1,720,995 research outputs found
DETERMINANTY PRZEZORNOŚCIOWYCH ZASOBÓW GOTÓWKI: ZNACZENIE ZARZĄDZANIA RYZYKIEM I ŁADU KOPORACYJNEGO
Get PDFPurpose. The main purpose of this study is to determine the drivers of a firm’s precautionary cash holdings, related to risk management and corporate governance factors. We add to the evident gap in the existing literature on cash holdings with a novel approach acknowledging the importance of the precautionary motive of holding cash in excess.
Method. We apply the original research approach, merging historical survey-based data on the motives behind holding idle cash in Polish listed firms, and the accounting based and hand collected data on risk management and corporate governance. Using a regression model, we investigate the interplay between precautionary cash holdings and a range of literature-guided variables on risk management and corporate governance.
Results. We have found that greater precautionary cash is held by firms exposed to a greater operating risk, with more sophisticated risk management, stronger supervisory board and dispersed ownership. Our results also demonstrate that a consideration of motives behind holding idle cash highlights the interlinks with risk management related drivers, which was not visible in prior works based on measurement of volume of cash holdings in a firm.Cel – Głównym celem niniejszego artykułu jest zbadanie determinant utrzymywania przezornościowych zasobów gotówki w firmach, związanych ze strategią zarządzania ryzykiem i ładu korporacyjnego. Dzięki zastosowaniu nowatorskiego podejćia badawczego związanego z uwzględnieniem motywów utrzymywania nadwyżkowych zasobów gotówki, badanie wypełnia lukę w obszarze wnioskowania opartego o pomiar wyłącznie wolumenu zasobów gotówkowych.
Metoda – W badaniach zastosowano autorskie podejście badawcze, łączące historyczne dane ankietowe dotyczące motywów utrzymywania nadwyżek gotówki w polskich firmach giełdowych, uzupełnione ręcznie zebranymi danymi dotyczącymi zarządzania ryzykiem i zmiennymi opisującymi ład korporacyjny. Zastosowano model regresji do zbadania związków pomiędzy przezornościowym motywem gromadzenia gotówki, a zmiennymi opisującymi zarządzanie ryzykiem i mechanizmy ładu korporacyjnego.
Wnioski – Wyniki badan wskazują, że motywem ostrożnościowym w gromadzeniu zasobów gotóki kierują się firmy o zwiększonej ekspozycji na ryzyko operacyjne, z bardziej zaawansowanym procesem zarządzania ryzykiem, niskiej koncentracji własności oraz silną i zróżnicowaną radą nadzorczą. Wykazaono, że wrześniejsze prace oparte o pomiar wolumentu gotówki nie pozwoliły wychwycić związków widocznych przy uwzględnieniu motywów utrzymywania tej gotówki w firmie
Directors’ duties and risk governance
No full textManagerial literature offers anecdotal evidence that board risk oversight is mainly driven by the search for compliance with regulatory requirements, thus turning a value creation mechanism into an ineffective bureaucratic exercise. The inadequate risk culture of most boards is often reported as the main determinant of the gap between the expected and the actual effectiveness of board risk oversight. We provide an additional explanation based on a review of the leading guidance on corporate governance. We contend that the image of board risk oversight marketed through most of the governance literature is a simplified, unrealistic representation of a complex set of activities, whose effectiveness depends on the solution of theoretical as well as practical problems. In our view, leading risk management frameworks and guidance do not address most of those critical issues, just providing one size fits all solutions that are frequently derived from concepts and practices developed in highly regulated industries, a-critically transferred to different and distant industries and contexts. We argue that this practice has led to some significant biases that make the implementation of risk oversight in different contexts, less effective than in the original one. We also re-examine board risk oversight in the light of directors’ fiduciary duties. We contend that the well-established jurisprudential orientation of courts inspired by the business judgment rule may even encourage boards to be uninformed of aggressive risk-taking by officers and management. Nonetheless recent jurisprudence seems to reconsider responsibility (and liability) of directors for risk oversight, apparently recognizing the conflict between the weak fiduciary standards set by previous jurisprudence and the increasing request coming from investors for a more active role of the board
Does non-financial reporting regulation increase diversity and equal opportunity disclosures? Evidence from Poland
Get PDFPurpose: The main aim of our study is to verify whether the implementation of non-financial reporting regulations, following the adoption of Directive 2014/95/EU, in-creased disclosures on diversity and equal opportunities in Polish listed firms. We study whether the diversity and equal opportunities disclosures differ significantly if we compare the information presented in companies’ non-financial reports in the pre-Directive period (2016) and the post-Directive period (2018). Methodology/approach: Guided by Clarkson et al. (2008), as well as by the Global Rerporting Initiative (GRI) standards, we have applied manual content analysis, using the coding scheme that is useful in capturing the types of disclosures. We implement Wilcoxon signed ranks test to verify the statistical significance of the differences be-tween the diversity and equal opportunities disclosures in the pre- and post-Directive periods. Findings: Our evidence suggests that disclosures on diversity and equal opportunities in Poland significantly increased after the implementation of the Directive, but the patterns of the prevalence of disclosure types have remained stable. Research limitations/implications: This evidence is provided for a relatively small sample of Polish listed firms (N=19) that issued CSR/sustainability reports in 2016 and 2018, which could be considered a limitation of our study. Nevertheless, our study has practical implications within the impacts of the regulatory framework of companies’ reporting schemes, as far as diversity and equal opportunities (DEO) disclosures are concerned. Originality/value: Our evidence fills an important gap within the studies that review the implementation of the Directive in developing European economies. At the same time, it provides evidence within the emerging field of studies that compare the various types of disclosures before and after the implementation of the EU Directive, which is relevant for revising the impact of regulatory frameworks on non-financial reporting
Climate change risks and business resilience strategies
No full textClimate risk resilience is increasingly important in modern business strategy due to the growing focus on achieving climate neutrality targets. Firms worldwide face pressure to address climate risks and report their impacts, prompting strategic responses. This chapter explores how businesses perceive and understand climate change impacts, emphasising resilience. It discusses the challenges of climate risks and strategies for enhancing business resilience. By analysing climate-related disclosures, we shed light on businesses’ awareness of climate impacts and their strategies for resilience. This chapter contributes to understanding how businesses navigate climate risks and highlights several proactive measures companies can use
The Impact of ESG Regulation on Environmental Decoupling—An Exploratory Study on Polish Listed Companies
Get PDFThe sustainable finance framework implements the regulation to enhance firms’ sustainable reporting and increase market transparency in channeling funds. However, firms are under the pressure of going green and, thus, often demonstrate a propensity to environmental decoupling, which means the gap between what is told about environmental performance and what is truly done within. The main purpose of our exploratory work is to detect the environmental decoupling among sampled firms. The research problem relates to the effects of reporting requirements and aligning symptoms of environmental decoupling by comparing the increase in qualitative disclosures (talk) relative to measurable KPIs (real actions). We have empirically confirmed the potential problems of environmental decoupling within the environmental aspects other than carbon emissions. We have observed the improvement of qualitative disclosures, while the KPIs other than carbon-emission- related (use of resources and energy) confirmed no real actions. This result is aligned with the current policymakers’ focus on carbon emission reporting. Firms declare the implementation of policies and targets, but it does not fully drive real change. Our study contributes to the emerging strand of the literature on environmental decoupling, as well as offers implications for policymakers, to enhance the efficiency (and prevent environmental decoupling) within the new sustainable finance regulatory framework of the European Union
Assessment of Credit Risk Management Efficiency in Banking Industry with DEA and Logit Model
No full textSociological associations and their journals: a comparative inquiry of 'European Societies' and 'International Sociology'
No full textInsurance and the corporate cost of capital
Get PDFThe purpose of the paper is to provide some support to the thesis that insurance may reduce the cost of capital in a company by influencing both the cost of capital components and the need for rising capital. The problem is here perceived from two perspectives the classical concept related to the weighted average cost of capital (WACC) and a novel concept related to the risk-based capital structure model with the total average cost of capital (TACC). The paper explains the idea of insurance as a retrospective (post-loss) risk financing tool and the risk transfer mechanism upon it. As the risk financing tool insurance reduces the need for the balance-sheet capital in a company and thus the financial distress costs. Also, insurance may reduce the level of operating risk and thus influences the required returns of the capital providers. These observations allow emphasising the impact of insurance on the WACC. However, according to the novel concept of the risk-based capital structure, insurance (as a risk financing tool) represents an off-balance sheet capital component. As a consequence, it extends the volume of total capital. The presented conceptual model, based on the TACC concept, indicates that large volume of insurance (the insurance sum) and its relatively low cost (the insurance premium) gives the possibility to the significant reduction of the cost of capital on average. The concluding remarks discuss some dilemmas over the utility of the TACC concept
INSURANCE AND THE CORPORATE COST OF CAPITAL
Get PDFThe purpose of the paper is to provide some support to the thesis that insurance may reduce the cost of capital in a company by influencing both the cost of capital components and the need for rising capital. The problem is here perceived from two perspectives – the classical concept related to the weighted average cost of capital (WACC) and a novel concept related to the risk-based capital structure model with the total average cost of capital (TACC). The paper explains the idea of insurance as a retrospective (post-loss) risk financing tool and the risk transfer mechanism upon it. As the risk financing tool insurance reduces the need for the balance-sheet capital in a company and thus the financial distress costs. Also, insurance may reduce the level of operating risk and thus influences the required returns of the capital providers. These observations allow emphasising the impact of insurance on the WACC. However, according to the novel concept of the risk-based capital structure, insurance (as a risk financing tool) represents an off-balance sheet capital component. As a consequence, it extends the volume of total capital. The presented conceptual model, based on the TACC concept, indicates that large volume of insurance (the insurance sum) and its relatively low cost (the insurance premium) gives the possibility to the significant reduction of the cost of capital on average
The Importance of Non-Traditional Insurance Distribution Channels in Poland in 2007-2012
No full textThe purpose of the paper is to analyse the chosen aspects of direct and indirect insurance sales in Poland with the goal to indicate the importance of non-traditional insurance distribution channels over a given period of time. The changes of the importance of non-traditional insurance distribution channels is interpreted with regard to the changes of the share of gross premium written within a given direct or indirect distribution channel in the total direct or indirect gross premiums written, respectively. The analysis of data confirmed that the importance of some non-traditional insurance distribution channels is growing, whereas the importance of others is declining. Additionally, the data showed that the importance of a given non-traditional channel is related to insurance branch (life or non-life)
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