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The objective of this study is to investigate further the interplay between market globalisation and corporate governance practices. The study is conducted in Canada using a sample of 230 firms listed on the TSX in 2002 and ranked by Report on Business (ROB) on a set of corporate governance best practices. The ROB corporate governance index is built around four categories, namely board composition, compensation, shareholder rights and disclosure. The interaction of the sample companies with the US markets is analysed on the three following dimensions: financial market, product market and multi‐markets (combining financial, product and labour markets). Overall, our results show that greater US market interaction is associated with higher corporate governance ratings.This study adds evidence on the positive relation between market integration and corporate governance practices and, as such, provides some credence to the claim that globalisation will lead to a certain degree of market‐driven convergence in corporate governance.

AbstractThe objective of this paper is to show how data envelopment analysis (DEA) could be used to assess the performance of social enterprises (SEs). This paper is based on a general review of the literature dealing with both the DEA and SEs. Despite its popularity, the DEA has rarely been employed to analyse the efficiency of SEs. This is quite surprising considering the analytical strength of the DEA and its adaptability to different organizational forms and contexts. This paper highlights the advantages of the DEA for dual‐function organizations such as SEs and proposes DEA formulation guidelines tailored for these organizations.

PurposeThe objective of the study is to analyze corporate governance practices of Canadian companies in the post‐Enron period. The attempt is to investigate whether the convergence phenomenon evidenced in prior studies is limited to the minimum mandatory requirements imposed by regulators or reflects a real behavioral transformation.Design/methodology/approachChanging governance structure might be slow except in times of financial crisis, increased public scrutiny and reforms. These conditions are met in the post‐Enron period (2002 to 2005) where major reforms have been launched including the Sarbanes‐Oxley Act (SOX) in the USA and Bill 198 in Canada. The authors expect changes in corporate governance to be more important during this period, therefore, enhancing the robustness and reliability of their results. They measure corporate governance on a global scale, relying on the ROB index published by the Globe and Mail. The index distinguishes between four blocks of corporate governance, namely, board composition, compensation, shareholder rights, and disclosure.FindingsThe present results show signs of convergence. However, Canadian companies improved their corporate governance practices in the post‐Enron period mainly in areas mandated by regulation. This includes provisions related to the composition, attributes and working of the board of directors and board committees. No significant improvement is found in non‐regulated governance best practices.Research limitations/implicationsOverall, the findings suggest a lack of real behavioral change in corporate leaders. Instead, convergence in corporate governance appears to be the result of a box‐checking exercise.Practical implicationsIf corporate governance is about ethical conduct and stems from the culture and mindset of management, these results show that corporate governance cannot be regulated by legislation alone.Originality/valueThis study goes beyond the minimum mandatory requirements and looks into compliance of non‐regulated provisions as well. Examining the evolution of corporate governance practices on these two fronts helps to further investigate the extent and nature of convergence.

AbstractThe objective of this study is threefold. First, we present a review of the international studies that have investigated the link between firm‐level governance scores and performance. To our knowledge, this study is the first to provide a comprehensive review of this recent and growing literature. Second, we discuss potential methodological shortcomings of using governance indexes. Third, we propose directions for future research. Overall, a clear positive relation is found between governance ratings and performance in Europe and in emerging economies, whereas studies conducted in the US and Canada have generated mixed evidence. The empirical problems related to measurement, substitution between governance arrangements, endogeneity, and optimization across governance choices are discussed. Solutions are proposed to alleviate these concerns. Copyright © 2011 ASAC. Published by John Wiley & Sons, Ltd.

AbstractThe objective of this study is to analyze the relation between ownership concentration and corporate governance practices of a group of Canadian companies listed on the Toronto Stock Exchange. We rely on the corporate governance index developed by the Report on Business (ROB) in 2002. Our empirical results are consistent with the expropriation effect argument that predicts a negative relation between deviation from the one share‐one vote rule and corporate governance best practices. In this context, the dominant shareholder has incentives to maintain weak internal controls in order to facilitate expropriation. In addition, consistent with prior research, our results give partial support to the substitution effect argument by showing a negative impact of ownership concentration on the board composition subindex. Copyright © 2007 ASAC. Published by John Wiley & Sons, Ltd.

RésuméL'objectif de cette éetude est d'analyser I'impact de la privatisation sur I'efficacite technique d'un groupe de societes d'Etat au Canada. L'attention est toutefois portee sur les changements qui auront precede le transfen de propriete et qui visent a commercialiser les entre‐prises. Au Canada, la commercialisation des entreprises du secteur public fut initiee vers le milieu des annees 80. Ces reformes se sont poursuivies par la privatisation de certaines societes d'Etat. Ce contexte particulier permet donc d'evaluer dans quelle mesure la commercialisation affecte la performance post‐privatisation. Les resultats obtenus suite aux analyses multivariees suggerent que la commercialisation et la privatisation ont un impact positif et significatif sur l'efficacite technique des societes d'Etat. Les resultats revelent aussi qu'une fois les entreprises commercialisees, l'impact de la privatisation sur l'efficacite des entreprises devient non significatif.AbstractThis study sets out to analyze the impact of privatization on the technical efficiency of some state‐owned enterprises (SOEs) in Canada. It also focuses on the changes that are undertaken, prior to the transfer of property, in a bid to commercialize the corporations. In Canada, the commercialization of public sector enterprises started in the mid‐1980s and the reforms were pursued with the privatization of SOEs. This specific context can be used to assess the impact of commercialization on the performance of public corporations in the post‐privatization era. The results obtained following the multivariate analysis show that commercialization and privatization have a positive and significant impact on the technical efficiency of SOEs. They also show that once the corporations are commercialized, the impact of privatization on their efficiency becomes insignificant.

State‐owned enterprises (SOEs) have been described as being inefficient and losing money. The theories pretend that private property rights will solve the problem. In practice, SOEs are reorganized to follow the model of the private firm, a period known as the public sector corporatization. One critical element of this reform is an important modification of the mission of the firm away from social and toward profitability goals. Most SOEs become profit‐seeking organizations. The objective of this study is to examine the impact of the corporatization process on the financial performance of SOEs. From the Financial Post 500, we selected the largest SOEs in Canada. For each firm, the critical year of the mandate revision has been set as the beginning of the corporatization period. We covered the years between 1976 and 1996. The performance is measured from a multi‐criteria approach including measures of profitability and productivity. The results suggest that the financial performance of SOEs improves significantly when firms are corporatized. Therefore, the main difference in the financial performance is caused by the difference in the objectives of the firm, not the property or some dubious political activities.

RésuméLe présent article avance que plus le bénéfice publié par une firme est crédible, plus il est jugé utile par les investisseurs. Le contexte choisi pour la validation de cette proposition est celui des firmes ayant émis des prévisions de bénéfice lors de leur premier appel public à l'épargne au cours de la période 1985‐1992. Les résultats montrent que lorsque le bénéfice publié par l'entreprise s'écarte de manière significative de la prévision émise antérieurement, l'investisseur le juge moins crédible et, par conséquent, moins utile en tant que mesure de valeur. Par contre, lorsque les états financiers sont vérifiés par un cabinet comptable de grande taille, les investisseurs tendent à accorder au bénéfice publié plus de poids en tant qu'indicateur de la valeur de l'entreprise.AbstractThis study posits that the credibility of earnings reported by a firm enhances their usefulness for investors. The sample comprises IPO firms having issued earnings forecasts during 1985‐1992. Measures of earnings credibility encompass earnings forecast error and quality of audit services. Results show that a material difference between post‐IPO actual earnings and forecasted earnings significantly undermines the usefulness of earnings as an indicator of firm value. In contrast, the audit of a firm's financial statements by a Big Six firm significantly enhances the usefulness of earnings as an indicator of firm value.

Corporate governance is nowadays one of the most discussed topics by academics, practitioners and regulators. Most of the discussion is targeted at publicly held corporations. The present research deals with the issue of governance in the public sector and more specifically in state‐owned enterprises (SOEs). We investigate the effect of the reform of Canadian SOEs on the characteristics of boards and board committees.Our results seem to confirm the presence of significant adjustments in board characteristics following two major events in the reform: commercialisation and privatisation. In both cases, boards have on average evolved towards a set of structures and mechanisms that have the potential to improve independence and governance. This study sheds new lights on the process of adjusting corporate governance mechanisms to new strategies and to new environments.