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Abstract
• PurposeThis paper attempts to analyze the relationship between Operational Risk Management (ORM), Size, and ownership of Indian Banks. This is important in the context of financial crisis experienced by developed countries due to lax regulation.
Purpose
The purpose of this paper is to examine the effect of the presence of independent board directors on financial performance in India.
Design/methodology/approach
This study used panel regression models on large listed Indian firms to investigate the impact on financial performance owing to the presence of independent directors.
Findings
The findings suggest that independent board directors in Indian contexts do not significantly affect financial performance.
Practical implications
This study has implications for the formulation of regulation related to appointment of independent directors and the extent of their representation on the board for them to be effective.
Social implications
The proportion of independent directors on the board of the firm is influenced by the trade-off between the cost of having independent directors on the board versus the benefits to the firm and society.
Originality/value
The impact of the presence of an independent director on financial performance in highly concentrated ownership remains ambiguous.
Purpose
This paper aims to examine the impact of corporate governance practices on the level of financial disclosures made by the Indian firms. This assumes importance in the context of the role of financial disclosures in addressing the agency problem.
Design/methodology/approach
Financial disclosure score is computed by considering disclosures provided by the generally accepted accounting principles and is the dependent variable. The independent variable – corporate governance score – is an index comprising internal governance mechanisms. The authors empirically examine the impact of corporate governance practices on financial disclosure using multiple regression model for 200 large listed Indian firms.
Findings
The study suggests that quality of governance practices significantly improves financial disclosure practices of the firm. Particularly, the composition of the audit committee is effective in improving disclosures.
Practical implications
The finding has implications for policy makers and practitioners. It will help investors, lenders, and other stakeholders to assess firms’ financial disclosure quality. In addition, the findings, suggest the influence of governance practices on disclosure, might help in the formulation of appropriate policies about board structure and audit function. It is also a call to investors to emphasize on governance quality of the investing firms.
Originality/value
The study builds a case for an urgent intervention for improving the existing governance standards to advance the quality of financial disclosure in an emerging market context.
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