A Study on the Effect of Corporate Governance on Share Prices - Finance Assignment Help

Assignment Task

1. INTRODUCTION

1.1 INTRODUCTION TO CORPORATE GOVERNANCE
Corporate governance broadly refers to the mechanisms, processes and relations by which corporations are controlled and directed. Governance structures and principles identify the distribution of rights and responsibilities among different participants in the corporation (such as the board of directors, managers, shareholders, creditors, auditors, regulators, and other stakeholders) and includes the rules and procedures for making decisions in corporate affairs. Corporate governance includes the processes through which corporations' objectives are set and pursued in the context of the social, regulatory and market environment. Governance mechanisms include monitoring the actions, policies, practices, and decisions of corporations, their agents, and affected stakeholders. Corporate governance practices are affected by attempts to align the interests of stakeholders. Interest in the corporate governance practices of modern corporations, particularly in relation to accountability, increased following the high-profile collapses of a number of large corporations during 2001–2002, most of which involved accounting fraud; and then again after the recent financial crisis in 2008.
Contemporary discussions of corporate governance tend to refer to principles raised in three documents released since 1990: The Cadbury Report (UK, 1992), the Principles of Corporate Governance (OECD, 1999, 2004 and 2015), the Sarbanes-Oxley Act of 2002 (US, 2002). The Cadbury and Organization for Economic Co-operation and Development (OECD) reports present general principles around which businesses are expected to operate to assure proper governance. The Sarbanes-Oxley Act, informally referred to as Sarbox or Sox, is an attempt by the federal government in the United States to legislate several of the principles recommended in the Cadbury and OECD reports.
Rights and equitable treatment of shareholders: Organizations should respect the rights of shareholders and help shareholders to exercise those rights. They can help shareholders exercise their rights by openly and effectively communicating information and by encouraging shareholders to participate in general meetings.
Interests of other stakeholders: Organizations should recognize that they have legal, contractual, social, and market driven obligations to non-shareholder stakeholders, including employees, investors, creditors, suppliers, local communities, customers, and policy makers.
Role and responsibilities of the board: The board needs sufficient relevant skills and understanding to review and challenge management performance. It also needs adequate size and appropriate levels of independence and commitment.
Integrity and ethical behavior: Integrity should be a fundamental requirement in choosing corporate officers and board members. Organizations should develop a code of conduct for their directors and executives that promotes ethical and responsible decision making.
Disclosure and transparency: Organizations should clarify and make publicly known the roles and responsibilities of board and management to provide stakeholders with a level of accountability. They should also implement procedures to independently verify and safeguard the integrity of the company's financial reporting. Disclosure of material matters concerning the organization should be timely and balanced to ensure that all investors have access to clear, factual information.

1.2 NEED FOR THE STUDY
The stock prices in the financial market are characterized by fluctuations and wide, which requires an appropriate model to explain these fluctuations in a scientific manner. Therefore, fluctuation and variation in the prices of industrial stocks contributing pays to question about the causes of this volatility. This study was to identify the principles of corporate governance that may affect the stock prices of companies listed in the Dubai Financial Market. To ensure that it has become one of the possibilities of modern seeking to achieve the greatest return on the share price, and is considered the ASE of the markets in which aspires to apply the concept of corporate governance in listed companies to provide investment opportunities safe and true to its investors, so the study will seek to answer the following questions:
What is the impact of the application of the principle of ensuring the existence of a basis for an effective framework for corporate governance on the share price of the companies under study?

1.3 OBJECTIVE OF THE STUDY
The main objective of this study is
To identify the corporate governance of selected companies in the Dubai Financial Market
To identify if the corporate governance policies and the procedures followed by a company actually has an impact on the share prices of the company listed in the Dubai Financial Market. Based on this we form the following hypothesis.
Null Hypothesis: Ho: There is a relationship between corporate governance policies practiced by a company and the share prices of the company.
Alternate Hypothesis: Ha: There is no relationship between corporate governance policies practiced by a company and the share prices of the company.

Corporate Governance is considered as a construct which is represented by the following relationship -
Corporate Governance Score = Related Party Transactions + Board Members +Board Structure + CEO Chairman Duality + Term in office(3 years) + Details of directors’ remunerations + Functions of Board Members + Annual General Meetings + Auditor Name + Auditor Fees + Credit Ratings + Disclosure of matters related to AGM + Disclosure pf penalties + Audit Committee Structure + Nomination and Remuneration Structure + Internal Controls and Risk Management

This Finance Assignment has been solved by our Finance experts at My Uni Paper. Our Assignment Writing Experts are efficient to provide a fresh solution to this question. We are serving more than 10000+ Students in Australia, UK & US by helping them to score HD in their academics. Our Experts are well trained to follow all marking rubrics & referencing style.
Be it a used or new solution, the quality of the work submitted by our assignment experts remains unhampered. You may continue to expect the same or even better quality with the used and new assignment solution files respectively. There’s one thing to be noticed that you could choose one between the two and acquire an HD either way. You could choose a new assignment solution file to get yourself an exclusive, plagiarism (with free Turnitin file), expert quality assignment or order an old solution file that was considered worthy of the highest distinction.