Does certification of corporate governance compliance pay off? Evidence from a unique regulatory setting

IF 4.6 3区管理学 Q1 BUSINESS

Corporate Governance-An International Review Pub Date : 2023-10-20 DOI:10.1111/corg.12563

Abdus Sobhan, Sudipta Bose, Muhammad Shahin Miah, Rushdi Md. Rezaur Razzaque

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引用次数: 0

Abstract

Research Questions/Issues

Using insights from agency and signaling theories, we examine the effect on companies' market-based performance of a unique monitoring mechanism of compliance with a corporate governance (CG) code, that is, independent certification of compliance with a CG code and type of certification provider. Furthermore, we examine the impact of two boundary conditions, family company status and company-level information asymmetry, influencing the effect of independent CG compliance certification and type of certification provider on the market-based performance of companies.

Research Findings/Insights

Based on 1110 Bangladeshi company-year observations from 2006 to 2017, we firstly find that independent CG compliance certification is positively associated with companies' market-based performance. Secondly, we show that CG compliance certification by a chartered secretarial firm is related to higher market-based performance. Thirdly, we document that family companies attenuate both these associations. Finally, we find that, while company-level information asymmetry reinforces the association between CG compliance certification and market-based performance, it weakens the relationship between certification by a chartered secretarial firm and companies' market-based performance.

Theoretical/Academic Implications

Our findings are consistent with the agency and signaling theory that independent certification of CG compliance and this certification by a chartered secretarial firm reduce information asymmetry between managers and external investors by signaling enhanced credibility of reported CG compliance information. However, the roles of CG compliance certification and certification by a chartered secretarial firm to reduce agency conflict and provide credible signals are conditional on two boundary conditions: family company status and company-level information asymmetry.

Practitioner/Policy Implications

This study's findings highlight the economic implications of a unique mechanism for monitoring compliance with an adopted CG code. The findings have significant implications for policy makers and regulators in emerging economies.

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公司治理合规认证是否有回报？来自独特监管环境的证据

研究问题/议题利用代理理论和信号理论的观点，我们研究了公司治理（CG）规范合规性的独特监督机制（即公司治理规范合规性独立认证和认证提供商类型）对公司市场化绩效的影响。此外，我们还考察了家族企业地位和公司层面的信息不对称这两个边界条件对公司治理独立合规认证和认证提供商类型对公司市场化绩效的影响。研究结果/启示基于 2006 年至 2017 年 1110 个孟加拉国公司年度观察数据，我们首先发现独立 CG 合规认证与公司的市场化绩效正相关。其次，我们表明由特许秘书公司进行的企业管治合规认证与较高的市场化绩效相关。第三，我们发现家族企业削弱了这两种关联。最后，我们发现，虽然公司层面的信息不对称加强了企业管治合规认证与市场化绩效之间的关联，但却削弱了特许秘书公司认证与公司市场化绩效之间的关系。理论/学术启示我们的研究结果与代理和信号理论相一致，即企业管治合规的独立认证以及由特许秘书事务所进行的这种认证，通过增强报告的企业管治合规信息的可信度，减少了管理者与外部投资者之间的信息不对称。然而，企业管治合规认证和特许秘书事务所认证在减少代理冲突和提供可信信号方面的作用取决于两个边界条件：家族企业地位和公司层面的信息不对称。实践者/政策启示本研究的结论强调了一种独特的企业管治准则合规监督机制的经济意义。研究结果对新兴经济体的政策制定者和监管者具有重要意义。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Corporate Governance-An International Review Multiple-

CiteScore

7.00

自引率

11.30%

发文量

期刊介绍： The mission of Corporate Governance: An International Review is to publish cutting-edge international business research on the phenomena of comparative corporate governance throughout the global economy. Our ultimate goal is a rigorous and relevant global theory of corporate governance. We define corporate governance broadly as the exercise of power over corporate entities so as to increase the value provided to the organization"s various stakeholders, as well as making those stakeholders accountable for acting responsibly with regard to the protection, generation, and distribution of wealth invested in the firm. Because of this broad conceptualization, a wide variety of academic disciplines can contribute to our understanding.