A Comparative Study of Corporate Governance between Failed and Non-Failed Firms Evidenced from the Stock Exchange of Thailand
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Published:
Aug 16, 2019
Keywords:
Corporate Governance Failed
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Abstract
The objective of the study was to compare corporate governance between failed and non-failed firms listed on the Stock Exchange of Thailand (SET). The data were collected from the annual report and form 56-1 during 2006 to 2016. The samples were equally selected from firms being classified as failed firm status and from a matched-pair method of non-failed firm status totaling 54 pairs. The research instrument and hypothesis testing were descriptive statistics and univariate analysis. The results of the study showed that non-failed firms had unqualified opinion over failed firms. In addition, non-failed firms had a number of directors, remuneration for the board of directors and outsider ownership were statistically significant higher than failed firms.
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How to Cite
รักษาพงษ์ ศ., & นาคประสิทธิ์ ช. (2019). A Comparative Study of Corporate Governance between Failed and Non-Failed Firms Evidenced from the Stock Exchange of Thailand. KKBS Journal of Business Administration and Accountancy, 3(1), 21–48. Retrieved from https://so04.tci-thaijo.org/index.php/kkbsjournal/article/view/171325
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Research Articles
The articles published in the journals are the authors' opinions, not the opinion of the editorial team or administrative staff. The articles published is copyright of the Journal of Business Administration and Accounting, Khon Kaen University.
References
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Bhagat, S. & Black, B. (2002). The Non-correlation between board independence and long-term firm performance. Journal of Corporate Law, 27, 231-273.
Bouaziz, M.Z. (2014). Corporate governance and voluntary financial disclosure by Canadian Listed Firms. Management Review: An International Journal, 9(1), 44-69.
Bradbury, M.E. (1990). The incentives for voluntary audit committee formation. Journal of Accounting and Public Policy, 9(1), 19-36.
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Bunyawat, K. & Manawapat, S. (2011). An ownership structure and the quality of a financial report. Executive Journal, 31(4), 153-156. (In Thai)
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Core, J.E., Holthausen, R.W. & Larcker, C.F. (1999). Corporate governance, chief executive officer compensation, and firm performance. Journal of Financial Economics, 51(3), 371-406.
Daily, C.M. & Dalton, D.R. (1994). Bankruptcy and corporate governance: The impact of board composition and structure. Academy of Management Journal, 37(6), 1603-1617.
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Deborah, S.A. (2000). The relation between corporate governance strength and fraudulent financial reporting. Alabama: The University of Alabama.
Demsetz, H. & Lehn, K. (1985). The structure of corporate ownership causes and consequences. Journal of Political Economy, 93(6), 1155-1177.
Donaldson, L. & Davis, J.H. (1991). Stewardship theory or agency theory: CEO governance and shareholder returns. Australian Journal of Management, 16(1), 49-65.
Elloumi, F. & Gueyie, J. (2001). Financial distress and corporate governance: an empirical analysis. Corporate Governance International Journal of Business in Society, 1(1), 15-23.
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Fich, E.M. & Stezak, F.L. (2008). Can corporate governance save distressed firms from bankruptcy? An empirical analysis. Review of Quantitative Finance and Accounting, 30(2), 225-251.
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Junhom, S. & Srijunpetch, S. (2012). Earnings quality of family firm. Journal of Accounting Profession, 8(21), 80-81.
Khiari, W. (2013). Corporate governance and disclosure quality: Taxonomy of Tunisian listed firms using the decision tree method based approach. Emerging Markets Journal, 3(2), 46-68.
Lama, T. (2012). Empirical evidence on the link between compliance with governance of best practice and firms' operating results. Australasian Accounting, Business and Finance Journal, 6(5), 63-80.
Lamberto, A.P. & Rath, S. (2008). The survival of initial public offerings in Australia, 4(1), 133-147.
Lawrence, F. & Griffith, J.M. (2000). Control and bank performance. Journal of Financial and Strategic Decisions, 13(3), 63-69.
Lee, T.-S. & Yeh, Y. (2004). Corporate governance and financial distress: Evidence from Taiwan. Taipei: National Taiwan University.
Lertrujiwanich, A. (2016). The relationship of corporate governance, anti-corruption, and value of corporations listed on The Stock Exchange of Thailand. Bangkok: Thamasat Univerity. (In Thai)
Menon, K. & Schwartz, K. (1986). The auditor’s report for companies facing bankruptcy. Journal of Commercial Bank Lending, (January), 42-52.
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Pfeffer, J. & Salancik, G.R. (1978). The external control of organizations: A resource dependence perspective. London: Harper & Row.
Phannarong, S. (2010). Corporate governance: Prediction for rehabilitating distressed companies. Journal of International Management Studies, 10(2), 58-78. (In Thai)
Rechner, P.L. & Dalton, D.R. (1989). The impact of CEO as board chairperson on corporate performance: Evidence vs. Rhetoric. The Academy of Management Executive, 3(2), 141-142.
Rueangsuwan, S. (2010). Does corporate governance enhance firm performance?: Evidence from food and beverage industry in The Stock Exchange of Thailand. Journal of Accounting Profession, 6(17), 57-71. (In Thai)
Sathitmanwiwat, K. (2005). The relationship between control mechanisms in corporate governance and corporate performance of listed companies in The Stock Exchange of Thailand other than financial institutions. Bangkok: Chulalongkorn University. (In Thai)
Scholtz, H.E. & Smit, A. (2012). Executive remuneration and company performance for South African companies listed on the Alternative Exchange (AltX). Southern African Business Review, 16(1), 22-38.
Sethsathira, P. (2016). Insider trading and corporate governance. Retrieved January 16, 2019, from https://thaipublica.org/2016/01/insider-trading-corporate-governance. (In Thai)
Shaw, M.E. (1981). Group dynamic: The psychology of small group behavior. Boston: McGraw Hill.
Simpson, W.G. & Gleason, A.E. (1999). Board structure, ownership, and financial distress in banking firms. International Review of Economics and Finance, 8(3), 281-292.
Srijunpetch, S. (2008). Corporate governance. Journal of Accounting Profession, 31(120), 1-4. (In Thai)
Srijunpetch, S. (2008). The relationship between corporate governance mechanism and economic value added (EVA) of listed companies in Thailand (SET 50). Journal of Accounting Profession, 4(10), 29. (In Thai)
Srijunpetch, S. (2012). The core principles of corporate governance. Journal of Accounting Profession, 35(133), 1-4. (In Thai)
Tangpol, S. (2015). The relation between firm performance, corporate governance, corporate ownership and executive compensation. Economic Development and Cultural Change, 54(4), 945-983. (In Thai)
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Thunputtadom, P., Pongsupatt, T., Sincharoonsak, T., Chuaychoo, M. & Bosakoranut, S. (2018). The Impacts of Ownership Structure and Firm Performance of Listed Companies in The Stock Exchange of Thailand. Bangkok: University of Thai Chamber of Commerce. (In Thai)
Torung, A. & Srijunpetch, S. (2010). The relationship between proportion of independent board with board compensation. Journal of Accounting Profession, 6(17), 83.
Zahra, S.A. & Pearce, J.A. (1989). Board of directors and corporate financial performance: A review and integrated model. Journal of Management, 15(2) 291-334.
Zheng, X. & Cullinan, C.P. (2010). Compensation/audit committee overlap and the design of compensation systems. Accounting Journal Articles, 7(2), 136-152.
Anurakamolkul, T. (2005). Relevance of audit reports in predicting possibility of rehabilitation of listed companies in the Stock Exchange of Thailand. Bangkok: Chulalongkorn University. (In Thai)
Attanayake, L. & Wijekoon, N. (2010). Corporate governance and corporate failure. Procedia Economics and Finance, 2, 191-198. (In Thai)
Aramtianthamrong, N. (2011). Bankruptcy prediction: Evidence in Thailand. Bangkok: Chulalongkorn University. (In Thai)
Beasley, M.S. & Salterio, S. (2001). The relationship between board characteristics and voluntary improvements in audit committee composition and experience. Waterloo, Ontario: School of Accounting, University of Waterloo.
Bhagat, S. & Black, B. (2002). The Non-correlation between board independence and long-term firm performance. Journal of Corporate Law, 27, 231-273.
Bouaziz, M.Z. (2014). Corporate governance and voluntary financial disclosure by Canadian Listed Firms. Management Review: An International Journal, 9(1), 44-69.
Bradbury, M.E. (1990). The incentives for voluntary audit committee formation. Journal of Accounting and Public Policy, 9(1), 19-36.
Buallay, A., Hamdan, A. & Zureigat, Q. (2017). Corporate governance and firm performance: evidence from Saudi Arabia. Australasian Accounting, Business and Finance Journal, 11(1), 78-98.
Bunyawat, K. & Manawapat, S. (2011). An ownership structure and the quality of a financial report. Executive Journal, 31(4), 153-156. (In Thai)
CG Thailand. (2017). Corporate governance code for listed companies 2017. Retrieved January 4, 2019, from https://www.cgthailand.org/microsite/documents/CGCode.pdf (In Thai)
Changanti R.S., Mahajan V. & Sharma S. (1985). Corporate board size, composition and corporate failures in retailing industry. Journal of Management Studies, 22(4), 400-417. (In Thai)
Connelly, T.J. & Limpaphayom, P. (2004). Corporate governance in Thailand. Retrieved January 4, 2019 from https://ssrn.com/abstract=965300 (In Thai)
Conyon, M.J. & Simon, I.P. (1998). Board control, remuneration committees, and top management compensation. Academy of Management Journal, 41(2), 146-157.
Core, J.E., Holthausen, R.W. & Larcker, C.F. (1999). Corporate governance, chief executive officer compensation, and firm performance. Journal of Financial Economics, 51(3), 371-406.
Daily, C.M. & Dalton, D.R. (1994). Bankruptcy and corporate governance: The impact of board composition and structure. Academy of Management Journal, 37(6), 1603-1617.
Davis, J.H., Schoorman, F.D. & Donaldson, I. (1997). Toward a stewardship theory of management. Academy of Management Review, 22(1), 20-47.
Deborah, S.A. (2000). The relation between corporate governance strength and fraudulent financial reporting. Alabama: The University of Alabama.
Demsetz, H. & Lehn, K. (1985). The structure of corporate ownership causes and consequences. Journal of Political Economy, 93(6), 1155-1177.
Donaldson, L. & Davis, J.H. (1991). Stewardship theory or agency theory: CEO governance and shareholder returns. Australian Journal of Management, 16(1), 49-65.
Elloumi, F. & Gueyie, J. (2001). Financial distress and corporate governance: an empirical analysis. Corporate Governance International Journal of Business in Society, 1(1), 15-23.
Fama, E.F. & Jensen, M.C. (1983). Separation of ownership and control. Journal of Law and Economics, 26(2), 301-325.
Fich, E.M. & Stezak, F.L. (2008). Can corporate governance save distressed firms from bankruptcy? An empirical analysis. Review of Quantitative Finance and Accounting, 30(2), 225-251.
George, D. & Mallery, M. (2010). SPSS for Windows step by step: A simple guide and reference 17.0 update. 10th ed. Boston: Pearson.
Harinanon, T. (2017). The effects of corporate governance on earnings management and economic value added (EVA): a case study of listed companies in the Stock Exchange of Thailand SET 100. Songkla: Prince of Songkla University.
Hassan, S., Christopher, T. & Evans, R. (2003). Directors’ remuneration and firm performance: Malaysian evidence. Malaysian Accounting Review, 2(1), 57-67.
Hermalin, B.E. & Weisbach, M.S. (2003). Boards of directors as an endogenously determined institution: A survey of the economic literature. New York Economic Policy Review, 9(1), 7-26.
Jensen, M.C. (1993). The modern industrial revolution, exit, and the failure of internal control systems. The Journal of Finance, 48(3), 831-880.
Jensen, M.C. & Murphy, K. (1990). Performance pay and top management incentives. Journal of Political Economy, 98(2), 225-264.
Jiamsagul, S. (2007). The performance effects of transparency and disclosure, and board of directors: The case of SET100 Thailand. Bangkok: National Institute of Development Administration. (In Thai)
Junhom, S. & Srijunpetch, S. (2012). Earnings quality of family firm. Journal of Accounting Profession, 8(21), 80-81.
Khiari, W. (2013). Corporate governance and disclosure quality: Taxonomy of Tunisian listed firms using the decision tree method based approach. Emerging Markets Journal, 3(2), 46-68.
Lama, T. (2012). Empirical evidence on the link between compliance with governance of best practice and firms' operating results. Australasian Accounting, Business and Finance Journal, 6(5), 63-80.
Lamberto, A.P. & Rath, S. (2008). The survival of initial public offerings in Australia, 4(1), 133-147.
Lawrence, F. & Griffith, J.M. (2000). Control and bank performance. Journal of Financial and Strategic Decisions, 13(3), 63-69.
Lee, T.-S. & Yeh, Y. (2004). Corporate governance and financial distress: Evidence from Taiwan. Taipei: National Taiwan University.
Lertrujiwanich, A. (2016). The relationship of corporate governance, anti-corruption, and value of corporations listed on The Stock Exchange of Thailand. Bangkok: Thamasat Univerity. (In Thai)
Menon, K. & Schwartz, K. (1986). The auditor’s report for companies facing bankruptcy. Journal of Commercial Bank Lending, (January), 42-52.
Nitthaworn, B. (2015). CG lesson: the cause of Volkswagen. Retrieved January 16, 2019, from https://www.bangkokbiznews.com/blog/detail/635743 (In Thai)
Pfeffer, J. & Salancik, G.R. (1978). The external control of organizations: A resource dependence perspective. London: Harper & Row.
Phannarong, S. (2010). Corporate governance: Prediction for rehabilitating distressed companies. Journal of International Management Studies, 10(2), 58-78. (In Thai)
Rechner, P.L. & Dalton, D.R. (1989). The impact of CEO as board chairperson on corporate performance: Evidence vs. Rhetoric. The Academy of Management Executive, 3(2), 141-142.
Rueangsuwan, S. (2010). Does corporate governance enhance firm performance?: Evidence from food and beverage industry in The Stock Exchange of Thailand. Journal of Accounting Profession, 6(17), 57-71. (In Thai)
Sathitmanwiwat, K. (2005). The relationship between control mechanisms in corporate governance and corporate performance of listed companies in The Stock Exchange of Thailand other than financial institutions. Bangkok: Chulalongkorn University. (In Thai)
Scholtz, H.E. & Smit, A. (2012). Executive remuneration and company performance for South African companies listed on the Alternative Exchange (AltX). Southern African Business Review, 16(1), 22-38.
Sethsathira, P. (2016). Insider trading and corporate governance. Retrieved January 16, 2019, from https://thaipublica.org/2016/01/insider-trading-corporate-governance. (In Thai)
Shaw, M.E. (1981). Group dynamic: The psychology of small group behavior. Boston: McGraw Hill.
Simpson, W.G. & Gleason, A.E. (1999). Board structure, ownership, and financial distress in banking firms. International Review of Economics and Finance, 8(3), 281-292.
Srijunpetch, S. (2008). Corporate governance. Journal of Accounting Profession, 31(120), 1-4. (In Thai)
Srijunpetch, S. (2008). The relationship between corporate governance mechanism and economic value added (EVA) of listed companies in Thailand (SET 50). Journal of Accounting Profession, 4(10), 29. (In Thai)
Srijunpetch, S. (2012). The core principles of corporate governance. Journal of Accounting Profession, 35(133), 1-4. (In Thai)
Tangpol, S. (2015). The relation between firm performance, corporate governance, corporate ownership and executive compensation. Economic Development and Cultural Change, 54(4), 945-983. (In Thai)
The Stock Exchange of Thailand. (2006). Corporate governance code for listed companies 2006. Retrieved December 8, 2018, from https://capital.sec.or.th/webapp/nrs/data/1914a2.pdf. (In Thai)
The Stock Exchange of Thailand. (2012). Corporate governance code for listed companies 2012. Retrieved December 8, 2018, from https://www.set.or.th/sustainable_dev/th/cg/files/2013/CGPrinciple2012Thai-Eng.pdf. (In Thai)
Thunputtadom, P., Pongsupatt, T., Sincharoonsak, T., Chuaychoo, M. & Bosakoranut, S. (2018). The Impacts of Ownership Structure and Firm Performance of Listed Companies in The Stock Exchange of Thailand. Bangkok: University of Thai Chamber of Commerce. (In Thai)
Torung, A. & Srijunpetch, S. (2010). The relationship between proportion of independent board with board compensation. Journal of Accounting Profession, 6(17), 83.
Zahra, S.A. & Pearce, J.A. (1989). Board of directors and corporate financial performance: A review and integrated model. Journal of Management, 15(2) 291-334.
Zheng, X. & Cullinan, C.P. (2010). Compensation/audit committee overlap and the design of compensation systems. Accounting Journal Articles, 7(2), 136-152.