Assessing the Impact of Corporate Governance on Non-Performing Loans: Empirical Analysis of the Listed Commercial Banks of Pakistan
Financial crisis shows the ambiguous role of the corporate governance system. Hence, the main purpose of this paper is to assess the impact of corporate governance on Non-performing loans of the banking industry of Pakistan. The time period selected from 2006 to 2016 and source of data is annual reports of respective banks and the World Bank. In order to explain the relationship between the governance system and non-performing loans used descriptive, correlational and panel data analyses. The results revealed a negative and significant effect of corporate governance on nonperforming loans of sample firms of the study. Therefore, suggested for the banking industry of Pakistan to implement and make sure their reports according to corporate governance code compliance to control non-performing loans.
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Business Collapses, Corporate Governance, NonPerforming Loans.
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(1) Ihtesham Khan
Assistant professor, Institute of Business Studies and Leadership,Abdul Wali Khan University Mardan, KP, Pakistan.
(2) Muhammad Ilyas
Lecturer, Institute of Business Studies and Leadership, Abdul Wali Khan University Mardan, KP, Pakistan.
(3) Shehzad Khan
Assistant professor, Institute of Business Studies and Leadership,Abdul Wali Khan University Mardan, KP, Pakistan.
Effects of Corporate Governance on Capital Structure and Financial Performance: Empirical Evidence from Listed Cement Corporations in Pakistan
The key aim of current research is to investigate the influence of CG on financial performance (FP) and capital structure (CS) of cement companies listed on Pakistan Stock Exchange (PSX). To accomplish this purpose, twenty cement firms listed on the PSX was deployed from 2005 to 2014. Auto-correlation and heteroscedasticity were tested and Regression analyses were used to test the hypotheses. SPSS 21 is conducted to perform the analyses.CG is analyzed via board size, board independence, and institutional ownership while, return on assets and return on equity are employed to analyze FP, whereas CS is calculated via debt to equity. The outcomes document that CG positively affects FP, however, negatively impact CS. This research not only contributes to examining the impact and association between CG, FP, and CS but also prove the outcomes of previous studies that have presented a significant influence and association between CG, FP, and CS.
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Corporate Governance, Capital Structure, Financial Performance, Pakistan Stock Exchange
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(1) Mahboob Ullah
PhD Scholar, Department of Management Sciences, Preston University, Islamabad, Pakistan.
(2) Nouman Afgan
Associate Professor, Department of Management Sciences, Preston University, Kohat, KP, Pakistan.
(3) Sajjad Ahmad Afridi
Assistant Professor,Department of Management Sciences, Hazara University Mansehra, KP, Pakistan.
Aspect[s] of the Corporate Governance that Matter in a Firm's Value: Evidence from Non-Financial Firms in Pakistan
Corporate governance (CG) is key to enhance firm’s value. The purpose of this research is to examine effects of various aspects of corporate governance on firm’s value. We used secondary penal data of 100 companies on Pakistan Stock Exchange for the period: 2010 – 2016. Findings revealed that among other aspects of CG, managerial ownership and board size have significant influence on the value of a firm. Among controlled variables, firm size and firm ages were also found significant in firm’s value. We are convinced that findings of this study would help addressing agency issues through effective corporate governance measures. This study has come up with some practical implications as well. It is suggested that for better firm performance and increasing efficiency the board size may be kept at minimum.
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Corporate Governance, Firm’s Value, Size of Firm, Age of Firms, Capital Structure, Non-Financial Firms.
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(1) Sammar Abbas
Assistant professor,Institute of Business Studies, Kohat University of Science & Technology, KP, Pakistan.
(2) Zeeshan Zaib Khattak
Assistant professor,Institute of Business Studies, Kohat University of Science & Technology, KP, Pakistan.
(3) Hafeez Ullah
Assistant Professor,Institute of Business Studies, Kohat University of Science & Technology, KP, Pakistan.
Unlocking the Role of Corporate Boards in Stimulating Corporate Governance
Corporate boards have gained remarkable significance over the past few years due to the efforts of various scholars who explored the positives of corporate boards in the context of governance of companies. This paper investigates the effectiveness of corporate boards in stimulating corporate governance, generating shareholder value and examining physiognomies that affect good governance practices. The intention is to explore: how principles of corporate governance can be stimulated to be more effective and efficient; what attributes of corporate governance may influence the performance of corporate boards for satisfying the shareholder expectations. The methodology used for this paper is qualitative and employs an inductive approach along with exploratory and analytical philosophy. The findings of this paper emphasize the fair appointment process for directors and to increase the number of external directors in corporate boards; so that the significant issues of companies could be discussed properly and finalized timely.
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Corporate Boards, Corporate Governance, Effectiveness of Board of Directors
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(1) Muhammad Bilal
Assistant Professor, Department of Law, Bahauddin Zakariya University, Multan, Punjab, Pakistan.
(2) Samza Fatima
Assistant Professor, Department of Law, Bahauddin Zakariya University, Multan, Punjab, Pakistan.
(3) Aamir Abbas
Assistant Professor,Department of Law, G. C. University, Faisalabad, Punjab, Pakistan.
Relationship between Earning Multiples, Corporate Governance and Earnings Management Practices: An Empirical View with a Mediation Analysis
This paper investigated the effect of corporate governance in improving the earnings multiple and reducing the discretionary accruals. This study developed four econometrics models. Random effect model employed for examining the first three econometric models, while for the fourth econometric model study used Andrew F. Hayes mediation process. Results suggest that BOD size, BOD meetings and audit committee size has a significant positive impact on earnings multiples, while earnings multiples have a negative impact on dictionary accrual. Moreover, BOD size and audit committee size has a significant negative impact on dictionary accrual, whereas BOD meetings and employee ownership has a significant positive impact on dictionary accrual. The results further revealed the novel link that earnings multiples partially mediate the relationship between corporate governance variables and dictionary accrual. The new findings provide important insights for all the stakeholders like government, practitioners, academia, researchers, banks, Bursa Malaysia, security commission and public listed companies.
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Corporate Governance Variables, Earnings Multiples (Firm's Financial Performance), Discretionary Accruals (Earnings Management), Mediation
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(1) Syeda Faiza Urooj
Assistant Professor, Department of Commerce, Federal Urdu University of Arts Science & Technology, Islamabad, Pakistan.
(2) Muhammad Anees Khan
Assistant Professor, Department of Management Studies, Bahria University Islamabad Campus, Pakistan.
(3) Muzammal Ilyas Sindhu
Lecturer, Department of commerce, Federal Urdu University of Science and Technology, Islamabad, Pakistan
Value Boosters or Dampers? Insights Of Corporate Governance Practices From Pakistan
Rampant corporate failures have placed corporate governance in the limelight again however not all governance practices help firms in enhancing value. This empirical research examines impact of corporate governance practices on shareholders' value represented by earning per share of 243 listed firms on Pakistani Bourse. It ensued in the conclusion that overall corporate governance tends to have significant impact on earnings per share and reveals dichotomy of corporate governance practices based on direction of their association with share holders' value and terms them as value boosters and value dampers. It has also been found that pro-entrenchment practices tend to lower earnings per share in the listed firms either due to complacency or vested interests while rest of the practices help in enhancing value earned on each share thus endorsing the theoretical perspectives emanating out of agency and shareholder activism theories. This study emphasizes the significance of Board Attendance, Board Independence, Non-duality of CEOChairman Role for listed firms' value. It also shows that entrenchment acts like larger boards, directors' ownership, large block holders and disclosure of such ownership can adversely impact the firms' value and thus play a significant role in scaring away the potential investors who primarily look at earnings per share for buying of stocks of a particular company. It entails policy implications that implementation of counter-entrenchment regulations needs strengthening as the existing seem to have cosmetic effect. Identification and implementation of good governance practices can be best ensured when propagated in the perspective of value enhancement.
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Agency Theory, Corporate Governance, Earning per Share, Entrenchment, Shareholder Activism.
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(1) Abida Razzaq
Ph.D Scholar, Department of Leadership & Management Studies, National Defence University, Islamabad, Pakistan.
(2) Ghulam Shabbir Khan Niazi
Professor, Lahore Business School, University of Lahore, Islamabad Campus, Pakistan.
Relationship between Corporate Governance and Financial Performance of Manufacturing Firms through Moderating Role of ISO-14001
The objective of this research is to investigate the potential moderating role of ISO14001 in the relationship between corporate governance and firm financial performance. Corporate governance is measured using four dimensions, the variable considered in this analysis encompass board size, frequency of board meetings, gender diversity within the board, and the presence of independent non-executive directors. The assessment of financial performance involves both accounting-based and market-based metrics. The results of this study are obtained from annual company reports, and the study employs purposive sampling with a sample size of 70 manufacturing firms from the PXS 100 index. The empirical findings indicate that CG has a positive significant influence on both ROA and Tobin's Q. Additionally, ISO14001 significantly moderates the relationship between CG and FP.
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Corporate Governance, Financial Performance, Environmental Management Standards, Return on Asset, Tobin’s Q
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(1) Nosheen Rasool
Assistant Professor/ In-charge, Department of Commerce & Finance, Government College University, Lahore, Punjab, Pakistan.
(2) Zunaira Zulfiqar
Research Scholar, Department of Commerce & Finance, Government College University, Lahore, Punjab, Pakistan.