Firm Performance and Condensed Corporate Governance Mechanism: Evidence of Nigerian Financial Institutions

Adegboye, Alex; Ojeka, Stephen; Adegboye, Kofo; Ebuzor, Emmanuel; Samson, Dayo

doi:10.3846/btp.2019.38

Cited by 15 publications

(11 citation statements)

References 50 publications

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“…This is because its implementation strengthens the performance and protects companies against the risk of financial distress (Murhadi et al, 2018). Furthermore, the structure fosters accountability and transparency with the aim of minimizing agency problems due to the separation between managers and shareholders, which is realized in the form of effective supervision and management (Adegboye et al, 2019). When a company has a weak corporate governance mechanism structure, more agency problems tend to occur (Nasir & Ali, 2018), leading to the possibility of a financial distress.…”

Section: Introductionmentioning

confidence: 99%

Corporate Governance Structures and Probability of Financial Distress: Evidence From Indonesia Manufacturing Companies

Indarti¹,

Widiatmoko²,

Pamungkas³

2020

IJFR

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This study aims to examine the effect of four variables, which include independent commissioners, audit committees, institutional ownership and managerial ownership as a proxy for the corporate governance mechanisms on financial distress. This was carried out on the manufacturing companies listed on the Indonesia Stock Exchange (IDX) in 2016-2018. The samples were selected using the purposive sampling method and 224 data were obtained. The hypothesis in this study was tested using logistic regression. The results showed that independent commissioners have a negative influence on financial distress, while the audit committee, institutional ownership and managerial ownership have no effect. This implies that an independent commissioner functions as an effective supervisory mechanism to prevent a company from experiencing financial distress. Furthermore, two control variables used in this study, namely leverage and profitability, were able to produce results as predicted. It was discovered that a higher leverage level leads to a greater possibility of experiencing financial distress and conversely, the higher the profitability of a company, the lower the probability of experiencing financial distress.

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Section: Introductionmentioning

confidence: 99%

Corporate Governance Structures and Probability of Financial Distress: Evidence From Indonesia Manufacturing Companies

Indarti¹,

Widiatmoko²,

Pamungkas³

2020

IJFR

View full text Add to dashboard Cite

show abstract

“…where Q is Tobin's Q as a proxy for firm value with the formula: (market value of equity + total debt) / total assets or (MVE + D) / TA). Tobin's Q has been widely used in previous studies, such as Adegboye et al (2019); Li (2019); Martins and Lopes (2016); Nazir and Afza (2018); Ni et al (2019); Wang (2019).…”

Section: Methodsmentioning

confidence: 99%

“…E (earnings) is profit for the period divided total asset. This measure shows the company's performance as measured by accounting indicators (Adegboye et al, 2019).…”

Section: Methodsmentioning

confidence: 99%

Earnings and Firm Value: The Moderating Impact of Large Deferred Taxes and Large Accruals in Indonesia

Sutopo

Adiati

Siddi

2021

Business: Theory and Practice

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Deferred tax and accruals have the characteristic of causing reported earnings to be above or below normal. Both are permitted to be used by companies in financial reporting. This study examines whether large deferred taxes and large accruals have an impact on the relationship between earnings and firm value. Using a sample that includes 1938 company-year observations for the 2007−2017 periods listed on the Indonesia Stock Exchange (IDX), this study found that large positive deferred taxes with large positive accruals had weakened the relationship between earnings and firm value. In contrast to these results, a large negative deferred tax with a large negative accrual does not have an impact on the relationship between earnings and the firm value. This finding suggests that “liberal” accounting policies that cause reported “above normal” earnings have a negative effect on the association between earnings and firm value. However, “below normal” earnings resulting from “conservative” accounting policies do not affect the association between earnings and firm value. The uniqueness of this study is the incorporation of deferred taxes with accruals with variations in the form of positive versus negative and large versus small. The findings imply that the presentation of financial information with small deferred taxes and small accruals is more beneficial for investors compared to financial information with large positive deferred taxes and large positive accruals. However, results of this study indicate that large negative deferred taxes and large negative accruals, indicating conservative accounting, are not responded differently by investors.

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“…Certainly, as per Weber, it should be emphasised that the overarching goal for the implementation of controlling is "to increase the efficiency and effectiveness of management and to strengthen adaptation to changes occurring inside and outside the organisation" (Weber, 1991, p. 50;Sierpińska & Niedbała, 2003, p. 15). Ensuring the management rationality is also indicated as the goal of controlling (Kuc, 2011;Zur Muehlen, 2002;Nowosielski, 2018;Weber, 2019;Adegboye et al, 2019), which can be directly linked to "enabling managers to make more accurate (credible) decisions in the organisation" (Marciniak, 2008, p. 17), "management decision making" (Zoni & Merchant, 2007), coordination of the management system (Küpper, 2008) or "improving the business management process" (Nowak 2003, p. 9) or improving management (Zur Muehlen, 2002, p. 72). Sierpińska and Niedbała (2003, p. 7) stated that controlling "provides various levels of management with cross-sectional information necessary to manage a future-oriented enterprise".…”

Section: Impact Of Controlling On the Organisational Performancementioning

confidence: 99%

Controlling Effectiveness Model — empirical research results regarding the influence of controlling on organisational performance

Bieńkowska

2020

Engineering Management in Production and Services

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The article aims to explain how controlling influences an organisation as a whole, considering the job performance of employees and managers. It describes the development and verification of the Controlling Effectiveness Model, which characterises the impact, the place of each variable and the direction of each relationship in the effort to shape organisational performance. The hypothesis was verified with the help of empirical research, which was conducted with 264 organisations operating in Poland. The survey took place in October 2019. The authors of the article used the CAWI method. Efforts had been made to ensure a diversified research sample encompassing various organisational characteristics. The exploratory and confirmatory factor analysis and the sequentially mediated regression model were used to verify the hypothesis. The empirical research allowed confirming a statistically significant indirect impact of the quality of controlling on organisational performance. This relationship depends on the job performance of managers and employees. The analysis of the impact made by controlling on the job performance of employees and managers as we as the organisational performance resulted in a mediation model (the Controlling Effectiveness Model) and confirmed the effect of controlling on organisational performance through the impact on job performance of managers and employees. The article has practical implications. The organisations that decide to implement controlling should focus on the quality of this management support method. It is not enough to simply implement controlling as organisations need to ensure the correct implementation. In this context, it is also relevant to properly shape functional, organisational and instrumental controlling solutions (tailored to the characteristics of the organisation as a whole, as well as to the environmental conditions, under which the organisation operates), which determine the quality of controlling.

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Firm Performance and Condensed Corporate Governance Mechanism: Evidence of Nigerian Financial Institutions

Cited by 15 publications

References 50 publications

Corporate Governance Structures and Probability of Financial Distress: Evidence From Indonesia Manufacturing Companies

Corporate Governance Structures and Probability of Financial Distress: Evidence From Indonesia Manufacturing Companies

Earnings and Firm Value: The Moderating Impact of Large Deferred Taxes and Large Accruals in Indonesia

Controlling Effectiveness Model — empirical research results regarding the influence of controlling on organisational performance

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