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Minggu, 01 April 2012

A summary of the findings of a survey into: “Investment beliefs relating to corporate governance and corporate responsibility”

by : Danyelle Guyatt
This summary report is based on the full report prepared for the Marathon Club, University of Bath, September 2005

This report summarises the results of a survey into ‘Investment beliefs relating to
good corporate governance and responsibility’, which was carried out amongst 180
people associated with the members of the Marathon Club.
The survey sought participants’ views about the role and responsibilities of the
institutional investment management community, as well as their views on the
promotion of good corporate governance, corporate responsibility and integration into
the investment management process.
The survey found that 83% of senior investment professionals support the promotion
of good corporate governance (CG) and corporate responsibility (CR) in investee
companies, although, as the findings showed, there is considerable potential to
improve how such a strategy could be pursued.

The key highlights of the survey included:
• Portfolio performance will improve if the investment horizon is
lengthened. Over 30% of respondents believe that the most important way to
improve corporate behaviour, performance and ultimately portfolio
performance is to lengthen the investment horizon. The next most important
factors were: better integration of extra financial information [26%], terms (or
duration?) of engagement [16%], collaboration [15%] and withstanding shortterm
market trends/cycles [12%].
• Good corporate governance and responsibility add value. There was a
strong belief that the promotion of good CG and CR is an opportunity rather
than an obligation. Over 88% [CG] and 80% [CR] of respondents agreed that
these policies would help to manage a fund’s investment risks and long-term
return prospects more effectively.
• Integrating CG and CR into the core investment process is important. The
survey revealed a strong desire to integrate CG and CR factors into buy/sell
decisions and core investment processes, with 90% support for CG and 80%
for CR. There was significantly less support amongst respondents for using a
specialist index [50%] or screening/divestment [50].
• Over-emphasis on returns relative to an index impedes CG and CR
implementation. Despite the generally strong support for CG and CR,
opinions were divided as to whether or not these factors should be integrated
into the way that fund managers are selected and reviewed, with excess returns
to an index being the preferred performance metric. Only 50% of ...... (baca_selengkapnya )

Addressing Some Inherent Challenges to Good Corporate Governance

by : N Balasubramanian 
The Indian Journal of Industrial Relations: A Review of Economic & Social Development, Shri Ram Centre for Industrial Relations and Human Resources, New Delhi. (Volume 44, No. 44, April 2009, pp.554 - 575)

Are corporations, in general, amenable to good governance? Are there inherent incompatibilities between good governance and the corporate format of organizations? How can these be addressed satisfactorily without over-regulation that might impair entrepreneurial potential? These are some of the nagging issues we seek to explore in this paper, organized as follows: Section I recapitulates the conventional principal – agent paradigm in corporations and flags some of the more important issues that militate against good governance; Section II deals with current governance frameworks and identifies some of the countervailing measures that best-practice prescriptions advocate; and Section III concludes exploring a few out-of-the-box measures that might serve as potential enablers of better governance and discusses both their justification and impact.

... (baca_selengkapnya )


by : Verica Babic

1. Introduction
Corporate governance has become a topic of a worldwide political debate. A series of events over the last two decades has placed corporate governance issues - including the power and responsibilities of boards of directors, the rules governing takeovers, the role and influence of institutional investors, and the compensation of chief executives - as a top concern for both the international business community and international financial institutions.
Research in the area of corporate governance spans multiple disciplines, including finance, strategic management, sociology and political science. The state of current knowledge is such that we need to have an interdisciplinary approach to studying the problem of corporate governance. The study of corporate governance can involve the problems of corporate decision making, strategic management, leadership, organization theory, and the sociology of elites. It can also be related to a whole range of other broader subjects, including macroeconomic policy, the level of market competition and political science. The framework of corporate governance also depends on the legal and regulatory environment. In addition, the factors of corporate responsibility and ethics are significant aspects of the problem of corporate governance. Thus one must first recognize the complexity and interdisciplinary nature of corporate governance before attempting to research its problems in a transition economy.
In developed market economies, a system of corporate governance has been . . .... (baca_selengkapnya)


Yuwa Wei 
MqJBL (2007) Vol 4

Companies are fundamental cells of modern commercial society. Although people
generally regard the rise and fall of companies as part of the natural circle of
corporate development, the collapse of large corporations and the consequentially
profound social and economic impact have caused great concern in the community,
particularly when corporate failure has resulted from mismanagement. For this
reason, issues of corporate governance have attracted enormous attention since the
Securities markets and takeover activities are important mechanisms of corporate
governance.1 The law and economics tradition recognises that the hostile takeover
performs a desirable disciplinary function by placing management under the
market's judgment.2 According to law and economics literature, the pressure of
takeovers and the advantages of being listed on a stock exchange are effective
stimuli of promoting good corporate governance. Furthermore, by having a wide
and varied scope of owners, listed companies generally tend to improve on their . . .... (baca_selengkapnya )

Corporate Governance in Africa: The Record and Policies for Good Governance

 by : Melvin D. Ayogu
Published : ECONOMIC RESEARCH PAPERS No 66, The African Development Bank, 2001

This study first delineates the conceptual and practical issues in corporate governance,
without assuming any prior understanding of corporate governance. It then surveys,
using some of the more objective international criteria, the institutional record for
quality corporate governance in Africa.
In our conclusion, we suggest that corporate governance in Africa is enriched by
expanding the framework of analysis beyond the conventional criteria developed
from the limited assumption of homo economicus. Incorporating the influence of
norms and values or moral sentiments can improve our understanding of board
room dynamics and the characteristics of the decision management and decision
control they engender in “Business Africa.”

1. Introduction
This study reviews the institutional record of “corporate governance” in Africa and offers some policy directions for improving performance. The underlying thesis is that a crisis of governance is basically a crisis of board of directors. Our approach is to first delineate the conceptual and practical issues in corporate governance, without assuming any prior understanding of corporate governance. Proceeding under this constraint forces us to be more mindful of jargons, a strategy that we hope should open the ideas to more constructive debates that are obviously required in such a timely topic. We have always believed that research in corporate governance is an agenda that can benefit from insights from other disciplines that study organizations, such as organizational psychology and sociology. For instance, the concept of “bounded rationality” taken from psychology has been used by economists to shed light on why contracts are necessarily incomplete, and, by linking that to transaction costs, to make sense of the many observed agency relationships that . . . .... (baca_selengkapnya )

Corporate Practices and National Governance Systems: What do Country Rankings Tell Us?

By : Peter Cornelius
 Paper prepared for the Third Colloquium of the European
Academy of Business in Society, Gent, September 27-28, 2004.

Nations compete for investment capital, and the assurances investors seek as they decide to provide that capital are universal. Motivated by the growing appetite for a global benchmark of corporate  behaviour, this paper examines the relationship between the measured quality of corporate governance at the firm level and national competitiveness. It begins by analyzing the perceived quality of institutions in the 23 largest capital markets. Hypothesizing that good corporate governance at the company level may compensate for perceived weaknesses in the institutional framework, the paper then focuses on the pilot governance index developed by the Financial Times and ISS and compares it with new survey evidence from the World Economic Forum’s Global Competitiveness Report. Finally, the paper discusses corporate governance in the EU accession countries and the extent to which the quality of
governance has affected the mode of entry for foreign investment.

A. Introduction
In the broadest sense, corporate governance can be defined as the stewardship
responsibility of corporate directors to provide oversight for the goals and
strategies of a company and to foster their implementation. Corporate governance
may thus be perceived as the set of interlocking rules by . . . .... (baca_selengkapnya )

Cross validating the consequences model of corporate governance underlying combination of stewardship and stakeholder theories

by : Karun Pratoom
Published : African Journal of Business Management Vol. 5(27), pp. 11178-11188, 9 November, 2011
ISSN 1993-8233 ©2011 Academic Journals

In this study, we examine the outcomes of good corporate governance underlying combination of stewardship and stakeholder theories. We develop a model that links good corporate governance, trust in top management, turnover intention, and organizational citizenship behaviors (OCBs). Good corporate governance was considered as antecedent and turnover intention and OCBs were considered as distal outcomes. Trust in top management was treated as a mediator in the model. We use a data set consisting of 303 and 156 branch managers collected in life assurance and banking business in Thailand to test the hypothesis. Results of our LISREL analyses support the proposed model. Good corporate governance was found to affect branch managers’ trust in top management, which in turn affects the turnover intention and OCBs. These findings have practical implication for the corporate management in Thai life assurance and banking business.
Key words: Good corporate governance, trust in top management, organizational citizenship behaviors,
turnover intention, multi-sample analysis.

As a result of the bankruptcies of large U.S. firm such as
Enron Corporation and WorldCom, good corporate
governance became a dominant issue in the international
business world nowadays. Generally, the main ideas of
good governance focus on the mechanisms that an
organization used in order to maximize the return to . .... (baca_selengkapnya )

Fundamental and Ethics Theories of Corporate Governance

by : Haslinda Abdullah
Published : EuroJournals Publishing, Inc. Middle Eastern Finance and Economics
ISSN: 1450-2889 Issue 4 (2009).

History has revealed that there is a never-ending evolution of theories or models of
corporate governance. One of the reasons is due to the very essence of social consciences
that is minimal and profit making took center stage. All over the world, companies are
trying to instill the sense of governance into their corporate structure. With the surge of
capitalism, corporation became stronger while governments all over the world had to
succumb to its manipulations and dominance. Hence, this article is a review of literature on
the range of theories in corporate governance. The fundamental theories in corporate
governance began with the agency theory, expanded into stewardship theory and
stakeholder theory and evolved to resource dependency theory, transaction cost theory,
political theory and ethics related theories such as business ethics theory, virtue ethics
theory, feminists ethics theory, discourse theory and postmodernism ethics theory.
However, these theories address the cause and effect of variables, such as the configuration
of board members, audit committee, independent directors and the role of top management
and their social relationships rather than its regulatory frameworks. Hence, it is suggested
that a combination of various theories is best to describe an effective and good governance
practice rather than theorizing corporate governance based on a single theory.
Keywords: Corporate governance, theory, ethics
1.0. Introduction
Corporations have become a powerful and dominant institution. They have reached to every corner of
the globe in various sizes, capabilities and influences. Their governance has influenced economies and
various aspects of social landscape. Shareholders are seen to be losing trust and market value has been
tremendously affected. Moreover with the emergence of globalization, there is greater
deterritorialization and less of governmental control, which results is ... (baca_selengkapnya )

How global is good corporate governance?

by: Stephanie Maier
Published :  Ethical Investment  Research  Service, Research briefing August 2005

High profile corporate governance
scandals and increased shareholder
activism are driving better governance
practice. As governments and
regulators respond to these challenges
with the adoption or revision of new
corporate governance codes we are
seeing an emerging consensus of
accepted best practice and this trend is
likely to continue. As codes converge
and standards improve investors are
looking beyond straightforward
compliance to seek out factors that
contribute to the creation of long term
value. However, despite this promising
trend important geographical variation
in governance practices remains and as
EIRIS’ analysis shows some companies
and countries still have a long way to
• Only 25% of US companies separate
the roles of chairman and CEO
compared with at least 50% for
companies in other developed
• Swiss boards have the highest
percentage of independent directors
(81%) – Germany, Austria and Japan
all have less than 10%
• Only 4% of companies in Japan have
audit committees comprising a
majority of independent directors
compared to over 95% in the USA,
Canada, the Netherlands,
Luxembourg, the UK and Ireland
• Only 22% of companies in Singapore
and 25% of companies in Hong Kong
have meaningful codes of ethics . . . .... (baca_selengkapnya )

Opinion of the European Economic and Social Committee on the ‘Green Paper — The EU corporate governance framework’


Published : 28.1.2012 Official Journal of the European Union C 24/91

The European Economic and Social Committee (EESC) welcomes the intent behind the European Commission's Green Paper, but strongly recommends ( 1 ) a more precise and robust definition of corporate governance.
The Green Paper asks genuinely important questions. When answering all of them, the EESC would always like to quote the ten principles of the good corporate governance, listed in 2.14 and calls the Commission to take the relevant measures to make sure that all companies comply with these principles and the relevant operationalised rules listed in 2.15.
However, given the wide diversity of national corporate governance models, as described in point 2.4, the EESC finds it particularly difficult to give a one-size-fits-all solution to them. The specific characteristics of legislation, traditions, manner of doing business and behavioural patterns of shareholders vary across Member States and make it very challenging to provide a sound legislative framework at EU level.
Although, in the EESC's opinion, most of the questions in the Green Paper have been answered by national corporate governance codes, this does not diminish the need for EU legislative intervention, with the scope set out in the Green Paper, in order to improve corporate governance in the European Union, by strengthening legislation and non-binding rules.
The EESC calls on the Commission to exercise caution, however, when deciding on regulatory initiatives. In this regard, careful impact assessment is strongly recommended before producing any legislation.
The EESC stresses that if the Commission seeks adequate answers to questions 16 to 25 it should perform and make available a detailed study on recent developments and trends in shareholders' types, structure and relative importance in terms of shares held.... (baca_selengkapnya )

Principles for Corporate Governance in Kenya and a Sample Code of Best Practice for Corporate Governance


Prepared by: Private Sector Initiative for Corporate Governance

In November 1998, a workshop on the Role of Non-Executive Directors was held at the Kenya College of Communications Technology, Mbagathi, Nairobi. Although this seminar was sponsored and supported by leading organisations with specific interest in corporate governance such as the Nairobi Stock Exchange (NSE), Capital Markets Authority (CMA), Institute of Certified Public Accountants (ICPAK) and the Kenya Chapter of the Association of Chartered Certified Accountants (ACCA), with participation drawn from many leading corporate organisations, the organisers, M/s Dominion Consultants Limited, had no idea that this effort would develop into a major initiative on corporate governance. However, it was agreed that another forum be convened early the following year to deliberate more on the many issues that were mentioned but not exhaustively discussed. By the time the second seminar was being organised in March, 1999 at the Whitesands Hotel, Mombasa, it was becoming clear that the seminar would have to discuss major topics and principles of good corporate
The reasons for this development included, but were not limited to:
(1) The quality of governance at all levels was increasingly being seen as the most important factor for the success of both the politico-economy and its institutions.
(2) Corporate governance was increasingly taking centre stage, with the privatisation and corporatization of the economies globally.
(3) There was greater expectation from society that corporate organisations, especially private ones, should take a more leading role in the debate and implementation of economic revival strategies.
(4) In the face of major scandals leading to the collapse of big corporations, especially state owned ones, with disastrous social and economic consequences, it was inevitable that the wider society, led by the mass media, would start questioning how these organisations were run.
(5) Shareholders, especially in publicly listed companies were becoming increasingly vocal demanding better transparency and disclosure of information from their directors.
(6) Regulatory bodies, notably the CMA and the NSE, were already hinting that they would require good corporate governance practices amongst the publicly listed companies.
The Mombasa seminar made important decisions one of which was to create an interim committee with the mandate of doing all that was necessary to formulate a Code of Best Practice for Corporate Governance in Kenya and to co-ordinate, where applicable, with other efforts in the region and beyond for the purpose of improving Corporate Governance. The committee was also mandated to seek the establishment of a permanent organ to oversee the implementation of the Code if the effort was to be sustained. The Interim Committee set to work immediately and co-opted additional members from all organisations that were considered to have an interest in corporate governance. The committee also produced a first draft code of best practice and distributed it to over four hundred corporate organisations, development agencies, embassies and government departments with a request to send in comments about the draft and the way forward. The response was very encouraging and in the following weeks the committee was bold enough to register a Trust, and to commence the organisation of a workshop and seminar to further discuss and arrive at a wider consensus on the way forward. With the support of three development agencies, namely the Ford Foundation, the British Department for International Development and the Friedrich Ebert Foundation, a two-day workshop of experts was held at the Safari Park Hotel on the 6th and 7th October 1999. This was followed by a Seminar attended by representatives from over seventy corporate and other organisations on the 8th October 1999. 

Participants at the two functions resolved, among other things:
(1) That the Code of Best Practice for Corporate Governance, as previously circulated and subsequently refined through expert input and comments from corporate respondents, be adopted, printed and circulated as a guide for Corporate Governance in Kenya.
(2) That there was an urgent need to establish a “Corporate Sector Foundation” to promote, co-ordinate and guide corporate governance in Kenya and
(3) That the steering committee be mandated to proceed to work on the implementation of this resolution.

After the Seminar in October, the Committee continued working and it is most gratifying that we can forward this document to a much wider group of corporate and other organisations. It is our hope that this document will be discussed and analysed by corporate directors and managers wishing to commence or enhance better corporate governance practices in their own organisations.
The Private Sector Initiative for Corporate Governance, and hopefully, at a later stage, the Corporate Sector Foundation, will be more than willing to assist such organisations to implement corporate governance programmes. The Initiative has already affiliated or is in communication with all major corporate governance organisations across the globe and is building a library of knowledge and ideas that should be amply sufficient for the needs of our corporate organisations. The Initiative will further conduct studies and undertake research in all the main areas that could be of interest in the improvement of corporate governance for better national economic performance.... (baca_selengkapnya )

Strategic Corporate Social Responsibility Management for Competitive Advantage

by : José Milton de Sousa Filho
Published : Brazilian Administration Review, Curitiba, v. 7, n. 3, art. 5, pp. 294-309, July/Sept. 2010

Corporate social responsibility strategy and competitive advantage are important issues for the contemporary discussion on corporations in society when taking into account social and environmental impacts. Empirically, we can see that social responsibility strategies are associated with competitive advantages, such as attracting valuable employees as well as enhancing the company image and reputation. This paper presents a theoretical review that demonstrates the association between social strategy and competitive advantage through the formulation of social strategies that influence and are influenced by opportunities, resources, skills, corporation merits, industry structure and stakeholders. Based on the literature and a case study of Carrefour, a model is proposed for competitive advantages stemming from the formulation of social strategies, which are explained based on their elements and adaptation to societal expectations. This article seeks to enrich the discussion on the strategic management of social responsibility and contribute to the literature on Corporate Social Responsibility as well as Strategy and Competitive Advantage.
Key words: corporate social strategy; strategic management; competitive advantage; corporate social responsibility.

... (baca_selengkapnya )

The Nomination and Motivations of Irish Non- Executive Directors of Listed Companies

by : Anna Egan, Rebecca Maughan & Joseph Coughlan

Published : Conference papers School of Accounting and Finance, 2009-05-01

This paper reports the preliminary findings of an empirical investigation into the process
of appointing non-executive directors and their motivations behind the adoption of the
position. While research into the board of directors has been extensive, little deliberation
has been given to the motives of non-executives who choose to sit on boards (Roberts,
2002). Given that the board of directors has been charged with much more responsibility
in recent years and is being held to a higher level of accountability than would
historically be expected (Donnelly and Kelly, 2005), the choice of non-executives to
continue to take up roles on boards is an interesting one and as such warrants academic
attention. Many of the directors interviewed acknowledged that the remuneration
received for the position did not fully compensate for the personal liability they exposed
themselves to and as such was not an appropriate determinant of motive. Instead nonexecutive
directors interviewed presented motivations such as the valid contribution they
had to offer, or merely viewed the acceptance of non-executive positions as part of the
The validity of nomination and selection procedures demonstrated by Irish companies in
sourcing non-executive directors has been highlighted as a consistent source of concern
(O'Higgins, 2002, Brennan and McDermott, 2004, O'Regan et al., 2005). By focusing on
the nomination of non-executive directors it is hoped that some insight will be gained as
to the level of commitment organizations have made to implementing good corporate
For the purpose of the study qualitative research in the form of semi-structured interviews
with non-executive directors was carried out. This research method has been chosen as
semi-structured interviews offer a focused approach to questioning, while allowing for
greater probing and interaction with the interviewee than other methods provide. The
non-executive directors interviewed demonstrated a lack of consistent viewpoint
regarding the nominations process of organizations. Whereas some non-executive
directors interviewed suggest the nominations procedure is a robust process, others would
view it as the job of the chairman and have little or no knowledge of any actual procedure
in place.


Stemming from the financial scandals of the 1990s and the resulting corporate
governance initiatives established (Lannoo, 1999), the board of directors has faced
increased scrutiny. In particular non-executive directors of plc boards have been met with
a substantial rise in responsibilities both from legal and other standpoints. Although the
Cadbury Report (1992) and it’s successors attempted to address many areas that were
viewed as contributing to poor corporate governance, the board of directors was given by
far the most weight.
While . . . . .... (baca_selengkapnya )


by : Trevor D. Wilmshurst

In this paper the contribution of stakeholder theory to good corporate governance is discussed.
This study sought to assess whether theories about firm-stakeholder interactions offered
insights into motivations influencing the decision to report to stakeholders. Stakeholder
theories have fallen into managerial or normative-ethical perspectives. This study identifies
the motivations underlying each of these theories and assesses whether they influence the
decision to report. Data analysis found that each offers only a part of the story supporting the
contention that an approach combining the various theories would better reflect decision
making. It is argued that such an approach would better enable an understanding of whether
or not stakeholder reporting undertaken could be described as good corporate governance
Key words: Stakeholder theory, corporate governance, reporting, disclosure, motivation,
environment, stakeholders

TIns paper reports on a study that investigated the motivations of management to report
environmental information to stakeholders, and was undertaken in the context of stakeholder
theory. Theories about stakeholders suggest motives for the decision to report to
stakeholders, taking either a management or a normative-ethical approach to their
construction. Recent literature has called for an approach to stakeholder theory that bridges
the . . . .... (baca_selengkapnya )