Impact of corporate governance score on abnormal returns and financial performance of mergers and acquisitions

Rani, Neelam; Yadav, Surendra S.; Jain, Pramod Kumar

doi:10.1007/s40622-014-0067-8

Cited by 11 publications

(8 citation statements)

References 70 publications

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“…From the agency theory perspective, guidelines for the relationships between managers and owners are warranted; they should protect shareholders' interests through implementing codes of good governance. The agency theory suggests that a bettergoverned firm should demonstrate superior performance due to lower agency costs (Rani et al, 2014;Sami et al, 2011). However, there is no consensus in the existing literature with regard to how corporate governance or performance outcomes should be measured.…”

Section: Corporate Governance and Firm Performancementioning

confidence: 99%

Corporate governance practices and comprehensive income

López-Quesada

Miñano

Idowu

2018

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Purpose: The objective of this research is to analyze the effect of corporate governance practices on firms' financial performance, as measured by comprehensive income.Design/methodology/approach: Using a sample of 237 firms from the S&P 500 Index during the years 2004 to 2009, multivariate statistical analyses are conducted in order to confirm our main hypothesis. Findings:The results indicate that having high levels of corporate governance culture has a positive impact on a measure of firms' financial performance, namely comprehensive income. Furthermore, they indicate a positive correlation between the percentage of external directors and financial performance, and a negative relationship between number of board meetings and financial performance.Originality/value: The main contribution of this research is that good corporate governance strategies deliver superior financial performance for businesses in terms of comprehensive income. This serves as a method of value creation, which is the ultimate goal of a business. In addition to the use of comprehensive income as an indicator of financial performance, a unique measure of corporate governance level is tested.

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Section: Corporate Governance and Firm Performancementioning

confidence: 99%

Corporate governance practices and comprehensive income

López-Quesada

Miñano

Idowu

2018

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“…The corporate governance, especially board structure is important during the economic recession period, as it is board that control on the decision making and strategic direction which has a decisive bearing on firm's performance (O'Connell and Cramer, 2010;Rani et al, 2014). A company having better corporate governance structure and practices derives better valuations (Rani et al, 2014;Reddy, 2015). This study examines the efficacy of the board of directors on firm performance during the period of financial crisis.…”

Section: Introductionmentioning

confidence: 99%

Does governance structure have any effect on firm performance during the financial crisis

Srivastava¹

2015

Journal of Strategy and Mgt

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Purpose – The financial crisis of 2008-2009 was truly global in nature that affected all sectors and countries of the world. Being considered that a board of directors is the main governance mechanism through which a company is governed and managed. The purpose of this paper is to examine the effect of the governance structure of a company on its financial performance during the period of financial crisis. Design/methodology/approach – The study investigates the effect of board structure parameters – board leadership, directors and board size on the financial performance for 164 non-financial listed firms in India during the period of financial crisis of 2008-2009. Findings – The study finds a significant positive effect with Chief Executive Officer duality, executive chairperson and proportion of inside directors on the firm’s financial performance. Independent directors have no significant influence, while non-executive (grey) director’s being affiliated with the firm has a negative influence on firm’s financial performance. A larger board has a negative relationship with the firm’s financial performance. Research limitations/implications – The study is limited to large non-financial firms of the Bombay Stock Exchange-200 index. The study may be extended to include other firms to generalize the findings. Practical implications – Results imply that during the period of financial distress, a company having more inside (or management) directors with an executive chairperson are in a better position to manage company resources with positive impact on financial performance. Companies with larger boards may find it difficult to take quick decisions, which ultimately affect their performance. Originality/value – The study is original in its idea of assessing company strategy to adopt a suitable governance structure that can sustain its performance during the period of financial crisis.

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“…Majority of corporate governance studies in India are linked with financial performance (e.g., Arora & Sharma, 2016;Bansal & Sharma, 2016;Bhatt & Bhattacharya, 2015;Kandukuri et al, 2015;Mishra & Mohanty, 2014;Palaniappan, 2017;Rani et al, 2014;Sanan, 2016;Singla & Singh, 2019;Yameen et al, 2019). The results of these studies are inconsistent and the findings are conflicted in some cases.…”

Section: Literature Reviewmentioning

confidence: 99%

“…The results of these studies are inconsistent and the findings are conflicted in some cases. Some studies reported that there is an association between corporate governance indicators and financial performance (Arora & Sharma, 2016;Kandukuri et al, 2015;Rani et al, 2014). Some other studies revealed that some corporate governance attributes only have a positive influence on firms' performance; larger board size and attendance of the board members (Bhatt & Bhattacharya, 2015), promoters' ownership (Mishra & Kapil, 2017), board age diversity (Kagzi & Guha, 2018), board size and CEO Chairman dual role (Bansal & Sharma, 2016), independent women directors (Sanan, 2016), board independence, board size and busyness (Mishra & Kapil, 2018).…”

Section: Literature Reviewmentioning

confidence: 99%

Corporate governance in India: A systematic review and synthesis for future research

Almaqtari

Al-Hattami

Al-Nuzaili

et al. 2020

Cogent Business & Management

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The present study aims to review systematically the state of the art of corporate governance in India. The study uses a sample of 161 published research papers extracted from 101 journals and 17 publishers' databases. The results indicated that 151 studies investigated the board of directors' issues, 90 studies analyzed ownership structure, 64 studies discussed audit committee attributes, and 11 articles studied audit quality. The results provided that among corporate governance issues, board and audit committee independence, foreign and institutional ownership have the highest and majority focus of research in India. In terms of the relationship of corporate governance with other areas, the results exhibited that financial performance has a major concern in prior research. The results also indicated that there is a lack of studies that have samples after 2015. Further, the results observed that there are numerous conceptual repetitive studies and the majority of the studies followed either descriptive statistics or basic regression analysis. The current study provides an insight for academicians, policymakers (e.g.,

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Impact of corporate governance score on abnormal returns and financial performance of mergers and acquisitions

Cited by 11 publications

References 70 publications

Corporate governance practices and comprehensive income

Corporate governance practices and comprehensive income

Does governance structure have any effect on firm performance during the financial crisis

Corporate governance in India: A systematic review and synthesis for future research

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