国际前沿 | Corporate Governance: An International Review2018年第1期目录摘要

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CONTENT

1.Risk governance, structures, culture, and behavior: A view from the inside

Elizabeth Sheedy, Barbara Griffin

2.The effects of politically connected outside directors on firm performance: Evidence from Korean chaebol firms

Jae Yong Shin,  Jeong‐Hoon Hyun,  Seungbin Oh,  Hongsuk Yang

3.Founder‐CEOs and corporate turnaround among declining firms

Michael A. Abebe, Chanchai Tangpong

4.Do OECD‐type governance principles have economic value for Vietnamese firms at IPO?

My Tran Ngo,  Ann Jorissen, Walter Nonneman

ABSTRACT

1

Risk governance, structures, culture, and behavior: A view from the inside

Elizabeth Sheedy, Barbara Griffin   (Macquarie University)

Abstract

Research Questions

Risk governance (emphasizing internal structures and risk culture) is a relatively new approach to the governance of financial institutions that is being widely adopted in the industry. Due to obvious assessment challenges, to date no evidence exists regarding the effectiveness of risk structures nor the status of risk culture in financial institutions. We therefore investigate the extent to which bank employees view risk structures as effective and risk culture as favorable. We also investigate how risk structures and risk culture together influence risk behavior.

Research Findings

Risk structures were typically rated as effective with the exception of  remuneration. Risk culture varied at the business unit level as well as by firm and country. Senior leaders tended to have a rosier perception of risk culture than staff generally. Favorable risk culture together with effective risk structures was associated with high levels of desirable and low levels of undesirable risk behavior.
Implications

The study provides a window into internal bank governance using a novel survey methodology. Many governance papers rely exclusively on external measures of governance; these do not guarantee effective internal risk governance.
Further managerial and supervisory attention should be paid to ensure that culture and remuneration structures support risk management in financial institutions. As risk culture varies at the local level, it should be measured and managed at the local level. Senior leaders cannot rely on their own perceptions but should rely instead on independent assessments of risk culture.

Keyword:

Corporate Governance, Split‐share Structure, Non‐tradable Shares, Stock Price Crash Risk,Principal‐Principal Agency Problems

2

The effects of politically connected outside directors on firm performance: Evidence from Korean chaebol firms

Jae Yong Shin  (Seoul National University)

 Jeong‐Hoon Hyun (NEOMA Business School, Reims, France)

 Seungbin Oh (University of Wisconsin‐Eau Claire)

 Hongsuk Yang (Seoul National University)

Abstract:

Research Questions
While most prior studies on the value of political connections focus on the political connections of controlling shareholders and top management, we examine the performance impact of appointing politically connected outside directors (PCODs) in Korean chaebol firms.
Research Findings
Using a manually collected sample of PCODs in Korean chaebol firms, we find that larger, high‐performing, less volatile firms with a larger board and higher divergence between voting rights and cash flow rights are more likely to appoint PCODs in the next year. We also report that firms with a high number of PCODs exhibit better operating performance and enjoy lower risk. On the other hand, we find evidence of weak monitoring ability by PCODs. Overall, we suggest that the number of PCODs correlates positively with firm performance, and that the value effect of PCODs increases with the importance of internal trade among group affiliates, the existence of inside directorship by controlling shareholders, and potential settlements from pending litigation. We further differentiate between PCODs and find that former government officials as PCODs drive our findings.

Implications
This study contributes to corporate governance knowledge by revealing the relationship between PCODs and firm performance via an empirical inquiry into the role of PCODs on the board. As the controlling shareholders of Korean chaebol firms obtain greater private benefits of control, and such firms may face active government involvement in curbing controlling shareholders’ rent extraction, we examine the role and effects of PCODs in these situations and find evidence of the PCOD's value‐enhancing effect. We also complement and extend prior studies by providing more direct mechanisms through which PCODs can add value above and beyond firms’ ownership structure. Additionally, we expand the concept of political connection by analyzing outside directors’ human and social capital from the resource dependence theory perspective. Our attempt complements prior research's exclusive focus on connections of large shareholders or top executives to political parties and is more comprehensive in illustrating the firm's dynamic business environment.
The results of our study are potentially useful to regulators, who will benefit from an understanding of how the presence of PCODs on boards affects firm performance. In particular, our results suggest that in countries where recent reforms aim to improve minority investor protection and market confidence, regulators should consider the composition of outside directors as well as explicit board independence. The results of our study may also be useful to investors, financial analysts, and auditors, as they highlight the importance of considering specific feat

Keyword:

Corporate Governance, Chaebol, Korea, Politically Connected Outside Directors (PCODs)

3

Founder‐CEOs and corporate turnaround among declining firms

Michael A. Abebe

(The University of Texas Rio Grande Valley)

Chanchai Tangpong

( North Dakota State University)

Abstract:

Research Questions
Despite the growing interest in leaders' role in the turnaround process, there is a paucity of research on founder‐CEOs' role in achieving successful turnaround among declining firms. In this study, using insights from the organizational identification literature, we argue that founder‐CEOs play an important role in turnaround attempts due to their strong organizational commitment and psychological attachment to the declining firm as well as the relative absence of agency problem issues common among their non‐founder counterparts.
Research Findings
Using data from a matched pair sample of 142 US firms that experienced performance decline, we found that founder‐CEO leadership significantly increases turnaround success in declining firms. We also found that, among turnaround firms, those led by founder‐CEOs tend to put more emphasis on market‐based turnaround strategies, such as new product introductions, and less emphasis on retrenchment actions, such as divestments.
Implications
Our findings contribute to corporate turnaround research by providing a more nuanced view of leaders' role in the turnaround process by specifically exploring the effect of founder CEO leadership. Furthermore, this study contributes to the turnaround literature by highlighting the strategic choices of founder‐CEO‐led firms and how these choices influence successful turnaround. Finally, by introducing organizational identification perspective, this study provides additional theoretical explanation of leadership antecedents of successful turnarounds.
The findings of this study suggest that boards of directors, shareholders, and consultants who often participate in turnaround management should carefully consider retaining founder‐CEOs and endorsing their leadership during the turnaround process. Further, the findings provide turnaround specialists and other stakeholders with further understanding of not only the importance of product market strategies in the turnaround process but also founder‐CEOs' role in fostering such strategies.

Keyword:

Corporate Governance Founder CEOs Turnaround Organizational Decline Bankruptcy

4

Do OECD‐type governance principles have economic value for Vietnamese firms at IPO?

My Tran Ngo (Can Tho University)

 Ann Jorissen (University of Antwerp)

Walter Nonneman (University of Antwerp)

Abstract:

Research Questions
Using agency and resource dependency insights this paper examines first which type of firm‐level antecedents trigger the adoption of OECD‐type governance principles by Vietnamese listed firms at IPO. Subsequently this paper investigates whether the adoption of these governance principles leads to higher firm values at IPO and whether stricter governance is related to transparency after IPO.
Research Findings
With respect to the antecedents of OECD‐type governance in Vietnam this study finds that firms with foreign shareholders and younger firms adopt these governance principles. The adoption of stricter governance principles, especially in terms of strict supervisory board independence, as well as the appointment of directors with multiple director seats are beneficial for firm value at IPO. Governance transparency after IPO is unrelated to a firm's governance characteristics but positively associated with increasing firm size.
Implications
The results show that agency insights are applicable in a context of concentrated ownership, low investor protection and weak enforcement, since stricter board independence leads to higher firm value. In addition resource dependence theory explains the choice of directors and provides evidence that boards with better network potential lead to higher firm value in this relationship‐based emerging market.
Vietnamese firms benefit from higher value at IPO when they adopt stricter internal governance mechanisms and appoint directors holding multiple board seats. However, to ensure compliance with governance and transparency principles, formal institutional changes related to stricter enforcement of the regulation are of utmost importance.

Keyword:

Corporate Governance Board of Director, Mechanisms Vietnam Board Composition, Financial Auditing Issues, External Audit

本期编审人员

资料整理 | 中国海洋大学 在读会计硕士生   汪 丽

执行编辑丨 吉林建筑大学 在读会计本科生 暴庭玮

审核编辑 | 英国纽卡斯尔大学博士研究生 Li Jing Claire

终审 | 西北师范大学 在读会计硕士生  杨   阳

主编｜北京交通大学会计系博士生  水皮（李高波）

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