Browsing: corporate governance
Corporate Covernance As A Tool For Curbing Bank Distress In Nigeria Deposit Money Bank: Empirical Evidence
Introduction. The Organization of Economic Corporation and development (OECD) paper defines corporate governance as involving “a set of relationships between a company’s management, its board, its shareholders, and other stakeholders. Corporate governance also provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined. Good corporate governance should provide proper incentives for the board and management to pursue objectives that are in the interests of the company and shareholders and should facilitate effective monitoring, thereby encouraging firms to use resources more efficiently”.
Aim of the study. The study objective is aimed at finding the relationship between corporate governance bank distress in deposit money banks. The research design adopted in this paper is the case study method, in other to have an intensive insight of the subject matter. Primary data was used specifically the survey technique. The method that was used in the presentation of data in this study is the Statistical Package for Social Sciences (SPSS) which contains all the necessary and important statistical technique for data analysis. For testing the hypothesis, correlation analysis which measures the degree of relationship between variables was used to analyze the result generated from the questionnaire. The evidence shows that corporate governance has no significant improvement on the prevention of bank distress but has significantly improved the performance of the Nigerian banking sector. We therefore recommend that banks should demonstrate strong internal policies to identify and manage conflict of interest and zero tolerance posture against cases of unsound corporate governance practices.
Keywords: Corporate Governance, Bank Distress, Code of Conduct, Pearson Correlation
The Agency Problem in the Romanian State Owned Enterprise: The “Contractual Paradox”
Introduction.The first is informal and the latter is formal. Both contracts are concluded between the same actors. The first transaction sets the rent extraction from the firm, while the second contract establishes the decision-making mechanism for the allocation of the firm’s resources. The “rent” is not treated in this study as a surplus, as in Ricardo-Marshall model, but as a profit.
Aim of the study. This article is an analysis of a “contractual paradox” which exists in the relation between an agent and a principal, in the presence of rent extraction. This case focuses exclusively on the State Owned Enterprise – SOE in Romania. If the model built by MC Jensen and WH Meckling examines the agency costs occurring in the presence of an information asymmetry and conflicts of interest between the agent and the principal, “the contractual paradox” that I consider in this article assumes that the “agent” and the “principal” cooperate to extract a rent/profit detrimental to a State Owned Enterprise and, in this case, the conflict of interest between the two disappears or subsists only as regards rent extraction and risks sharing. The “contractual paradox” refers to the coexistence of two agency contracts in the same State Owned Enterprise.
Keywords: corporate governance, agent – principal, agency costs, rent seeking, rent extraction
Introduction. The place and role of SOEs in a national economy was debated many years ago from the collapse of socialist economies when it came to the former communist countries to make a transition from the planned economy to an economy of free market, and even back in time to the early 80s, an example being the Teacher government in the UK. The subject remains as important nowadays for Romania, given that there are still many problems in connection with the responsibility of the state towards various fields of economic activity, the leadership and the involvement of public authorities and, not least, the economic performances brought by this type of enterprise.
Aim of the study. This paper try to make a review of the scientific literature in order to reveal significant researches in the domain, a short presentation of Romanians SOEs and their economic environment in 2014 and an analysis of the economic efficiency of public enterprises in Romania that focuses on the evolution of the 2012-2014 period of the number of public companies, of the major financial indicators, of the number of insolvencies, of the outstanding payments and of the state subsidies, as well as correlation between these results and the type of management and leadership applied in public enterprises, and that reflects the importance of this study for actual research in Romania.
Keywords: state owned enterprises, corporate governance, leadership, economic efficiency, financial indicators
JEL Classification: H54, H83, I32, I33
Introduction. The analysis of corporate governance within institutions is a top subject right now. This concept currently de-fines a central and dynamic aspect in terms of economic reality, being increasingly present in many countries of the world. In the context of a modern economy, where all companies are facing changes due to the famous effects of the fourth industrial revolution and the crises caused by the Covid 19 pandemic, those who need to survive must be able to adapt immediately and operate at the highest level of efficiency. The ability to adapt to these challenges of the national and international markets depends on both managerial and leadership capabilities, as well as the general structure and characteristics. Achieving maximum overall performance of companies is the microeconomic goal of the “new economy”. The entire activity of financial institutions is built around the correct assessment and management of risk. Thus, risk management, ownership structure, motivation and remu-neration of the general manager were the central elements found in research papers on “corporate governance of banks”. The results of the literature study on risk management suggest a continuous increase in the relevance of this topic.
Aim of the study. The aim of the paper is to present the topic of corporate governance within the banking institutions. One of the limitations of this study is the lack of analysis in the current context triggered by the COVID-19 pan-demic. This pandemic is already having effects in terms of corporate governance, but also risk management as a whole. From the way banks approach and reanalyze customer relations, we see that the effects of the pandemic are already here.
Keywords: corporate governance, banking, leadership, economic efficiency
JEL Classification: G20, G30, G32, G34