Compliance with Corporate Governance Best Practice. The Perspective of Ownership Structure
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Opublikowane:
lip 27, 2019
Słowa kluczowe:
Corporate governance, best practice, compliance, Poland
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Abstrakt
The article examines compliance with corporate governance best practice in the post transition economy addressing the heterogeneity of interests of different shareholders. On the basis of the agency theory, we suggest that in the concentrated ownership environment the principal-principal conflict results in lower compliance with the corporate governance code. More specifically, since compliance with best practice requires introducing independent directors and in that sense shifts control from shareholders to the board, we hypothesize that companies characterized by concentrated ownership and the dominant position of the founder/individual investor are reluctant to comply with board governance best practice. To evaluate our hypotheses, we explore compliance with board governance best practice with respect to the presence of independent directors, formation of an audit committee and other specialized board committees (remuneration, risk, strategy). We test the link between the compliance with the code and the ownership structure. Our analysis supports the principal-principal
conflict argument and shows that companies with concentrated ownership and founder control do not comply with the board governance best practice. We believe this article contributes to the existing literature twofold. Firstly, we identify the patterns of corporate governance best practice implementation in the post socialist, post transition, emerging economy and depict the dynamics of the compliance with the code guidelines. Secondly, we show that the principal-principal conflict addresses the compliance policy of listed companies and results in various approaches to corporate governance conformity.
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Article Details
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Aluchna, M., & Tomczyk, E. (2019). Compliance with Corporate Governance Best Practice. The Perspective of Ownership Structure. Journal of Management and Financial Sciences, (32), 9–26. https://doi.org/10.33119/JMFS.2018.32.1
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Bibliografia
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14. Chizema A., 2008. Institutions and voluntary compliance: The disclosure of individual executive pat in Germany. Corporate Governance, Vol. 16, pp. 359–374.
15. Chu W., 2009. The influence of family ownership on SME performance: Evidence from public firms in Taiwan. Small Business Economics, Vol. 33, pp. 353–373.
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23. Goncharov I., Werner J., Zimmermann J., 2006. Does compliance with the German corporate governance code have an impact on stock valuation? An empirical analysis. Corporate
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38. Su Y., Xu D., Phan P., 2008. Principal-principal conflict in the governance of the Chinese public corporation. Management and Organization Review, Vol. 4, pp. 17–38.
39. Tihanyi L., Johnson R., Hoskisson R., Hitt M., 2003. Institutional ownership differences and international diversification: The effect of boards of directors and technological opportunity.
Academy of Management Journal, Vol. 46, pp. 105–211.
40. Tricker B., 2012. Corporate Governance. Principles, Policies and Practices. Oxford University Press, Oxford.
41. van Essen M., Carney M., Gedajlovic E., Heugens P., 2015. How does family control influence firm strategy and performance? A meta-analysis of US publicly listed firms. Corporate
Governance: An International Review, Vol. 23, pp. 3–24.
42. Vander Bauwhede H., 2009. On the relation between corporate governance compliance and operating performance. Accounting and Business Research, Vol. 39, pp. 497–513.
43. Werder A., Talaulicar T. Kolat G., 2005. Compliance with the German Corporate Governance Code: an empirical analysis of the compliance statements by German listed companies. Corporate Governance, Vol. 13, pp. 178–187.
44. Zattoni A., Cuomo F., 2008. Why adopt codes of good governance? A comparison of institutional and efficiency perspective. Corporate Governance, Vol. 16 (1), pp. 1–15.
2. Aluchna M., 2009. Implementation of best practice code. Practical implications from Warsaw Stock Exchange. Social Responsibility Journal, Vol. 5, pp. 123–140.
3. Aluchna M., 2015. Własność a corporate governance [Ownership and corporate governance]. Wydawnictwo Poltext, Warszawa.
4. Anderson R., Reeb D., 2003. Founding family ownership and firm performance: Evidence from the S&P 500. Journal of Finance, Vol. 58, pp. 1301–1329.
5. Andres Ch., Theissen E., 2008. Setting a fix to keep the geese – Does the comply-or-explain principle work? Journal of Corporate Finance, Vol. 14, pp. 289–301.
6. Arcot S., Bruno V., Faure-Grimaud C., 2010. Corporate governance in the UK: Is the comply or explain approach working. International Review of Law and Economics, Vol. 30, pp. 193–201.
7. Barontini R., Caprio L., 2006. The effect of family control on firm value and performance. Evidence from continental Europe. European Financial Management, Vol. 12, pp. 689–723.
8. Berglöf E., Claessens S., 2006. Enforcement and good corporate governance in developing countries and transition economies. World Bank Research Observer, Vol. 21, pp. 123–150.
9. Berglöf E., Pajuste A., 2005. Why do firms disclose and why? Enforcing corporate governance and transparency on Central and Eastern Europe. Oxford Review off Economic Policy, Vol. 21,
pp. 178–197.
10. Bhagat S., Bolton J., 2008. Corporate governance and firm performance. Journal of corporate Finance, Vol. 14, pp. 257–273.
11. Bistrowa J., Lace N., 2012. Corporate governance best practice and stock performance: Case of CEE companies. Systemics, Cybernetics and Informatics, Vol. 10, pp. 63–69.
12. Bozec R., Dia M., Bozec Y., 2013. Corporate ownership and governance practices in Canada: a longitudinal study. International Journal of Corporate Governance, Vol. 4, pp. 51–73.
13. Campbell K., Jerzemowska M., Najman K., 2009. Corporate governance challenges in Poland: Evidence from comply or explain disclosures. Corporate Governance, Vol. 9, pp. 623–634.
14. Chizema A., 2008. Institutions and voluntary compliance: The disclosure of individual executive pat in Germany. Corporate Governance, Vol. 16, pp. 359–374.
15. Chu W., 2009. The influence of family ownership on SME performance: Evidence from public firms in Taiwan. Small Business Economics, Vol. 33, pp. 353–373.
16. Colley J., Doyle J., Logan G., Stettinius W., 2003. Corporate Governance. McGraw-Hill.
17. Cromme G., 2005. Corporate Governance in Germany and the German Corporate Governance Code. Corporate Governance, Vol. 13, pp. 362–367.
18. Cuervo A., 2002. Corporate governance mechanisms: a plea for less code of good governance and more market control. Corporate Governance, Vol. 10, pp. 84–93.
19. Davies M., 2008. The impracticality of an international ‘one size fits all’ corporate governance code of best practice. Managerial Auditing Journal, Vol. 23, pp. 532–544.
20. Dedman E., 2002. The Cadbury Committee recommendations on corporate governance – a review of compliance and performance impacts. International Journal of Management
Reviews, Vol. 4, pp. 335–352.
21. Faccio M., Lang L., 2002. The ultimate ownership in Western European corporations. Journal of Financial Economics, Vol. 65, pp. 365–395.
22. Gompers P., Ishii J., Metrick A., 2003. Corporate governance and equity prices. The Quarterly Journal of Financial Economics, Vol. 118, pp. 107–155.
23. Goncharov I., Werner J., Zimmermann J., 2006. Does compliance with the German corporate governance code have an impact on stock valuation? An empirical analysis. Corporate
Governance, Vol. 14, pp. 432–445.
24. Hermes N., Postma T., Zivkov, O., 2007. Corporate governance codes and their contents: An analysis of Eastern European codes. Journal for East European Management Studies, Vol. 12,
pp. 53–74.
25. La Porta R., Lopez-de-Silanes F., Shleifer A., 1999. Corporate ownership around the World. Journal of Finance, Vol. 54, pp. 471–517.
26. Larcker D., Tayan B., 2011. Corporate Governance Matters. Pearson Education.
27. MacNeil I., Li X., 2006. Comply or explain: market discipline and non-compliance with the Combine Code. Corporate Governance, Vol. 14, pp. 486–496.
28. Mallin Ch., 2004. Corporate Governance. Oxford University Press, Oxford.
29. Monks R., Minow N., 2004. Corporate Governance. Blackwell Business.
30. Morck R., Yeung B., 2004. Family control and the rent-seeking society. Entrepreneurship Theory and Practice, Vol. 28, pp. 391–409.
31. Morck R., 2004. How to eliminate pyramidal business groups – the double taxation of intercorporate dividends and other incisive uses of tax policy. Tax Policy and the Economy, Vol. 19.
32. Nenova T., 2003. The value of corporate voting rights and control: A cross-country analysis. Journal of Financial Economics, Vol. 68, pp. 325–351.
33. OECD, 2015. G20/OECD Principles of Corporate Governance, http://www.oecd.org/daf/ca/Corporate-Governance-Principles-ENG.pdf [accessed January 9th, 2016].
34. OECD, 2004. Principles Of Corporate Governance, http://Www.Oecd.Org/Corporate/Ca/Corporategovernanceprinciples/31557724.Pdf, [accessed January 9th, 2016].
35. Sheridan A., 2001. A view from the top: women on the boards of public companies. Corporate Governance, Vol. 1, pp. 8–14.
36. Shleifer A., Vishny R., 1997. A survey of corporate governance. Journal of Finance, Vol. 52, pp. 737–783.
37. Soren C., Turnbull S., 2012. What’s wrong with corporate governance best practices? In Baker, H. & Anderson. A. eds. Corporate Governance. A Synthesis of Theory, Research and Practice. John Willey and Sons, New Jersey, pp. 79–96.
38. Su Y., Xu D., Phan P., 2008. Principal-principal conflict in the governance of the Chinese public corporation. Management and Organization Review, Vol. 4, pp. 17–38.
39. Tihanyi L., Johnson R., Hoskisson R., Hitt M., 2003. Institutional ownership differences and international diversification: The effect of boards of directors and technological opportunity.
Academy of Management Journal, Vol. 46, pp. 105–211.
40. Tricker B., 2012. Corporate Governance. Principles, Policies and Practices. Oxford University Press, Oxford.
41. van Essen M., Carney M., Gedajlovic E., Heugens P., 2015. How does family control influence firm strategy and performance? A meta-analysis of US publicly listed firms. Corporate
Governance: An International Review, Vol. 23, pp. 3–24.
42. Vander Bauwhede H., 2009. On the relation between corporate governance compliance and operating performance. Accounting and Business Research, Vol. 39, pp. 497–513.
43. Werder A., Talaulicar T. Kolat G., 2005. Compliance with the German Corporate Governance Code: an empirical analysis of the compliance statements by German listed companies. Corporate Governance, Vol. 13, pp. 178–187.
44. Zattoni A., Cuomo F., 2008. Why adopt codes of good governance? A comparison of institutional and efficiency perspective. Corporate Governance, Vol. 16 (1), pp. 1–15.