Zuaini Ishak

The failure of business entities across the globe has continued to draw the attention of stakeholders of those entities. Due to these problems, different countries issued corporate governance regulations to avoid the repeat of the past. Part of the aims of these CG guides is to increase firm value. In Nigeria, similar guidelines issued for firms are referred to as codes of CG. However, arguments exist between stakeholders on whether those corporate governance mechanisms increase the value of shareholders. Some investment analysts suggest the consideration of governance mechanism before investment, while some argue that CG practices are not necessary for Nigeria. To address this problem, this research empirically examines the effects of female directorship, director compensation and managerial shareholding on price-earnings multiple of Nigerian firms. The research uses data from 100 firms listed in the Nigerian Stock Exchange (NSE). The study used the generalized method of moments (GMM) to estimate the regression due to endogeneity problem amongst the variables. The study reveals a significant positive association between female directorship, director compensation, managerial shareholding and price-earnings multiple at 10%, 1% and 10%, respectively. Therefore, it recommends additional females on board, compensation for directors and more managerial share ownership

Because of agency conflict in firms with dispersed ownership, governance mechanisms to mitigate this agency cost, such as shareholders’ active monitoring of the firm’s management, have been developed. However, shareholder activism is contextual; therefore, the characteristics of shareholder activism in corporate governance practices in Libyan listed companies we explored. The data were collected from the 42 non-financial and 22 financial companies listed in the Libyan stock market during 2007–2016. Data envelopment analysis was done to generate an efficiency score based on corporate governance and shareholder activism. Linear regression analysis was used to determine whether a relationship exists between the efficiency of corporate governance and shareholder activism. All the companies were characterized by joint private-government ownership. The companies had an average corporate governance index of 2.24. Implementation of the Libyan good corporate governance practices is anticipated to give a score ≥ 2.95.
Vote “No” shareholder activism targeting the boards of directors and their committees was the predominant form of shareholder activism (average number of annual events = 3.08) compared to shareholder proposal (average annual events = 1.67) and shareholder negotiation with management (average annual events = 1.6).
Shareholder activism was more frequent in companies with low than with average governance scores compared to those with above-average governance scores. Moreover, the scores of shareholder activism were inversely related to corporate governance scores (r = –0.766, p < 0.01). Ordinary least-squares regression analysis revealed that a decrease in corporate governance score of one unit was associated with a 57% increase in shareholder activism (B = –0.57, F = 30.64, p < 0.01).
Our study findings indicate that poor corporate governance practices do influence the frequency of shareholder activism in Libyan listed companies. Vote “No” activism is the most frequently used form of shareholder activism. The less frequent use of shareholder proposals and negotiation with management is probably related to legal and sociocultural factors.

The purpose of shareholders’ involvement in the process of governance is to add corporate value and achieve better governance and firm performance (FP). However, corporate governance (CG) practices can vary from country to country and change over time. This study examines the moderating influence of shareholders’ activism (SA) on the CG effectiveness – FP relationship in non-financial companies listed in the Libyan Stock Market between 2007 and 2016. CG effectiveness was the independent variable and consisted of five dimensions: board of directors, monitoring committee, audit committee, nomination and compensation committee, and ownership. Leverage, firm age and firm size were used as control variables. Return on investment was used to assess the corporate performance. SA was tested as a moderating variable using the interactive regression models. The study found out that the CG effectiveness is positively and significantly related to return on investment (beta = 0.608, p < 0.01). This relationship was strengthened by SA (R2 = 0.053, P < 0.05). Overall, the study shows that SA boosts the relationship between CG and FP in the Libyan Stock Market.