Analysis of Corporate Governance

This assignment provides a comprehensive analysis of corporate governance, covering topics such as the importance of corporate governance in banks, the role of top management in implementing changes, and the significance of good corporate governance in financial institutions. The research methodology and ethical issues are also discussed, along with findings and recommendations for improving corporate governance.

Research Project

Table of Contents
Topic - “Reforms in Corporate Governance and their impact on financial reporting quality”.......1
CHAPTER 1: INTRODUCTION....................................................................................................1
Overview and Background of research.......................................................................................1
Aims and Objectives...................................................................................................................2
Rationale of the study..................................................................................................................2
Significance of study...................................................................................................................2
CHAPTER 2: LITERATURE REVIEW.........................................................................................3
Reason to reform corporate governance within IFIC bank.........................................................3
Strategies by which new corporate governance can be implemented by appropriately..............4
Impact of reformation in corporate governance upon financial reporting quality:.....................6
Benefits gain by IFIC bank after developing corporate governance...........................................6
CHAPTER 3: RESERACH METHODOLOGY & ETHICAL ISSUES.........................................7
CHAPTER 4: ANALYSIS, FINDINGS AND DISCUSSION......................................................7
CHAPTER 5: CONCLUSION AND RECOMMENDATION.......................................................7
REFRENCES...................................................................................................................................9
.........................................................................................................................................................9

Topic - “Reforms in Corporate Governance and their impact on financial reporting quality”
CHAPTER 1: INTRODUCTION
Overview and Background of research
Corporate governance is seen as the system which includes processes, practices and rules
through which an organisation is controlled and managed. It basically concern about the interest
of stakeholders of specific company and it also tries to balance them effectively. The main
stakeholders of organisation includes government, employees, customers, financiers,
management, suppliers and the community. It can be said that directly or indirectly corporate
governance is related to each and every department of the company. Financial reporting is
termed as the procedure of communication in which information related to finance such as
financial statements are shared with the creditors and investors of company. It is essential for
every company to improve quality of their financial reporting in order to provide satisfactory
financial information to user so that they take right financial decision for company. In context to
part of finance department, it has been analysed that corporate governance impacts upon
financial reporting quality. This is because, a good corporate governance helps...,
The present research is based on International Financial Investment and Commerce Bank
Limited. The bank is popularly known as IFIC bank. It is commercial bank but still its majority
of share are owned by governmental authority of Bangladesh. IFIC bank was incorporated in
1976 and headquartered in Dhaka, Bangladesh. In few past years, it has been analysed that issues
related to default loans are arising rapidly in this sector. The main reason behind this situation
was identified as lack of good governance. The governor of Bangladesh have directly blamed
financial institution and banks that their non compliance of regulation is supporting increasing
number of default loans. This also becomes reason for weakness of stakeholders' confidence
particular investors. Therefore, it creates requirement for banking sector to reform their corporate
governance in order to overcome this issue and also reduce number of default loans in banking
sector. In this regard, top management team of IFIC bank have planned to conduct the present
research on reformation of corporate governance and its influence over financial reporting
quality. With reference to the present scenario, formulated aims and objectives for this research
are defined as below:
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Aims and Objectives
Aim of research:
The chosen aim for current research is “To analyse the importance of reformation in
corporate governance and its impact on financial reporting Quality”. A case study on IFIC
bank.
Objectives of research:
 To analyse the reason to reform corporate governance within IFIC bank
 To ascertain strategies by which new corporate governance can be implemented by
appropriately.
 To identify the impact of reformation in corporate governance upon financial reporting
quality.
 To determine the benefits gain by IFIC bank after developing corporate governance.
Research Questions:
 What are the main reason to reform corporate governance within IFIC bank?
 To ascertain strategies by which new corporate governance can be implemented by
appropriately.
 How reformation in corporate governance impacts upon financial reporting quality?
 What are the main benefits gain by IFIC bank after developing corporate governance?
Rationale of the study
The main purpose of conducting this research is to reduce number of default loans for
IFIC bank and other banks or financial institution belonging to Bangladesh. Another objective of
conducting current research is to raise confidence of stakeholders by reforming corporate
governance. In context to researcher, this research have been started for common aid of
improving their own knowledge on banking industry. This will create opportunity for them to
work with banking sector in future. Along with this, researcher also aims to improve their
professional skills with the help of this research so that they could conduct even better research
in future on different – different topics.
Significance of study
The significance of this research is to improve economic status of banking sector within
Bangladesh with the help of appropriate compliance of rule and regulation within same industry.
Along with this, this research will improve communication skill, management skill, convincing
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skill of researcher which help them in improving their quality of research in future. It will also
improve level of confidence of researcher which will impact positively on obtaining genuine and
valid outcome for this research.
CHAPTER 2: LITERATURE REVIEW
Reason to reform corporate governance within IFIC bank
As per the thoughts presented by …, banking sector and financial institution are seen as
the backbone of economic sector of every country. It has been analysed that good governance is
required in every sector. It has been analysed by the specified by the same author that good
corporate governance helps financial institutions in taking right decision and implementing them
effectively in the company. Along with this, a good corporate governance includes various things
like transparency, responsibility, effectiveness, equality and followee of all mandatory rules and
regulations which formulated to be followed in banking sector. It can be said that financial
institutions and banks belonging to banking sector are required to follow all legal laws for
making their brand image at market place in positive manner. With reference to banking sector,
it can be said that there are numerous of reasons which influences Banking sector to reform
corporate governance in the bank of financial institution to conduct their practices effectively. It
can be said that reformation in corporate governance is required to be done for improvising
performance of the company effectively. Along with this, it is also done for developing positive
brand image of company at market place as well as in front of customers. Some of the main
reason for banking sector especially IFIC bank for which corporate governance is reformed are
defined as below:
To encourage investors protection and trust: It is the first and foremost reason which
influences banking sector to reform its corporate governance and other legal laws. This is
basically done for enhancing trust of investors on the specific financial institutions. It can be said
that without investors support it wont be possible for companies to sustain longer in banking
industry. This is because, investors are the major one who provide financial support to the bank
so that they could perform their work effectively at market place.
Transparency: It can be seen as the another influential reason for reformation of
corporate governance. In this, IFIC bank mainly focuses on building up transparency in their
working practices, financial statements which are shared to investors, any wrong or unethical
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conduct which have impacted negatively on companies performance. It can be said that
transparency in all working practises will allow this financial institution in developing faith
among stakeholders especially investors. As a result, it will help company in improving its sales
which will ultimately raise profits of banks.
To decrease the level of non compliance: Another reason for reformation of corporate
governance is non compliance of legal laws which are affecting operational activities of banking
sector effectively. It can be said that, if IFIC bank improves or reformulate their corporate
governance then it will help them in influencing employees and management team to follow all
legal laws in strict manner so that they could survive longer in the industry.
To increase goodwill of company: Corporate governance are also reformed for the main
aid to develop positive goodwill of the IFIC bank in front of customers. It can be said that
effective up gradation in corporate governance will help this bank in executing their business
activities in ethical manner. Along with this, ethical values directly develops positive image of
IFIC bank in front of customers.
On the basis of above specified reasons it can be said that all of these influences IFIC
bank in reforming corporate governance in order to improve performance of this bank in
Bangladesh. Along with this, it has been analysed that reformation of corporate governance helps
company in improving its brand image among investors.
Strategies by which new corporate governance can be implemented by appropriately.
As per the thoughts presented by …, it has been analysed that every work or law or
corporate governance requires an specific strategy or pattern through which they could
implement new corporate governance within the company in effective manner. It is further seen
that corporate governance are helps company in improving its brand image of the company
among stakeholders in effective manner. With reference to banking sector, it has been analysed
that this sector is broad in size which requires to upgrade its corporate governance and other
legal laws for improving their sustainability at workplace effectively. It has been further
evaluated that it is required by the banking sector to formulate some specific strategies for
implementing their modified corporate governance effectively. On the basis of this, it can said
that there are some specific rules which could be considered as the strategies through which IFIC
bank can implement new corporate governance within the company effectively. All of the main
rules or strategies are defined as below:
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 Commitment begins at top: the first strategy of implementing new corporate
governance is to initial inform top management team of the company about the modified
norms. This will help other employees to accept reasons behind accepting these changes
and modification positively. In addition to this, it can be said that top management team
of a company holds good position and reputation among other workers and market place
which also helps them in convincing others to accept changes with the actual reason sue
to which are changed. For instance: if IFIC bank is planning to implement new corporate
governance within their financial institution then it is required by them to firstly start with
top management or senior department of company in order to persuade interest of others
quickly.
 Accountability must be established and communicated clearly: Another strategy or
rule of implementing new corporate governance in banking sector includes clearly
elaborating and communicate accountability and responsibility to each and every
authorised person. With reference to banking sector, it can be said that by communicating
roles of responsibilities of every involved person, it can be said that new corporate
governance can easily be implemented at work place. It has been evaluated that if every
individual knows about their own roles and responsibilities then it would be easier for
them to work effectively by following each and every norm. Thus, it will improve their
work performance without compromising with non followee of any rule or regulation. As
a result, it will maximise working capabilities of employees as well as their performance
at work place effectively.
 Alignment between structure and business is imperative: The next strategy or rule
which helps company in effective implementing new corporate governance within
banking sector is appropriate ordination and alignment between business and structure is
essential. This strategy simply states that it is important for banking industry to initially
balance its business and structure effectively so that could sustain longer at market place
as compared to its competitors. For instance: if IFIC bank is planing to implement new
corporate structure then it is required by them to make an appropriate coordination
between structure and business. It will help this financial institution in implementing their
business activities effectively at market place without ignoring any any legal clause or
law. As a result, they will get support of customers, investigator as well as other
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stakeholder which will positively enhance sustainability of the IFIC bank at market place
in comparison to their competitors or rival companies.
 Flexibility to adapt and build up on the sustainability program across business units
and regions can advance the sustainability agenda: In this, another strategy of
implementing new corporate governance within banking industry states that company
working within this sector could adopt sustainability program as its core strategy for
appropriate execution of formulated changes. It has been analysed that sustainability
programs are seen as the CSR activities which helps companies in developing their brand
image in front of customers so that they could enhance get their support during different
activities. Along with this, it can be said that
Impact of reformation in corporate governance upon financial reporting quality:
On the basis of thoughts represented by ...., it has been evaluated that reformation or
modification in corporate governance influences financial reporting and quality. This is because,
corporate governance is directly related to each and every department of the company. Its
department are human resource, finance, production, marketing, sales etc. It can be said that if
any kind of changes took place in the corporate governance then it will influence functioning and
productivity of each and every department. This also means that if companies
Benefits gain by IFIC bank after developing corporate governance.
According to the perception of ….,
 Commitment begins at top: the first strategy of implementing new corporate governance
is to initial inform top management team of the company about the modified norms. This
will help other employees to accept reasons behind accepting these changes and
modification positively. In addition to this, it can be said that top management team of a
company holds good position and reputation among other workers and market place
which also helps them in convincing others to accept changes with the actual reason sue
to which are changed. For instance: if IFIC bank is planning to implement new corporate
governance within their financial institution then it is required by them to firstly start with
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top management or senior department of company in order to persuade interest of others
quickly.
CHAPTER 3: RESERACH METHODOLOGY & ETHICAL ISSUES
CHAPTER 4: ANALYSIS, FINDINGS AND DISCUSSION
CHAPTER 5: CONCLUSION AND RECOMMENDATION
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REFRENCES
Books and Journal
McCahery, J.A., Sautner, Z. and Starks, L.T., 2016. Behind the scenes: The corporate
governance preferences of institutional investors. The Journal of Finance, 71(6),
pp.2905-2932.
Crowther, D. and Seifi, S. eds., 2018. Redefining Corporate Social Responsibility. Emerald
Group Publishing.
Jacoby, S.M., 2018. The embedded corporation: Corporate governance and employment
relations in Japan and the United States. Princeton University Press.
De Haan, J. and Vlahu, R., 2016. Corporate governance of banks: A survey. Journal of
Economic Surveys, 30(2), pp.228-277.
Jiang, F. and Kim, K.A., 2015. Corporate governance in China: A modern perspective.
Rodriguez-Fernandez, M., 2016. Social responsibility and financial performance: The role of
good corporate governance. BRQ Business Research Quarterly, 19(2), pp.137-151.
Dignam, A. and Galanis, M., 2016. The globalization of corporate governance. Routledge.
IFiC
Aguilera, R.V. and Crespi-Cladera, R., 2016. Global corporate governance: On the relevance of
firms’ ownership structure. Journal of World Business, 51(1), pp.50-57.
Aguilera, R.V. and Crespi-Cladera, R., 2016. Global corporate governance: On the relevance of
firms’ ownership structure. Journal of World Business, 51(1), pp.50-57.
Andreou, P.C., Antoniou, C., Horton, J. and Louca, C., 2016. Corporate governance and firm‐
specific stock price crashes. European Financial Management, 22(5), pp.916-956.
Adegbite, E., 2015. Good corporate governance in Nigeria: Antecedents, propositions and
peculiarities. International Business Review, 24(2), pp.319-330.
Online
Default loans plague banking sector. 2019. [Online]. Available Through:
<https://www.dhakatribune.com/business/banks/2018/03/22/default-loan-plagues-
banking-sector>
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