Changes in the influence of board characterisitcs on corporate results due to the recent global financial crisis

The main purpose of this study is to analyse the changes caused by the global financial crisis on the influence of board characteristics on corporate results, in terms of corporate performance, corporate risk-taking, and earnings management. Sample comprises S&P 500 listed firms during 2002-2008. This study reveals that the environmental conditions call for different behaviour from directors to fulfil their responsibilities and suggests changes in normative and voluntary guidelines for improving good practices in the boardroom.

Riders in the storm: the professions and healthcare governance

The public sector is facing turbulent times and this also challenges the health professions who are expected to serve both the interests of the citizens and the cost-containment and austerity policies of governments. This article seeks to explore the changing role of the health professions. I introduce an approach on ‘citizen professionals’ as active players in the policy process and mediators between the state/policymakers and the citizens/patients. The aim is to highlight a transformative potential of professionalism and the connectedness with other sets of governance, like management. Empirical material from a German case study and a comparative European study serve to illustrate the arguments, drawing on policy analysis and secondary sources. The results bring the complexity of transformations and new emergent forms of professionalism into view that cannot be understood in traditional categories of conflict, exclusion and jurisdiction. Exploring the potential of the health professions to creatively respond to new challenges may reveal new opportunities for innovating healthcare policy beyond market and management.

Effects of health decentralization, financing and governance in Mexico

OBJECTIVE: To identify the effects of decentralization on health financing and governance policies in Mexico from the perspective of users and providers. METHODS: A cross-sectional study was carried out in four states that were selected according to geopolitical and administrative criteria. Four indicators were assessed: changes and effects on governance, financing sources and funds, the final destination of resources, and fund allocation mechanisms. Data collection was performed using in-depth interviews with health system key personnel and community leaders, consensus techniques and document analyses. The interviews were transcribed and analyzed by thematic segmentation. RESULTS: The results show different effectiveness levels for the four states regarding changes in financing policies and community participation. Effects on health financing after decentralization were identified in each state, including: greater participation of municipal and state governments in health expenditure, increased financial participation of households, greater community participation in low-income states, duality and confusion in the new mechanisms for coordination among the three government levels, absence of an accountability system, lack of human resources and technical skills to implement, monitor and evaluate changes in financing. CONCLUSIONS: In general, positive and negative effects of decentralization on health financing and governance were identified. The effects mentioned by health service providers and users were related to a diversification of financing sources, a greater margin for decisions around the use and final destination of financial resources and normative development for the use of resources. At the community level, direct financial contributions were mentioned, as well as in-kind contributions, particularly in the form of community work.

When Corporate Governance crosses the firm borders: family firms in local productive systems

The family involvement in firms is observable is most economies around the world, although there are significant differences among these countries, not only regarding its predominance in these economies, but also in what refers to the levels of involvement of the family in business. This research aims at understanding the family-based firms’ management when compared to non family based, with particular regards to the forms of corporate governance. This analysis is based on case studies and on secondary data found in the literature to support the findings from the empirical research. The data was collected via face to face in-depth interviews with entrepreneurs from the furniture and the events organisation industries (where the family is predominantly present in the furniture but not on the events organisation industry) and with industry and regional business associations. The case studies used in this research allowed the comparison between the Portuguese firms when the family plays an important role in business and those in which the family is absent. It has been found that there are important differences in businesses in countries/industries/local productive systems in which the family is seen as a dominant institution in the society (where businesses are based on strong ties; there is a harmonious relationship between the family members; and the family is accepted locally and dominates the firm organization) and on situations in which the family plays a more marginal role in the society. In fact, the family brings special characteristics to the business, in terms of management, corporate governance, inter and intra firm relationships and succession. Our findings confirm other empirical studies’ results found in the literature. Thus, this article provides a discussion on the factors that play a role in the form of corporate governance structure in family firms highlighting the pros and cons of organising the firm around the family.

Impactos do projecto solvência II nos sistemas de governance das seguradoras portuguesas

Mestrado em Contabilidade e Gestão das Instituições Financeiras

Regional governance: strategies and disputes in health region management

OBJECTIVE To analyze the regional governance of the health systemin relation to management strategies and disputes.METHODOLOGICAL PROCEDURES A qualitative study with health managers from 19 municipalities in the health region of Bahia, Northeastern Brazil. Data were drawn from 17 semi-structured interviews of state, regional, and municipal health policymakers and managers; a focus group; observations of the regional interagency committee; and documents in 2012. The political-institutional and the organizational components were analyzed in the light of dialectical hermeneutics.RESULTS The regional interagency committee is the chief regional governance strategy/component and functions as a strategic tool for strengthening governance. It brings together a diversity of members responsible for decision making in the healthcare territories, who need to negotiate the allocation of funding and the distribution of facilities for common use in the region. The high turnover of health secretaries, their lack of autonomy from the local executive decisions, inadequate technical training to exercise their function, and the influence of party politics on decision making stand as obstacles to the regional interagency committee’s permeability to social demands. Funding is insufficient to enable the fulfillment of the officially integrated agreed-upon program or to boost public supply by the system, requiring that public managers procure services from the private market at values higher than the national health service price schedule (Brazilian Unified Health System Table). The study determined that “facilitators” under contract to health departments accelerated access to specialized (diagnostic, therapeutic and/or surgical) services in other municipalities by direct payment to physicians for procedure costs already covered by the Brazilian Unified Health System.CONCLUSIONS The characteristics identified a regionalized system with a conflictive pattern of governance and intermediate institutionalism. The regional interagency committee’s managerial routine needs to incorporate more democratic devices for connecting with educational institutions, devices that are more permeable to social demands relating to regional policy making.

Governance mechanisms in Spanish financial intermediaries

This paper examines the governance of Spanish Banks around two main issues. First, does a poor economic performance activate those governance interventions that favor the removal of executive directors and the merger of non-performing banks? And second, does the relationship between governance intervention and economic performance vary with the ownership form of the bank? Our results show that a bad performance does activate governance mechanisms in banks, although for the case of Savings Banks intervention is confined to a merger or acquisition. Nevertheless, the distinct ownership structure of Savings Banks does not fully protect non-performing banks from disappearing. Product-market competition compensates for those weak internal governance mechanisms that result from an ownership form which gives voice to several stakeholder groups.

The Cost of ownership in the governance of interfirm collaborations

This paper investigates the selection of governance forms in interfirm collaborations taking into account the predictions from transaction costs and property rights theories. Transaction costs arguments are often used to justify the introduction of hierarchical controls in collaborations, but the ownership dimension of going from “contracts” to “hierarchies” has been ignored in the past and with it the so called “costs of ownership”. The theoretical results, tested with a sample of collaborations in which participate Spanish firms, indicate that the cost of ownership may offset the benefits of hierarchical controls and therefore limit their diffusion. Evidence is also reported of possible complementarities between reputation effects and forms of ownership that go together with hierarchical controls (i.e. joint ventures), in contrast with the generally assumed substitutability between the two.

Corporate governance in banking: the role of board of directors

We test hypotheses on the dual role of boards of directors for a sample of large international commercial banks. We find an inverted U shaped relation between bank performance and board size that justifies a large board and imposes an efficient limit to the board’s size; a positive relation between the proportion of non-executive directors and performance; and a proactive role in board meetings. Our results show that bank boards’ composition and functioning are related to directors’ incentives to monitor and advise management. All these relations hold after we control for bank business, institutional differences, size, market power in the banking industry, bank ownership and investors’ legal protection.

The Known Unknowns of Governance.

Empirical researchers interested in how governance shapes various aspects of economic development frequently use the Worldwide Governance indicators (WGI). These variables come in the form of an estimate along with a standard error reflecting the uncertainty of this estimate. Existing empirical work simply uses the estimates as an explanatory variable and discards the information provided by the standard errors. In this paper, we argue that the appropriate practice should be to take into account the uncertainty around the WGI estimates through the use of multiple imputation. We investigate the importance of our proposed approach by revisiting in three applications the results of recently published studies. These applications cover the impact of governance on (i) capital flows; (ii) international trade; (iii) income levels around the world. We generally find that the estimated effects of governance are highly sensitive to the use of multiple imputation. We also show that model misspecification is a concern for the results of our reference studies. We conclude that the effects of governance are hard to establish once we take into account uncertainty around both the WGI estimates and the correct model specification.

The Politics of Network Governance in Europe: The Case of Energy Regulation

Networks are considered increasingly important for policy-making. The literature on new modes of governance in Europe suggests that their horizontal coordination capacity and flexible and informal structures are particularly suitable for governing the multilevel architecture of the European polity. However, empirical evidence about the effects of networks on policy-making and public policies is still quite limited. This article uses the case of the European network of energy regulators to explore the determinants of the position of network members and, in turn, the domestic adoption of soft rules developed within this network. The empirical analysis, based on multivariate statistics and semi-directive interviews, supports the expectation that institutional complementarities increase actors' centrality in networks, while arguments based on organisational resources and age are disproved. Furthermore, results show that the overall level of adoption is considerable and that centrality might have a small positive effect on domestic adoption.

A study of governance practices in corporate foundations

Implementation of social investments through corporate foundations is growing and, therefore, it is important to study their governance aspects better. Governance is conceptualized as a set of control and incentive mechanisms to overcome the so-called agency conflicts, which originate from the separation of property and management in for-profit organizations, a concept also applied to nonprofit institutions. It is argued that corporate foundations have the characteristics both of companies and of civil society organizations, which distinguishes them from both types of organizations. This paper analyses a study in which a set of governance mechanisms, adapted from those identified by a literature review of corporate and nonprofit governance, was selected for study. It is an exploratory descriptive case study, which analyzed data about eight organizations collected through publications and interviews with their CEOs. The data analysis indicates that it is appropriate to distinguish the different organization types and to apply the agency theory. Research results indicate that the selected governance mechanisms may be adapted and used in corporate foundations. However, they are only partially applied in the observed cases, which suggests the need for further studies that might consolidate these practices in such organizations.

Economics of public governance with strategic production of information: four essays

SUMMARY This paper analyses the outcomes of the EEA and bilateral agreements vote at the level of the 3025 communities of the Swiss Confederation by simultaneously modelling the vote and the participation decisions. Regressions include economic and political factors. The economic variables are the aggregated shares of people employed in the losing, Winning and neutral sectors, according to BRUNETTI, JAGGI and WEDER (1998) classification, Which follows a Ricardo-Viner logic, and the average education levels, which follows a Heckscher-Ohlin approach. The political factors are those used in the recent literature. The results are extremely precise and consistent. Most of the variables have the predicted sign and are significant at the l % level. More than 80 % of the communities' vote variance is explained by the model, substantially reducing the residuals when compared to former studies. The political variables do have the expected signs and are significant as Well. Our results underline the importance of the interaction between electoral choice and participation decisions as well as the importance of simultaneously dealing with those issues. Eventually they reveal the electorate's high level of information and rationality. ZUSAMMENFASSUNG Unser Beitrag analysiert in einem Model, welches gleichzeitig die Stimm- ("ja" oder "nein") und Partizipationsentscheidung einbezieht, den Ausgang der Abstimmungen über den Beitritt zum EWR und über die bilateralen Verträge für die 3025 Gemeinden der Schweiz. Die Regressionsgleichungen beinhalten ökonomische und politische Variabeln. Die ökonomischen Variabeln beinhalten die Anteile an sektoriellen Arbeitsplatzen, die, wie in BRUNETTI, JAGGIl.1I1d WEDER (1998), in Gewinner, Verlierer und Neutrale aufgeteilt Wurden, gemäß dem Model von Ricardo-Viner, und das durchschnittliche Ausbildungsniveau, gemäß dem Model von Heckscher-Ohlin. Die politischen Variabeln sind die in der gegenwärtigen Literatur üblichen. Unsere Resultate sind bemerkenswert präzise und kohärent. Die meisten Variabeln haben das von der Theorie vorausgesagte Vorzeichen und sind hoch signifikant (l%). Mehr als 80% der Varianz der Stimmabgabe in den Gemeinden wird durch das Modell erklärt, was, im Vergleich mit früheren Arbeiten, die unerklärten Residuen Wesentlich verkleinert. Die politischen Variabeln haben auch die erwarteten Vorzeichen und sind signifikant. Unsere Resultate unterstreichen die Bedeutung der Interaktion zwischen der Stimm- und der Partizipationsentscheidung, und die Bedeutung diese gleichzeitig zu behandeln. Letztendlich, belegen sie den hohen lnformationsgrad und die hohe Rationalität der Stimmbürger. RESUME Le présent article analyse les résultats des votations sur l'EEE et sur les accords bilatéraux au niveau des 3025 communes de la Confédération en modélisant simultanément les décisions de vote ("oui" ou "non") et de participation. Les régressions incluent des déterminants économiques et politiques. Les déterminants économiques sont les parts d'emploi sectoriels agrégées en perdants, gagnants et neutres selon la classification de BRUNETTI, JAGGI ET WEDER (1998), suivant la logique du modèle Ricardo-Viner, et les niveaux de diplômes moyens, suivant celle du modèle Heckscher-Ohlin. Les déterminants politiques suivent de près ceux utilisés dans la littérature récente. Les résultats sont remarquablement précis et cohérents. La plupart des variables ont les signes prédits par les modèles et sont significatives a 1%. Plus de 80% de la variance du vote par commune sont expliqués par le modèle, faisant substantiellement reculer la part résiduelle par rapport aux travaux précédents. Les variables politiques ont aussi les signes attendus et sont aussi significatives. Nos résultats soulignent l'importance de l'interaction entre choix électoraux et décisions de participation et l'importance de les traiter simultanément. Enfin, ils mettent en lumière les niveaux élevés d'information et de rationalité de l'électorat.

Corporate governance and corporate social performance

By integrating the agency and stakeholder perspectives, this study aims to provide a systematic understanding of the firm- and institutional-level corporate governance factors that affect corporate social performance (CSP). We analyze a large global panel dataset and reveal that CSP is positively associated with board independence, but negatively with ownership concentration. These results underscore the idea that the benefits of CSP do not flow to shareholders to the same extent as the costs and that the allocation of resources to CSP is lower when shareholders are powerful. Furthermore, these findings indicate that independent directors should be understood as agents in their own right, not only focused on defending shareholder interests. We also find that CSP is negatively related to investor protection and shareholder-oriented environments, while it is positively related to egalitarian environments. Finally, we jointly analyze firm-level drivers and institutional contexts.

Do PES Improve the Governance of Forest Restoration?

Payments for Environmental Services (PES) are praised as innovative policy instruments and they influence the governance of forest restoration efforts in two major ways. The first is the establishment of multi-stakeholder agencies as intermediary bodies between funders and planters to manage the funds and to distribute incentives to planters. The second implication is that specific contracts assign objectives to land users in the form of conditions for payments that are believed to increase the chances for sustained impacts on the ground. These implications are important in the assessment of the potential of PES to operate as new and effective funding schemes for forest restoration. They are analyzed by looking at two prominent payments for watershed service programs in Indonesia-Cidanau (Banten province in Java) and West Lombok (Eastern Indonesia)-with combined economic and political science approaches. We derive lessons for the governance of funding efforts (e.g., multi-stakeholder agencies are not a guarantee of success; mixed results are obtained from a reliance on mandatory funding with ad hoc regulations, as opposed to voluntary contributions by the service beneficiary) and for the governance of financial expenditure (e.g., absolute need for evaluation procedures for the internal governance of farmer groups). Furthermore, we observe that these governance features provide no guarantee that restoration plots with the highest relevance for ecosystem services are targeted by the PES