A u t h o r sAya d u r ai, C a n d E s k a n d a ri, R Typ e Book S e c tio n U RL This ve r sio n is a v ail a bl e a t : h t t p:// u sir.s alfo r d. a c. u k/id/ e p ri n t/ 4 6 2 9 3/ P u b l i s h e d D a t e 2 0 1 8 U SIR is a di git al c oll e c tio n of t h e r e s e a r c h o u t p u t of t h e U niv e r si ty of S alfo r d. W h e r e c o py ri g h t p e r mi t s, full t e x t m a t e ri al h el d in t h e r e p o si to ry is m a d e fr e ely a v ail a bl e o nli n e a n d c a n b e r e a d , d o w nlo a d e d a n d c o pi e d fo r n o nc o m m e r ci al p riv a t e s t u dy o r r e s e a r c h p u r p o s e s . Pl e a s e c h e c k t h e m a n u s c ri p t fo r a n y fu r t h e r c o py ri g h t r e s t ri c tio n s. Fo r m o r e info r m a tio n, in cl u di n g o u r p olicy a n d s u b mi s sio n p r o c e d u r e , pl e a s e c o n t a c t t h e R e p o si to ry Te a m a t: u si r@ s alfo r d. a c. u k . Abstract During the Global Financial Crisis (GFC) of 2007-09, even banks in industrial economies with long established markets suffered significantly. This highlights the weakness in the banking system and the importance of a sound banking sector. This article illustrates the drivers of bank soundness for G7 countries during the period 2003-2013. In creating a parsimonious model, the study assembles 18 manifest variables of 6 constructs as the cause of bank soundness. The structural equation model comprises of six latent exogenous constructs [Capital (C), Asset (A), Management (M), Earnings (E), Liquidity (L) and Sensitivity(S)] which explains the observed consequences of bank soundness in these countries. Results indicate that 43.8% of the variation in banks' soundness is explained by CAMELS. The model's predictive relevance (Q 2 ) with regard to endogenous construct stands at a strong category of 0.425. The results imply that banks placed high importance on off balance sheet and capital activities thus taking on higher risk. Surprisingly, these banks were operating at low levels of capital and liquidity resembling banks that failed during the Great Depression. The weakness in capital and liquidity measures calls for robust policy measures to create convergence with soundness.

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This paper employs the data from 155 companies from 27 different industries listed on the Tehran Stock Exchange (TSE) for the period from 2000 to 2009 to examine the direction of causality between cash flow and earnings after taking consideration of stationarity and co-integration. The results indicate that there is a bidirectional causal relationship between cash flow and earnings at the level of all individual companies, so that cash flow variables caused earning variables and vice versa. However, at the level of industrial sectors, causality exists only between Profit before Interest and Taxation (EBIT) and Cash Flow from Operating Activities (CFOA).

This chapter aims to critically reflect on the available literature on leadership style and innovation, and especially to assess the linkages between these variables. It starts with an overview of leadership studies, tracing the historical emergence and development of leadership theories, from the Great Man theory, trait theory and leader behaviour theory to situational and contingency theories of leadership. It then delves deeply into the transformational theory, owing to the vast amount of research focus that appears to be dedicated to this theory. The chapter critically analyses the scope of transformational theory, and explores the gaps that may need refinement in order for the theory to remain relevant in the current, 21st Century, business environment. The chapter also discusses innovation theory and literature related to different perspectives on innovations, including the radical and disruptive views, the ambidextrous perspective, design thinking, open, lean and horizontal models, and their impacts on organizational performance. The chapter then turns to explore the linkages between managing innovation, leadership style and organizational performance. The review in this chapter adds to the existing literature and provides support for the contention that innovation impacts organizational performance, while leadership has a moderating impact on this relationship.

This paper reiterates the importance of corporate governance in banks. Failure prediction studies have mainly relied on using financial ratios as predictors. The most suitable financial predictors for banks are financial ratios following the CAMEL rating system. Also, corporate governance has been proven to be an important aspect of banks, especially after the financial crisis. Given its importance, the novelty of this paper is to test the ability of corporate governance to increase the accuracy and extend the time-horizon of bank failure prediction in the US market. Using discriminant analysis, we predict the failure of banks insured by the Federal Deposit Insurance Corporation from 2010 to 2018. Using financial and non-financial predictors, we find that combining CAMEL ratios with corporate governance variables not only increases the accuracy of prediction but also extends the time horizon to three years before failure. We also show that bank earnings is a more significant predictor than capital structure and asset quality. The results further reveal that CEO compensation, voting rights and institutional ownership are significant predictors. These results are robust when using logit regression and out-of-sample examination. This study shows that corporate governance plays a key role in the success or failure of banks. The regulatory implication of this paper is that more attention needs to be directed to corporate governance and earnings aspects of banks rather than focusing on capital structure.