The Impact Of Internal Corporate Governance Mechanism On The Performance Of Firms

The purpose of this paper is to explore effect of internal corporate governance mechanisms on company performance. Whether a good corporate governance causes higher firm performance is still a valid research question for reasons like ambiguity regarding the direction of causality. An empirical study was conducted in studying the effect of different of corporate governance internal mechanisms on corporate performance. The result of showed that internal corporate governance mechanism represented by Ownership Structure, Board of Directors, Management Remuneration, Internal Control & Audit and Transparency & Disclosure have a great effect on corporate performance. The corporate performance evaluation criteria's used in this study: Financial Viability, Corporate Growth, Effectiveness, Efficiency, and Risk Reduction are affected by Internal corporate governance mechanisms. The study reveals also that corporate governance affects highly company performance in the medium to long term runs but in the short term performance does not necessarily depend on governance.

This book begins by analysing the various corporate governance mechanisms explored in the extant literature and determining their effectiveness in enhancing the firm value using multivariate analysis. The findings are of global relevance as the corporate governance regulations of most countries focus on independent directors as the mainstay of good governance. The empirical evidence from the first objective of this study corroborates the claim that independent directors do not strengthen the firms’ governance quality. The book is one of the few works to have analysed the possible reasons behind the ineffectiveness of the independent directors. Also, in view of the famous concept of the bundle of governance mechanisms, it might be possible that the independent directors strengthen the firms’ governance quality indirectly by strengthening other governance mechanisms. This aspect too has little precedence. This study adopts a novel moderation and mediation approach to analyse the monitoring behaviour of independent directors in relation to other governance mechanisms. The work is a must read for corporate players as well as researchers and scholars studying this discipline.

This paper analyses the relationship between internal and external corporate governance mechanisms and the performance of UK companies within the context of the Cadbury Committee's Code of Best Practice. The results show, first, that the market for corporate control is an effective governance mechanism that may be regarded as a substitute for the other mechanisms. Second, there is a weak relationship between the internal governance mechanisms and performance. Third, there is also little evidence that with firms in the top and bottom performance deciles have different internal governance characteristics. The results therefore raise questions about the efficacy of imposing prescriptive internal governance mechanisms on companies, particularly given that the market for corporate control has been shown to be an effective means of reducing agency costs.

This book examines the impact of Corporate Governance Mechanism on the performance of sample firms listed in NSE. The success or failure of firms mainly depends on the extent to which the firms are managed efficiently. The performance of firms is influenced by Corporate Governance Mechanism in India. The study of governance mechanism would be helpful for the shareholders to take better investment decisions. Besides, it is also helpful to corporates to organize accounting and auditing transparently and synchronies reporting system with global standards. It is beneficial for the firms to enhance the quality of corporate strategy, financial integrity of their organisations to protect the interests of all the stakeholders including creditors, investors, policy makers, apex regulating bodies and the economy as a whole. Besides, it increases the responsiveness of the firm to the needs of the society.

Internal Corporate governance refers to the controlling mechanism of various internal actors of a firm. The aim of the study is to explore the impact of internal corporate governance (CG) mechanism on firm performance in three Asian countries namely Bangladesh, Malaysia, and Singapore. Results show that Board Size, Board Independence and CEO Duality have impact on firm performance. Though the impact of CG on firm performance is significant in Singapore, the impact is not significant in Bangladesh and Malaysia. These findings of the study have significant implications to public policy makers and corporate managers to understand the evolution and effectiveness of internal CG practices in different Asian countries.

Corporate CEOs are headline news. Stock prices rise and fall at word of their hiring and firing. Business media debate their merits and defects as if individual leaders determined the health of the economy. Yet we know surprisingly little about how CEOs are selected and dismissed or about their true power. This is the first book to take us into the often secretive world of the CEO selection process. Rakesh Khurana's findings are surprising and disturbing. In recent years, he shows, corporations have increasingly sought CEOs who are above all else charismatic, whose fame and force of personality impress analysts and the business media, but whose experience and abilities are not necessarily right for companies' specific needs. The labor market for CEOs, Khurana concludes, is far less rational than we might think. Khurana's findings are based on a study of the hiring and firing of CEOs at over 850 of America's largest companies and on extensive interviews with CEOs, corporate board members, and consultants at executive search firms. Written with exceptional clarity and verve, the book explains the basic mechanics of the selection process and how hiring priorities have changed with the rise of shareholder activism. Khurana argues that the market for CEOs, which we often assume runs on cool calculation and the impersonal forces of supply and demand, is culturally determined and too frequently inefficient. Its emphasis on charisma artificially limits the number of candidates considered, giving them extraordinary leverage to demand high salaries and power. It also raises expectations and increases the chance that a CEO will be fired for failing to meet shareholders' hopes. The result is corporate instability and too little attention to long-term strategy. The book is a major contribution to our understanding of corporate culture and the nature of markets and leadership in general.