- Title
- Corporate governance: the significance of the duties of directors in promoting corporate success
- Creator
- Teoh, Teik Toe
- Relation
- University of Newcastle Research Higher Degree Thesis
- Resource Type
- thesis
- Date
- 2014
- Description
- Research Doctorate - Doctor of Business Adminstration (DBA)
- Description
- The growing concern over the need to monitor corporate governance practices has gained much attention over the past three decades, primarily due to the failure of corporate giants e.g. the Maxwell Group, Bank of Credit and Commerce International (“BCCI”), Polly Peck International (“PPI”) and Enron (Mayson, French and Ryan, 2012). Corporate governance codes of best practice have been devised as a form of “soft laws” to guide corporations to corporate success and long-term sustainability (Lowry and Dignam, 2009). Although there is yet to be a Code of Best Practice that serves global needs, most codes of corporate governance emphasise the primary responsibility carried by the Board of Directors in ensuring transparency (in accountability, boardroom processes, a balanced make-up of the Board and decision making processes) that is based on stakeholder interests without emphasis on shareholder primacy (Hampel Report, 1998). It has been proven that companies which comply with recommended best practice of corporate governance perform better and garner better market prices compared to those which place a lower emphasis on such compliance measures (Horwarth Report, 2002). The Horwarth Report makes specific reference to the importance of the role of the Board of Directors and its need to maintain an independent and transparent process to attain corporate success (Horwarth Report, 2002). The Horwarth Report also emphasises the importance of factors, namely: (a) independence; (b) competencies, i.e. skills and characters of the members of the board; (c) the existence of sub- committees under the board; and (d) the composition of the Board (Horwarth Report, 2002). An interpretivism research approach is undertaken to examine the subjective views of directors who spearhead their corporations in their respective industries to aid the understanding on the practicality of codes of best practice. A series of twenty-four questions is posed in face-to-face interview sessions with selected directors to seek their views on issues that relate to corporate governance codes of best practice. These range from general views on corporate governance and its practical use for their businesses to include non-executive directors on the Board and their major participation in sub-committees like the Audit and Remuneration Committees. The results of this study reveal that the most robust codes devised (particularly in the UK (“the United Kingdom”), Malaysia and Singapore) adhered to by corporations for better performance and enhancing growth involve the commitment from the Board of Directors to: (a) embrace the importance of understanding the demands and underlying rationale of the codes; (b) have an ideal make-up of the Board to promote independence and avoid domination; (c) have boardroom processes in place for a smooth flow of communications; (d) incorporate sub-committees of the board; and (e) emphasise the importance of including stakeholder interests in boardroom decisions. This study is beneficial to companies which are incorporating best practices into their Board processes.
- Subject
- corporate governance; best practice; industry codes; Board of Directors
- Identifier
- http://hdl.handle.net/1959.13/1042441
- Identifier
- uon:14056
- Rights
- Copyright 2014 Teik Toe Teoh
- Language
- eng
- Full Text
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