Resultados en pacientes con MER macular y/o síndrome de TVM

The importance of CG for achieving better FP, along with taking care of social welfare, cannot be undermined. CG holds a vital and dynamic position in all aspects of business (Dibra, 2016). The inefficient management of either WCM or CG will result in poor FP(Gill & Shah, 2012; Tsagem et al., 2014). Keeping in view the importance of both (WCM and CG) this research investigates the collective effect of WCM and CG on FP (see research objectives in section 1.4). Hence, it is necessary to review the CG literature review.

CG literature has gained immense academic and corporate attention after the collapse of several major firms across the world, such as Adelphia, Enron, Global crossing, Arthur Anderson, WorldCom (Lins, Servaes, & Tamayo, 2017). This section provides a broad definition of CG, considering both narrow and wider views (Solomon, 2010).In the case of the narrow view, Shleifer and Vishny (1997) define CG as “[…] the ways in which suppliers of finance to corporations assure themselves of getting a return on their investment” (p.123). Similarly, the Cadbury Committee defines CG “as the system by which companies are directed and controlled” (Cadbury, 1992). According to Doidge, Karolyi, and Stulz (2007) CG is defined as the customs, laws, policies, and procedures that affect the functioning of corporate firms, which in return effects FP.

The literature recommends that publicly listed firm should adopt specific internal governance structures (Weir, Laing, & McKnight, 2002). As this study considered publicly listed firms in developed markets, it also examines internal CG mechanism factors while investigating the relationship with FP. The same has been implemented in regards to CG, when e defining the conceptual framework of this research and selecting independent variables (see sections 3.3 and 3.4.2).This study did not examine external governance mechanisms. This limitation is discussed further in section 6.6.

Definitions of CG can be divided into two main groups. The first group deals with behavioural patterns of corporations, such as shareholders, stakeholders and financial growth. The studies for single countries or firms operating within that particular country normally choose the first group. Whereas, the second group is concerned with normative frameworks, such as firm operations, firm performance and data is based on legal, judicial and financial systems. On the basis of the normative group, cross country studies are conducted in order to allow for comparisons (Claessens & Yurtoglu, 2013). This study follows this approach.

20 Questions may arise over how to compare results across six selected markets, if the CG frameworks of these markets (see Table 3.2) are different? This issue was addressed while selecting the sample markets for this study ; the sample markets are signatories of the OECD CG framework and have a uniform set of CG practices (OECD, 2017). Hence, no problem arises while comparing the results across our sample markets due to uniform CG standards. Table 2.5 provides further definitions of CG reported by prior studies.

2.5.1 Corporate Governance Theories

According to Abu-Tapanjeh (2009), CG holds different meanings in an organisational context. Due to the failure of corporate firms in recent years, the corporate sector is now paying more attention to CG practices. To some extent, the CG literature has not captured the true concept hidden in this term. Ambiguity arises in words such as manage, govern, regulate and governance. Due to these ambiguities, various researchers have interpreted governance according to their own understandings. Hence, Abdullah and Valentine (2009)reviewed different basic theories emphasising CG, using agency theory, expanded into stewardship and stakeholder theory. Each of these theories is briefly discussed.

2.5.1.1 Agency Theory

Alchian and Demsetz (1972) provide a comprehensive description and explanation of agency theory, which was originated from economic theory and was further developed by Jensen and Meckling (1976). It is defined as the “relationship between the principals, such as shareholders and agents such as the company executives and managers” (p.366). In agency theory, shareholders are empowered to perform the work as an owner or principal. According to Clarke (2004), principals or owners delegate business matters to managers or directors to ensure the smooth functioning of the organisation. There are two crucial factors to consider in relation to agency theory (Daily, Dalton, & Cannella, 2003). Firstly, it reduces the corporation to two participants (managers and shareholders). Secondly, it foregrounds the self-interested relationship of employees or managers in an organisation.

The basic objective of agents acting on behalf of shareholders is to make decisions in favour of the principal interest. However, agents do not always make decisions that reflect principals’ best interests (Vives, 2000). Adam Smith first identified this in the 18th _{century. His theory}

was later confirmed by Ross (1973). In fact, Davis, Schoorman, and Donaldson (1997) also highlight problems arising due to a separation of ownership in agency theory. Bhimani,

21 Horngren, and Foster (2008) explains that agency theory was introduced as a result of the separation between ownership and control in firms.

Figure 2.3 explains the relationship and role of each component in an agency theory setting. The figure explains that the principals (as owners of the firms), hire and delegate power to agents to act on their behalf. In ideal conditions, agents must make decisions in favour of the owners, but at the same time, they also consider their own interests.

Hires and Delegates

Performs

Figure 2.3 Agency Model

Source: Author’s Illustration Based on Jensen and Meckling’s (1976) Agency Theory

2.5.1.2 Stewardship Theory

Stewardship theory originates in sociology and psychology. Davis et al. (1997) explain that "a steward protects and maximises shareholder's wealth through FP because by so doing, the steward's utility functions are maximised" (p.217). Based on this definition, firm executives or managers are stewards working to maximise profit for shareholders. In contrast to agency theory, stewardship theory focuses on individualism and the role of top management as stewards (Donaldson & Davis, 1991).

According to Donaldson and Davis (1991), stewardship theory acknowledges the importance of structures that enable stewards to offer possible autonomy built on trust. It focuses on employees or executive positions so that they can work independently and in return, can maximise shareholders profit. However, Argyris (1973) argues that agency theory considers employees as economic beings, which ignores individuals’ own ambitions or goals. Hence, the autonomy given by stewardship theory minimises processes designed to monitor and control costs (Davis et al., 1997).

22 Empirical studies have also found that returns could be improved by combining both theories rather than using them in isolation (Donaldson & Davis, 1991). Figure 2.4 explains that shareholders empower and trust stewards (company executives or managers) for the maximisation of shareholders profits. In comparison to agency theory, stewardship theory acknowledges that stewards are humans who need intrinsic and extrinsic motivations along with self-autonomy to make decisions for maximum shareholder profit.

Empower and Trust

Shareholders Profit

Figure 2.4 Stewardship Model

Source: Author’s Illustration based on Davis, Schoorman& Donaldson’s (1997) Stewardship

Theory

2.5.1.3 Stakeholder Theory

Stakeholder theory originated in 1970 in management studies. Freeman (1984) developed the theory by integrating corporate accountability to a broad range of stakeholders. However, Wheeler, Fabig, and Boele (2002)argue that it originated from within both organisational and sociological fields. Indeed, stakeholder theory is less of a formal unified theory and more of a broad research tradition, incorporating philosophy, ethics, political theory, economics, law and organisational science.

According to Freeman (1984), stakeholder theory is defined as “any group or individual who can affect or is affected by the achievement of the organisation's objectives” (p. 46). Stakeholder theorists suggest that managers should have strong networking skills (with employees, suppliers and business owners). According to Harrison and Freeman (1999), to achieve organisation goals, a strong networking relationship is much more important than an employee-manager-owner relationship (preferred in agency theory).

Figure 2.5, explains the reciprocal relationship between firms and their stakeholders in light of stakeholder theory. According to stakeholder theory, managers have relationships with these different stakeholders to achieve their ultimate purpose, that is, the firm’s objectives.

23

Figure 2.5 Stakeholder Model

Source: Author’s Illustration based on Donaldson and Preston’s (1995) Stakeholder Theory