scholarly journals Corporate Governance Practices In Selected Indian Financial Institutions

2012 ◽  
Vol 5 ◽  
Author(s):  
Suman Kalyan Chaudhury ◽  
Sanjay Kanti Das ◽  
Devi Prasad Mishra
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Financial Institutions ◽  
Financial Reporting ◽  
Vital Role ◽  
Key Factors ◽  
Additional Information ◽  
Governance Practices ◽  
Increasing Demand

It has been realized that Corporate Governance is vital for better management of any organization. Financial reporting and disclosure of any information are the key factors of corporate governance. Financial Institutions are no exceptions and there has been increasing demand for transparency in functioning of these Institutions in view of several scams.In this paper a modest effort is made to discuss the reporting pattern of India’s twelve financial institutions namely SBI, IDBI, SIDBI, IFCI, NABARD, PNB, UBI, BOB, BOI, KMB, NHB and HDFC. Top Six commercial banks namely (SBI, BOB, PNB, KMB UBI & BOI), six developments banks viz. SIDBI, IFCI, HFDC, IDBI, NHB, and NABARD  are selected under study .The rationale for selection of these institutes is that being incorporated organizations, they should have same Corporate Governance standards. In view of transparency in functioning, the role of different Committees has a vital role to play. Six parameters have been chosen for comparison of various corporate governance practices in all these twelve financial institutions namely, Company’s philosophy on Corporate Governance, Formation of Board of Directors, Composition of Board of Directors, Particulars of Director’s, Organizational Committees, and Additional Information supplied in CG report or in the Annual report. 

Do corporate governance practices restrain earnings management in banking industry? Lessons from India

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Deepa Mangala ◽  
Neha Singla ◽  
Neha Singla
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Board Of Directors ◽  
Audit Committee ◽  
Least Square ◽  
Loan Loss ◽  
Content Type ◽  
Governance Practices ◽  
Indian Banks

Purpose This study aims to investigate the role of corporate governance practices in restraining earnings management in Indian commercial banks. Design/methodology/approach Estimation of earnings management is based on discretionary loan loss provision and discretionary realised security gains and losses using Beatty et al. (2002) model. The effect of corporate governance on earnings management is examined by performing two-way least square dummy variable regression. Data for a period of five years (2016–2020) is collected from the Centre for Monitoring Indian Economy ProwessIQ database, Reserve Bank of India website, annual report of banks, National Stock Exchange and bank’s website. Findings Regression results exhibit that number of board committees, size and independence of audit committee and joint audit are significantly effective in curbing earnings management. Other board-related variables (size, independence, meetings and diligence) and audit committee variables (meetings and diligence) are not effective in restraining earnings management in Indian banks. Practical implications The findings may prove to be helpful to regulators, board of directors and investors. It shows the weak area of corporate governance in India that is lack of autonomy to independent directors, which needs regulators attention and it also suggests that the number of independent auditors should be adequate for audit purposes. The board of directors must ensure the formulation of an adequate number of committees, which perform their own super specialised functions. This study brings an alarm to investors not to rely on reported earnings alone as they may be manipulated. Originality/value This paper substantiates the scant literature on the role of corporate governance practices in restraining earnings management in banks of emerging markets and to the best of the authors’ knowledge impact of joint audits on earnings management is previously unexplored in Indian banks, which are examined in this study.

Corporate Governance: Principles and Objectives

1998 ◽  
Vol 2 (2) ◽  
pp. 18-22
Author(s):  
N. Vittal
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Financial Institutions ◽  
Code Of Conduct ◽  
Ethical Values ◽  
Good Corporate Governance ◽  
The Board Of Directors ◽  
Fundamental Value ◽  
The Government

Corporate Governance provides the fundamental value framework for the culture of an organisation which ensures efficient functioning of enterprises on sound ethical values and principles. Corporate governance has become a necessity, especially since 1991, when India made a U-turn in its economic policy and the revised policy of the government was aimed at attracting funds from foreign financial institutions. The primary resonsibiity of good corporate governance is that of the Board of Directors. For better corporate governance the boards should perform the role of monitoring the functioning of an organisation, without at the same time reducing the effectiveness of the management by interfering with their day-to-day matters. One of the impediments in the way of good corporate governance is corruption. The three factors within any system which generate corruption are: scarcity, lack of transparency and delay. If these three problems are tackled effectively, corruption can be checked to a great extent. As far as public sector undertakings are concerned, the “Code of Conduct and Ethics” should facilitate the redesigning of the PSEs.

scholarly journals The impact of good corporate governance practices on financial reporting quality: Empirical evidence from Jordanian listed companies

2012 ◽  
Vol 9 (4) ◽  
pp. 178-186 ◽  
Author(s):  
Khaled Erieg Abu-Risheh ◽  
Mo’taz Amin Al-Sa’eed
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Financial Reporting ◽  
Stock Exchange ◽  
Reporting Quality ◽  
Audit Committees ◽  
Financial Reporting Quality ◽  
Good Corporate Governance ◽  
Governance Practices ◽  
The Relationship

The main objective of this paper is to analyze the relationship between the good corporate governance practices on the financial reporting quality of Jordanian listed companies. Specifically, we focus on the board’s independence, board’s transparency, and separate audit committee. A listing of Share -Traded Jordanian Companies was available from the Amman Stock Exchange as of 31 December 2011. A total of (167) company shares were traded as of 31 of December 2011. It was decided to distribute (160) questionnaires to the related external auditors, the expertise members of the Audit Committees, and the Jordanian regulatory bodies that oversight the corporate reporting of those companies, which include the Jordanian Securities Commission, Insurance Commission, and Central Bank of Jordan. The empirical study is realized based on a sample of the companies listed on the Amman Stock Exchange. Our research results shows that the good corporate governance practices impact the financial reporting quality, were Independence is considered one of the determinants of the success of financial reporting quality (T = 3.709, 008) and (R= 0.676), in addition to that; the independent variables are able to explain the variance in the dependent variable, a multiple regression test was carried out to test the relationship between board of directors’ transparency, board of directors’ independence, and audit committees, and financial reporting quality (FRQ), they are able to explain nearly 0.805% (R=0.805% P< 0.000) of the variance in financial reporting quality. The correlation analysis allows testing the strength of relationships between several independent variables and one dependent variable, which is the case in this study. The results of correlation analysis shows that the relationships between boards of directors’ transparency, board of directors’ independence, and separate audit committees, and the dependent variable which is financial reporting quality (FRQ), are significant.

scholarly journals Corporate governance on financial performance of insurance industry

2015 ◽  
Vol 13 (1) ◽  
pp. 1201-1209 ◽  
Author(s):  
Gardachew Worku Fekadu
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Financial Institutions ◽  
Insurance Industry ◽  
Insurance Companies ◽  
Regulatory Body ◽  
Discretionary Power ◽  
Insignificant Effect ◽  
The Impact

The role of corporate governance in financial institutions differs from that of non- financial institutions for the discretionary power of the board of directors would be limited especially in regulated financial systems where financial institutions are obliged to function through legislative and prescriptive procedures, policies, rules and regulations. This study, therefore, was aimed at examining the impact of corporate governance on the performance of closely regulated Ethiopian insurance Industry. The study employed explanatory research design with an econometric panel data of 10 Insurance companies that covers the period 2007 to 2014. Board size, board independence and board diversity have negative and insignificant effect on the performance of insurance companies while size and independence of audit committee and frequency of board meetings have positive but insignificant effect on the performance of insurance companies in Ethiopia. Thus it could be concluded that all corporate governance mechanisms have insignificant effect on the performance of insurance companies measured by return on asset. This vividly affirms that the role of board of directors in closely regulated financial sector is dismal and insignificant for they have limited discretionary power to exercise as board of directors. Thus it would be recommendable if the regulatory body could relax its prescriptive and stringent policies and devolve its power to board of directors without endangering the viability of insurance companies.

scholarly journals Corporate Governance and Board of Directors Responsibility in Appointing Senior Managers: A Case in Saudi Arabia

2017 ◽  
Vol 13 (1) ◽  
pp. 183
Author(s):  
Ayman Mohamed Zerban ◽  
Abdullah Mohammed Abdullateef Madani
Keyword(s):  
Corporate Governance ◽  
Saudi Arabia ◽  
Board Of Directors ◽  
Financial Institutions ◽  
Financial Reporting ◽  
Financial Institution ◽  
Business Community ◽  
Senior Managers ◽  
Financial Reporting Standards ◽  
Good Reputation

Corporate governance is a cornerstone in improving efficiency and creating confidence to attract investors. After collapses of giant companies, worldwide business community are trying to infuse a culture of honesty and integrity in business. Commitment of board of directors and willing of top management and employees to strength corporate governance is essential. Failure to compliance with corporate governance rules will increase operational risk and hence impacting interests of stakeholders.Saudi Arabian Monetary Agency (SAMA) which is the central bank in the Kingdom of Saudi Arabia with Capital Market Authority (CMA) are thriving continuously to strength corporate governance rules for banks and financial institutions. One of the circulars for banks and financial institutions is the requirements for appointments of senior positions in financial organizations with the objective of appointing persons who possess integrity, honesty, and good reputation. Companies should obtain written non-objection form for the appointment of senior managers and it is the responsibility of board of directors to ensure compliance with this regulation. In addition, SAMA issued several guidelines for anti-money laundering, rules for countering fraud and a code of professional ethics of staff. Recently, banks are required to form compliance unit to make sure banks prepare their financials according to International Financial Reporting Standards (IFRS).The aim of this paper is to highlight a case of corporate governance and board responsibilities in one of the financial institutions in Saudi Arabia. The case will be presented to show the mechanism followed by the financial institution and whether it is complied with rules in appointing senior managers and if not what corrective actions are done in order to strength corporate governance principles.

scholarly journals Corporate governance practices and the role of the board of directors: Evidence from UAE conventional and Islamic banks

2013 ◽  
Vol 10 (2) ◽  
pp. 207-213 ◽  
Author(s):  
Hussein A. Hassan Al-Tamimi ◽  
Husni A. Charif
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
United Arab Emirates ◽  
Islamic Banks ◽  
Significant Difference ◽  
Governance Practices ◽  
The Board Of Directors ◽  
And Performance ◽  
Conventional Banks

The purpose of this study is to examine the United Arab Emirates (UAE) national banks’ practices of corporate governance regarding the role of the board of directors in the formulation and implementation of bank policies and strategies. A questionnaire has been developed using established reliable and valid measures of certain characteristics of corporate governance with minor modifications to fit the context. The results indicate that the UAE banks’ board of directors are satisfied with the compensation system; they are aware of the importance of the relationship with the shareholders; they understand and develop a good relationship with stakeholders; the composition of the UAE banks’ board of directors is appropriate; meetings of the UAE banks’ board of directors are effective and productive; the UAE banks’ board of directors are satisfied with the chairman’s leadership skills and performance; and finally, the UAE banks’ board of directors are aware of the requirements of corporate governance practices. Furthermore, the results indicate that there is a significant positive relationship between the role of the UAE banks’ board of directors and their education background, as well as their experience, compensation and corporate governance awareness. In addition, the statistical results confirmed that there is no significant difference in the role of the board of directors between the UAE conventional banks and Islamic banks

scholarly journals COMPARATIVE ANALYSIS OF SELECTED INDIAN HOUSING FINANCE COMPANIES BASED ON CAMEL APPROACH

2017 ◽  
Vol 4 (37) ◽  
Author(s):  
A. Kavitha
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Financial Institutions ◽  
Regulatory Compliance ◽  
Housing Finance ◽  
Capital Adequacy ◽  
Governance Practices ◽  
Increasing Demand ◽  
Asset Quality ◽  
Sound Management

Good Corporate Governance is important for sound management of any organization. Non-Banking Financial Institutions like Housing Finance Companies are no exception and there has been ever-increasing demand for transparency. HFCs are facing more number of challenges in comparison with commercial banks and concentrate more on efficiency in order to survive, so there is much importance of sound management. The main aim of this research paper is to analyze the financial performance of the listed Five Housing Finance Companies (HFCs) in India, namely Can Fin Homes, DEWAN Housing finance, PNB Housing finance, LIC Housing, HDFC, by using the CAMEL model (Capital Adequacy, Asset Quality, Management Efficiency, Earning Capability and Liquidity). On the basis of corporate governance practices and disclosures in the annual report for the year 2007-2008 to 2016-2017. For this purpose, corporate governance score (CG score) is calculated for each HFCs across the different parameters as per the Companies Act. These components are used to reflect financial performance, operating soundness and regulatory compliance of financial institutions.

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