Corporate Governance and Performance in the Largest European Listed Banks During the Financial Crisis
This research focuses on the relationship between corporate governance and performance in the largest European listed banks, which have been studied to a lesser extent within this field. The study is based on agency theory and we use a sample of 404 observations referring to 97 banks selected from the annual ranking of the 2,000 biggest companies in the world prepared by Forbes. The paper covers the period from 2006 to 2010, thus, examining the changes in the performance drivers in the recent financial crisis. On the basis of the panel data analysis, we confirm that the variety of governance factors including board size, insider appointed, directors’ age, board meetings and affiliated committees influence the performance of the banks. This paper contributes to a better understanding of the effect of corporate governance on the financial performance of the financial companies in times of high capital market volatility.
This article discusses the objectives and challenges for corporate governance of SOEs in Russia, and provides an international perspective of the performance of SOEs as compared to privately owned companies. Recent trends in the policy and management of state property are described. The problems of corporate governance in Russia are described in an agency perspective, and survey evidence on corporate governance and transparency of Russian SOEs is provided. Particular attention is given to the legal construction of the state corporation. The final section on the performance effects of state ownership summarizes the key contributions in the international economic literature in this field.
The Working Paper examines the peculiarities of the Russian model of corporate governance and control in the banking sector. The study relies upon theoretical as well as applied research of corporate governance in Russian commercial banks featuring different forms of ownership. We focus on real interests of all stakeholders, namely bank and stock market regulators, bank owners, investors, top managers and other insiders. The Anglo-American concept of corporate governance, based on agency theory and implying outside investors’ control over banks through stock market, is found to bear limited relevance. We suggest some ways of overcoming the gap between formal institutions of governance and the real life.
The chapter describes the current state of corporate governance in Russia and the dynamics of recent years. Important features of the environment that affect corporate governance include weak legal institutions that lead to high private benefits to control, underdeveloped capital markets, high levels of ownership concentration and significant state involvement in business. In this situation, the main conflict of interest is not between a manager and a large number of dispersed shareholders, but between large and small shareholders, between different large shareholders, and between minority shareholders and managers/board members in state-owned companies. Many of these features are very similar to other emerging markets, but substantially different from conditions faced by firms in developed countries. Despite substantial improvement during the 2000s, the quality of corporate governance in Russia is still much lower than in developed countries, primarily because of the low quality of Russian institutions.
The main purpose of this monograph is to identify the key factors of risk man- agement efficiency of firm, whose management is able to increase the investment attractiveness of the business in general, as well as the formation of an effective or- ganizational risk management model that allows, on the one hand - to provide reliable protection for companies against unexpected losses, on the other hand - to make a risk management tool for the creation of corporate value. This monograph presents the organization of risk management in accordance with the latest regulatory require- ments. In the monograph authors provide a developed methods for evaluating the effectiveness of existing mechanisms of risk management, based on a representative theoretical review of the scientific literature of leading researchers in the field of risk management and internal control. In addition, an algorithm for evaluating the econom- ic and investment efficiency of the risk management is given, that takes into account the existing methods of performance evaluation, as well as recommendations on the organization of internal compliance as a tool ensuring the consistency of individual and corporate interests of the company. Most of the conclusions and positions pre- sented in the book, confirmed by empirical calculations on the example of Russian and international companies.
The article familiarizes the reader with key ratings of corporate governance. It is concerned with the goals, specific features and methodology of such ratings as well as the availability of such ratings for Russian companies. The paper gives consideration to both commercial and research ratings. On basis of the analysis of existing ratings and research papers it is concluded that a scientifically substantiated algorithm for a corporate governance rating has not yet been created.
This paper aims at explaining the differences in valuation of banking firms in Russia through the impact of selected elements of corporate governance. We rely upon value-based management theory to test the hypothesis that expenses on corporate governance system create shareholder value. The price at which share stakes are acquired by strategic foreign investors is for us a criterion of market-proven value, so we use the standard valuation tool, i.e. price-to-book-value of equity (P/BV) multiple, as the dependent variable. The set of corporate governance parameters whose materiality for a would-be external investor we would like to test includes: the degree of concentration of ownership and control; maturity of corporate governing bodies; degree of Board independence; qualification of external auditors; stability of governing bodies (Management Board and Board of Directors); and availability of external credit ratings from the world’s leading rating agencies. We test our approach on a sample of acquisition deals and public offerings over the period 2004-2008 that we develop for the first time. Firstly, we find out which factors are statistically significant and relevant to a bank’s selling price. Secondly, a least squares multiple linear regression model is devised to check how each individual variable impacts the dependent variable. We discover that external investors attach value to high concentration of ownership, external credit rating coverage, stability of the Board of Directors, and involvement of well-established external auditors. Investors of a strategic nature tend to pay a higher acquisition premium. Independence of the Board of Directors might be perceived by external strategic investors as a disadvantage and might destroy shareholder value.
The present article aims to analyze the degree of diffusion of modern international business ethics practices in Russian enterprises.