Measuring Corporate Governance: Lessons from the 'Bundles Approach'

Schnyder, Gerhard

doi:10.2139/ssrn.2220616

Cited by 22 publications

(27 citation statements)

References 57 publications

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“…Sound corporate governance will act as the control for firms to maximize the shareholders' value with fair and just decision making (Mehran & Mollineaux, 2012). Schnyder (2012) also reaffirmed this statement, stating that sound corporate governance practices will indeed prevent shareholders from being exploited by internal management through an effective control mechanism. Thus, the interests of shareholders and management will be aligned, resolving agency problem.…”

Section: Why Systemic Risk Of Financial Institutions Is Triggered By mentioning

confidence: 78%

“…Its role as the intermediary to channel the capital across the economy has shown how essential this industry is for the economic development of a country as a whole. Schnyder (2012) stated that as long as the financial institutions are tightly regulated and their resources are distributed effectively, they can act as the catalyst for rapid economic development. Unfortunately, in 2008, the collapse of some U.S. financial institutions has resulted in a global financial catastrophe which affected the economies of countries all over the world (Erkens et al 2012).…”

Section: Introductionmentioning

confidence: 99%

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An Analysis of XBRL Adoption Towards Systemic Risk of Financial Institutions Listed in NYSE

Suwardi¹,

Tohang²

2017

AABFJ

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This research aims to test the impact of the mandatory adoption of XBRL towards the systemic risk of American financial institutions listed in New York Stock Exchange (NYSE) by utilizing 45 NYSE listed financial institutions for the time period of [2007][2008][2009][2010][2011][2012]. The measure of systemic risk is based on SRisk by Acharya et al. (2012) which is available in the NYU Stern V-Lab. XBRL is a dummy variable, in which 0 represents a pre XBRL adoption period (2007)(2008) while 1 represents an XBRL reporting environment (2011)(2012). It is further interacted with Corporate Governance, which is measured using an index developed by Brown & Caylor (2006). The result proves that XBRL do not significantly impact systemic risk of financial institutions listed in NYSE. The findings have been determined after having controlled firm size, capital ratio, leverage ratio and performance. KeywordsSystemic Risk, XBRL, Corporate Governance, Market Discipline, Financial Institution, Disclosure, NYSE, Risk Taking Cover Page FootnoteThis research focuses on the impact of XBRL towards systemic risk of financial institutions listed in NYSE. Apart from this, it will also test the impact of the adoption towards size, capital ratio, leverage and performance of the financial institutions. The sample includes all financial institutions listed in NYSE between the years of 2007-2012. The impact is determined by comparing the systemic risk of individual financial institutions pre and post the mandate of XBRL adoption in U.S. in 2009, in which the year 2009 and 2010 will be considered as transition periods due to the fact that XBRL is implemented through phased-in approach. Based on the data of 45 financial institutions, the findings will provide meaningful analysis and worthy discussions over the subject of XBRL. This research is expected to contribute to 1. Companies (Financial Institutions) Financial institutions that are committed towards improving their corporate governance, can utilize this research to have an idea regarding how XBRL can serve as the tool to improve their corporate governance while also mitigating risky behaviors (which in turn reduces systemic risk) in order to further maximize their shareholder values. 2. Investors This research has the potential to provide investors with new insights which can assist in their decision making particularly regarding financial institutions. They will be acquired with the knowledge that financial firms with XBRL in place will provide them with timely and accurate information, improving their decision making. XBRL enhances transparency of financial firms which means that investors will face less difficulty in analyzing the financial information and will be able to properly asses the risk associated in their investments. 3. Government (Regulatory Agencies) In understanding the impact of XBRL towards systemic risk in U.S. financial institutions, regulatory agencies all around the world that are facing similar problems can utilize the same tool in order to limit the ris...

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Section: Why Systemic Risk Of Financial Institutions Is Triggered By mentioning

confidence: 78%

Section: Introductionmentioning

confidence: 99%

An Analysis of XBRL Adoption Towards Systemic Risk of Financial Institutions Listed in NYSE

Suwardi¹,

Tohang²

2017

AABFJ

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“…In our view, there is no overriding objection to the combination of cardinal and ordinal values into a single composite score, nor to the mixing of indicators with different degrees of incremental variation, as long as each individual indicator is thought to be an accurate (or the best possible) measure of the particular aspect of legal reality which it is meant to be capturing. The use of an aggregate measure, rather than individual values, is in line with research in corporate governance that expresses a preference for composites or '"undles" of variables in order to capture substitutes and complements across individual variables (Schnyder, 2012b;Aguilera et al, 2012). A further, practical consideration in favour of using aggregate scores is that the extent of variation across time in respect of the composite indicator is greater than that for any individual variable (see section 2.2).…”

Section: Shareholder Action Against Resolutions Of the General Meetingmentioning

confidence: 93%

Is There a Relationship Between Shareholder Protection and Stock Market Development?

Deakin

Sarkar

Siems

2018

LFA

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“…Corporate governance: A survey on organisation for economic co-operation and development (OECD) member countries Schnyder (2012) stated that one of the major challenges of corporate governance research since its inception has been the definition of measures of good corporate governance, i.e. of corporate governance mechanisms that lead to financial efficiency, social legitimacy.…”

Section: 5mentioning

confidence: 99%

“…of corporate governance mechanisms that lead to financial efficiency, social legitimacy. However, Schnyder (2012) Licht, Goldschmidt and Schwartz (2005) argued that theorists, policy-makers, and practitioners share the intuition that corporate governance reflects national culture. Now, definitions of culture abound.…”

Section: 5mentioning

confidence: 99%

Values Based Ideal Types of Corporate Governance Systems

Banerjee

Wahl

2017

JOB

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Values and differences in corporate governance across the world are part and partially related and it is obvious that owners know what results they want to have from the corporations in the long run. In this regard, some scientific studies have revealed that owners would be succeed in a dynamic environment only if they formulate ownership strategy based on values. Consequently, to understand corporate governance better, some research has been carried out on corporate governance by relating values towards the area of knowledge but there is a scarcity of research which proposing comprehensive and explains corporate governance systems consisting values. Therefore, authors of this paper identified the following research problem which is: "Lacking of theory behind corporate governance systems including values which gives an opportunity towards the owners under different corporate governance systems to analyse its own behaviour, learning, managing knowledge, and finally clearly expressing ownership will in the form of an ownership strategy." There were two data set was analysed in this study. One is Organisation for Economic Co-Operation and Development (OECD) company law and corporate governance database based on member countries submission and the second set of data is Schwartz's value survey to characterise multiple countries by their culture. Methodologically, after using multi quantitative tools this study is valuable to analyse all the secondary data to produce new knowledge, adopting different theoretical lens, by analysing and understanding the interrelationships of values and different systems of corporate governance across the world. The result of the study comes with a typology including values based three ideal types (Affective type, Cognitive type and Conative type) of corporate governance systems, with a practical contribution towards enriching the available knowledge for owners to formulate ownership strategy. Considering future direction, the constructed typology is required for assessment of the capability of refutation aside from OECD countries.This is an open access article under the terms of the Creative Commons Attribution License 4.0, which allows use, distribution and reproduction in any medium, provided the original work is properly cited.

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Measuring Corporate Governance: Lessons from the 'Bundles Approach'

Cited by 22 publications

References 57 publications

An Analysis of XBRL Adoption Towards Systemic Risk of Financial Institutions Listed in NYSE

An Analysis of XBRL Adoption Towards Systemic Risk of Financial Institutions Listed in NYSE

Is There a Relationship Between Shareholder Protection and Stock Market Development?

Values Based Ideal Types of Corporate Governance Systems

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