Saidatou Dicko

Political connections, ownership structure and quality of governance

Purpose - The purpose of this paper is to ask the following question: is there a link between being politically connected, the quality of governance and the company’s ownership structure? Design/methodology/approach - The author then examined Canadian companies from the SP ownership concentration is associated with lower quality of governance in relation to the overall governance, board of directors, shareholders’ rights and compensation structure indices; ownership structure does not mediate the relationship between political connections and quality of governance; and number of political connections through the executive is associated with less risky governance practices in relation to compensation structure; in other words, when members of the executive are politically connected, the firm adopts better compensation practices. Research limitations/implications - The time limitation is the main weakness of this study and probably the cause of observed mitigated results. Practical implications - The author hope that the results will inform regulators on the need not only to further regulate the business-politics relationship, but also to consider the specific traits of concentrated ownership companies and the most critical aspects of corporate governance in politically connected firms, such as shareholders’ rights, particularly those of minority shareholders. For example, an intriguing case to investigate in the Canadian context would be Pierre Karl Peladeau’s foray into Quebec politics and the controversy ignited by his political bid in light of his position as majority shareholder (75 percent) in communications giant Quebecor Inc. Social implications - In fact, the results shown that concentrated ownership firms have lower governance quality than non-concentrated ones. Furthermore, in a concentrated ownership context, the minority shareholders’ rights could be threatened. In this sense, the results also shown that shareholders’ rights seem to be the most critical governance issue for the politically connected Canadian firms. These results are therefore the indication that Canadian financial market regulators must take action about politically connected and concentrated ownership firms in order to further protect minority shareholders’ rights. Originality/value - This study makes a double theoretical contribution by enriching the literature on corporate governance and by providing one of the first investigations into the direct and comprehensive relationships between political connections, governance and ownership structure.

Social Network and Firm Performance: An Empirical Analysis of Canadian Boards

Despite a still low level of theorization of firm’s management, we have some proposals pointing in the direction of an effect of the Board composition on the performance. The Resource based view of the firm would explain this relationship by the social capital (networks) of Board’s members. This study examines the influence of social relationships of board of directors’ members on the performance of the firm using a sample of the 100 largest listed Canadian companies. Social relationships are measured by three factors: economic affiliations, political affiliations and social affiliations. The performance of the firm is measured by the return on assets. The results of regression analysis suggest that only the political affiliations of board of directors’ members have a significant although negative impact on the performance of the firm. These results suggest that separating business and politics might be a good idea as politics appear to be harmful to business.

Directors' networks and access to collective resources

Purpose – This paper aims to illustrate the resource dependency theory by making ties between the different resources needed by a firm and the members of the board through their allegiances to different organizations. Many researchers have explained the formation of the board through a controlling function. Alternative explanation is proposed by the resource dependency theory. Design/methodology/approach – To investigate the case of the largest company in Canada, the authors took their data in the Boardex database. Then drawing an affiliation matrix, they used the Pajek software to analyze these connections. They obtained a non-directional social network prone to illustrate the resource dependency theory. Findings – The authors found different categories of resources being placed at firm’s disposal: political, social and economic, under different forms. Because a case study approach was used, the findings will be used to complete the theory rather than confirm or contradict it. The case firm is well-conne...

IFRS adoption and the opinion of OHADA accountants

With market globalisation and the adoption of international financial reporting standards (IFRSs) by more and more countries worldwide, it seems appropriate to investigate the level of IFRS knowledge among African accountants working in countries belonging to the Organization for the Harmonization of Business Law in Africa (OHADA). It is also important to determine how they feel about the relevance of IFRSs in Africa. This study is a seminal step towards any level of IFRS adoption by African standards setters and companies. The results indicate that participants appear to have fairly good knowledge of IFRSs and are in favour of applying them for listed companies, but not for all businesses. These results may be of interest to OHADA and will provide data for future decisions about the evolution of accounting standards in OHADA member countries.