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Corporate governance is a
system of rules and principles
by which companies are
directed and controlled.
Corporate governance
comprises of a network of
various stakeholders in which
their interests are protected.
Introduction
Introduction
Organization of Economic
Co-operation and
Development (OECD)
states that Corporate
Governance is the
platform for interrelated
relationships between
management, board of
directors, shareholders
and other stakeholders of
the corporation.
Introduction
In the beginning of 2002
Securities and Exchange
Commission of Pakistan (SECP)
revolutionized the Corporate
Culture by introducing codes of
corporate governance in
Pakistan.
It provides transparency in
corporate practices and ensures the
maximum availability of information
to markets for new stakeholders
Literature review
Cost-Income Ratio
which is used as a
quick test of efficiency
which reects the non-
Corporate Governance
interest costs as
and Bank Performance: proportion of net
Evidence from income
Macedonia Capital Adequacy Ratio
Data and study (CAR) expressed as
Spencer Stuart Board proportion of nancial
Index (2008) reports capital
that worldwid Managing Board
National Bank of the (MBSIZE)
Republic of Macedonia Supervisory Board
(NBRM) (SBSIZE)
Supervisory Board
proxy statements
Independence
published by the banks
(SBINDEPEND)
at the end of the year
Women members of
Supervisory
(WSBRATIO
Literature review
FACTORS INFLUENCING CORPORATE WORKING CAPITAL
MANAGEMENT: EVIDENCE FROM AN EMERGING ECONOMY
Company size
Diversication
number of SIC codes reported by the company
Tobins Q and Return on Assets (ROA)
Company size is positively correlated with board
size.
Board size is positively correlated with company
diversication
Number of board interlocks is positively correlated
Research Objectives
The main objective of the study
is to nd out the signicant
difference between corporate
governance practices on
working capital management
efficiency.
The secondary objective is to
suggest the listed
manufacturing rms in
Pakistan to get the efficiency in
the working capital
management through the best
corporate governance
practices
Research Questions
Does the Board Leadership structure impact the
capital management?
Contribution to study
There is an important need for research to inform current
corporate governance debates. Yet the study of corporate
governance is complicated by the fact that the structure, role
and impact of boards have been studied from a variety of
theoretical perspectives, which in turn have resulted in a
number of sometimes competing theories concerning
corporate governance. A common aim of many of the
theories of corporate governance has been to posit a link
between various characteristics of the board and corporate
working capital management.
Signicance of the study
This study will help the top echelon of any rm
while making strategic planning to improve the
efficiency of working capital management through
best corporate governance practices.
the idea.
Conceptual Framework (Independent
Variables)
CEO Duality
CEO duality refers to the
situation when the CEO also
holds the position of the
chairperson of the board.
Number of board
meetings
Meetings held in a calendar
year. More number board
meetings. Greater frequency
of board meetings tends to
higher performance.
Conceptual Framework (Dependent
Variables)
Board
Committees (BC)
Board Meetings
(BM)
Hypothesis of the study
Hypothesis 1 (H1)
There is a signicant impact of corporate Governance practices on
the Cash Conversion cycle.
There is a signicant impact of corporate Governance practices on
the Current Assets to Total Assets.
Research Models
Model 1
APT
It is the working capital management efficiency of the
rms at time t
= It is intercept and constant of the linear equation
i = It is the coefficient of change in Xit variables
Xit = It shows the independent variables that will be
used for corporate governance
practices of the rms i at time t.
i = It shows the number of rms that will be used in
the study i.e. here 130 rms.
t = It shows the time period will be used in the
study i.e. here 5 years.
Working capital management of the rms can be
measured by using the following seven models on the
basis of above general linear equation. All the models
will be used to measure the impact of corporate
governance practices on the working capital
management efficiency
DATA ANALYSIS AND STATISTICAL
TOOLS