on the quality of the accounting information. Our study shows that although the main international guidelines relating to the rules of good governance have been followed closely by Portuguese institutions, the actual implementation of these rules did not occur. 2 1. INTRODUCTION The aim of this paper is to contribute to the study of the influence of the type of corporate governance on the financial reporting quality in countries with a tradition of continental accounting. Despite the profuse literature about this topic, adapted to Anglo-Saxon environments, its applicability to companies with different structures, specifically companies in Latin markedly...
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...Corporation CG Performance Analysis Report ----Based on the past fiscal year’s US SEC filings Company Name: Constellation Brands, Inc. (STZ) Xu (Answer) HAN The Johns Hopkins University Carey Business School 1. Executive Summary 1.1 Purpose The purpose of this report is to evaluate the corporate governance performance of the Constellation Brands, Inc., based on its last fiscal year’s US SEC filings, and then to use the relevant findings and information to discuss the implications for the company, investors, regulators, and the economy. 1.2 Scope While evaluating the corporate governance performance of the company, it is useful and important to pay attention to the four core values of corporate governance, including transparency, accountability, responsibility, and fair and equitable stakeholders, as well as to consider some indicators of the company, such as its Board Structure, Compensation system, Shareholder Rights, and Audit issues. On the other side, the financial information that the company disclosed on its financial statements is also considerable to deal with its corporate governance performance analysis. 1.3 Method I divided the whole report into three main parts—Self-Diagnostic Issues, Competitor-Diagnostic Issues, and SWOT Analysis—to analyze the corporate governance performance of the company comprehensively. In the first section, I did a 100-question corporate governance survey using “Corporate Governance Self-Diagnostic...
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...Case description: ajax 3 Theory: groups and teams in corporate life 4 Analysis: AJAX and group behavior 6 Conclusion 7 Bibliography 8 Appendix 9 Introduction In this case, the issue that will be discussed is about Ajax and the problems between Johan Cruijff and the Supervisory Board. Which functions are engaged within the decision making for Ajax and what exactly happened recently between the directors? Furthermore, there will be a focus on the difference between groups and teams. Founded on March 18, 1900 AFC Ajax is one of the largest and most storied clubs in European football. For example, they won 30 times the National Championship, 18 times the Dutch cup, 7 times the Johan Cruijff shield, 4 times the Champions league and many more. While led by the world famous Johan Cruijff, AFC Ajax had one of the best seasons ever in 1972 by a professional football team winning the National Championship, the Dutch Cup, the European Champions Cup and the World Cup. Everybody will agree on the fact that being so successful is not only about having a good soccer team. Recently, the Ajax supporters, and of course the rest of the soccer world, were surprised by Johan Cruijff. The supervisory board was in conflict with Johan Cruijff, and this situation was even brought to court since Ajax is not only a football club. Eventually, this led to the resign of the entire board of directors. How is it possible, that such a successful organization as Ajax experiences...
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...(“Sports Everywhere”) acquired Burger Palace after the Board of Directors unanimously approved the transaction. Upon learning of the acquisition, the Sports Everywhere shareholders plan to file a derivative lawsuit alleging that the directors breached their fiduciary duty to the corporation. Eugene Dallas (“Dallas”), Chairman of the Board of Directors, inquires whether the business judgment rule is applicable to the determination of the Board. STATEMENT OF FACTS Dallas is the Chairman of the Board of Directors of Sports Everywhere, a company that operates a small chain of gyms in and around Albany, New York, with revenue of two million dollars last year. A few years ago, Dallas lent a small sum of money to his sister’s best friend to start Burger Palace, an upscale specialty hamburger restaurant that has yet to reach its potential, according to Dallas....
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...CHAPTER ONE INTRODUCTION 1.1 BACKGROUND TO THE STUDY The experience of business failure and financial scandals around the world brought about the need for good governance practices. The United States of American, Brazil, Canada, Germany, France, England, Nigeria all witnessed financial failures in the 90s and in the recent periods. This view was supported by Bell et al (2000), that the last 20 years witnessed several bank failures throughout the world. Financial distresses in most of these countries were attributed to a high incidence of non – performing loans, weak management and poor credit policy. In the view of Omankhanlen (2011), the development was said to have reflected the deterioration in the quality of credit facilities, coupled with the ongoing reclassification of bank assets. The banking institution occupies a vital position in the stability of the nation’s economy. It plays essential roles on fund mobilization, credit allocation, payment and settlement system as well as monetary policy implementation. Management is expected to exhibit good governance practices to ensure achievement of it objectives and avoid the consequences of failure leading to loss of confidence. This view was supported by Wilson (2006) that poor corporate governance can lead market to lose confidence in the inability of a bank to properly manage it assets and liability, including deposits which could in turn trigger a bank liquidity crisis. Oluyemi (2005) considered corporate governance...
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