Introduction: Japan’s gradual transformation in corporate governance

Japan has recovered from a ‘lost decade’ of economic stagnation over the 1990s. Anyway, it has been a ‘found decade’ for civil and criminal justice law reform, especially in corporate and securities law. Yet, have liberalisation and globalisation in those fields led to major changes in the ‘law in action’? Does this represent ‘Americanisation’ of Japan’s corporate governance system, focusing on shareholders rather than other key stakeholders such as ‘main banks’, core employees, and partners within diffuse corporate groups (keiretsu)? This version of our introductory chapter explains how our forthcoming book argues for a more complex ‘gradual transformation’. Such shifts are also found in many other post-industrial economies, but Japan appears to give greater emphasis given to certain modes of achieving change. The book brings together contributions from academics and practitioners from Japan, Australia, New Zealand, Canada and the United States. An early chapter introduces methodology for effective cross-country comparisons and for evaluating the burgeoning but divergent literature on Japanese corporate governance. The concluding chapter compares continuities and changes in Japan’s largest companies now and two decades ago. Other chapters cover ‘lifelong employment’, main banks, the untold story of closely-held companies, the limited uptake of the Committee-based governance form, and the procedural, substantive and FDI policy dimensions of takeovers law and practice.

Corporate fraud culture: Re-examining the corporate governance and performance relation

We analyse the corporate governance and performance relation, when conditioning on corporate fraud, for fraud firms during 2000 – 2007. Fraud firms are identified as either self- reported fraud events, or subject to regulatory investigation. We use the inverse Mills ratio procedure to account for firms' (unobservable) fraud culture in the dynamic system GMM model of the performance- governance relation. We find that corporate governance is an endogenously determined characteristic that has no causal impact on firm performance when conditioning on fraud. Fraud is a significant regulatory event but its overall economic impact at the firm level is highly variable.

The economic consequences of corporate financial reporting on Twitter

The use of social media has spread into many different areas including marketing, customer service, and corporate disclosure. However, our understanding of the timely effect of financial reporting information on Twitter is still limited. In this paper, we examine the timely effect of financial reporting information on Twitter in the Australian context, as reflected in the follow-up stock market reaction. With the use of event methodology and comparative setting, we find that financial reporting disclosure on Twitter reduces the information asymmetry level. This is evidenced by reduction of bid-ask spread and increase of share trading volume. The results of this study imply that financial reporting disclosure on social media assists the dissemination of information and the stock market response to this information

Shari'ah supervision, corporate governance and performance: Conventional vs. Islamic banks

The performance and accountability of boards of directors and effectiveness of governance mechanisms continue to be a matter of concern. Focusing on differences between conventional banks and Islamic banks, we examine the effect of (i) Shari-ah supervision boards, (ii) board structure and (iii) CEO-power on performance during the period 2005-2011. We find Shari'ah supervision boards positively impact on Islamic banks' performance when they perform a supervisory role, but the impact is negligible when they have only an advisory role. The effect of board structure (Board size and board independence) and CEO power (CEO-chair duality and internally recruited CEO) on the performance of Islamic banks is overall negative. Our findings provide support for the positive contribution of Shari'ah supervision boards overall negative. Our findings provide support for the positive contribution of Shari'ah supervision boards overall negative. Our findings provide support for the positive contribution of Shari'ah supervision boards but also emphasize the need for enforcement and regulatory mechanism for them to be more effective.

Corporate Governance in European Banks: Essays on Bank Ownership

Banks are important as they have a central role in the financial system, where funds are channelled either through financial intermediaries, such as banks, or through financial markets, hence promoting growth in any economy. Recently, we have been reminded of the drawbacks of the central role of banks. The current financial crisis, which started out as a sub-prime mortgage crisis in the US, has become a global financial crisis with substantial impact on the real economy in many countries. Some of the roots to the current financial crisis can be sought in the changing role of banks and in bank corporate governance. Moreover, the substantial revitalising measures taken have been justified by the central role of banks. Not only are banks important, they are also very special. The fact that banks are regulated in conjunction with greater opacity, make bank corporate governance different from corporate governance in non-bank companies. Surprisingly little is, however, known about bank corporate governance, in particularly, in a European setting. Hence, the objective of this doctoral thesis is to provide new insights in this research area by examining banks from 37 different European countries. Each of the three essays included in the doctoral thesis examines a particular aspect of bank corporate governance. In the first essay the interaction between the regulatory environment a bank operates in and its ownership structure is explored. Indicators of the severity of the moral hazard problem induced by the deposit insurance system and implicit too-big-to-fail government guarantee, particular features of deposit insurance systems as well as legal protection of shareholders, legal origin of a country and level of integration to the European community are used in the analysis. The empirical findings confirm previous findings on the link between legal protection of shareholders and ownership structure. Moreover, they show that differences in deposit insurance system features can explain some of the differences in ownership structure across European banks. In the second essay the impact of management and board ownership on the profitability of banks with different strategy is examined. The empirical findings suggest that the efficiency of these two particular corporate governance mechanisms varies with the characteristics of the agency problem faced by the bank. More specifically, management ownership is important in opaque non-traditional banks, whereas board ownership is important in traditional banks, where deposit insurance reduces the monitoring incentives of outsiders. The higher profitability does, however, go together with higher risk. In the third essay the profitability and risk of commercial, savings and cooperative banks are compared. The empirical findings suggest that distinct operational and ownership characteristics rather than only the mere fact that a bank is a commercial, savings or cooperative bank explain the profitability and risk differences. The main insight from the three essays is that a number of different aspects should be addressed simultaneously in order to give the complexity of bank corporate governance justice.

Company financial performance: Does board size matter? Case of the EUROSTOXX50 index

[EN] This study analyzes the relationship between board size and economic-financial performance in a sample of European firms that constitute the EUROSTOXX50 Index. Based on previous literature, resource dependency and agency theories, and considering regulation developed by the OECD and European Union on the normative of corporate governance for each country in the sample, the authors propose the hypotheses of both positive linear and quadratic relationships between the researched parameters. Using ROA as a benchmark of financial performance and the number of members of the board as measurement of the board size, two OLS estimations are performed. To confirm the robustness of the results the empirical study is tested with two other similar financial ratios, ROE and Tobin s Q. Due to the absence of significant results, an additional factor, firm size, is employed in order to check if it affects firm performance. Delving further into the nature of this relationship, it is revealed that there exists a strong and negative relation between firm size and financial performance. Consequently, it can be asseverated that the generic recommendation one size fits all cannot be applied in this case; which conforms to the Recommendations of the European Union that dissuade using generic models for all countries.

Livelihoods and poverty reduction in coastal communities in the Western Region of Ghana: analysis of livelihoods baseline data of the ICFG Program

This report is the result of the livelihoods baseline survey as part of the USAID-funded Integrated Coastal and Fisheries Governance (ICFG) Program for the Western Region of Ghana (Hen Mpoano). The survey aims to provide a baseline for interventions to be implemented as part of the Hen Mpoano project by: 1) Establishing a baseline of the status of livelihoods of households in target communities (assess income levels and sources, seasonality issues, assets, vulnerability); 2) Establishing a simplified nutritional baseline of households in target communities and fish species consumed; 3) Identifying opportunities for livelihood diversification in the target opportunities.

Sizes of walleye pollock (Theragra chalcogramma) and Atka mackerel (Pleurogrammus monopterygius) consumed by the western stock of Steller sea lions (Eumetopias jubatus) in Alaska from 1999 to 2000

Prey-size selectivity by Steller sea lions (Eumetopias jubatus) is relevant for understanding the foraging behavior of this declining predator, but studies have been problematic because of the absence and erosion of otoliths usually used to estimate fish length. Therefore, we developed regression formulae to estimate fish length from seven diagnostic cranial structures of walleye pollock (Theragra chalcogramma) and Atka mackerel (Pleurogrammus monopterygius). For both species, all structure measurements were related with fork length of prey (r2 range: 0.78−0.99). Fork length (FL) of walleye pollock and Atka mackerel consumed by Steller sea lions was estimated by applying these regression models to cranial structures recovered from scats (feces) collected between 1998 and 2000 across the range of the Alaskan western stock of Steller sea lions. Experimentally derived digestion correction factors were applied to take into account loss of size due to digestion. Fork lengths of walleye pollock consumed by Steller sea lions ranged from 3.7 to 70.8 cm (mean=39.3 cm, SD=14.3 cm, n=666) and Atka mackerel ranged from 15.3 to 49.6 cm (mean=32.3 cm, SD=5.9 cm, n=1685). Although sample sizes were limited, a greater proportion of juvenile (≤20 cm) walleye pollock were found in samples collected during the summer (June−September) on haul-out sites (64% juveniles, n=11 scats) than on summer rookeries (9% juveniles, n=132 scats) or winter (February−March) haul-out sites (3% juveniles, n=69 scats). Annual changes in the size of Atka mackerel consumed by Steller sea lions corresponded to changes in the length distribution of Atka mackerel resulting from exceptionally strong year classes. Considerable overlap (>51%) in the size of walleye pollock and Atka mackerel taken by Steller sea lions and the sizes of these species caught by the commercial trawl fishery were demonstrated.