Special Issue "Corporate Governance, Accountability and Disclosure"

A special issue of Journal of Risk and Financial Management (ISSN 1911-8074). This special issue belongs to the section "Economics and Finance".

Deadline for manuscript submissions: 31 October 2021.

Special Issue Editors

Dr. Mohamed H. Elmagrhi
E-Mail Website
Guest Editor
Hawkes Centre for Empirical Finance, Department of Accounting and Finance, Swansea University, School of Management, Swansea SA1 8EN, UK
Interests: accounting (corporate governance, risk disclosure, executive pay, internal control systems, taxation, financial accounting and reporting); auditing (the internationalisation of auditing standards, the role of an internal/external auditor in enhancing corporate governance); accountability and ethics (corporate social responsibility, social and environmental accounting)
Dr. Erhan Kilinçarslan
E-Mail Website
Guest Editor
Northern Productivity Hub, Department of Accouting, Finance and Economics, Huddersfield Business School, University of Huddersfield, Huddersfield HD1 3DH, UK
Interests: corporate finance; dividend policy; capital budgeting; financial effects and management in various sectors such as tourism, banking and REITs; corporate governance; ownership structure; institutional investors and board of directors effects on financial policies; environmental, social and governance disclosures; corporate social reponsibilty; emerging markets

Special Issue Information

Dear Colleagues,

The increased competition, financing constraints, and market reforms in the public and private sectors in recent years have increased pressures on private and public sector institutions to demonstrate greater accountability, transparency, good governance, and sound financial and risk management to various groups of stakeholders (e.g., governments, tax payers, providers of finance, and the wider community) in order to maintain sustainable operations. Despite the increasing demand for greater accountability, transparency, and sound governance and risk management, and the significant changes in and reforms to private and public sectors, including changes in government policies and the funding landscape due to the COVID-19 pandemic, there has been limited research investigating issues relating to accountability, governance, risk management, and disclosure among private sector institutions in general and public sector institutions in particular.

In this Special Issue, we are interested in bringing together rigorous manuscripts that advance accountability, governance, and disclosure research. We invite manuscripts featuring original research that complements our understanding of the impact of new reforms and challenges, including introduction of New Public Management (NPM), significant cuts to public funding, and the COVID-19 pandemic on issues relating to accountability, governance, risk management, and disclosure among private and public sector institutions.

We welcome submissions that address the following research areas:

  • governance and risk management disclosure practices;
  • social and environmental accountability disclosure practices;
  • anticorruption polices and voluntary corporate social responsibility (CSR) disclosure practices;
  • CSR disclosure/performance and tax avoidance;
  • internal governance mechanisms (e.g., governing board and committees) and voluntary disclosure practices;
  • external governance mechanisms (e.g., government bodies, institutional investors, auditors, and labour unions) and voluntary disclosure practices;
  • the impact of new reforms and challenges (e.g., introduction of New Public Management (NPM), significant cuts to public funding, and the COVID-19 pandemic) on voluntary public accountability disclosure practices;
  • governing board diversity, accountability, and disclosure;
  • corporate governance structures and executive pay; and
  • corporate governance structures and financial/non-financial performance.

We are interested in conceptual, theoretical, methodological, empirical, and systematic review studies. We would like to stress that the above list is merely indicative rather than exhaustive, and, thus, we welcome submissions on other topics relating to accountability, governance, risk management, and voluntary disclosures.

Dr. Mohamed H. Elmagrhi
Dr. Erhan Kilinçarslan
Guest Editors

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All papers will be peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Journal of Risk and Financial Management is an international peer-reviewed open access monthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1200 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • accountability
  • governance
  • disclosure
  • risk management
  • tax avoidance
  • financial/non-financial performance
  • corporate social responsibility
  • environmental, social, and governance factors

Published Papers (6 papers)

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Research

Article
The Old Boys Club in New Zealand Listed Companies
J. Risk Financial Manag. 2021, 14(8), 342; https://doi.org/10.3390/jrfm14080342 - 22 Jul 2021
Viewed by 362
Abstract
The board of directors plays an important role in implementing corporate governance in the firm, as directors have a fiduciary duty to the firm’s shareholders. The effectiveness of directors is a key determinant of corporate value and they need to bring a range [...] Read more.
The board of directors plays an important role in implementing corporate governance in the firm, as directors have a fiduciary duty to the firm’s shareholders. The effectiveness of directors is a key determinant of corporate value and they need to bring a range of skills and experience to the boardroom. This skill and experience cannot be developed solely within the firm, and most boards incorporate non-executive directors who are or have been directors of other firms. Current research on the benefits of interlocking directorships is mixed between the claim that they bring outside feedback to the table and open decision makers’ minds, and those who think outside directors are a waste of money and can reduce company performance. This paper investigates the extent of interlocking directorship in New Zealand and how it affects corporate performance. Our findings of largely no significant impact on firm performance are consistent with the management control theory of director interlocks; the exceptions support the class hegemony theory that links interlocking directorship with a negative firm performance. Full article
(This article belongs to the Special Issue Corporate Governance, Accountability and Disclosure)
Article
Risk Disclosure and Corporate Cash Holdings
J. Risk Financial Manag. 2021, 14(7), 328; https://doi.org/10.3390/jrfm14070328 - 15 Jul 2021
Viewed by 1279
Abstract
In this paper, we extend corporate disclosure and corporate cash holdings literature by testing whether corporate voluntary risk disclosure affects corporate cash holdings for a sample of Tunisian non-financial listed companies. As a measure of risk disclosure, we use manual content analysis to [...] Read more.
In this paper, we extend corporate disclosure and corporate cash holdings literature by testing whether corporate voluntary risk disclosure affects corporate cash holdings for a sample of Tunisian non-financial listed companies. As a measure of risk disclosure, we use manual content analysis to count the number of risk-related sentences in the narrative sections of corporate annual reports. As a measure of corporate cash holdings, we use the ratio of cash and cash equivalent over the total assets. Using a sample of 140 firm-year observations for the period of 2008–2013, we find that corporate risk disclosure has a negative impact on corporate cash holdings. Our results are consistent with agency, legitimacy and impression management theories. Our paper adds to the existing literature by being the first empirical evidence for the impact of risk disclosure on cash holdings. Our findings offer policy implications relevant for the current debate on the reliability of narrative risk disclosure and whether managers inform or obfuscate stakeholders by disclosing more risk-related information in their annual report narratives. Full article
(This article belongs to the Special Issue Corporate Governance, Accountability and Disclosure)
Article
Impact of Efficiency on Voluntary Disclosure of Non-Banking Financial Company—Microfinance Institutions in India
J. Risk Financial Manag. 2021, 14(7), 289; https://doi.org/10.3390/jrfm14070289 - 24 Jun 2021
Viewed by 436
Abstract
This paper investigates how the financial and social efficiency of firms influence the extent of the voluntary disclosure of Non-Banking Financial Companies–Micro Financial Institutions (NBFC-MFI). The study constructed an unweighted index of voluntary disclosure to estimate the level of voluntary disclosure of all [...] Read more.
This paper investigates how the financial and social efficiency of firms influence the extent of the voluntary disclosure of Non-Banking Financial Companies–Micro Financial Institutions (NBFC-MFI). The study constructed an unweighted index of voluntary disclosure to estimate the level of voluntary disclosure of all of the included firms from the years 2015–2019. The financial and social efficiency, which is analogous to the technical efficiency of production theory and analyses both sustainability and outreach, respectively, was estimated using data envelopment analysis (DEA). The panel data analysis was completed, and a positive association of financial efficiency was estimated. The social efficiency was found to have no relationship to the voluntary disclosure level. This paper contributed to the literature by providing new determinants of voluntary disclosure. The study examines the econometric model and suggests that financially sustainable firms that utilize these resources well are more open to outsiders, while socially efficient firms are reluctant to voluntary disclosure, which also includes social activities, and consider this as a wasteful activity. The findings of this study are relevant to industry practitioners and regulators, who need to think upon the sustainability of this crucial sector by meeting the dual objectives of financial and social performance. This study is helpful to all stakeholders as well as for the government, who can use the results to design additional rules for the NBFC–MFI. This study will also help firms to design disclosure strategies to ascertain goodwill and less cost of capital, with easy access to funds. Full article
(This article belongs to the Special Issue Corporate Governance, Accountability and Disclosure)
Article
CEO–Employee Pay Gap, Productivity and Value Creation
J. Risk Financial Manag. 2021, 14(5), 196; https://doi.org/10.3390/jrfm14050196 - 29 Apr 2021
Viewed by 606
Abstract
This study examines the effect of the CEO–employee pay gap on productivity and performance. Using extensive data of 751 constituents of the Standard and Poor’s (S&P) 1500 index between the years 1992–2016, we found a cubic relationship between salary differential and corporate productivity, [...] Read more.
This study examines the effect of the CEO–employee pay gap on productivity and performance. Using extensive data of 751 constituents of the Standard and Poor’s (S&P) 1500 index between the years 1992–2016, we found a cubic relationship between salary differential and corporate productivity, with a rising gap adversely affecting productivity principally when it is both too low, as well as too high; intermediate pay inequality levels are less influential. A contrast in the productivity effects of the CEO–worker pay gap for firms with high average salaries and more employees was noticeable, whereas positive productivity gains were present even with a high salary gap. Thus, big companies with a highly skilled workforce are able to achieve tangible benefits through higher salary differentiation. On the other hand, companies with lower average salaries and lower capital intensity were characterized by the negative effects of wage dispersion on productivity. As a result, increasing inequality aversion is an important issue affecting performance among smaller, lower skilled labor dependent firms. Additionally, female CEOs had a significant and positive lagged effect on productivity. Finally, firm market valuation was positively stimulated by the increasing pay gap. Full article
(This article belongs to the Special Issue Corporate Governance, Accountability and Disclosure)
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Article
The Relationship between Governance Quality and the Cost of Equity Capital in Italian Listed Firms: An Update
J. Risk Financial Manag. 2021, 14(3), 131; https://doi.org/10.3390/jrfm14030131 - 20 Mar 2021
Viewed by 533
Abstract
This paper investigates the relationship between corporate governance quality and the cost of equity capital, intended as the discount rate the market applies to a firm’s expected future cash flows to evaluate the current share price. Using data from the Italian listed corporations [...] Read more.
This paper investigates the relationship between corporate governance quality and the cost of equity capital, intended as the discount rate the market applies to a firm’s expected future cash flows to evaluate the current share price. Using data from the Italian listed corporations in 2018, this paper combines several attributes like board independence, board size, the existence of the internal audit, and CEO duality incorporated in a corporate governance quality index. Our results do not provide evidence of a statistically significant relationship between the corporate governance score and the firm’s equity capital cost. A possible explanation is that in recent years a greater homogeneity, and a generalized increase in corporate governance quality standards, has been observed in the Italian framework with worse companies that closed the gap with those with higher performances. Hence, lower variability in the corporate governance index results in a not significant effect of a composite index on reducing the cost of equity capital. Full article
(This article belongs to the Special Issue Corporate Governance, Accountability and Disclosure)
Article
Factors Influencing the Extent of the Ethical Codes: Evidence from Slovakia
J. Risk Financial Manag. 2021, 14(1), 40; https://doi.org/10.3390/jrfm14010040 - 17 Jan 2021
Cited by 2 | Viewed by 865
Abstract
Even though formalization of ethical principles is a must in today’s business, research and evidence in the Slovak conditions remain scarce. Yet, creating an ethical business climate and especially the formalization of ethics through codes of ethics incorporated in corporate standards is a [...] Read more.
Even though formalization of ethical principles is a must in today’s business, research and evidence in the Slovak conditions remain scarce. Yet, creating an ethical business climate and especially the formalization of ethics through codes of ethics incorporated in corporate standards is a particularly interesting phenomenon in the conditions of transit economies due to the significant role of multinationals in this process. Therefore, the purpose of this study was to examine main factors influencing the extent of ethical codes in 225 subsidiaries of multinational companies operating in Slovakia. The conducted questionnaire study containing items focused on area and extent of ethical code, number of employees, economic performance, regional and industrial scope, ownership structure, and nationality of executive director was used as a tool for data collection. Factor analysis was processed to identify the interdependencies between observed variables and to find the latent variables. Further, the Kruskal–Wallis test was applied to identify the differences among the variables along with the Bonferroni correction test, which specified the items between which the significant difference occurred. The following findings emerged. First, companies with lower extent of ethical code use general phrases. When they want to specialize on any ethics problems, extent must be wider. Second, companies with a lower number of employees do not need extensive ethical code due to clear rules with which they are familiar in a direct way by owners. In multinational companies, the communication of ethical rules is realized via ethical codes with specific purposes because the direct way is impossible. Third, companies with foreign ownership used different managerial approaches, and therefore ethical codes differ in extent and content. Full article
(This article belongs to the Special Issue Corporate Governance, Accountability and Disclosure)
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