This paper aims to investigate the extent to which Malaysian small- and medium-sized enterprises （SMEs） adopted corporate governance （CG） principles and their effects on firm performance. The principles examined i...This paper aims to investigate the extent to which Malaysian small- and medium-sized enterprises （SMEs） adopted corporate governance （CG） principles and their effects on firm performance. The principles examined included： establishing clear roles and responsibilities; strengthening composition; and reinforcing independence. The paper is based on a questionnaire survey study among 113 SMEs that consisted of 35% （39） of manufacturing and related services and 65% （74） from services including information and communication technology （ICT）, primary agriculture, construction, mining, and quarrying. The analysis of the data indicates that 32% of the respondents said that the primary reason why they have their own business is to have control over their own working life. This fmding appears to confirm the f＇mancing theory that SMEs owners have other goals than profitability. In addition, 30% of SMEs perceived that the most important role played by the board is risk management; hence, these boards have a greater control over financial risks that may lead to better financial performance. The analysis also shows that 81% of the respondents＇ board consisted of internal board members only. These enterprises need to see the important role of external board members as a source of advice providers and experts to them. For policies relating to clear roles and responsibilities of board, only 28% of the respondents established clear functions reserved for the board and those delegated to management; substantial respondents did not draw up policies relating to reinforce board independency （between 75% and 79%） and to strengthen board composition （46%）. Besides, 68% of the respondents have the position of chairman and CEO held by same individuals and 81% of the chairman is an executive member of the board. These findings suggest that SMEs cannot see the importance of strengthening board and having independent board members. Regression analysis also indicates that board independence has a significant and positive impact on firm performance. Hence, SMEs need to appreciate networking advantages, competency, and strategic knowledge that the right board can offer. The governmental ministries and agencies in Malaysia need to take active measures to encourage SMEs to strengthen their board governance, because SMEs are the important economic powers for stimulating national economic growth. This paper contributes to the empirical literatures on the adoption of CG principles and their effects on SMEs＇ firm performance in emerging markets.展开更多
The purpose of this article is to analyze the impact of corporate governance and disclosure policy on corporate financial performance by examining the combined effect of board characteristics and disclosure level on f...The purpose of this article is to analyze the impact of corporate governance and disclosure policy on corporate financial performance by examining the combined effect of board characteristics and disclosure level on financing costs. The empirical analysis, conducted on a sample of 192 Canadian companies, generally shows the importance of board characteristics in determining the level of disclosure and firms＇ costs of financing. In particular, the results found indicate that boards whose characteristics meet the governance requirements that are associated with greater transparency in disclosure on governance attributes reduce the costs of financing of their companies by debt as well as by equity capital.展开更多
To be successful in global markets, companies from the emerging countries need the approval of foreign investors and other stakeholders. In this regard, Brazil, Russia, India, and China （BRIC） have progressively str...To be successful in global markets, companies from the emerging countries need the approval of foreign investors and other stakeholders. In this regard, Brazil, Russia, India, and China （BRIC） have progressively strengthened their corporate governance rules to help their companies overcome the competitors from the old industrialized countries. Directors＇ non-executive qualification, independence, and professional expertise represent basic requirements for effective corporate governance, so they should be carefully considered to guarantee a proper board composition and an adequate establishment of internal committees in listed companies. The paper intends to compare the legislative and regulatory frameworks adopted by the four countries; then it aims at answering to the following research questions by means of an empirical investigation： Have BRIC companies appointed non-executive and independent board members？ What do BRIC companies do in order to assure an effective participation of non-executive and independent board members to corporate governance activities？ Have BRIC companies established internal committees？ The research examines the appointment of non-executive directors and independent directors to the boards of 100 BRIC leading firms, as well as their involvement in internal committees focused on matters requiring motivated and impartial opinions. Although the laws and recommendations seem to favor a general convergence of corporate governance principles among the four BRIC and towards the international best practices, some differences and peculiarities emerge from a firm-level perspective. Indeed, the Indian and the Chinese companies analyzed appear more inclined than the Brazilian and the Russian ones to reassure their international stakeholders about board independence and effective committees.展开更多
文摘This paper aims to investigate the extent to which Malaysian small- and medium-sized enterprises （SMEs） adopted corporate governance （CG） principles and their effects on firm performance. The principles examined included： establishing clear roles and responsibilities; strengthening composition; and reinforcing independence. The paper is based on a questionnaire survey study among 113 SMEs that consisted of 35% （39） of manufacturing and related services and 65% （74） from services including information and communication technology （ICT）, primary agriculture, construction, mining, and quarrying. The analysis of the data indicates that 32% of the respondents said that the primary reason why they have their own business is to have control over their own working life. This fmding appears to confirm the f＇mancing theory that SMEs owners have other goals than profitability. In addition, 30% of SMEs perceived that the most important role played by the board is risk management; hence, these boards have a greater control over financial risks that may lead to better financial performance. The analysis also shows that 81% of the respondents＇ board consisted of internal board members only. These enterprises need to see the important role of external board members as a source of advice providers and experts to them. For policies relating to clear roles and responsibilities of board, only 28% of the respondents established clear functions reserved for the board and those delegated to management; substantial respondents did not draw up policies relating to reinforce board independency （between 75% and 79%） and to strengthen board composition （46%）. Besides, 68% of the respondents have the position of chairman and CEO held by same individuals and 81% of the chairman is an executive member of the board. These findings suggest that SMEs cannot see the importance of strengthening board and having independent board members. Regression analysis also indicates that board independence has a significant and positive impact on firm performance. Hence, SMEs need to appreciate networking advantages, competency, and strategic knowledge that the right board can offer. The governmental ministries and agencies in Malaysia need to take active measures to encourage SMEs to strengthen their board governance, because SMEs are the important economic powers for stimulating national economic growth. This paper contributes to the empirical literatures on the adoption of CG principles and their effects on SMEs＇ firm performance in emerging markets.
文摘The purpose of this article is to analyze the impact of corporate governance and disclosure policy on corporate financial performance by examining the combined effect of board characteristics and disclosure level on financing costs. The empirical analysis, conducted on a sample of 192 Canadian companies, generally shows the importance of board characteristics in determining the level of disclosure and firms＇ costs of financing. In particular, the results found indicate that boards whose characteristics meet the governance requirements that are associated with greater transparency in disclosure on governance attributes reduce the costs of financing of their companies by debt as well as by equity capital.
文摘To be successful in global markets, companies from the emerging countries need the approval of foreign investors and other stakeholders. In this regard, Brazil, Russia, India, and China （BRIC） have progressively strengthened their corporate governance rules to help their companies overcome the competitors from the old industrialized countries. Directors＇ non-executive qualification, independence, and professional expertise represent basic requirements for effective corporate governance, so they should be carefully considered to guarantee a proper board composition and an adequate establishment of internal committees in listed companies. The paper intends to compare the legislative and regulatory frameworks adopted by the four countries; then it aims at answering to the following research questions by means of an empirical investigation： Have BRIC companies appointed non-executive and independent board members？ What do BRIC companies do in order to assure an effective participation of non-executive and independent board members to corporate governance activities？ Have BRIC companies established internal committees？ The research examines the appointment of non-executive directors and independent directors to the boards of 100 BRIC leading firms, as well as their involvement in internal committees focused on matters requiring motivated and impartial opinions. Although the laws and recommendations seem to favor a general convergence of corporate governance principles among the four BRIC and towards the international best practices, some differences and peculiarities emerge from a firm-level perspective. Indeed, the Indian and the Chinese companies analyzed appear more inclined than the Brazilian and the Russian ones to reassure their international stakeholders about board independence and effective committees.
