Corporate Law and Governance Review

Journal Information
ISSN / EISSN : 2707-1111 / 2664-1542
Published by: Virtus Interpress (10.22495)
Total articles ≅ 36
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Sathanantham Shiyalini,
Corporate Law and Governance Review, Volume 4, pp 8-18; https://doi.org/10.22495/clgrv4i1p1

Abstract:
This research investigates the effect of the components of state government debts (domestic and external debts) on the various forms of investment (domestic investment and foreign direct investment — FDI) in Sri Lanka both in the short and long terms applying the ARDL bounds testing approach over the period, 1980–2020. The previous research has revealed that higher internal and external government borrowing lowers domestic investments in both the short and long terms, confirming the crowding-out effect of public debt on the volume of domestic investment of our country. The research discovered that internal debt accumulates FDI inflows in the short term, but it crowds out FDI when considering the long term. In contrast, foreign debt has a substantial inverse connection with FDI inflows in the short term, as expected, but it does not influence FDI in the long run. The findings also showed that higher lending rates of interest share a considerably inverted connection with domestic investments, but it does not have any impact on the long-term FDIs. However, in the short term, an increase in the rate of lending interest rate decreases the prospect of external financiers and crowds out the course of FDI in Sri Lanka. Further, the depreciation of the exchange rate decreases both domestic investment and the flow of FDI in the short-run, but it encourages both types of investments in the long run
Karen M. Hogan,
Corporate Law and Governance Review, Volume 3, pp 41-52; https://doi.org/10.22495/clgrv3i2p4

Abstract:
This paper provides an overview of business entities in the United States. We analyze current trends in the ownership structures of U.S. firms, diversity and inclusion, mergers and acquisitions, minority shareholder rights protections, and review the literature related to corporate ownership and financial performance. With the shift in the U.S. from defined benefit pension plans to defined contribution plans and a desire for increased corporate governance, we observe a significant increase in the financial assets under management by large institutional investors. It is believed these large institutional investors can have a significant impact on the governance, decision-making, and performance of the U.S. publicly traded firms. We observe an increasing trend in foreign indirect investment in the U.S. from countries in Europe, Asia and the Pacific Rim, North and South America, the Middle East, and Africa. Additionally, increased compensation of publicly traded firms’ top executives is shown, which has resulted in an increased disparity between the compensation of top management teams and the firms’ hourly employees. Lastly, we expect the suggested bias against women and other minorities, as evidenced here, will be lessened in the future and should result in improved financial performance for firms
Wasiu Ajani Musa, Ramat Titilayo Salman, Ibrahim Olayiwola Amoo
Corporate Law and Governance Review, Volume 3, pp 30-40; https://doi.org/10.22495/clgrv3i2p3

Abstract:
Regulators have ensured the compulsory disclosure of audit fees in the financial statement to overcome abnormal fees and instill credibility in the financial report since audit pricing is contingent upon audit quality. However, discrepancies between audit fee dimensions are evidenced in the abnormal audit fees, resulting in accounting scandals. Hence, this study assessed the determinants of audit fees in quoted financial and non-financial firms by building a model underpinned by agency theory (Mitnick, 2006) and economic theory of product differentiation (Beath & Katsoulacos, 1991). Secondary data were utilized from companies’ annual reports between 2009 and 2018 using the purposive sampling technique. Furthermore, Breusch-Pagan Lagrangian multiplier (LM) test and the Hausman test indicated the consistency of the models. The static panel regression estimations showed that auditee size, risk, auditor size, reputation, engagement lag, and International Financial Reporting Standards (IFRS) implementation significantly affect audit fees in both sectors. This study concluded that the three dimensions largely determine audit fees. This study instructively proposed that assurance clients should devise an outline of guidelines and practices to guide activities in the sectors by monitoring the variables that impact audit fees
Wajdi Ben Rejeb
Corporate Law and Governance Review, Volume 3, pp 20-29; https://doi.org/10.22495/clgrv3i2p2

Abstract:
This paper reviews the corporate governance practices of listed Tunisian companies. Besides that, the paper explores the evolution of corporate governance legislation between 2013 and 2017 in order to identify the changes caused by the revolution to accompany the current context’s needs and the democratic transition in Tunisia. Although the most of companies in Tunisia are dominated by family small and medium enterprises (SMEs) and very small enterprises (VSEs) we have chosen to focus on listed companies. These companies present more advanced practices of corporate governance given the legislation in force. Results of this paper shed light on several important features of the Tunisian corporate governance system, for example, interlocking directorates. It is interesting to notice that a limited number of directors control the majority of the market capitalization in Tunisia. The practice of interlocking directorates reflects the Tunisian way of economic lobbying. As for gender diversity, although there are no laws imposing a minimum quota of women directors, the proportion of female board members has slightly increased during the last years, moving from 7.87% in 2013 to 9.92% in 2017. In contrast to Arab and African countries, it should be noted that the majority of women directors sit on boards as members of the family controlling the company or because they are civil servants representing the state’s interests in state-owned enterprises
Chryssoula E. Tsene
Corporate Law and Governance Review, Volume 3, pp 8-19; https://doi.org/10.22495/clgrv3i2p1

Abstract:
Corporate governance encompasses a multidisciplinary approach, which includes the internal and external factors that affect the interests of a company’s stakeholders. The Greek corporate governance framework of listed companies has initially been established in accordance with EU regulation and soft law recommendations, in order to enhance board accountability and transparency, empower shareholders’ activism and promote financial disclosure. In that regard, it has recently been reformed by the provisions of Law 4706/2020, aiming mainly: to empower the strategic and supervisory role of the board of directors, by introducing a clear description of the obligations of non-executive and independent non-executive directors and by including the establishment of an “adequacy (internal fit-and-proper) policy” for the appointment of board members. Accordingly, two new compulsory committees are added, the nomination and the remuneration committee, which should entirely be composed by non-executive members and are invested with an advisory role in determining the remuneration policy and proposing board candidates. Furthermore, the adoption of a Corporate Governance Code is rendered substantial for all listed companies. These provisions illustrate specifically the reform of the internal corporate governance structures, which should be implemented having regard to the general principles of transparency and proportionality
Corporate Law and Governance Review, Volume 3, pp 4-6; https://doi.org/10.22495/clgrv3i1editorial

Abstract:
Corporate governance and corporate law cover a wide range of eminent topics for the effective governance system. The articles published in this issue have focused particularly on the board configuration, commercial code regulations about the managers’ decision and compensation, the comparative perspective of the common law rule on pre incorporation contracts, and the responsibility of the company with the authorized fictitious capital from the evidence of emerging markets. Moreover, this issue includes a book review of the theoretical, essential, and international practices of corporate governance, which consists of various timely and interesting concepts, such as the role of institutional investors in corporate governance, the board of directors’ impact on performance and the role of non-executive directors, the audit function and the role of regulation international corporate governance, and socially responsible investment, etc.
José Manuel Bernardo Vaz Ferreira
Corporate Law and Governance Review, Volume 3, pp 53-57; https://doi.org/10.22495/clgrv3i1p5

Abstract:
This review covers the textbook titled “Corporate governance: Theoretical essentials and international prectices”, authored by Aws Alhares and Naser Ibrahim Abumustafa (Virtus Interpress, 2021; ISBN: 978-617-7309-17-7). The review focuses particularly on the relationship between corporate governance and financial structure, the role of institutional investors in corporate governance, the board of directors’ impact on performance and the role of non-executive directors, the audit function and the role of regulation international corporate governance, and socially responsible investment. It also highlights the contribution of this textbook to the ongoing discussion on key points relating to corporate governance
Yalid Yalid, Ryan Aditama, Sindi Sindi, Husni Tamrin, Iswandi Iswandi
Corporate Law and Governance Review, Volume 3, pp 43-52; https://doi.org/10.22495/clgrv3i1p4

Abstract:
The phenomenon of law related to the capital subscribed and fully paid up company is limited liability companies in Indonesia, many of which are not real. The aim of this research is to answer the question: "What is the legality and legal consequences of an establishment with a fictitious authorized capital?". The research was conducted via the study of literature with this type of normative legal research supported by an empirical approach. The results of the research contribute to knowledge that the responsibility of a limited liability company with a capital payment basis is fictitious when the establishment does not essentially meet the validity of the establishment of the limited liability company itself, whether based on terms “materially” or “formally”. The terms formilnya (“formally”) depositing of the authorized capital must be issued and paid-up in full. Although the capital is fictitious or not real, if it has been approved by a legal entity, then it remains as a legitimate legal entity, but the substance of it is a limited liability company. Depositing the authorized capital which is not real contradicts the nature of the limited liability company as a legal entity
Wiseman Ubochioma
Corporate Law and Governance Review, Volume 3, pp 29-42; https://doi.org/10.22495/clgrv3i1p3

Abstract:
The question of how best to protect the interests of a promoter, a third party, and a company in pre-incorporation contracts is one that seems to have defied corporate law. Although this problem has its origin in common law, various countries have made efforts to address it through statutory reforms. The paper, therefore, examines the extent to which the Canadian and Nigerian legal regimes for the pre-incorporation contract have provided panaceas to the problem. This paper, through a comparative analysis, argues that although the legal regimes have made efforts to reform the common law rule on pre-incorporation contracts, they suffer patent defects. It also posits that notwithstanding the defects in the laws, the Canadian legal regimes offer more protection to parties to pre-incorporation contracts than Nigerian law. The paper suggests reforms in both regimes that would meet the reasonable expectations of the parties to a pre incorporation contract
Shu Li
Corporate Law and Governance Review, Volume 3, pp 17-28; https://doi.org/10.22495/clgrv3i1p2

Abstract:
This article aims to reveal the three trajectories of establishing the two-tier model and select Germany, Italy, and China to discuss the ontology of the two-tier model, its integration with other local models, and its development variants. This article compares the similarities and differences of the two-tier model in the organizational structures of three countries to show that there is institutional inertia or path dependence in the design of legal systems and rules on corporate governance. In the two-tier model, the management agency performs the corporate business, the supervisory agency supervises the corporate operations, and the relationship between the management agency and the supervisory agency is subtle and complex. Germany is the original user of the two-tier model. Italy introduced the two-tier model as an optional model in addition to the traditional model. China is learning from the world’s experience and establishing its own two-tier corporate structure based on its own conditions. As Buck and Shahrim (2005) mentioned, cultural traditions, historical development paths and models, the overall development level and maturity of the market economy, social legal awareness, and the improvement of the rule of law influence the corporate governance structure that the country chooses to adopt
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