Search

Research Background - Trust is the focal point of this thesis. It is an integral part of capitalist economies and, therefore, corporate governance. The relationship of trust serves as a bond and brings together different individuals of diverse interests to work collectively to fulfil their objectives. But in the last two decades, this relationship of trust has been badly shaken due to various reasons. To restore the bond of trust, policymakers in different jurisdictions have developed and introduced various policies and procedures. Such effort has been made by the Security and Exchange Commission of Pakistan (SECP), as it developed and implemented the country first Corporate Governance Code in 2002 and revised them twice in 2012 and 2017. But making rules, regulations, procedures, and policies are only one aspect of restoring the relationship of trust. The rules can be made very strong and fanciful, but only the implementation, compliance, and actions make them effective. Therefore, this doctoral research thesis empirically examines and evaluates the SECP Corporate Governance Code and tries to find out to what degree the SECP has succeeded in restoring the relationship of trust. Correspondingly, the doctoral research thesis increases awareness by empirically examining the benefits of compliance and implementation of regulatory frameworks with a truthful spirit and sound Corporate Governance practices among key stakeholders. Research Setting -Theoretically, the research is focused on the overall domain of Corporate Governance. In empirical and geographic terms, it is located across the listed Pakistani banking sector, during years prior to and post the introduction of the SECP revised Corporate Governance Codes, 2012 and 2017. The research constructs a conceptual model by using the two most important theories - Signalling Theory and Stakeholder Trust Theory and seeks provide a comprehensive theoretical explanation using sets of hypotheses that are employed as a theoretical foundation for further empirical investigations Research Purpose - A review of the relevant literature more than suggests a literature gap in terms of the effectiveness of board monitoring and governance disclosure quality. It is this gap that motivates and gives basis to the research. Additionally, the recent revisions of the current relevant Corporate Governance Code both provoke and invite an empirical examination of the effect (if any) on governance disclosure quality made by the identified sector over relevant years to determine changes in such quality - those possibly triggered by the identified revised code. In so doing, appropriate linked knowledge is also generated. Research Design/Methodology/Approach - Significant consideration is given to the design and methodology employed for the research. Thus, appropriate decisions are made concerning the intended research philosophy (primarily positivist), approach (essentially deductive), method (significantly quantitative and mono methodical), strategy (archival), time horizon (longitudinal, as the construction of disclosure index and measurement process, is very time consuming, a longer sample period as uses in time series analysis is not feasible). The actual research set of banks represents 100% of the listed Pakistani banks uses to examine the impact of revisions of the SECP code across three-time periods. Regression analyses are used to test the relationship between variables. The study develops a Governance Disclosure Quality Index (GQI) using guidelines identified by the United Nation Conference on Trade and Development (UNCTAD, 2006), OECD Principles, 2015, Basel Requirements for Corporate Governance of Banks, 2015, Global Reporting Initiative (GRI) Standards, 2018 and provisions of the SECP Corporate Governance Code and other key previous literature. Research Findings/Outcomes - The research's main findings show that the Governance Disclosure Quality of the Pakistani listed banks in their annual were reports enhanced after each revision of the SECP Corporate Governance Code. However, better board and audit committee composition and function through enhanced SECP Corporate Governance Codes did not significantly impact governance disclosure quality. The main reason for this non-significant relationship appears to be that Pakistani listed banks have not complied with the board and audit committee structural guidelines of the SECP CG Code with spirit and instead used the tick box approach. Research Limitations - The research has used data from only one sector, Pakistani listed banks. This has been done because the financial sector has special regulations regarding Corporate Governance and disclosure, and it is not wise to compare this sector with others. Either we can exclude the financial sector from sample selection or only use the data from that particular sector. Research Contribution to Knowledge - The contribution and value of this research can be mainly divided into four areas. Firstly, it focuses on the banking sector in emerging markets. Many studies have been done on industrial firms in developed countries. This research takes a different view and provides empirical evidence within the Pakistani environment. Secondly, the study provides a comprehensive theoretical explanation using two distinct but relevant theories - Signalling Theory and Stakeholder Trust Theory. Thirdly, this is the first study that primarily evaluates and examines the impact of the SECP Code's revisions on governance disclosure quality in Pakistani listed banks. The input-mediator-output approach examines how banks' financial position mediates the relationship between board and audit committee characteristics and governance disclosure quality. The research also empirically confirms that the SECP code's revisions act as a moderator, and the above-mentioned relationship is stronger after each revision. By so doing the study contributes to bringing increased awareness of sound Corporate Governance practice among key stakeholders. Fourthly, the research provides recommendations to enhance governance disclosure quality. It describes the corporate board in the Pakistani listed banking context using inclusive board composition and functioning measures. The findings help policymakers and regulators assess the adequacy of the Board of Directors' guidelines in the terms of SECP Corporate Governance Code of Pakistan. Originality/Value - In contrast with several previous studies in Corporate Governance domains, which mainly examine and compare Corporate Governance practices between developing and developed countries (to highlight the importance and bring awareness among stakeholders) in terms of sound Corporate Governance. This research examines and compares Corporate Governance practices within a single country, but across three different time periods (each time period had different corporate governance practices in Pakistani listed banks due to revisions of the SECP Corporate Governance Code, 2012 and 2017) to increase awareness of sound Corporate Governance practices (proxies of governance disclosure quality) among stakeholders. Indeed, when stakeholders are made aware of the importance of sound Corporate Governance, they tend to demand more of it.

The objective of this thesis is to provide exploratory, theoretical, and new empirical insights into Non-Executive Directors' (NEDs) contribution to corporate strategy within London Stock Exchange's largest 350 companies (FTSE 350), all of which have the same legal and regulatory duties. This research deploys an interpretivist philosophy, responding to four fundamental research questions, with appropriate ontological, epistemological, and axiological considerations surrounding NEDs' corporate strategy oversight. This research uniquely applies the constructs of Institutional Theory in conjunction with Instrumental Stakeholder Theory, whilst the empirical examination of NEDs' oversight contributions into corporate strategy capabilities is considered in terms of their constituents: 'Shaping', 'Conducting' and 'Deciding' appropriate strategies. The research itself employed a mixed-method, parallel-layered, theoretically informed, content and descriptive analysis, including cross-sectional financial data analysis performed during 2019-2020, targeting data covering FTSE 350 NEDs' strategic oversight role. The theoretical and empirical research provides original and valuable insights into NED's involvement in corporate strategy. Specifically, it produced no observable evidence of the existence of any Corporate Strategy Committees involving FTSE 350 NEDs. The explicit and implicit contributions to knowledge and policies arising from the research outcomes is the identification of a need for NEDs to show greater strategic leadership and become directly involved in a proposed Corporate Strategy Committee. This would afford the board greater strategic oversight to deliver more meaningful, measurable statements on the long-term sustainability of their company, i.e., over 5 to 10 years, within their Strategic Report. This research identifies the need for further research into theoretical and methodological issues relating to FTSE 350 NEDs' strategic oversight role.

Sound Corporate Governance (CG) requires business entities to take responsible regard for the equitable interests of all stakeholders and appropriately align their individual concerns. Given that society generally is one significant stakeholder, it then becomes relevant to determine how such entities take regard for and report upon the social and environmental issues that currently threaten the sustainability of our globe. Accordingly, this research focuses on such sustainability issues and how they are reported, through Sustainability Reporting (SR). Verifying corporate social and environmental activities to stakeholders through Sustainability Reporting (SR) tends to gain and maintain corporate social Legitimacy and continuity in the market. This is because, SR is an effective and efficient tool for measuring and communicating the corporate social and environmental performance, in conjunction with its economic performance to stakeholders. Despite the critical importance of Sustainability Reporting, academics and professionals claim that the Quality of Sustainability Reporting is poor. Given this poor quality, it is recognized that several Sustainability Reports do not fulfill the needs of stakeholders. Consequently, based on the theoretical foundation of Legitimacy Theory and relevant literature, this research aims at hypothesizing and testing the effect of four features on the Quality of Sustainability Reporting (QSR). These features are Adherence to Regulation (ATR), External Assurance of Report (ASR), Independence of Board (IOB) and Type of Information (TOI). QSR is determined via the Index of the Global Reporting Initiatives (GRI). The GRI is regarded as the international proxy for Sustainability Reporting. Its Index identifies the performance indicators that should be included within the Sustainability Report, in order to fulfill the needs of stakeholders. The relationship between these features and QSR are tested/evaluated within 500 reports. These 500 are the Sustainability Reports of the Global Fortune 100 (G100) companies over the five-year period 2011-2015. Employing an ordinal dependent variable (QSR), the research applies an Ordinal, Logistic Regression (OLS) to statistically test hypothesized relationships. The SPSS statistical software package is used to implement that regression and to statistically analyze the collected data. The research concludes that Adherence To Regulations, External Assurance of Report, Independence of Board and Type of Information significantly affect, (representing 37.1% - 41% of the change in) the Quality of Sustainability Reporting. It also concludes that, Adherence to Regulations and External Assurance of Report have an Extremely Significant and Positive, relationship with the Quality of Sustainability Reporting. Moreover; there is a Significant and Positive, relationship between the Type of Information and Quality of Sustainability Reporting. Regarding the Independence of Board, two main phenomena are identified from the empirical results. The results identify that, there is a Non-significant relationship between Independence of Board Members and the Quality of Sustainability Reporting. However; there is a Significant, Positive, relationship between the Independence of Board Chair and the Quality of Sustainability Reporting. Therefore, Adherence to Regulations, External Assurance of Report, Independence of Board Chair and Type of Information are significant influencing factors that should be seriously considered by reporting firms in order to improve the Quality of Sustainability Reporting.

The prediction of stock market indices and issues/questions associated with such predictions, have been a challenge for several academics, business analysts and financial researchers for many years. In the main, these challenges have been addressed within developed economies; statistically using appropriately determined macroeconomic independent variables. However, much less attention has been directed to the use of such variables within developing economies. This sparse attention forms the research background (Chapter I) and provides partial justification for the research itself. Thus, the research comparatively focuses on both, certain developing and selected developed economies. The precise context of the research considers/compares the impact and potential/possible relationships of meaningfully selected macroeconomic variables, upon respective stock market indices of two sets of economies - BRICS (i.e. Brazil, Russia, India, China and South Africa) and five meaningfully selected developed economies (i.e. France, Germany, Japan, UK and US). Thus, a significant motivation for the research is to evaluate/test theoretical linkages and empirical relationships of selected macroeconomic variables, in terms of their predictive power vis a vis related stock market indices. The research then offers consequent policy implications/contributions. It is of benefit and significance to (inter alia) investors, who would welcome "early signals" when evaluating stock markets via relevant indices. In so doing, the research adds theoretical and empirical knowledge, with practical potential, to this domain. Finally, within its concluding chapter, the thesis also offers some suggestions for further research and future researchers. Against the above background, the research addresses ten individual, but related, objectives (Chapter II). These objectives range from an attempt to identify the directional and potentially causal relationship between sets of selected macroeconomic variables and relevant stock market indices (Objective 3), through to determining dynamic relationships across sets of comparable indices (Objective 10). The literature review (Chapter III) confirms the relative absence of relevant empirical literature within developing countries. However, related literature within developed economies does prevail. For instance, in terms of the U.S., Domian and Louton (1997) find evidence that stock price declines (and so of market indices) are associated with abrupt decreases in growth rates of industrial production and increases are comparably associated with mild increases in industrial production. Equally, in terms of Germany, France, United Kingdom, Sweden, Japan, Canada and United States, Longin and Solnik (1995) provide evidence in terms of the predictive power of macroeconomic variables related to stock prices (and by implication indices). Accordingly, the extant research literature reveals a gap. There appears to be no study that comparatively analyses the effects of the 2007-8 financial crisis between the BRICS and the five developed countries, selected for this analysis. Equally, in contrast to the present research, there appears to be no study that (as "dummy" variables) tests the effect of the US quantitative easing policy undertaken during the financial crisis, on the financial markets of BRICS and the five selected developed countries. And, therein lies some of the uniqueness and original contribution of this research. Saunders et al. (2016) who consider the construction of research with the six "layers" of their "Research Onion" influence the research design and methodology (Chapter IV). Thus, with explanations provided within the thesis, the research engages with five of these "layers" as follows: philosophy - positivist, approach - deductive, strategy - archival, choice of method - quantitative - but with qualitative elements. The research time-horizon is longitudinal, with, respectively, the same dependent (identified stock market indices) and independent (selected macroeconomic variables) research variables being considered and analysed over a significant period of time (January 2000 to December 2015). Thus, the research data are mainly stock market indices (dependent variables) and meaningfully identified macroeconomic features (independent variables - derived from a Keran diagram), over the research period. Equally, appropriately developed variables, intended to quantitatively capture the 2008 financial crisis and the US quantitative easing are also used as dummy variables within the independent variable data set. The research data itself and its analysis, and the dependent and independent variables are identified and rationalised within the thesis. And, in this context, the research draws on, and analyses, pre-existing quantitative data stored (mainly) in the Bloomberg repository - a public database. This public accessibility obviates ethical issues relating to the access, use and storage of the research data. The research mathematical/statistical procedures and analyses (Chapter V), mainly computed descriptive and inferential statistics, are developed and presented within the research, Firstly, in order to condition and/or quality control variables, appropriate pre-statistical operations (including Units Roots Tests, Correlations, Seasonal Adjustments and Log Transformations) are duly performed on quantitative data. Then, descriptive statistics (including mean, mode, median and standard deviation) are developed (primarily) in order to reveal and describe properties of the variables attached to the cases, and to be assured that the inferential statistical tests to be applied to them are, indeed, appropriate. Finally, appropriate inferential statistics are applied and determined as necessitated by individual and particular research objectives.