| 1 |
Author(s):
Gerhard Schnyder.
Page No : 1-7
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MAKING CG RESEARCH FIT FOR THE 21ST CENTURY: TIME FOR COURAGE A NOTE
Abstract
The job of a corporate governance scholar was comparatively simple back in the 1990s. It
essentially consisted of figuring out what corporate governance mechanisms maximise
shareholder returns. Since then, the world has changed and with it corporate governance
scholarship as well. Not only have the never ending news of corporate scandals and major
financial crises, most importantly the Global Financial Crisis of 2007 and following, cast
serious doubt on the desirability and effectiveness of corporate governance policies of the
1990s; but also have bigger issues , the so-called ‘Grand Challenges’ (Ferraro et al., 2015)
changed policy makers’ and the public’s demands on stock corporations.
| 2 |
Author(s):
Shweta Sharda, Shital Jhunjhunwala, J.P.Sharma.
Page No : 8-38
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ROLE OF CORPORATE BOARDS IN ADDRESSING STAKEHOLDERS’ EXPECTATIONS
Abstract
In the current competitive scenario, the sustainability of an organization is based upon the
contribution made by multiple stakeholders in achieving its objectives. Among all the stakeholders,
employees and government hold a significant place for their contribution as primary and
secondary stakeholders respectively. Government acts as the backbone in the formation of a
company, and employees influence the firm’s performance by building customer loyalty, eventually
generating value for shareholders. Since the management has discretion over a wide range of
decisions including those affecting the stakeholders’ interest, the role of the board becomes pivotal
in justifying the actions of corporate managers in addressing them. The study is therefore
undertaken to investigate the impact of the board on addressing expectations of these stakeholders,
using panel data of 4065 Indian listed companies for fourteen years from 2006 to 2019. The results
show a negative impact of board meetings on employees’ compensation, and that separation of
CEO and Chairman positions and multiple directorships positively impact both stakeholders. Also,
the results showed that the presence of independent directors negatively affects compensation but
their participation benefits both. This indicates that the mere presence of independent directors on
board cannot make them effective but their engagement is what matters in making the corporate
governance meaningful. This implies the need to frame stringent regulations on the evaluation of
contributions made by independent board members to make them accountable.
| 3 |
Author(s):
Sakshi Mittal, Niti Bhasin.
Page No : 39-64
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PERFORMANCE OF ESG FUNDS IN EMERGING ASIAN COUNTRIES: A COMPARATIVE ANALYSIS
Abstract
The study has primarily been undertaken to examine the performance of ethical funds in
comparison to the mutual funds that have been serving the investors with the profit motive. It
focuses on evaluating the select emerging Asian countries on the basis of their performance
which is measured by certain parameters.
The primary purpose of this study is to provide a detailed analysis of the increasingly evolving
socially responsible asset management market and go beyond aggregate financial comparisons
in developed countries between SRI and traditional mutual funds. To do so, we have studied
137 socially conscious mutual funds and 137 traditional funds which are closely matched based
on age, objective and size. The key feature of this paper involves an empirical analysis of
mutual fund performance measured by Sharpe ratio, Treynor ratio and Jensen alpha. For the
purpose of this study the mutual funds are distinguished on the basis of their investment
objective and were named as ESG funds and conventional mutual funds.
A comparison was drawn between the ESG funds and matched conventional mutual funds of
the five emerging Asian countries namely, China, India, Thailand, South Korea, and Taiwan
using five parameters. The Sharpe ratio, Jensen's Alpha, excess return of funds over the index,
Treynor ratio and last 5 years Returns. The results shows that for China, the last 5 years returns
are significantly higher for the ESG funds. The other four parameters are not significantly
different for the matched conventional funds. In India, ESG funds have performed better in
terms of generating returns versus the index whereas for the other four parameters the
difference in ESG and matched conventional is found to be insignificant. In South Korean
markets, the matched conventional funds have performed significantly better in terms of Sharpe
ratio and rest of the parameters are insignificantly different. In Thailand also, the matched conventional funds have outperformed in terms of Sharpe ratio whereas, the other parameters
are found to be insignificantly different. In Taiwan there is no significant difference between
the performance of ESG funds and the matched funds. The selection of ESG and SRI
sustainability stocks by the investors will provide them with the additional opportunity to
diversify their portfolio without sacrificing on the financial grounds. Moreover, these options
also provide them a set of safer haven during economic downturn. It is demonstrated by the
analysis that the ESG funds are less sensitive to the risk factors, so in times of crisis, the ESG
funds are expected to sail through the deep waters.
| 4 |
Author(s):
Twinkle Prusty, Waleed M. Al-ahdal.
Page No : 65-80
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CAN OWNERSHIP STRUCTURE INFLUENCE FIRM PERFORMANCE? A STUDY OF NON-FINANCIAL LISTED COMPANIES OF UAE
Abstract
This paper examines the relationship between ownership structure and financial performance
using panel data of 10 companies that are listed on the UAE stock exchange during a period
of 2009 to 2016. This study uses a REM model to estimate the pane l data regression. The
different dimensions of ownership structure that are included in the study are involved twelve
items used as proxies for the corporate ownership Index. In addition, firm performance is
estimated by two measures: ROA, and ROE. While the control variable are firm size,
governance effectiveness and leverage. The empirical evidence in this study shows that
ownership structure Index has a positive and significant effect on ROA. However, firm size and
governance effectiveness have an insignificant impact on the financial performance of firms as
measured by return on assets. Moreover, the return on equity has positive and statistically
insignificant association between each of ownership structure and firm size. Furthermore,
there are a negative and statistically insignificant association between ROE and each
governance effectiveness and leverage. This study supports the previous empirical results and
adds value to finance research that explores the different aspects of ownership structure in the
Arabian Gulf market by using UAE as an example.
| 5 |
Author(s):
Sugandha Jain.
Page No : 81-104
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A REVIEW PAPER ON SHADOW BANKING IN INDIA
Abstract
The field of ‘shadow banking’ has garnered a lot of interest from the research community since
the financial crisis of 2007-08. On the other hand, their Indian counterparts – non-bank
financial companies (NBFCs), still have a very shallow pool of knowledge. This paper intends
to systematically review the existing literature on Indian NBFCs, categorize it thematically and
summarize to find research gaps. The present study considers Scopus as its data house to
undertake a ‘systematic literature review’ (SLR) of the NBFC sector in India. By synthesizing
various exclusion criteria, relevant studies in the area are identified. Following this,
‘conceptual/thematic content analysis’ is done to identify popular themes. 25 relevant articles
subject to the exclusion criteria are identified from the data house. Three dominant themes
emerge. These are ‘Performance of NBFCs’, ‘Risks and Challenges of NBFCs’ and ‘Evolution
and Future of NBFCs’. Microfinance Institutions (NBFC-MFIs) were found to be the mostresearched type of NBFC. Some of the gaps in research, as diagnosed by this review, are
studies comparing banks and NBFCs, studies comparing different shadow banking systems in
the world, studies analyzing NBFCs in the wake of COVID-19 and studies focusing on NBFCs
other than MFIs (there are more than 10 different types of NBFCs). The paper is the first of its
kind – systematically collating the literature on Indian shadow banking. This research work
holds importance for future researchers looking for potential topics in the area of non-bank
financial intermediation that are still waiting to be explored.
