Purpose – The article investigates the patterns of asset impairment recognition in search of signs of “big bath” earnings management practices across an internationally diversified sample of public companies. It also elucidates the incentives that may underlie such practices and explores possible safeguards embedded in the existing corporate governance mechanisms.
Design/methodology/approach – The article applied static panel and binary logit models to an international firm-level panel dataset of 1045 public companies observed between 2003 and 2018.
Findings – Our empirical results suggest that recognition of asset impairment has no determinate impact on earnings volatility. Investigating the possibility of “big bath” earnings management practices, the authors found no impact of asset impairment recognition on total senior executive compensation in firms, which pay performance-based remuneration. The quality of corporate governance has appeared to impact the firms’ intertemporal proclivity to recognize asset impairment with those having the more entrenched and
management-controlled boards being more likely to time impairment recognition by delaying it during exceptionally good and exceptionally bad years. While generally unlikely, recognition of asset impairment in a period with a recorded negative operating performance is found to be closely associated with key executive departures.
Originality/value – The article corroborates the salient role of corporate governance mechanisms in shaping the intertemporal patterns of asset impairment recognition. The possible remedies to the phenomenon should be derived therefrom.

Purpose: This article’s primary purpose is to present and analyze the current state of board gender diversity and elaborate on the relatively sparse literature in this field in the Czech Republic, a post-transition Eastern European economy. The described study sought to identify and comment on the theoretical views concerning previous research in other, mainly Western European countries, by highlighting new perspectives on board gender diversity.

Design/methodology/approach: The study’s empirical analysis was based on 235 companies domiciled in the Czech Republic with 500 or more employees. We followed a selection protocol consisting of several filters in arriving at our final sample. We initially analyzed the data in relation to (a) the number of employees, (b) organization turnover, and (c) industrial classification. We calculated the mean (μ), standard deviation, (σ), and coefficient of variation (CV) of the data/variances, then tested our hypotheses through χ2, determining the significance through the p-value. Finally, we calculated the board diversity index (DI) for female/male board members.

Findings: Our findings showed that the representation of women on corporate boards of Czech Republic companies is well below the European directive target figure of 40%. There is a greater representation of women on supervisory than on statutory boards. Moreover, the research revealed that female directors are more likely to serve on boards of companies in health care, social, wholesale, retail, and administration sectors compared to the construction, manufacturing, transportation, and storage sectors. Furthermore, company turnover also plays a part in board gender diversity. Finally, we highlighted many reasons why the Czech Republic is a fertile ground for the study of board gender diversity.

Practical implications: We believe this article will be valuable to senior managers in industry and wider regulatory, corporate governance, and ethical environments, fostering diversity and equality on corporate boards. This article forms a sound foundation for future studies on board gender diversity in the Czech Republic and contributes to the ongoing discussion on any adoption of possible future quota.

Originality/value: This research presents a rare insight into the current board gender diversity structure in the Czech Republic, especially because the country is relatively under-researched in the corporate governance and gender diversity literature. Thus, the research adds to the theoretical views concerning earlier research undertaken in other, mainly Western European countries, highlighting new perspectives on board gender diversity.

Purpose: The article analyzes the consequences of transformation in governance structures of stock exchanges on their CSR initiatives, in particular relations between their organizational forms and the number and nature of CSR initiatives as well as their influence on stock exchanges’ performance.

Methodology: In our study covering 40 European stock exchanges, we identified 527 sustainability practices implemented between 1992 and 2019. We divided these practices into two categories: internal, applying to the stock exchange itself, and external, targeted at listed companies. Moreover, we proposed a synthetic indicator of stock exchange development to measure its economic performance.

Findings: We found that publicly traded stock exchanges undertake a greater number of CSR initiatives and have a higher proportion of internal practices, than stock exchanges organized as non-public entities. Our study also indicates that a large number of implemented CSR practices positively affects the economic performance of stock exchanges, and furthermore, that internal practices have a greater impact than external ones.

Research limitations: The surveyed European stock exchanges may differ from stock exchanges in other regions regarding their CSR policies.

Originality: Our study proved that the corporatization of stock exchanges affect their CSR practices. It also showed that some types of sustainability activities affect performance in a more significant way than others.

Purpose: The main purpose of the article is to determine the key success factors of enterprise risk management systems, understood as the characteristics of these systems that have the greatest impact on the effectiveness of their functioning.

Methodology: Bearing in mind the most accurate determination of key success factors of enterprise risk management systems, I used several research methods. The conducted research was divided into four stages: (1) literature review, (2) financial statements analysis, (3) individual in-depth interviews, and (4) anonymous surveys. The research embraced enterprises operating in Poland.

Findings: Based on the literature analysis, in-depth interviews, and conducted surveys, a list of risk management systems’ success factors was created and sorted in the order from the most important ones – that have the greatest impact on the success of risk management – to the least important ones.

Additional analysis of financial statements of all WSE-listed companies allowed me to discern that few of the surveyed companies use mature modern ERM systems, and it enabled me to identify a group of companies that qualified to participate in the survey. Moreover, a statistically significant positive correlation appeared between the degree of key success factors’ implementation and the overall ERM implementation’s impact on the organization, while a statistically significant negative correlation emerged between the overall impact of ERM implementation on the organization and the degree of ERM implementation goals’ achievement, but also between the degree of the implementation of key success factors and the degree of the ERM implementation objectives’ implementation. Moreover, I noted that the fact of using individual features has no significant impact on the assessment of a given feature by respondents.

Implications: All factors included in the study are success factors of risk management systems. However, the surveys’ results suggest a different level of individual factors’ significance, thus a different degree of these factors impact on risk management success.

Originality/Value: The article presents an original set of key success factors in risk management systems, created based on my own research. The obtained research results can be used by managers willing to implement or develop risk management systems in their organizations.

Purpose: Knowing the factors that might affect board structure is an important step in understanding
boards and their role in corporate governance. This research aims to examine the effect of firm
characteristics closely related to corporate governance mechanisms, such as the model of corporate
governance, shareholder capital concentration, and stock exchange listing on board structure variables (size, independence, and gender diversity).

Methodology: The sample of this study stems from large Macedonian joint-stock companies. We run
a hierarchical linear regression of board characteristics on common demographic firm characteristics
as control variables and contextual firm characteristics related to corporate governance mechanisms
as independent variables.

Findings: Joint-stock companies in the Republic of North Macedonia have relatively small boards,
which provide no positive effects that would originate from the larger number of board members.
Moreover, the number of outside independent members is small, insufficient to influence the boards
with greater objectivity, independence, and quality. Larger companies with a one-tier model have
statistically significant larger corporate boards and a larger number of independent directors.

Implications: The best corporate governance practices worldwide must be used as a basis for future
improvements of corporate governance in joint-stock companies in developing economies.

Purpose: The paper examines auditors’ experiences with corporate governance (CG) in general and
audit committees (ACs) in particular in the setting of a Polish two-tier board system and a capital
market characterized by high ownership concentration, which therefore extends the research on
CG practices of an economy beyond the well-researched Anglo-American model.

Methodology: This study adopts a qualitative research approach by using interview data from
fifteen interviews with auditors working with large publicly-listed companies in Poland to examine
the relationships among auditors, Audit Committees, and CG.

Findings: The auditors indicate that the CG environment has changed. However, the institutionalization
of an AC in Poland generally is the subject of coercive isomorphic pressures, which lead
to its decoupling and transition toward a ritualistic role. Moreover, auditors report only some
reliance on CG information in the planning phase and none in the field-testing or review phases.

Originality: The findings differ from those of prior studies conducted predominantly in the USA
and the UK, in which auditors reported far greater reliance on CG in all phases of the audit process.
The two possible reasons for this difference in findings could be the different development stages
between capital markets and different CG systems.

Purpose: This study is aimed at analyzing the influence of the size of the board of directors, audit committee, institutional ownership and managerial ownership on the fnancial performance of manufacturing companies listed on the Indonesia Stock Exchange.

Methodology: The study analyses 156 Indonesia frms listed on the Indonesia Stock Exchange using linear regression analysis.

Findings: The results indicated that the size of the board of directors has a positive effect on fnancial performance, while the size of the audit committee, institutional ownership and managerial ownership has no effect on the fnancial performance. While on the simultaneously testing, it showed that the size of the board of directors, audit committee size, institutional ownership and managerial ownership influence the fnancial performance.

Research limitations/implications: The research has been limited to the manufacturing sector of Indonesian companies and the internal mechanism of corporate governance. The study suggests considering an external mechanism of corporate governance as predictor variables.

Originality: The study adds to the literature of corporate government and frm performance in emerging countries. The study implies that corporate governance mechanism for audit committee, managerial ownership and institutional ownership do not enhance company performance. The average size of an audit committee just to fulfll the regulation. Corporate governance mechanism that improve fnancial performance is size board director. Improvement in board performance as board size increase has positive impact that enhance fnancial performance of company.

Purpose: This paper investigates the relationship between the internal governance structure and fnancial performance of Polish companies. Ensuring diversity of corporate boards has been on the agenda of various regulators on a national and international level as it is generally expected corporate boards that are more diverse will be more competent and more effective monitoring managerial actions, and therefore positively impact company performance.

Methodology: This paper uses a sample of companies listed on the Warsaw Stock Exchange and examines the two main compositional features of company supervisory boards (independence and experience) and their practices by companies. We also investigate the effect of diversity on company performance. As our empirical methodology, we use linear regression analysis.

Findings: Our fndings support the proposal that diversity matters, especially in terms of the presence of experienced members on supervisory boards, and that such diversity positively affects fnancial results. In addition to the main fnding, the results of the study indicate also the importance of the ownership structure. Family frms and companies with a higher level of gearing are more likely to perform less effectively.

Originality: To date, research on the association between supervisory board diversity and fnancial performance in either the Polish or Central and Eastern European capital markets has been limited. The paper also points to the importance of having experienced members on a company’s supervisory board. Independent members on supervisory boards do not seem to have a similar association.

Purpose: The primary purpose of the article is to present the specifcity of Russian boards of directors, critically analyze their main characteristics, and consider their relations to selected corporate governance mechanisms in Russia.

Methodology: The article was prepared based on specialist literature, which pertains to the theoretical aspects of the boards of directors’ activity and the changes in the corporate governance system in Russia. The qualitative research on the boards of directors’ key characteristics in the Russian public companies was based on SPARK data.

Findings: The central features of the boards of directors in the Russian companies depend on the key events in the Russian economy – such as fnancial and economic crises – changes in the companies’ ownership structure, including the participation of the state in ownership, as well as on their activity on the Russian and international fnancial market.

Research limitations: Research limitations resulted mainly from the lack of access to all the data about the directors of the companies under examination, including their independence from or obligation to the state institutions.

Originality: The research on the Russian joint-stock companies – that is, corporate governance in Russia with its mechanisms – is a relatively new issue in the Polish specialist literature. They may be an important trigger for comparative studies in the feld of corporate governance in Central and Eastern European economies.

Purpose: The purpose of this paper is to summarize studies aiming to defne matters related to the quality of explanations found in corporate governance statements published by listed companies. Another important aspect of the conducted analysis is the identifcation of various dimensions of explanation quality.

Methodology: The character of the conducted research is that of an overview of literature devoted to the subject. Apart from scientifc articles, it covers European Union regulations, regulations characteristic of countries selected for the analysis (member states of the European Union), and applied solutions aimed at guaranteeing the desired quality of explanations for deviation included in corporate governance statements that are in the centre of attention.

Findings: The conducted analysis organizes the current knowledge concerning actions aimed at improving the quality of explanations for deviation from principles of corporate governance. Without a doubt, the primary pillar consists of the level of information and its quality, as found in explanations for shareholders. It is this quality that determines if the shareholder understands the processes occurring in the realm of corporate governance in the company.

Research limitations: The conducted analysis should be treated as an introduction to related research issues. It should be stressed that research into explanations provided by companies is still in the process of development, and the number of publications devoted to this topic is still modest.

Practical implications: The study fts in the research into the phenomena of the “comply or explain” mechanism as applied in practice, which according of many researchers, continues to be poorly investigated. In terms of the directions for further research, there are promising topics including e.g. identifcation of factors that may translate into the quality of such statements (e.g. ownership structure, identity of shareholders), the role that should be played by institutions involved in developing CG codes (i.e. their successive versions), and the involvement of the board of directors/ supervisory board in the evaluation process.

Originality: The present paper identifes the key factors perceived as determining the quality of corporate governance statements. In addition to that, it outlines new avenues for further investigation.

Purpose: The purpose of the article is to indicate and characterize the stakeholder of the State Owned Company (SOC).

Methodology: All fi ndings are based on classic functional research and consists of regulation analysis and large sample analysis conducted among SOCs’ management and supervisory boards’ members and offi cials of Polish Ministry of Treasury that supervise SOCs. The research sample contains all the SOCs in which the shareholder’s rights are performed by the Minister of Treasury and all the ministry offi cials that supervise these companies.

Findings: The stakeholders of the SOCs are members of their management and supervisory boards and their employees. Partially (from some perspective), the minister, vice ministers of treasury and the ministry officials can be also regarded as the stakeholders. The shareholder, i.e. the treasury may not be regarded as the independent (autonomous) stakeholder, since it is represented by the minister who is attended by the ministry officials.

Implications: Generally, the article’s conclusions may relate not only to the Polish SOCs but to relevant companies in other countries. The problems of SOCs’ stakeholders and the infl uence of political and administrative factors on SOCs may constitute important fi eld of the corporate governance research.

Value: This research is unique due to the fact that it contains all the Polish SOCs. Their interdisciplinary character provides to indicate practical implications of the regulation in force. The high rate of return achieved in the research enables to conduct reliable reasoning.

Purpose: The paper presents a review of the latest research on executive compensation and indicates the main problems and weaknesses of the existing solutions as well as trends for the future.

Methodology: In the analysis executive compensation constitutes a crucial element of corporate governance. The analysis is based on a review of the latest studies and research on the effectiveness of executive compensation referring to its size, structure and disclosure.

Findings: The paper presents the latest fi ndings in the practice of executive compensation and it points to the extension of the period of time giving rise to the payment of cash bonuses, the introduction of a range of different indicators, based on which executives are evaluated, simplifying compensation packages, the implementation of deferred payments, the introduction of the “say on pay” rule and clawbacks.

Practical implications: The analysis points out the main weaknesses of executive compensation, which were particularly emphasized in research studies on companies affected by the financial crisis. The paper presents a wide range of suggested solutions that could be implemented in the fi eld of executive compensation in order to provide for a better alignment of the interests of executives with those of shareholders and for the increase in shareholder value.

Originality/value: The paper attempts to identify the most severe corporate governance problems with reference to executive compensation and to confront them with research results as well as the recently proposed and implemented reforms and recommendations.

Purpose: The purpose of this paper is a discussion and in-depth analysis of the legal and organizational circumstances associated with the activities of Supervisory Boards in housing cooperatives.

Methodology: A critical analysis of the existing legislation, own analytical analysis of the source documents, supplemented by conclusions and observations formulated on the basis of a case study, for the preparation of which information has been used obtained from primary sources in the form of documents of the analyzed housing cooperative and information obtained through participant observation.

Findings: What has a decisive impact on the mechanisms of corporate governance in housing cooperatives are the direct behaviors of Supervisory Board members, as well as the lack of awareness and involvement of the residents, who do not want to actively participate in the life of the cooperative. A diagnosis is presented of the most important factors that influence the actual operations of the analyzed Supervisory Board. While the current
legal regulations make it possible to ensure effective and proper control as well as adequate supervision over the activities of cooperatives.

Originality: The paper enriches the theory of management sciences in terms of a wider perception of the term corporate governance in relation to other organizations than companies. The presented methodological approach that is the basis for a comprehensive and thorough inspection of the activities of the Management Board can be used in other cooperatives as well. In the literature on the subject no similar analysis, supported by the results of own analytical research, had been found.