The Role of the Digital Economy in Rebuilding and Maintaining Social Governance Mechanisms

The digital transformation has impacted society at different levels, mainly on the economic and governance levels. This paper investigates the impact of the digital economy on social governance mechanisms. Additionally, it captures the indirect effects or mediating forces such as social reforms and a sustainable digital economy. The study followed a positivism philosophy, and it is survey research influencing cross-sectional study. The unit of analysis in the current paper was employees from four different professions as economists, financial analysts, managers, and teachers. The random sampling technique was used as a sampling type, and a questionnaire was used for data collection. Structural equation modeling (SEM) was carried out as a data analysis technique. The research findings revealed that the digital economy has a favorable impact on the social governance mechanism. Likewise, the digital economy positively affects social reforms and a sustainable digital economy. Social reforms also proved to link with a sustainable digital economy positively. The output of the indirect effects and structural model confirmed that social reform played a partial mediation role between the digital economy and sustainable digital economy. Moreover, a sustainable digital economy confirmed a partial mediation between the digital economy and the social governance mechanism. Finally, analysis confirmed a serial mediation among digital economy, social reforms, sustainable digital economy, and social governance mechanism. Therefore, policymakers and government agents should improve the digital economy to have a strong social governance mechanism.

The Impact of Corporate Governance Mechanisms on the Commitment of Managers in an IPO Setting: Evidence from Korean Small and Venture Firms

Managers’ commitment and dedication crucially affect the sustainable growth of firms. When private companies first offer their shares to the public in an initial public offering (IPO), an IPO lockup is one way of revealing managers’ commitments. IPO lockups are agreements that promise not to sell the shares retained by pre-IPO shareholders for a specified period in the market after the IPO. This paper investigates the impact of corporate governance mechanisms on the length of the lockup period. The paper’s sample consists of IPO firms that have gone public in Korea’s KOSDAQ market, which is a listing venue for small and venture companies. The major findings of this paper are as follows: first, the length of the lockup period increases with the number of outside directors and, second, IPO firms with audit committees have longer lockup periods than those without them. These results indicate that managers of firms with greater board independence choose a longer lockup period when going public. This paper also finds that the lockup period is positively related to the presence of venture capitalists serving as directors of IPO firms, which suggests that venture capital directors may ensure that managers have longer lockups. Overall, these findings suggest that, when small and venture companies go public, managers may use the IPO lockup as a commitment device that complements corporate governance mechanisms in reducing investor concern about the moral hazard problem of managers.

Family social capital and governance of family businesses: The emerging market evidence

Considered as the most dominant business form in the entrepreneurial fabric in Morocco, as in the majority of countries in the world (Salhi, 2017), the family business is distinguished by a family social capital (FSC) making it competitive and perennial (Mesfar & Ben Kahla, 2018). This paper aims to analyze the influence of this capital, through its three dimensions — structural, relational, and cognitive — on the governance system of Moroccan family firms. The results of our exploratory study conducted among 30 family businesses in the form of interviews showed, on the one hand, that the existence of a strong FSC within the company makes its governance system based on informal family mechanisms. On the other hand, the weakness of the said capital has not led the companies that are the subject of our study to adopt formal corporate governance mechanisms as shared by several researchers. This is due, according to the interviewees, to socio-cultural considerations. Our results contribute to the enrichment of the literature while showing that the informality of governance mechanisms can be explained, not only by the strength of its FSC but also by such a socio-cultural context where the family model is of a communal and clan type welded by Islamic religious values of group cohesion

Effective Agile IT Governance Mechanisms in Higher Education Institutions

Higher education institutions (HEIs) rely heavily on information technology (IT) to create innovations. Therefore, IT governance (ITG) is essential for education activities, particularly during the ongoing COVID-19 pandemic. However, the traditional concept of ITG is not fully equipped to deal with the current changes occurring in the digital age. Today's ITG requires an agile approach that can respond to disruptions in the HEI environment. Consequently, universities increasingly need to adopt agile strategies to ensure superior performance. This research proposes a conceptualization comprising three agile dimensions within the ITG construct: structures, processes, and relational mechanisms. An extensive qualitative evaluation of industry uncovered 46 agile governance mechanisms. Moreover, 16 professors rated these elements to assess agile ITG in their HEIs to determine those most effective for HEIs. This led to the identification of four structure elements, seven processes, and seven relational mechanisms.

The effect of financial and non-financial performance on investors’ reactions: The role of corporate governance mechanisms as moderating

The purpose of this study is to examine the effect of financial and non-financial performance on investor reactions and the role of corporate governance mechanisms as moderating. The analysis technique used is the moderated regression analysis (MRA). The research population is manufacturing sector companies listed on the Indonesia Stock Exchange (IDX). Based on the purposive sampling method, 78 companies were selected as the samples (390 firm-year observations). The results of this study provide empirical evidence that the existence of financial and non-financial performance in a company can increase investor reactions. Institutional ownership plays a role in the relationship between financial performance and investor reactions. Meanwhile, independent commissioners, boards of directors, and audit committees have no role in the relationship between financial performance and investor reactions. And independent commissioners and institutional ownership can moderate the influence of non-financial performance on investor reactions. Meanwhile, the board of directors and audit committee cannot moderate the influence of non-financial performance on investor reactions.

Corporate Governance Regulations and Practices under COVID-19 Crisis: Time to Rethink

The COVID-19 has brought the challenge of survival for all the companies around the globe. This pandemic totally changed the procedures of managing and governing the firms with the help of regulations of the state. The said disaster has also hit the existence of the major companies in different sectors of the economy. Consequently, it has drawn the attention of all the practitioners of the Corporate Governance along with the policy makers of the economy. The focus of this article is to see the utility and practicability of different regulations and practices of the corporate governance to cope with the current emerging challenges of COVID-19 in corporate sector. Furthermore, the current study takes some valuable insights from the leading business journal articles and find the key mechanisms of the corporate governance, which help the companies to deal with the recent crisis. These mechanisms could be effective for the different business units during this dilemma of COVID-19. This review intends to change the management philosophy of the different companies. Furthermore, this study aims to provide them with the latest mechanisms of corporate governance, which are helping the companies for their successful progression of business affairs in this tough time of Corona Virus. These mechanisms include presence of risk management committee, more attention to the stakeholders, family ownership, and block holders. This paper concludes that all the above said mechanisms of corporate governance are very helpful during the crisis of COVID-19. The study highlights that this pandemic has affected the governance mechanisms of al the establishments, therefore firms should be prepared for such crisis in future by paying attention to the different corporate governance mechanisms. The study recommends that certain practices of the corporate governance are very helpful in coping the challenges posed by the pandemic of COVID-19.

The Effect of Board Characteristics on Real Activities Manipulation in Tunisian Banks

The succession of financial scandals and resounding bank failures that characterized the economic environment over the past three decades have given more weight to governance mechanisms. As such, considered to be one of the most important internal governance mechanisms, the board of directors has shown its strengths in controlling earnings manipulation, in particular those linked to real activities. The aim of this paper is to examine the effect of board characteristics on real earnings management. Using panel data econometrics, on all Tunisian commercial banks over the period 2008-2019, we show that board gender diversity has a disciplinary role in real earnings management as measured by discretionary revenue on equity securities. However, we show that board independence increases the real earnings management. As for board size, board duality, as well as the number of meetings carried out per year by the board of directors, we prove that they have no significant effect on real earnings management.