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Faculty of Business - Papers (Archive)

Governance

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Does Corporate Governance Quality Affect Default Risk? The Role Of Growth Opportunities And Stock Liquidity, Searat Ali, Benjamin Liu, Jen Je Su Jan 2018

Does Corporate Governance Quality Affect Default Risk? The Role Of Growth Opportunities And Stock Liquidity, Searat Ali, Benjamin Liu, Jen Je Su

Faculty of Business - Papers (Archive)

A series of defaults, a distinctive corporate environment and inconclusive findings in literature make Australia an interesting case in which to investigate the association between corporate governance and default risk. Using a large panel of 1086 non-financial firms from 2001 to 2013, we find that better governed firms are strongly associated with a lower level of default risk, and that the association is stronger among firms with more growth opportunities. Moreover, empirical evidence supports the role of stock liquidity as a channel of the relationship. Overall these findings have practical implications for the stakeholders in Australia.


Stock Liquidity, Corporate Governance And Leverage: New Panel Evidence, Sivathaasan Nadarajah, Searat Ali, Benjamin Liu, Allen Huang Jan 2018

Stock Liquidity, Corporate Governance And Leverage: New Panel Evidence, Sivathaasan Nadarajah, Searat Ali, Benjamin Liu, Allen Huang

Faculty of Business - Papers (Archive)

We examine the effect of stock liquidity and corporate governance on the firm's leverage decision in the order-driven stock trading system and less stringent governance environment of Australia. Using a sample of 1207 non-financial firms from 2001 to 2013, resulting in 9855 firm-year observations, we find the posited negative stock liquidity-leverage relation, confirming prior research observations that firms with more liquid stocks are significantly less leveraged. We also find a significant and negative relation between corporate governance quality (CGQ) and leverage, indicating that firms with high CGQ significantly reduce leverage. In a closer analysis, we find that the significantly negative …


Corporate Governance And Stock Liquidity Dimensions: Panel Evidence From Pure Order-Driven Australian Market, Searat Ali, Benjamin Liu, Jen Je Su Jan 2017

Corporate Governance And Stock Liquidity Dimensions: Panel Evidence From Pure Order-Driven Australian Market, Searat Ali, Benjamin Liu, Jen Je Su

Faculty of Business - Papers (Archive)

Our newly constructed index of corporate governance quality (CGQ) provides comprehensive and robust evidence for the association between CGQ and stock liquidity in the pure order-driven Australia market. By using a large sample of 1207 firms from 2001 to 2013, we find a significant positive relationship between CGQ and stock liquidity, suggesting that better governed firms have greatly improved stock liquidity. Specifically, we find that better governed firms have a lower trading cost, smaller price impacts of trade, and higher trading speed. Moreover, the empirical results reveal that CGQ improves stock liquidity because it is associated with higher information disclosure.


Corporate Governance And Stock Liquidity In Australia: A Pitch, Searat Ali Jan 2016

Corporate Governance And Stock Liquidity In Australia: A Pitch, Searat Ali

Faculty of Business - Papers (Archive)

This pitch research letter (PRL) applies the pitch template developed by Faff to an academic project in corporate finance; that is, corporate governance and market microstructure, namely, stock liquidity for Australian firms. The pitch template is useful in identifying the core elements that form the framework of research project. This PRL encloses a brief background about the pitcher and pitch, followed by a brief commentary on the pitch and personal reflections of the pitcher on the pitch exercise itself.


Corporate Governance And The Insolvency Risk Of Financial Institutions, Searat Ali, Jamshed Iqbal Jan 2016

Corporate Governance And The Insolvency Risk Of Financial Institutions, Searat Ali, Jamshed Iqbal

Faculty of Business - Papers (Archive)

We investigate whether corporate governance is related to insolvency risk of financial institutions. Using a large sample of U.S. financial institutions over the 2005-2010 period, we find that corporate governance is positively related with insolvency risk of financial institutions as proxied by Merton's distance to default measure and credit default swap spread. We also find that "better" corporate governance increased insolvency risk relatively more for larger financial institutions and during the period of the global financial crisis. Our findings suggest that too-big-to fail and deposit insurance policies encourage excessive risk taking by financial institutions.


Corporate Governance And Stock Liquidity: Panel Evidence From 2001 To 2013, Searat Ali, Benjamin Liu, Jen Je Su Jan 2015

Corporate Governance And Stock Liquidity: Panel Evidence From 2001 To 2013, Searat Ali, Benjamin Liu, Jen Je Su

Faculty of Business - Papers (Archive)

Constructing a new index of corporate governance quality (CGQ), we provide comprehensive and robust evidence for the association between governance quality and stock liquidity in the pure order-driven stock market of Australia. We hypothesize that governance quality affects stock liquidity because effective governance alleviates information asymmetries between insiders (e.g., managers) and outsiders (e.g., investors), as well as among outsiders by improving the financial transparency of a firm. Consistent with this theoretical argument, by using a large sample of 1,207 firms (10,179 firm-year observations) over the long period from 2001 to 2013, we find a significant positive relationship between governance quality …


Is Asio's Corporate Governance An Oxymoron?, Mark Rix Jan 2015

Is Asio's Corporate Governance An Oxymoron?, Mark Rix

Faculty of Business - Papers (Archive)

This paper investigates corporate governance in the Australian Security Intelligence Organisation (ASIO), Australia's domestic intelligence agency. The paper seeks to determine and understand the extent to which ASIO's approach to corporate governance emulates that of organisations in the wider public sector and the private sector. This examination of ASIO's corporate governance considers the organisation's purpose, functions and extraordinary powers focusing on the importance of secrecy to achieving its objectives. The paper will also assess whether it is appropriate to attempt to assess ASIO's corporate governance in the same terms, and according to like standards, as are used to evaluate governance …


Role Of Non-Executive Directors In Implementing Non-Regulatory Codes On Corporate Governance In Smes Listed In The Alternative Investment Market In The Uk: A Content Analysis, Palli Mulla K A Chandrakumara, Gunetilleke Walter Jan 2015

Role Of Non-Executive Directors In Implementing Non-Regulatory Codes On Corporate Governance In Smes Listed In The Alternative Investment Market In The Uk: A Content Analysis, Palli Mulla K A Chandrakumara, Gunetilleke Walter

Faculty of Business - Papers (Archive)

This study explores roles of NEDs of SMEs listed in the Alternative Investment Market (AIM) in the London Stock Exchange. It extends the literature on NEDs’ roles relevant to a context where the adherence to the principles of non-regularity corporate governance is not compulsory. We adopted a content analysis approach as a novel method for exploring roles of NEDs using details of 1220 NEDs recorded in 75 annual reports. It revealed that NEDs meet the expectations of several stakeholders simultaneously by playing multiple roles. A conceptual model depicting testable relationship between cognitive tasks and key roles of NEDs is also …


Effectiveness Of The Sri Lankan Corporate Governance System: A Stakeholder Perspective, Athula Manawaduge, Anura De Zoysa, Kathleen Rudkin Jan 2014

Effectiveness Of The Sri Lankan Corporate Governance System: A Stakeholder Perspective, Athula Manawaduge, Anura De Zoysa, Kathleen Rudkin

Faculty of Business - Papers (Archive)

Poor corporate governance is often viewed as one of the main factors contributing to the weak company performances and failures in emerging markets (Johnson, 2000). Most of studies which have examined various aspects of corporate governance systems in emerging markets have assessed such practices from the point of view of companies and have paid little attention to examine how such practices are viewed by various stakeholders of the companies in these markets. To fill the gap in accounting literature, this study aims to examine the perceptions of various stakeholder groups in relation to the current status, issues, strategies and practices …


Governance, Media And The Quality Of Environmental Disclosure, Juergen Seufert Jan 2013

Governance, Media And The Quality Of Environmental Disclosure, Juergen Seufert

Faculty of Business - Papers (Archive)

Article review - Governance, Media and the Quality of Environmental Disclosure K. H. Rupley, D. Brown and R. S. Marshall Journal of Accounting and Public Policy, 2012, 31 (6), pp. 610-640


A Discussion Of The Suitability Of Only One Vs More Than One Theory For Depicting Corporate Governance, Abdullah Al Mamun, Qaiser Rafique Yasser, Md. Ashikur Rahman Jan 2013

A Discussion Of The Suitability Of Only One Vs More Than One Theory For Depicting Corporate Governance, Abdullah Al Mamun, Qaiser Rafique Yasser, Md. Ashikur Rahman

Faculty of Business - Papers (Archive)

Agency theory predicts that the Chief Executive Officer (CEO) and the chairman positions should be held by different individuals in order to protect shareholder's interest. Though there are mixed evidences on CEO duality and firm performance, most research have found that there is negative relationship between CEO duality and firm performance. Although, in the last decades of the twentieth century, agency theory became the dominant force in the theoretical understanding of corporate governance, it does not however cover all aspects of corporate governance. This paper aims to explore whether it is better to combine various theories in order to describe …


Local Council Governance And Audit Committees - The Missing Link?, Greg Jones, Graham Bowrey Jan 2013

Local Council Governance And Audit Committees - The Missing Link?, Greg Jones, Graham Bowrey

Faculty of Business - Papers (Archive)

Purpose: To examine the level of compliance of NSW Local Government councils with the Internal Audit Guidelines developed and published by the NSW State Government to address the identified weaknesses in the governance structures of the councils. The specific focus in this paper is on a key component of good governance, an audit committee, and whether the NSW Local Government councils have followed the guidelines and established an audit committee. Design / methodology: This paper is based on archival research of the 2009/2010 Annual Reports and websites of NSW Local Government councils to collect data on the existence and structure …