The Influence of Corporate Governance Systems on a Company’s Market Value

Abstract

Recent world events have refocused interest on the link between the existence of corporate governance and an entity’s effectiveness. The aim of this study was to identify the influence of the corporate governance system of an entity in order to measure its effects on market value. To achieve quality corporate governance and to increase an audit committee’s degree of effectiveness, one must take into consideration four core elements: members’ qualifications, authority, the resources necessary to develop the activity, and attention during the development of the activity. Our research methodology included a combination of qualitative analyses on theoretical aspects and a quantitative approach based on multiple regression and the estimation method. The main results showed that there is a solid link between strong corporate governance systems and effective audit committees, although we cannot state that the inclusion of an audit committee represents the key to success for a business. When studying the connection between audit committees and an entity’s market value, we found that this connection can lead to alleviating the problem of allocating power (principal–agent theory). We also found that the contribution of audit committees in corporate governance is to assess both the quality of financial reports and their approval and that creating an audit committee can have beneficial effects that can eventually lead to the consolidation of a company’s corporate governance.

Audit committee characteristics and bank performance: evidence from India

“…In this line, we test the hypothesis, whether AC characteristics explain the Indian bank performance. Consistent with the earlier research (Aldamen et al, 2012;Oncioiu et al, 2020), we estimate the fixed effect estimation model to identify the AC characteristics that impact the bank performance (Carcello and Neal, 2003;Aldamen et al, 2012). This study evidence regarding the impact of AC characteristics on the performance of 36 banks functioning in the Indian banking sector from 2009-2010 to 2016-2017.…”

“…"The maximum score that a bank could achieve is 11 and the minimum was 0 in the case of there not being any information regarding the AC variables. To facilitate our calculations and computing the final score, following Black et al (2006) and Baker and Wurgler (2002), we created a co-scoring of the result with values between 0 and 100" (Oncioiu et al, 2020), and then regressed this composite governance index and the control variables on performance (Aldamen et al, 2012). Additionally, we have made the AC index for public and private sector banks by again calculating the median of the variables separately for each type of bank.…”

Energy Poverty in European Union: Assessment Difficulties, Effects on the Quality of Life, Mitigation Measures. Some Evidences from Romania

“…Solutions to solve this problem must be adapted to the specifics of each category of vulnerable consumers (urban or rural), and require the involvement of many categories of stakeholders such as local communities, NGOs, banks that must have adapted credit offers, public institutions which The use of renewable energy sources-and the transition to the green economy-implies not only broad structural, institutional, technological, social, economic changes targeting the energy sector, transport, housing stock, equipment used by the population and companies in different fields, but also the behavior of consumers who must become more responsible in use of energy [68][69][70][71][72][73][74][75][76][77]. Modern societies must move towards an inclusive energy transition path that is achieved, on one hand, by reducing energy poverty, and on the other hand by controlling the impact of energy production and consumption on the environment through carbon emission [78][79][80][81].…”

Fuzzy bundling of corporate governance practices and performance of Indian firms

“…The impact of CG practices on firm performance has been extensive research in the literature (Khan and Rehman, 2020;Perrini et al, 2021;Utama et al, 2017). It is argued that the strong presence of shareholders that are not related to promoters possibly implies the reduced level of biases and heuristics in board decision-making and aids in firm performance Oncioiu et al, 2020). An independent board can extensively contribute to the rational decision-making process (Fahlenbrach et al, 2011;Ramasubramanian, 2017;Shawtari et al, 2016) and allows the board to perform their duties effectively and free from pressures.…”