Amon Chizema

Outside Directors on Korean Boards: Governance and Institutions

Drawing on institutional theory, this study examines the factors that pressured Korean firms to appoint outside directors to their boards. While this practice could be considered to be a management innovation in Korea, in the Anglo-American corporate governance system it has long been used as one of several mechanisms to mitigate agency costs between management and shareholders. As such, this response by Korean firms, following the 1997–98 currency crisis in Asia, could be seen as an example of corporate governance convergence on the Anglo-American model, where higher levels of outside director representation on the board are the norm. We examine the antecedents of having a higher proportion of outside directors on Korean boards. Our findings indicate that larger firms that are under stricter control by the government have higher representation of outside directors on the board. We also find a positive and significant relationship between the proportion of outside directors and business group affiliation, poor prior firm performance, higher levels of debt and foreign ownership.

New directions in the management of human resources in Africa

The last decade has witnessed a notable increase in the volume of publications on human resource management (HRM) in Africa, particularly in reputable management journals. Yet, within the broader context of the mainstream HRM debate, advances in research and theoretical sophistication have not quite kept pace with the actual practice of management. This is particularly notable when it comes to the progress that organizations in Africa have made in product innovation and service delivery, the creation and application of advanced technology, as well as in the adoption of progressive/innovative HRM practices. The six papers in this forum were drawn from an international conference on HRM in Africa held at Nottingham Business School in 2010. Taken together, they identify important new developments in theory and practice, and also open up avenues for further debate particularly in the areas of career development, knowledge appropriation, mergers and acquisitions, the role of HR professionals, the informal sector and the most effective ways to engage foreign investors.

The ‘Company with Committees’: Change or Continuity in Japanese Corporate Governance?

Corporate governance practices are arguably diffusing across the world. This paper examines the adoption of the committee‐based governance system (i.e. audit, nomination, and remuneration) in Japanese firms, a practice common in Anglo‐American capitalism but potentially contestable in Japan. The study finds that firms that are internationally exposed through cross listing are more likely to adopt the committee system. Moreover, more experienced and highly cross‐held firms, with larger proportions of foreign ownership, are more likely to adopt the committee system. On the other hand our study finds partial support for the hypothesis that larger proportions of bank ownership are negatively associated with the adoption of the committee system, suggesting a gradual withdrawal by banks from the traditional monitoring of firms. This paper adds to the longstanding debate on the convergence on or persistent divergence from the Anglo‐American corporate governance system. The study thus provides insights into corporate governance changes in non‐Anglo/American countries that face a struggle between global capital market forces for change and deep‐seated institutional practices of continuity.

Predicting corporate failure: a systematic literature review of methodological issues

Purpose – This paper aims to review the existing literature systematically so as to contribute towards a better understanding of methodological problems of the classical statistical techniques, artificially intelligent expert systems and theoretical approaches to solve the corporate failure syndrome. Design/methodology/approach – This paper presented a systematic review of 83 articles reporting 137 prediction failure models published within 1966-2012 in scholarly reviewed journals in four main disciplines, namely, accounting, finance, banking and economics. The authors performed the systematic literature review with five main sources, namely, Science Direct, Google Scholar, Wiley Interscience, Metalib, Web of Science and Business Source Complete of the Social Sciences. The review modified the approaches used by Aziz and Dar (2006), Ravi and Ravi (2007) and Balcaen and Ooghe (2006). Findings – The results indicate significant body of prior literature on prediction of corporate failure, but a theoretically ...

Remuneration committee and corporate failure

Purpose – This study aims to examine the role the structure of corporate boards plays in the failure of the firm. Specifically, it examines whether the remuneration committee is related to corporate failure in the UK. Design/methodology/approach – The study uses 1,835 firm-year observations for 98 failed and 269 non-failed UK-listed non-financial firms between the periods of 1994 and 2011. This study used pooled cross-sectional, fixed and random effects LOGIT models to estimate whether corporate failure is related to remuneration committee in the UK. Findings – The findings indicate that corporate failure is negatively related to the independence of the remuneration committee chairman and remuneration committee’s effectiveness but not remuneration committee’s presence, size and meetings. However, a positive and significant relationship was observed between corporate failure and remuneration committee independence. Practical implications – The findings of the study provide support for the appropriateness o...

Introduction: New Directions in the Management of Human Resources in Africa

The first named author edited a special issue on human resource management (HRM) in Africa in the International Journal of Human Resource Management a decade ago (Kamoche, 2002). At that time, it was fairly common to begin journal articles and doctoral literature reviews affirming that the literature on HRM and management in general in Africa was ‘scarce/scanty/sketchy’, and for authors to proceed as if they were in typically uncharted domain. We believe this affirmation to be largely untenable today. In proportion, of course, the amount of knowledge on the African management and organizational context, in high-impact publications, pales when compared with the West and Asia. The situation has changed considerably in the last decade or so, and the number of publications focused on African management, organizational and entrepreneurial issues grows every year. The relevant literature includes several books as well as articles in high-impact journals that characterize the diversity of HRM theory and practice, and how culture might be understood in highly complex societies (e.g. Jackson, 2004; Kamoche et al., 2004).

The Adoption of an American Executive Pay Practice in Germany

This chapter focuses on one element of German corporate governance — executive pay, specifically, executive stock options (ESOs) — as an American pay innovation dating from around 1960 (Lewellen, 1968). ESOs have been transplanted into many countries, even in Germany, with its distinctive cultural institutional environment. However, institutional theory has predicted conformism, isomorphism, path dependency and resistance to this kind of potentially illegitimate transplant (Tuschke and Sanders, 2003; Sanders and Tuschke, 2007). Perhaps this could explain why ESOs took over thirty years to penetrate German firms.

‘Imported’ Management Practices: The Disclosure of Individual Executive Compensation and Firm Performance

The question of whether executive directors have much impact on organizational outcomes is crucially important to a wide array of research agendas, including studies of executive compensation (Bebchuk and Fried, 2004). For example, research on the pay of executive directors is now a legitimate international business (IB) topic since such remuneration may motivate the strategies of peak-tier decision-makers in a variety of different institutional environments around the world (Buck et al., 2008). Research in this domain mainly seeks to measure the sensitivity of executive pay to share price performance (Tosi et al., 2000) relevant to pay packages supposedly designed to reduce agency problems by better aligning the rewards of shareholders and executives.