Search results for: governance and diversification

Authors: Lottie Lane

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It is habitually assumed and stated that the World Bank should engage and comply with international human rights standards. However, the basis for holding the Bank to such standards is unclear. Most advocates of the idea invoke aspects of international law to argue that the Bank has existing obligations to act in compliance with human rights standards. The Bank itself, however, does not appear to accept such arguments, despite having endorsed the importance of human rights for a considerable length of time. A substantial challenge is that under the current international human rights law framework, the World Bank is considered a non-state actor, and as such, has no direct human rights obligations. In the absence of clear legal duties for the Bank, it is necessary to look at the tools available beyond the international human rights framework to encourage the Bank to comply with human rights standards. This article critically examines several bases for arguing that the Bank should comply and engage with human rights through its policies and practices. Drawing on the Bank’s own ‘good governance’ approach as well as the United Nations’ ‘human rights-based-approach’ to development, a new basis is suggested. First, the relationship between the World Bank and human rights is examined. Three perspectives are considered: (1) the legal position – what the status of the World Bank is under international human rights law, and whether it can be said to have existing legal human rights obligations; (2) the Bank’s own official position – how the Bank envisages its relationship with and role in the protection of human rights; and (3) the relationship between the Bank’s policies and practices and human rights (including how its attitudes are reflected in its policies and how the Bank’s operations impact human rights enjoyment in practice). Here, the article focuses on two examples – the (revised) 2016 Environmental and Social Safeguard Policies and the 2012 case-study regarding Gambella, Ethiopia. Both examples are widely considered missed opportunities for the Bank to actively engage with human rights. The analysis shows that however much pressure is placed on the Bank to improve its human rights footprint, it is extremely reluctant to do so explicitly, and the legal bases available are insufficient for requiring concrete, ex ante action by the Bank. Instead, the Bank’s own ‘good governance’ approach to development – which it has been advocating since the 1990s – can be relied upon. ‘Good governance’ has been used and applied by many actors in many contexts, receiving numerous different definitions. This article argues that human rights protection can now be considered a crucial component of good governance, at least in the context of development. In doing so, the article explains the relationship and interdependence between the two concepts, and provides three rationales for the Bank to take a ‘human rights-based approach’ to good governance. Ultimately, this article seeks to look beyond international human rights law and take a governance approach to provide a convincing basis upon which to argue that the World Bank should comply with human rights standards.

Keywords: World Bank, international human rights law, good governance, human rights-based approach

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Authors: Abdullah AlGhazali, Richard Fairchild, Yilmaz Guney

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We examine the effect of managerial overconfidence on UK firms’ payout policy for the period 2000 to 2012. The analysis incorporates, in addition to common firm-specific factors, a wide range of corporate governance factors and managerial characteristics that have been documented to affect the relationship between overconfidence and payout policy. Our results are robust to several estimation considerations. The findings show that the influence of overconfident CEOs on the amount of, and the propensity to pay, dividends is significant within the UK context. Specifically, we detect that there is a reduction in dividend payments in firms managed by overconfident managers compared to their non-overconfident counterparts. Moreover, we affirm that cash flows, firm size and profitability are positively correlated, while leverage, firm growth and investment are negatively correlated with the amount of and propensity to pay dividends. Interestingly, we demonstrate that firms with the potential for undervaluation reduce dividend payments. Some of the corporate governance factors are shown to motivate firms to pay more dividends while these factors seem to have no influence on the propensity to pay dividends. The results also show that in general higher overconfidence leads to more share repurchases but the lower total payout. Overall, managerial overconfidence should be considered as an important factor influencing payout policy in addition to other known factors.

Keywords: dividends, repurchases, UK firms, overconfidence, corporate governance, undervaluation

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Authors: Helene Eller

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The aim of non-profit organizations (NPO) is to provide services and goods for its clientele, with profit being a minor objective. By having this definition as the basic purpose of doing business, it is obvious that the goal of an organisation is to serve several bottom lines and not only the financial one. This approach is underpinned by the non-distribution constraint which means that NPO are allowed to make profits to a certain extent, but not to distribute them. The advantage is that there are no single shareholders who might have an interest in the prosperity of the organisation: there is no pie to divide. The gained profits remain within the organisation and will be reinvested in purposeful projects. Good governance is mandatory to support the aim of NPOs. Looking for a measure of good governance the principals of corporate governance (CG) will come in mind. The purpose of CG is direction and control, and in the field of NPO, CG is enlarged to consider the relationship to all important stakeholders who have an impact on the organisation. The recognition of more relevant parties than the shareholder is the link to corporate social responsibility (CSR). It supports a broader view of the bottom line: It is no longer enough to know how profits are used but rather how they are made. Besides, CSR addresses the responsibility of organisations for their impact on society. When transferring the concept of CSR to the non-profit area it will become obvious that CSR with its distinctive features will match the aims of NPOs. As a consequence, NPOs who apply CG apply also CSR to a certain extent. The research is designed as a comprehensive theoretical and empirical analysis. First, the investigation focuses on the theoretical basis of both concepts. Second, the similarities and differences are outlined and as a result the interconnection of both concepts will show up. The contribution of this research is manifold: The interconnection of both concepts when applied to NPOs has not got any attention in science yet. CSR and governance as integrated concept provides a lot of advantages for NPOs compared to for-profit organisations which are in a steady justification to show the impact they might have on the society. NPOs, however, integrate economic and social aspects as starting point. For NPOs CG is not a mere concept of compliance but rather an enhanced concept integrating a lot of aspects of CSR. There is no “either-nor” between the concepts for NPOs.

Keywords: business ethics, corporate governance, corporate social responsibility, non-profit organisations

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Authors: Wencong Lu, Abdul Latif, Raza Ullah, Subhan Ullah

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Agricultural production is subject to risk and the attitudes of producers toward risk, in turn, may be affected by certain socioeconomic characteristics of producers. Although, it is important to assess the risk attitude of farmers and their perception towards different calamitous risk sources for better understanding of their risk management adoption decisions, to the best of our knowledge no studies have been carried out to analyze the risk attitude and risk perceptions in the context of tobacco production in Pakistan. Therefore the study in hand is conducted with an attempt to overcome the gap in existing literature by analyzing different catastrophic risk sources faced by tobacco growers, their attitude towards risk and the effect of socioeconomic and demographic characteristics, farmers’ participation in contract farming and off-farm diversification on their risk attitude and risk perception. Around 78% of Pakistan’s entire tobacco crop and nearly all of the country’s Flue-Cured Virginia (FCV) tobacco is produced in Khyber Pakhtunkhwa (KPK) province alone. The yield/hectare of tobacco produced in KPK province is 14% higher than the global average and 22 % higher than national average. Khyber Pakhtunkhwa province was selected as main study area as nearly all of the country’s Flue-Cured Virginia (FCV) tobacco is produced in Khyber Pakhtunkhwa (KPK) province alone. Six districts were purposely selected based on their contribution in overall production for the last five years which accounts for more than 94.84% of the tobacco production in KPK province. Specific objectives taken into considerations for this study are the risk attitude of the farmers for growing FCV tobacco crop, farmers’ risk perception for different risk sources related to tobacco production (as far as the incidence and severity of each risk source is concerned) and the effect of socioeconomic characteristics, contract farming participation and off-farm diversification (income) on the risk attitude and risk perception of FCV tobacco growers.

Keywords: risk attitude, risk perception, contract farming, off-farm diversification, probit model

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Authors: Endalew Jibat, Feyera Senbeta, Tesfaye Zeleke, Fitsum Hagos

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Institutions can play a key role in coordinating how natural resources are effectively used without over-exploitation. Institutions are the laws, policies, and organizational arrangements that permit, forbid or regulate human action. The aim of this study was to look into the roles of formal and informal institutions, as well as their interactions, in water resource governance in Ethiopia's Central Rift Valley (CRV), where water scarcity is a concern. Key informant interviews, group discussions, in depth-interview, and secondary data sources were used to generate relevant data. The study revealed that formal and informal institutions were involved in water resource governance in the study area. However, the influence of informal institutions on formal institutions or vice versa is trivial to change the action of water users. Lack of clear roles and responsibilities of actors, weak capacity and lack of meaningful decentralization and participation of key actors in policy development, lack of synergy and incongruence between formal and informal institutions, and absence of enforcement mechanisms including incentives are attributed to inefficient use of water resources in the CRV. Enhancing the interplay of formal and informal institutions in the water resource policy development and meaningful decentralization and key stakeholders' engagement is recommended for sustainable water use.

Keywords: institutions, governance, institutional interplay, water users

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Authors: Ernest Nweke, Enkhtuya Bavuudorj

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The harsh realities of the scandalous failure of several notable corporations in the past two decades have inextricably resulted in a surge in corporate governance studies. Nevertheless, little or no attention has been paid to corporate governance studies in Mongolian firms and much less to the comprehension of the correlation among ownership structure, corporate governance mechanisms and trend of innovative activities. Innovation is the bed rock of enterprise success. However, the funding and support for innovative activities in many firms are to a great extent determined by the incentives provided by the firm’s internal and external governance mechanisms. Mongolia is an East Asian country currently undergoing a fast-paced transition from socialist to democratic system and it is a widely held view that private ownership as against public ownership fosters innovation. Hence, following the privatization policy of Mongolian Government which has led to the transfer of the ownership of hitherto state controlled and state directed firms to private individuals and organizations, expectations are high that sufficient motivation would be provided for firm managers to engage in innovative activities. This research focuses on the relationship between ownership structure, corporate governance on one hand and the level of innovation on the hand. The paper is empirical in nature and derives data from both reliable secondary and primary sources. Secondary data for the study was in respect of ownership structure of Mongolian listed firms and innovation trend in Mongolia generally. These were analyzed using tables, charts, bars and percentages. Personal interviews and surveys were held to collect primary data. Primary data was in respect of corporate governance practices in Mongolian firms and were collected using structured questionnaire. Out of a population of three hundred and twenty (320) companies listed on the Mongolian Stock Exchange (MSE), a sample size of thirty (30) randomly selected companies was utilized for the study. Five (5) management level employees were surveyed in each selected firm giving a total of one hundred and fifty (150) respondents. Data collected were analyzed and research hypotheses tested using Chi-Square test statistic. Research results showed that corporate governance mechanisms were better and have significantly improved overtime in privately held as opposed to publicly owned firms. Consequently, the levels of innovation in privately held firms were considerably higher. It was concluded that a significant and positive relationship exists between private ownership and good corporate governance on one hand and the level of funding provided for innovative activities in Mongolian firms on the other hand.

Keywords: corporate governance, innovation, ownership structure, stock exchange

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Authors: Maria Ghorbanian, Mohammad Ghahramani, Mahmood Abolghasemi

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Universities and institutions of higher education in Iran, like other higher education institutions in the world, have a heavy mission and task to educate students based on the needs of the country. Taking on such a serious responsibility requires having a good governance system for planning, formulating executive plans, evaluating, and finally modifying them in accordance with the current conditions and challenges ahead. In this regard, the present study was conducted with the aim of identifying the components of good governance in the Iranian higher education system by survey method and with a quantitative approach. In order to collect data, a researcher-made questionnaire was used, which includes two parts: personal and professional characteristics (5 questions) and the three components of good governance in the Iranian higher education system, including good management and leadership (8 items), continuous evaluation and effective (university performance, finance, and university appointments) (8 items) and civic responsibility and sustainable development (7 items). These variables were measured and coded in the form of a five-level Likert scale from "Very Low = 1" to "Very High = 5". First, the validity and reliability of the research model were examined. In order to calculate the reliability of the questionnaire, two methods of Cronbach's alpha and combined reliability were used. Fornell-Larker interaction and criterion were also used to determine the degree of diagnostic validity. The statistical population of this study included all faculty members of public universities in Tehran (N = 4429). The sample size was estimated to be 340 using the Cochran's formula. These numbers were studied using a randomized method with a proportional assignment. The data were analyzed by the structural equation method with the least-squares approach. The results showed that the component of civil responsibility and sustainable development with a factor load of 0.827 is the most important element of good governance.

Keywords: good governance, higher education, sustainable, development

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Authors: Patrick Velte

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Sustainability reporting has become a central element of modern corporate governance practice. This paper is the first to recognize supervisory board independence, sustainable expertise and gender diversity in two European two tier countries and their impact on sustainability reporting quality. For a sample of 188 German and Austrian companies which are listed at the Prime Standard of the Frankfurt and Vienna Stock Exchange for the business years 2012-2013, descriptive findings show that CSR reporting quality is still low in both countries. Furthermore, multiple regressions state that independent and female members in the supervisory board do have a positive impact on CSR reporting quality in Germany and Austria. However, the existence of sustainable experts in the supervisory board both in Germany and Austria shows a positive but insignificant impact. Our findings suggest that the current European corporate governance regulations can be a useful instrument to increase the quality of modern CSR reporting for the stakeholders.

Keywords: sustainability reporting, corporate governance, gender diversity, board independence

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Authors: Kari Huhtala, Iiro Jussila

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The supervisory board is assumed to use power in the governance of a firm, but the actual use of power has been scantly investigated. The research question of the paper is “How does the supervisory board use power in the selection of the board of directors”. The data stem from 11 large Finnish agricultural cooperatives. The research approach was qualitative including semi-structured interviews of the board of directors and supervisory board chairpersons. The results were analyzed and interpreted against theories of social power. As a result, the use of power is approached from two perspectives: (1) formal position-based authority and (2) informal power. Central elements of power were the mandate of the supervisory board, the role of the supervisory board, the supervisory board chair, the nomination committee, collaboration between the supervisory board and the board of directors, the role of regions and the role of the board of directors. The study contributes to the academic discussion on corporate governance in cooperatives and on the supervisory board in the context of the two-tier model. Additional research of the model in other countries and of other types of cooperatives would further academic understanding of supervisory boards.

Keywords: board, co-operative, supervisory board, selection, director

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Authors: Lara Al-Haddad, Mark Whittington

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This paper aims to examine the impact of two influential internal corporate governance mechanisms, namely board characteristics and ownership structure on the use of real activities-based and accrual-based earnings management by Jordanian public firms. Using panel data from Jordanian public firms after the introduction of the Jordanian Corporate Governance Code (JCGC) in 2009, the study finds both institutional ownership and managerial ownership constrain the use of real and accrual earnings manipulations. On the other side, both independent directors and largest shareholders are found to exaggerate the incidence of using real and accrual earnings management. The study also examines the trade-off between real and accrual earnings management and found that Jordanian firms use a combination of real and accrual-based earnings management to obtain the greatest effect on earnings reporting strategies. For the purpose of this study, three types of real earnings management are considered: sales manipulation, overproduction, and the abnormal reduction of discretionary expenditures. The abnormal discretionary accrual is considered for accruals management. While for the internal corporate governance mechanisms; board characteristics are examined by using board independence, board size, and CEO-duality; and ownership structure is examined by using managerial ownership, institutional ownership, foreign ownership and largest shareholder ownership. To the best knowledge of the researchers, this study is the first to examine the relationship between board characteristics and real earnings management in Jordan. Further, it is the first to examine the relationship between corporate governance mechanisms and discretionary accruals after the introduction of the Jordanian Corporate Governance Code in 2009. Thus, the findings of this study have important policy implications for policymakers, regulators, standard setters, audit professional, and investors in their attempts to constrain the practice of earnings management, whether real or accrual, and to improve the financial reporting quality in Jordan.

Keywords: board characteristics, Jordan, ownership structure, real earnings management

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Authors: Lukman Oyelami

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Studies have identified trade as a veritable tool for inclusive economic growth and poverty reduction in developing countries. However, contrary to the overwhelming pieces of evidence of the Asian tiger as a success story of beneficial trade, many African countries still experience poverty unabatedly despite active engagement in trade. Consequently, this study seeks to investigate the contributory effect of technological innovation on total export performance and specifically manufacturing exports of African countries. This is with a view to exploring manufacturing exports as a viable option for diversification. To achieve the empirical investigation this study, require Systems Generalized Method of Moments (sys-GMM) estimation technique was adopted based on the econometric realities inherent in the data utilized. However, the static technique of panel estimation of the Fixed Effects (FE) model was utilized for baseline analysis and robustness check. The conclusion from this study is that innovation generally impacts export performance of African countries positively, however, manufacturing export shows more sensitivity to innovation than total export. And, this provides a clear pathway for export diversification for many African countries that run a resource-based economy.

Keywords: innovation, export, GMM, Africa

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Authors: Abul Quasem Al-Amin, Md. Hasanuzzaman, Mohammad Nurul Azam, Walter Leal Filho

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With regard to the future energy strategy and vision, this study aimed to find the drawbacks of proposed energy diversification policy for 2020. To have a clear picture of the drawback and competitive alternative, this study has explored two scenarios, namely Scenario a and Scenario b. The Scenario a indicates that in the year 2020 the GHG emissions would be 823,498.00 million tons (Mt) with a 2020 final demand and proposed fuel mix such as by the Five-Fuel Diversification Strategy. In contrast, as an alternative, the Scenario b with biofuel potentials indicates that the substitution of coal energy by 5%, 10%, and 15%, respectively, with biofuel, would reduce the GHG emissions from 374,551.00, 405,118.00, and 823,498.00 million tons to 339,964.00, 329,834.00, and 305,288.00 million tons, respectively, by the present fuel mix, business-as-usual fuel mix, and proposed fuel mix up to the year 2020. Therefore, this study has explored a healthy alternative by introducing biofuel renewable energy option instead of conventional energy utilization in the power generation with environmental aspect in minds. This study effort would lessen the gap between GHG mitigation and future sustainable development and would useful to formulate effective renewable energy strategy in Malaysia.

Keywords: energy, environmental impacts, renewable energy, biofuel, energy policy

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Authors: Rahaf Suleiman Altallaa

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City planning involves making plans, organizing and dealing with the cities urban areas. It attempts to organize socio-spatial relationships at exceptional ranges of governance Urban planning offers the social, monetary and environmental effects of defining spatial obstacles and the influence on the spatial distribution of resources. The dreams and methods of reaching such dissemination vary extensively traditionally and geographically and are often challenged through traditional strategies that expose the political nature of application interventions and the bounds of technical know-how claims. Space, network, argument, and postcolonial debates address how present-day socio-spatial organization is formed, what needs to or should not trade, and the way it underscores whether or not a good plan will contribute to a given situation. Inside the absence of an agreed-upon technical justification for the planning exercise, the planning idea has a tendency to focus on normative processes, positioning making plans as an area for participatory democracy.

Keywords: environmental governance, environmental planning, environmental management, sustainable competitiveness, sustainability

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Authors: Abubakar O. Sulaiman

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Agriculture was the main stay of Nigeria’s economy before the oil boom of the 1970s caused a gradual but steady shift from agriculture to crude oil as the major source of revenue and foreign exchange. The economy later experienced many symptoms of the 'Dutch disease', with exchange rate appreciation and erosion of competitiveness of the non-oil tradable goods. In order to reverse the worsening economic situations -high unemployment, galloping inflation, deteriorating balance of payment, declining economic growth, and fiscal deficits among others- the government, embarked on austerity measures in 1982 and Structure Adjustment Programme (SAP) in 1986. One of the cornerstones of SAP is the diversification of the economy from oil to non-oil. In the form of stocktaking, this paper investigates the impact of non-oil revenue on economic growth in Nigeria using quarterly time-series data from 1980 to 2019. The findings revealed that a long-run relationship exists between the variables (non-oil variables) and economic growth in Nigeria. Among the variables, (agriculture revenue, manufacturing revenue, revenue from services, and company income tax) contributed substantially to economic growth. The paper recommends that the government should continue to intensify efforts and policies in the diversification of the economy as it will bring about sustainable non-oil revenue and economic growth.

Keywords: non-oil revenue, economic growth, export, long run relationship

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Authors: Onur Arugaslan, Ajay Samant, Devrim Yaman

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Financial advisors and investors seek new assets which could potentially increase portfolio returns and decrease portfolio risk. Cryptocurrencies represent a relatively new asset class which could serve in both these roles. There has been very little research done in the area of the risk/return tradeoff in a portfolio consisting of fixed income assets, stocks, and cryptocurrency. The objective of this study is a rigorous examination of this issue. The data used in the study are the monthly returns on 4-week US Treasury Bills, S&P Investment Grade Corporate Bond Index, Bitcoin and the S&P 500 Stock Index. The methodology used in the study is the application Modern Portfolio Theory to evaluate the risk-adjusted returns of portfolios with varying combinations of these assets, using Sharpe, Treynor and Jensen Indexes, as well as the Sortino and Modigliani measures. The results of the study would include the ranking of various investment portfolios based on their risk/return characteristics. The conclusions of the study would include objective empirical inference for investors who are interested in including cryptocurrency in their asset portfolios but are unsure of the risk/return implications.

Keywords: financial economics, portfolio diversification, fixed income securities, cryptocurrency, stock indexes

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Authors: Sang-Ju Yu

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This paper examines the changing essences and effects of ‘affective atmosphere’ during the COVID-19 pandemic crisis, which have been facilitated and shaped the ‘affective governance’ in Taiwan. Due to long-term uncertainty and unpredictability, the COVID-19 pandemic not only caused unprecedented global crisis but triggered the public’s negative emotional responses. This paper unravels how the shortage of Personal Protective Equipment and the proliferating fake news heightened people’s fear and anxiety and how specific affective atmospheres can be provoked and manipulated to harness emotional appeals of citizens strategically in Taiwan. Through the in-depth interviews with diverse stakeholders involved, it unfolds the dynamics and strategies of affective governance, wherein public emotions and concerns are now given significant consideration in both policy measures and the affective expression of leadership, spatial arrangement, service delivery, and the interaction with citizens. Addressing psychosocial and emotional needs has become the core of crisis response mechanisms suited to dynamic affective atmospheres and pandemic situation. This paper also demonstrates that epidemic prevention and control is not merely the production of neutral or rational policy-making processes, as it is dominated by multiple emotions resulted from unexpected and salient events at different moments. It provides explicit insight into how different prevention scenarios operated effectively through political and affective mobilisation to strengthen emotional bonding and collective identity which energises collective action. Basically, successful affective governance calls for both negative and positive emotions, for both scientific and political decision-making, for both community and bureaucracy, and both quality and efficiency of private–public collaboration.

Keywords: affective atmospheres, affective governance, COVID-19 pandemic, private-public collaboration

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Authors: Omar Juhmani

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This paper examines the relation between internal corporate governance and the level of corporate compliance with mandatory IFRS disclosure requirements. The internal corporate governance is measured by board and audit committee characteristics. Using data from Bahrain Stock Exchange, the results show that board independence is positively and significantly associated with level of compliance with IFRS disclosure requirements. This suggests that internal corporate governance mechanisms are effective in the financial reporting practices by increasing the level of compliance with IFRS disclosures. Also, the results of the regression analyses indicate that two of the control variables; company size and audit firm size are significantly positively associated with the level of corporate compliance with mandatory IFRS disclosure requirements in Bahrain.

Keywords: Bahrain, board and audit committee characteristics, compliance, disclosure, IFRS

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Authors: Vibhore Bakshi

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This research paper is a step towards understanding the role of governance in the plan preparation process. It addresses the complexities of the peri-urban, historical constructions, politics and policies of sustainability, and legislative frameworks. The paper reflects on the Delhi NCT as one of the classical cases that have happened to witness different structural changes in the master plan around 1981, 2001, 2021, and Proposed Draft 2041. The Delhi Landsat imageries for 1989 and 2018 show an increase in the built-up areas around the periphery of NCT. The peri-urbanization has been a result of increasing in-migration to peri–urban areas of Delhi. The built-up extraction for years 1981, 1991, 2001, 2011, and 2018 highlights the growing peri-urbanization on scarce land therefore, it becomes equally important to research the history of the land and its legislative measures. It is interesting to understand the streaks of changes that have occurred in the land of Delhi in accordance with the different master plans and land legislative policies. The process of masterplan process in Delhi has experienced a lot of complexities in juxtaposition to other metropolitan regions of the world. The paper identifies the shortcomings in the current master planning process approach in regard to the stage of the planning process, traditional planning approach, and lagging ICT-based interventions. The metropolitan governance systems across the globe and India depict diversity in the organizational setup and varied dissemination of functions. It addresses the complexity of the peri-urban, historical constructions, politics and policies of sustainability, and legislative frameworks.

Keywords: governance, land provisions, built-up areas, in migration, built up extraction, master planning process, legislative policies, metropolitan governance systems

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Authors: Simphiwe Phungula

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In the past few years, the impact of Covid 19 in South Africa has given rise to the need for business rescue proceedings where businesses are financially distressed. Even more, the looting unrest and floods in certain parts of South Africa have also played an impact on businesses’ financial stress. To help financially distressed companies in South Africa, the Companies Act (“the Act”) has introduced a business rescue procedure aimed at helping those ailing companies. This mechanism is aimed at rehabilitating financially distressed companies so that they become solvent again and if it is not possible, results in a better return for the company’s creditors or shareholders than would result from the immediate liquidation of the company. Unfortunately, since the introduction of business rescue, evidence has shown that sometimes companies resort to business rescue proceedings to seek refuge from creditors even if the facts do not justify that the company should commence business rescue. In most cases, the abuse of business rescue is done by directors who pass a resolution that the company should embark on business rescue even if evidence shows that the company should not commence the proceedings. This is done notwithstanding the principles of King Code IV which requires ethics and good governance on the part of directors. This paper demonstrates how the abuse of business rescue can impact the principles of good governance and ethics of King Code IV. It argues that directors should rethink their corporate practices, and ethical standards when passing a resolution to commence business rescue proceedings.

Keywords: business rescue, king code, corporate governance, ethics

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Authors: R. Malisa, E. Schwella, K. I. Theletsane

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Due to climate change, population growth and rapid urbanization, the demand for water in South Africa is inevitably surpassing supply. To address similar challenges globally, there has been a paradigm shift from conventional urban waste water management “government” to a “governance” paradigm. From the governance paradigm, Integrated Urban Water Management (IUWM) principle emerged. This principle emphasizes efficient urban waste water treatment and production of high-quality recyclable effluent. In so doing mimicking natural water systems, in their processes of recycling water efficiently, and averting depletion of natural water resources.  The objective of this study was to investigate drivers of shifting the current urban waste water management approach from a “government” paradigm towards “governance”. The study was conducted through Interactive Management soft systems research methodology which follows a qualitative research design. A case study methodology was employed, guided by realism research philosophy. Qualitative data gathered were analyzed through interpretative structural modelling using Concept Star for Professionals Decision-Making tools (CSPDM) version 3.64.  The constructed model deduced that the main drivers in shifting the Stellenbosch municipal urban waste water management towards IUWM “governance” principles are mainly social elements characterized by overambitious expectations of the public on municipal water service delivery, mis-interpretation of the constitution on access to adequate clean water and sanitation as a human right and perceptions on recycling water by different communities. Inadequate public participation also emerged as a strong driver. However, disruptive events such as draught may play a positive role in raising an awareness on the value of water, resulting in a shift on the perceptions on recycled water. Once the social elements are addressed, the alignment of governance and administration elements towards IUWM are achievable. Hence, the point of departure for the desired paradigm shift is the change of water service authorities and serviced communities’ perceptions and behaviors towards shifting urban waste water management approaches from “government” to “governance” paradigm.

Keywords: integrated urban water management, urban water system, wastewater governance, wastewater treatment works

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Authors: Maria Consuelo Doble

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For decades, basic public education in the Philippines has been beleaguered by a governance scenario of multi-layered decision-making and the lack of collaboration between sectors in addressing issues on poor access to schools, high dropout rates, low survival rates, and poor student performance. These chronic problems persisted despite multiple efforts making it appear that the education system is incapable of reforming itself. In the mountainous rural towns of La Trinidad and Tuba, in the province of Benguet in Northern Philippines, collaborative education governance was catalyzed by the intervention of Synergeia Foundation, a coalition made up of individuals, institutions and organizations that aim to improve the quality of education in the Philippines. Its major thrust is to empower the major stakeholders at the community level to make education work by building the capacities of School Governing Councils (SGCs). Although mandated by the Department of Education in 2006, the SGCs in Philippine public elementary schools remained dysfunctional. After one year of capacity-building by Synergeia Foundation, some SGCs are already exhibiting active community-based multi-sectoral collaboration, while there are many that are not. With the myriad of factors hindering collaboration, Synergeia Foundation is now confronted with the pressing question: What are the factors that promote collaborative governance in the SGCs so that they can address the education-related issues that they are facing? Using Emerson’s (2011) framework on collaborative governance, this study analyzes the application of collaborative governance by highly-functioning SGCs in the public elementary schools of Tuba and La Trinidad. Findings of this action research indicate how the dynamics of collaboration composed of three interactive and iterative components – principled engagement, shared motivation and capacity for joint action – have resulted in meaningful short-term impact such as stakeholder engagement and decreased a number of dropouts. The change in the behavior of stakeholders is indicative of adaptation to a more collaborative approach in governing education in Benguet highland settings such as Tuba and La Trinidad.

Keywords: basic public education, Benguet highlands, collaborative governance, School Governing Council

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Authors: Tina Vuko, Marija Maretić, Marko Čular

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The aim of this study is to analyze the role and effectiveness of internal mechanism (audit committee) of corporate governance on credit institutions performance in Croatia. Based on research objective, sample of 78 credit institutions listed on Zagreb Stock Exchange, from 2007 to 2012, has been collected and efficiency index of audit committee (EIAC) has been created. Based on the sample and created EIAC, conclusions are as follows: audit committees of credit institutions have medium efficiency, based on EIAC measurement; there is a significant difference in audit committee effectiveness, in observed period; there is no positive relationship between audit committee effectiveness and credit institution performance; there is a significant difference between level of audit committee effectiveness and audit firm type. Future research should contain increased number of elements in EIAC creation and increased sample, for all obligators who need to establish audit committee.

Keywords: corporate governance, audit committee, financial institutions, efficiency index of audit committee

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Authors: Jacky Hau

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The prevalence of emerging technologies disrupts various industries as well as consumer behavior. Data collection has been in the fingertip and inherited through enabled Internet-of-things (IOT) devices. Big data analytics (BDA) becomes possible and allows real-time demand network management (DNM) through leagile supply chain. To enhance further on its resilience and predictability, governance is going to be examined to promote supply chain transparency and trust in an efficient manner. Leagility combines lean thinking and agile techniques in supply chain management. It aims at reducing costs and waste, as well as maintaining responsiveness to any volatile consumer demand by means of adjusting the decoupling point where the product flow changes from push to pull. Leagility would only be successful when collaborative planning, forecasting, and replenishment (CPFR) process or alike is in place throughout the supply chain business entities. Governance and procurement of the supply chain, however, is crucial and challenging for the execution of CPFR as every entity has to walk-the-talk generously for the sake of overall benefits of supply chain performance, not to mention the complexity of exercising the polices at both of within across various supply chain business entities on account of organizational behavior and mutual trust. Empirical survey results showed that the effective timespan on demand forecasting had been drastically shortening in the magnitude of months to weeks planning horizon, thus agility shall come first and preferably following by lean approach in a timely manner.

Keywords: governance, leagility, procure-to-pay, source-to-contract

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Authors: Khaled Alotaibi, Salah Alhamadi, Ibraheem Almubarak

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The study attempts to explore both corporate governance (GC) and business ethics (BE) practices in Kuwaiti banks and the relationship between CG and BE, using an accountability framework. By examining the perceptions of key stakeholder groups, this study investigates the practices of BE and CG in Islamic banks (IBs) compared to conventional banks (CBs). We contribute to the scarce studies concerned with relations between CG and BE. We have employed a questionnaire survey method for a random sample of crucial relevant stakeholder groups. The empirical analysis of the participants’ perceptions highlights the importance of applying CG regulations and BE for Kuwaiti banks and the clear link between the two concepts. We find that the main concern is not the absence of CG and BE codes, but the lack of consistent enforcement of the regulations. Such a system needs to be strictly and effectively implemented in Kuwaiti banks to protect all stakeholders’ wealth, not only that of stockholders. There are significant patterns in the CG and BE expectations among different stakeholder groups. Most interestingly, banks’ client groups illustrate high expectations concerning CG and BE practices.

Keywords: corporate governance, GC, business ethics, BE, Islamic banks, IBs, conventional banks, CBs, accountability

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Authors: Graham Brooks, Belaisha Bin Belaisha, Hakkyong Kim

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The problem of preventing and/or reducing corruption is a major international problem. This paper, however, specifically focuses on how organisations in Dubai are tackling the problem of money laundering. This research establishes that Dubai has a clear international anti-money laundering framework but suffers from some national weaknesses such as diverse anti-money laundering working practice, lack of communication, sharing information and disparate organisational vested self-interest.

Keywords: corruption, governance, money laundering, prevention, strategies

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Authors: Barbara Ballan

Abstract:

Environmental Justice (EJ) and Environmental Social Governance (ESG) are trending terms used to address the impacts of corporate actions and environmental and social regulations on the people and the planet. ESG is a private governance invention (though increasingly required by public law) that aims to disclose environmental and social criteria while fostering value for businesses. On the other hand, EJ was borne as a social movement that evolved into a regulatory tool employed by EJ advocates and governmental agencies to assess inequalities in environmental impacts and regulations. However, EJ usage is expanding, and private environmental governance in the form of ESG disclosure frameworks is incorporating EJ criteria, indexes, and tools as part of its metric-driven approach. There is an existing tension between (1) the notion of social justice at the heart of the environmental justice movement and (2) the nature of for-profit corporations which generate value by externalizing costs, translated to environmental injustices. This study aims to explore the paradoxical relation of ESG, including EJ criteria, despite their opposing notions, in response to the need for innovative mechanisms to address today’s pressing social and environmental challenges. To that end, this study will evaluate and critically assess the inclusion of EJ in ESG reporting. Furthermore, it identifies gaps in ESG frameworks and proposes the integration of EJ tools to address these deficiencies. This work is intended to help both businesses looking to expand their ESG frameworks and include EJ criteria to inform corporate decisions and assure long-term corporate viability, as well as EJ supporters in understanding the complex dynamic of ESG disclosure for the pursuit of EJ objectives.

Keywords: environmental justice, ESG, sustainability reporting, corporate law, environmental law, social justice

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Authors: Mustapha Shitu Suleiman, Francis Neshamba, Nestor Valero-Silva

Abstract:

Small businesses are considered as engine of economic growth, contributing to employment generation, wealth creation, and poverty alleviation and food security in both developed and developing countries. Nigeria is facing many socio-economic problems and it is believed that by supporting small business development, as propellers of new ideas and more effective users of resources, often driven by individual creativity and innovation, Nigeria would be able to address some of its economic and social challenges, such as unemployment and economic diversification. Using secondary literature, this paper examines the role small businesses can play in the creation of jobs in North-West Nigeria to overcome issues of unemployment, which is the most devastating economic challenge facing the region. Most studies in this area have focused on Nigeria as a whole and only a few studies provide a regional focus, hence, this study will contribute to knowledge by filling this gap by concentrating on North-West Nigeria. It is hoped that with the present administration’s determination to improve the economy, small businesses would be used as vehicles for diversification of the economy away from crude oil to create jobs that would lead to a reduction in the country’s high unemployment level.

Keywords: job creation, north-west, Nigeria, small business, unemployment

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Authors: Andrea Paltrinieri, Alberto Dreassi, Stefano Miani, Alex Sclip

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The financial crises caused a collapse in prices of most asset classes, raising the attention on alternative investments such as Sukuk, a smaller, fast growing but often misunderstood market. We study diversification benefits of Sukuk, their correlation with other asset classes and the effects of their inclusion in investment portfolios of institutional and retail investors, through a comprehensive comparison of their risk/return profiles during and after the financial crisis. We find a beneficial performance adjusted for the specific volatility together with a lower correlation especially during the financial crisis. The distribution of Sukuk returns is positively skewed and leptokurtic, with a risk/return profile similarly to high yield bonds. Overall, our results suggest that Sukuk present diversification opportunities, a significant volatility-adjusted performance and lower correlations especially during the financial crisis. Our findings are relevant for a number of institutional investors. Long term investors, such as life insurers would benefit from Sukuk’s protective features during financial crisis yet keeping return and growth opportunities, whereas banks would gain due to their role of placers, advisors, market makers or underwriters.

Keywords: sukuk, zero beta asset, asset allocation, sukuk market

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Authors: Hanjun Hu, Jinxiang Zhang

Abstract:

With the decline of "growthism", China's urbanization process has shifted from the stage of spatial expansion to the stage of optimization of built-up spaces, and urban renewal has gradually become a new wave of China's urban movement in recent years. The ongoing urban renewal movement in China not only needs to generate new motivation for urban development but also solve the backlog of social problems caused by rapid urbanization, which provides an opportunity for the transformation of China's urban governance model. Unlike previous approaches that focused on physical space and functional renewal, such as urban reconstruction, redevelopment, and reuse, the key challenge of urban renewal in the post-growth era lies in coordinating the complex interest relationships between multiple stakeholders. The traditional theoretical frameworks that focus on the structural relations between social groups are insufficient to explain the behavior logic and mutual cooperation mechanism of various groups and individuals in the current urban renewal practices. Therefore, based on the long-term tracking of the urban renewal practices in the Old City of Nanjing (OCN), this paper introduces the "collective action" theory to deeply analyze changes in the urban renewal governance model in OCN and tries to summarize the governance strategies that promote the formation of collective action within recent practices from a micro-scale. The study found that the practice in OCN experienced three different stages "government-led", "growth coalition" and "asymmetric game". With the transformation of government governance concepts, the rise of residents' consciousness of rights, and the wider participation of social organizations in recent years, the urban renewal in OCN is entering a new stage of "collective renewal action". Through the establishment of the renewal organization model, incentive policies, and dynamic negotiation mechanism, urban renewal in OCN not only achieves a relative balance between individual interests and collective interests but also makes the willingness of residents the dominant factor in formulating urban renewal policies. However, the presentation of "collective renewal action" in OCN is still mainly based on typical cases. Although the government is no longer the dominant role, a large number of resident-led collective actions have not yet emerged, which puts forward new research needs for a sustainable governance policy innovation in this action.

Keywords: urban renewal, collective action theory, governance, cooperation mechanism, China

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Authors: Aziz Larbi, Widad Sadok

Abstract:

In Morocco, the mountainous regions extend over about 26% of the national territory where 30% of the total population live. They contain opportunities for agriculture, forestry, pastureland and mining. The production systems in these zones are characterised by crop diversification. However, these areas have become vulnerable to the effects of climate change. To understand these effects in relation to the population living in these areas, a study was carried out in the zone of Taliouine, in the Anti-Atlas. The vulnerability of crop productions to climate change was analysed and the different ways of adaptation adopted by farmers were identified. The work was done on saffron, the most profitable crop in the target area even though it requires much water. Our results show that the majority of the farmers surveyed had noticed variations in the climate of the region: irregularity of precipitation leading to a decrease in quantity and an uneven distribution throughout the year; rise in temperature; reduction in the cold period and less snow. These variations had impacts on the cropping system of saffron and its productivity. To cope with these effects, the farmers adopted various strategies: better management and use of water; diversification of agricultural activities; increase in the contribution of non-agricultural activities to their gross income; and seasonal migration.

Keywords: climate change, Taliouine, saffron, perceptions, adaptation strategies

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