Three Essays on External Sources of Corporate Governance

Three Essays on External Sources of Corporate Governance
Author: Lee Kevin K.
Publisher:
Total Pages: 250
Release: 2012
Genre: Corporate governance
ISBN: 9781267537720
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Corporate governance is the system by which corporations are controlled. External sources of governance include regulatory and market mechanisms as well as the interplay of goals between managers, the board, and shareholders. Other external sources can include informal institutions which can shape goals as well as suggested by institutional theory, effectively constrain human behavior. In my first essay, I argue that foreign direct investors can act as agents of change in corporate governance. Investigating changes in ownership and control of Swedish firms, I find that active foreign investors' participation move firms away from a Swedish stakeholder orientation toward an Anglo-American shareholder wealth maximization focus. In my second essay, I explore the relationship of informal and formal institutions on microfinance institutions (MFI). Investigating the outreach and performance of MFIs in developing nations, I find that strong formal institutions foster better efficiency and outreach while strong informal institutions' impact is limited to better outreach. In my third essay, I investigate the apparent lack of market discipline in the bank subordinated debt market leading up to the 2008 finance crisis. I find that subordinated debt holders were caught off guard by the suddenness and magnitude of the crisis. I argue that bank opacity created a vulnerable environment in the banking industry that contributed to this collapse.

Three Essays on Corporate Governance

Three Essays on Corporate Governance
Author: Maryam Firoozi
Publisher:
Total Pages: 138
Release: 2015
Genre:
ISBN:
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This thesis is comprised of three essays on corporate governance issues. The first essay focuses on how board members’ geographical diversity relates to financial reporting quality. In principle, it is often argued that diversity has a positive impact on a group’s decision-making and monitoring abilities. In governance matters, while the attention has recently been placed on gender diversity, diversity is in fact multi-dimensional and encompasses attributes such as gender but also experience, expertise, independence and origins. The results show that a local board is more successful in monitoring financial reporting quality. The first essay provides evidence that although regulators are encouraging the diversity of boards of directors in all aspects, they may not be aware that each dimension of diversity may have a different impact on the performance of directors. The second essay ponders how the presence of foreign directors on audit committees affects their effectiveness. The rules-based approach of Canadian regulators with respect to audit committee membership has caused many Canadian firms to nominate foreign directors on their audit committees, especially from the U.S. The second essay provides evidence that the nomination of foreign directors to a monitoring committee, mainly due to the requirements regarding audit committee membership, may have reverse outcomes on the quality of financial reporting, even though these directors may share many similarities with directors from the country in which they are sitting on a board and to which they are geographically close. The last essay looks at the effects of the adoption of a new set of accounting standards within a single national context, Canada, with different legal regimes (common law outside Quebec, code law within Quebec). The third essay offers evidence that the introduction of a new set of accounting standards may even result in a different level of financial reporting quality between firms, dependent on firm- and country- level governance mechanisms. Key words, Board of Directors, Geographical Diversity, Earnings Quality, Audit Committee, Foreign Directors, IFRS, Firm- level governance mechanisms, Country – Level Governance Mechanisms.

Three Essays on Corporate Governance

Three Essays on Corporate Governance
Author: Aslihan Gizem Korkmaz
Publisher:
Total Pages: 155
Release: 2015
Genre: Boards of directors
ISBN:
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This dissertation consists of three essays focusing on corporate governance. The main goal of these studies is to contribute to a better understanding of the effectiveness of different corporate governance mechanisms. The first study explores the relationship between director expertise and performance following seasoned equity offerings (SEOs). In the short run, firms with financial experts have smaller offer discounts. The cumulative abnormal returns (CARs) following the equity issues are less negative for firms with financial, legal and joint expert directors. In the long run, expert directors continue to have a positive impact on stock price performance. In the case of firm operating performance, it seems to be better for firms with legal experts and joint experts. Overall, having financial experts and legal experts on the board seems to be significantly beneficial for firms while the results for joint expertise lack significance due to the small number of firms with joint experts. The second study focuses on identifying the most effective corporate governance attributes. This study uses a cross-sectional regression analysis to investigate which attributes have a significant effect on the market's reaction to the SEO announcements.The results show that among other corporate governance characteristics, the percentage of directors on the audit committee, board size, number of board meetings, audit committee size, average board age and average director tenure seem to be significantly related to market reaction. In the case of director expertise, market reacts more positively to SEO announcements by firms with legal experts or joint experts on their boards. The third study focuses on the impact of blockholder characteristics on earnings quality. Most of the studies in literature make the intrinsic assumption that blockholders are a homogeneous group. This study is one of the very few studies to acknowledge the heterogeneity of blockholders and attempts to understand the unexplained proportion of blockholder heterogeneity. Earnings quality is calculated using the FDD model of Lee and Masulis(2009) and it is regressed on various blockholder characteristics. The results show that earnings quality is lower for firms with market-driven and multilateral blockholders.

Three Essays in Corporate Governance

Three Essays in Corporate Governance
Author: Dong Chen
Publisher:
Total Pages: 302
Release: 2008
Genre: Boards of directors
ISBN:
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This dissertation consists of three related papers on corporate governance, especially corporate board of directors. The focus was put on the examination, both theoretically and empirically, of the two major roles played by boards: monitoring and advising management, and whether and to what extent there is tradeoff between these two roles. I also examine corporate governance on bond ratings and spreads.