Journal of Law and Governance

Editorial

Anona Armstrong — Tue, 20 Dec 2016 00:00:00 -0800

While governance practice has its legitimacy grounded in the corporate laws and various guidelines issued by stock exchanges and professional associations in the private sector, this edition of the Law and Governance Journal returns to questions raised by implementation of governance in the public sector.

Inequality, Poor Governance and Legitimacy Deficits in the European Union

Michael Longo, George Messinis — Tue, 20 Dec 2016 00:00:00 -0800

This article offers an interdisciplinary perspective on the drivers of political and economic crisis in the European Union. A growing body of literature highlights the detrimental effects of extractive institutions on opportunity, sustainable growth and social cohesion. The article therefore examines the link between income inequality, corruption and perceptions of illegitimacy in the European Union. It conjectures that poor institutional quality and governance are critical drivers of the European Union’s legitimacy deficit. The article concludes that for the European regional project to advance there is a need for greater institutional convergence amongst member states and a renewed commitment to social cohesion.

Appraising the Effect of Boko Haram Insurgency on the Agricultural Sector of Nigerian Business Environment

S.A. Adebisi, O.O. Azeez, R. Oyedeji — Tue, 20 Dec 2016 00:00:00 -0800

The study is an appraisal of Boko Haram’s insurgency on the agricultural sector of the Nigerian business environment. A time series analysis research method was adopted, while descriptive statistics and t-test were used to analyse the secondary data before and during the insurgency. The result of the findings showed that agricultural valued added to the GDP was high before Boko Haram disruption and has reduced during the period of insurgency. Based on the findings, the study recommends that Government should take legal and justifiable action to ensure that the ills caused by Boko Haram to the agricultural sector are arrested and farmers encouraged with better incentives to go back to farm.

Board Member Duality and Its Relationship with Corporate Performance in State-owned Enterprises in Indonesia

Agus Widodo, Anona Armstrong — Tue, 20 Dec 2016 00:00:00 -0800

This paper presents preliminary findings from a survey about board member duality and agency cost in state-owned enterprises in 2014 in Indonesia. Board member duality is defined as the appointment to the position of director in a parent company while at the same time also holding a position as a commissioner in its subsidiary company. Agency cost refers to the cost which arises as a consequence of an agent and principal relationship. The principal expects that agency cost incurred in the relationship, will, in turn, increase corporate performance. Director’s remuneration, as one of the proxies for agency costs, is tested together with several variables involved in the respondent attributes, namely gender, age, and education in order to find the best predictor of the dual director response regarding his/her role in parent and subsidiary governance. The preliminary finding reveals that Director’s remuneration is the best predictor of the dual director response against three propositions, namely (1) Dual directors use their experiences to the advantage of both companies; (2) Dual directors tend to choose the interests of the parent rather than those of its subsidiary; (3) Dual directors increase subsidiary performance.

Community Development as a CSR Strategy for Sri Lanka

Kumudini Heenetigala — Tue, 20 Dec 2016 00:00:00 -0800

The purpose of this paper was to investigate the corporate social responsibility (CSR) practices related to community development (CD) by Sri Lankan companies. This article investigated CSR practices related to community development in Sri Lanka from secondary data in websites, integrated reports and sustainability reports from a sample of 30 companies in the top 50 Companies in the Sri Lanka’s LMD 100 for the year 2013. Descriptive statistics were employed to investigate the reporting practices. Community development practices of the top 10 companies were investigated in-depth using content analysis. Results showed that 90% of the companies reported their CSR activities, and were moving towards integrated reporting. The majority of the CSR related CD practices were conducted to improve the quality of lives of people living in rural areas and they were mainly to provide better education, health facilities and livelihood development. However, education was the top most priority by the companies. In-depth analysis of this study is limited to the top 10 companies in the LMD 100 which are ranked among the most respected companies. This study implies that education is a top most priority among CSR practices in Sri Lanka because it improves the living standards and also contribute to economic development. This paper contributes to understanding the community development practices in developing countries in which a corporate sector should engage as their CSR if they are to have a strong impact on economic development.