Pros And Cons Of Corporate Governance

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DETERMINANTS OF CORPORATE GOVERNANCE DISCLOSURE The study of Weir and Laing, 2000; Bouwman, (2011), on corporate governance confirm that there are divergence in the level of intended disclosure among quoted companies. Many literatures also revealed that the level and quality of corporate governance disclosures are determined by board characteristics and corporate ownership structure (Ho and Wong, 2001; Haniffa and Cooke, 2002; Eng and Mak, 2003; García-Meca and Sánchez-Ballesta, 2010; Chalevas, 2011; Samaha et al., 2012; Allegrini and Greco, 2013; Ntim and Soobaroyen, 2013). This part of the study reviews the literature on the board of directors’ characteristics and how the ownership structures can have an influence on corporate governance…show more content…
Haniffa and Cooke (2002) and Barako et al. (2006) argue that independent directors can support the board and committees through their knowledge and experience. In addition, they are better able to monitor managers. In contrast, Bozec (2005) suggest that a high proportion of independent directors on the board may lead to excessive managerial monitoring, which could potentially hinder managerial initiatives. Many empirical studies revealed a positive relationship between the proportion of outside directors and corporate governance disclosure. The study of Haniffa and Cooke (2002) revealed that the presence of outside directors improved the accountability and transparency of the board among 167 malasian quoted companies in 1995. In a similar study by García-Meca and Sánchez-Ballesta (2010) it was found that board independence gives adequate level of protection to…show more content…
Agency theory suggests that board size is a essential factor when the issue of monitoring the activities of management behaviour arise (Fama and Jensen, 1983; Allegrini and Greco, 2013). Ntim and Soobaroyen (2013) has also argue that increased in managerial monitoring positively have an impact on the necessary disclosure of corporate entity
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