A Study on the Corporate Governance and Disclosure Practices of Tangible Assetsand Intangible Assets-Dominated Firms and Their Relationship

--Pankaj M Madhani

Corporate governance stands for responsible business management geared towards long-term value creation. Prior research found significant relationship between asset composition (tangible versus intangible assets) and corporate governance disclosure practices of firms. However, there is very little research in the current Indian context. Hence, this paper explores such a relationship for firms listed on the Indian stock market by considering a sample that includes firms from nine different sectors, viz., metal, oil and gas, power, IT, FMCG, capital goods, auto, consumer durables and healthcare. It applies Corporate Governance and Disclosure (CGD) index as a proxy for firm-specific rating of governance quality and calculates CGD scores of sample firms listed on Bombay Stock Exchange (BSE). To identify intangible assets dominance in firms, the ratio of market value to book value and capital intensity of sample firms are calculated. Accordingly, firms are divided into tangible assets-dominated and intangible assets-dominated sectors. The findings reveal that there is no significant difference in the corporate governance and disclosure practices of firms across tangible asset- and intangible asset-dominated sectors. The research identifies several reasons why this proposition does not hold true for firms in the current economic environment of India.

© 2015 IUP. All Rights Reserved.

Investigating the Impact of Corporate Governance on Capital Structure: A Case of KSE-Listed Companies

--Aamer Shahzad, Muhammad Ali Shahid, Amer Sohail and Muhammad Azeem

The study investigates the impact of multidimensional aspects of corporate governance on capital structure of manufacturing firms listed on the Karachi Stock Exchange (KSE), Pakistan during the period 2007-2012. All the manufacturing firms covered in KSE 100 index have been considered for analysis. The findings of the study suggest that the Corporate Governance Index (CGI) is statistically significant and negatively related to both measures of capital structure (i.e., total debt ratio and long-term debt ratio). This implies that sound corporate governance firms pursue lower leverage to avoid financial risk and dilution of powers. The findings of the study will help the firm managers in achieving an optimal level of capital structure. It also helps the regulatory authorities in making laws and providing institutional support to make corporate governance mechanisms more effective.

© 2015 IUP. All Rights Reserved.

Corporate Governance Practices of State-Owned Enterprises in Ghana: An Analysis

--George Kofi Amoako and Mawusi Kofi Goh

The present paper focuses on the corporate governance practices of the State-Owned Enterprises (SOEs) of Ghana. The three pillars—clear objectives, political insulation, and transparency—are found to be the critical foundations upon which any serious attempt to improve the performance of SOEs in Ghana and developing countries must be based. They reinforce each other and are part of an integrated package. When governments adopt only some of these reforms, such as establishing a clear mandate without sufficient transparency, the results are usually disappointing as can be found in Ghana and most African countries. These reforms may require a tremendous political commitment to implement. However, a system of professional oversight that includes checks and balances is the best recipe for countries in Africa and other emerging markets where privatization is not encouraged.

© 2015 IUP. All Rights Reserved.