Corporate governance looking back to look forward in Pakistan: a review, synthesis and future research agenda

Khan, Sattar; Kamal, Yasir; Hussain, Shahid; Abbas, Muhammad

doi:10.1186/s43093-022-00137-5

Cited by 12 publications

(17 citation statements)

References 93 publications

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“…In the CCG-2012, it is made mandatory that there must be at least one independent directors in the board, while in the CCG-2002 it is suggested to be one in the board [ 39 ]. In addition to this, it is preferred in the CCG-2012 to have 1/3 of independent directors in the board.…”

Section: The Context Of Pakistan and Different Corporate Governance R...mentioning

confidence: 99%

Board of directors and earnings manipulation: evidence from regulatory change

et al. 2022

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The purpose of this paper is to examine the effect of the board of directors’ related clauses such as independence, female director, CEO Duality and the expertise of director included in the Code of Corporate Governance 2017 (CCG-2017) on earnings management with the pre- and post-CCG-2017 analysis. This study has used the sample of 323 non-financial listed firms of the Pakistan Stock Exchange from 2015 to 2019. Data were manually collected from companies’ annual reports, and two proxies of earnings management have used: one is discretionary accruals and the other is real activity manipulation. The results of the study show that as compared to the pre-period of CCG-2017 in the post-period of CCG-2017 board independence, expertise and female inclusion has increased significantly. Moreover, board independence and financially expert directors are negatively related to discretionary accruals, while there is a positive relationship of female directors with discretionary accruals, which is also same for real activity manipulation. The findings also show that there is no relationship of board independence/outside directors and expert directors with real activity manipulation. This study recommended the CCG-2017 reforms introduced by the regulator. Moreover, we recommend that the regulator needs to augment the authentic independence of independent/outside directors in listed firms (concentrated ownership context) of Pakistan. This study adds its part in the corporate governance literature by focusing board attributes with regulatory reforms on earnings manipulation, which is lacking in the related literature in general and in Pakistan an emerging economy in particular.

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Section: The Context Of Pakistan and Different Corporate Governance R...mentioning

confidence: 99%

Board of directors and earnings manipulation: evidence from regulatory change

et al. 2022

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“…The final sample for this study is 327 non-financial firms from PSX after applying the inclusion and exclusion criteria as depicted in Table 1 Panel A. The financial firms have been excluded due to the difference in accrual procedures and accounting policies, as mentioned in the literature (Khan et al , 2022b; Khan and Kamal, 2022; Saleh et al , 2022). In addition to this, companies with missing annual reports, defaulter companies and those that were delisted were also excluded.…”

Section: Methodsmentioning

confidence: 99%

The same network auditor, family business groups and earnings manipulation: an evidence from emerging market

Khan

Kamal

2023

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Purpose This paper aims to examine whether family business groups’ (FBG) having the same network auditor among their affiliates mitigates earnings manipulation (EM). Design/methodology/approach This paper used unbalanced panel data from the years 2010–2019. The sample of the study is composed of 327 nonfinancial listed Pakistan Stock Exchange firms, consisting of 187 FBG-affiliated firms and 140 nonaffiliated firms. The ordinary least square and generalized least square regressions have been used to check the hypothesized relationship. Furthermore, the propensity score matching technique is used to ascertain comparable companies’ features and to control the potential endogeneity problem. Finally, the results are robust to various measures of EM and FBG’ proxies. Findings The findings of the study show that the same network auditor is reducing EM in FBG affiliates. In addition, the BIG4 same network auditors are also instrumental in constraining EM as compared to non-BIG4 audit firms. Overall, the results of this study depict that the same network auditor in FBG’s affiliated firms significantly influences EM. These results are robust with respect to generalized least squares and the endogeneity problem. Research limitations/implications This research study has two important implications for the interested parties. First, although the authors find in this research study that the same network auditor is negatively associated with EM in the FBG-affiliated firms, however, FBG-affiliated firms might use opportunistically the real activity manipulation. Second, regulators highlight the change in audit partner/firm rotation, though the study findings indicate that regulators and practitioners may consider the benefits associated with the same network auditors for FBG. Originality/value This research study adds a new investigation to previous literature by examining the role of the same network auditors in the EM of the FBG’ affiliates. To the best of the author’s knowledge, this is the first study to bring new knowledge by investigating the role played by the same network auditors along with the BIG4 same network audit firms in constraining EM in FBG.

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“…Based on various perspectives, “Corporate Governance is the mode through which substances are overseen and represented.” The ownership structure is one of the most important corporate administration factors impacting the extent of agency costs of a firm ( Arosa et al, 2010 ). The distribution of shares among owners has been characterized as the ownership structure in previous studies ( Khan et al, 2022 ), which refers to the stake holdings of families, state, foreign, institutions, managerial, and associates in a growing market ( Zureigat, 2015 ). The opposing perspective on ownership structures focuses on the mix of ownership concentration and control that results from the consequences of the agency dilemma ( Fama and Jensen, 1983 ).…”

Section: Introductionmentioning

confidence: 99%

“…The 2002 code was further revised in 2012, 2017, and 2019, respectively. The latest codes were gradually strengthened by the inclusion of mandatory provisions concerning board independence, diversity, directorship, respective committees, and/or auditing measures ( Khan et al, 2022 ).…”

Section: Introductionmentioning

confidence: 99%

“…The agency problem from the ownership context has not yet been properly addressed in the Pakistani context because of the limited scope taken in the previous studies, especially when various stakeholders become part of ownership. Keeping in view the context of agency theory and stakeholder theory, Khan et al (2022) recommended a comprehensive study on ownership formation to address the agency issue. Additionally, board insertion at the time of pursuing the respective interests of each stakeholder was also required to be addressed.…”

Section: Introductionmentioning

confidence: 99%

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Does board activeness strengthen the relationship between structure of corporate ownership and firm performance?

Yuan

Hussain²,

Khalid³

et al. 2023

Front. Psychol.

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This study empirically investigates the moderating effect of board activeness on the relationship between the structure of corporate ownership and firm performance. The objective was evaluated using the hierarchal panel regressions with data from non-financial companies of the Pakistan Stock Exchange from 2009 to 2018, operationalizing the ownership structure as state ownership, associated companies, foreign ownership, ownership concentration, institutional ownership, and family ownership, and firm performance as operating performance, financial performance, and stock market performance. The findings of the study revealed that operating, financial, and stock market performance were favorably influenced by the ownership stakes of the state, associated concerns, institutions, and foreigners. Family interests proved to be diverse for the firm performance. The isolated effect of the board consistently uplifted the firm productivity, but its interactional impact with all the ownership stakeholders postulated differential outcomes for internal and external performance. The study provides valuable insights for policymakers and investors to make optimal strategies to manage ownership interests and enhance value.

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Corporate governance looking back to look forward in Pakistan: a review, synthesis and future research agenda

Cited by 12 publications

References 93 publications

Board of directors and earnings manipulation: evidence from regulatory change

Board of directors and earnings manipulation: evidence from regulatory change

The same network auditor, family business groups and earnings manipulation: an evidence from emerging market

Does board activeness strengthen the relationship between structure of corporate ownership and firm performance?

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