Rethinking Corporate Governance - Research Proposal Example

School: ANALYSIS OF CURRENT ISSUES IN FINANCE WORK: RESEARCH PORTFOLIO Lecturer: Rethinking corporate governance Overview of the topic Growth in the banking sector in the United Kingdom (UK) has been found to be an important determinant of collective economic growth for the entire country (Walker, 2013). It is for this reason that various forms of search for interventions for growth continue to take place on a constant basis (Turner, 2009). Corporate governance has been identified as a very useful system by which banks in the UK can be regulated in the conduct of their business to ensure that they all follow a set of accepted and approved paradigm of operations that is acceptable by all stakeholders (Wofford and Liska, 1993). Very notable of corporate governance, it puts emphasis on what all major stakeholders and not only shareholders get from doing business with banks. Rethinking corporate governance would thus be a topic that focuses on new dimensions that can be added to existing corporate governance principles as a way of creating level playing field in the banking industry for both service providers and service users. Research Questions 1. How does corporate governance benefit non-shareholder stakeholders of banks in the UK? 2. In what ways do banks benefit from practicing corporate governance? 3. How do shareholder benefit when corporate governance is effectively utilised in UK banks? 4. What new approaches should be taken towards corporate governance in the UK? 5. What challenges have banks faced in the course of implementing corporate governance principles? Data Required The topic is an industry based topic, which will focus on data from banks in the UK. More specifically, 5 banks shall be selected and used as a case study. As part of the case study of the application of corporate governance principles in these banks, data will be required from both primary and secondary sources, pertaining to the benefits that the banks, non-shareholder stakeholders and shareholders have gained from corporate governance practices. More specifically, the secondary data will be sought from the annual financial reports of the banks whiles primary data will be sought through in-depth interview sessions with key persons within the banks such as managers of the banks. Five banks will be selected as a way of ensuring differentiation in perspectives of results. Proposed Methodology As part of the research questions and the overall goal of the proposed study, the researcher shall be seeking to identify the benefits of existing corporate governance principles as spelt out in the UK Corporate Governance Code and the Organization for Economic Cooperation and Development (OECD) (Tozer-Pennington, 2011). Based on these findings, a correlation will be drawn whether there is the need for there to be revisions in the existing corporate governance principles. For the relation of the correlation to be established and given the fact that most of the data to be collected are subjective, there will be a mixed methodology made up of quantitative research and qualitative research approaches. It is hoped that as part of the mixed research method, the researcher will be better placed to test and compare opinions of players on the field of practice with what prevails in literature and record books. References Tozer-Pennington, V. (2011) UK FSA to get intensive and intrusive on products. Operational Risk & Regulation, 12(2), p8. Turner, A. (2009) A regulatory response to the global banking crisis, FSA. Walker, G. A. (2013) Reference Rate Regulation and LIBOR. Banking & Finance Law Review, 28(3), pp.351-388. Wofford, J.C. and Liska, L.Z. (1993) Path-goal theories of leadership: a meta-analysis. Journal of Management, 19(4), pp. 857-76. Bank failures and regulation Overview of the topic Public sector growth has been attributed to several factors and been identified to be a process rather than an event (Jeon and Choi, 2012). What this means is that in order for the businesses in the public sector to grow, it is important that series of actions and interventions be delivered in accordance to accepted ways of doing business. Unfortunately, Kaufman and Englander (2007) lament on how most banks in the public sector in the UK have very good paperwork regarding how business should be conducted but lack the needed regulation to ensure the enforcement of these principles. Due to this situation, most people have attributed poor performance and lack of growth in public sector banks to poor banking regulation. The proposed research will therefore be conducted to find the relationship between bank failures and regulation. Research questions 1. In what ways do requirements and restrictions from bank regulators affect the governance of banks in the UK? 2. What are the benefits of having bank regulations in place? 3. In what ways have the supervisory roles of regulators been neglected in UK banks? 4. How does non-compliance to market discipline affect banks negatively? 5. What interventions exist for banks suffering failures as a result of regulation issues? Data Required Data collection share be focused directly on the banking industry with particular emphasis on public sector banks (PSB). These public sector banks will be noted to be banks that have over 50% share being for the government (Kabigting, 2011). The researcher shall focus on data that has to do with three main areas of general principles of bank regulation. These areas are minimum requirements, supervisory review and market discipline. For each of these principles, the way and manner in which PSBs are affected by them will be outlined. A sample size will therefore be built among respondents made up of branch managers of two major PSBs namely Bank of England and Northern Rock in Public Sector. Individual branches of the banks shall be used instead of the collective parent banks as various branches of the banks have been identified to have unique cases of regulation problems, which threaten difference cases of bank failure (International Financial Law Review, 2005). Proposed methodology A quantitative survey shall be created for data collection. This means that the researcher will be having a very large sample size to handle. Because of this, a research instrument in the form of a questionnaire shall be prepared for data collection. The questionnaire shall largely be an expansion of the research questions that have been asked. This means that the question shall be thematically structured to ensure that it collects data directly reflecting the purpose of the study. Based on the data collected in the three areas, a comparative data analysis process that seeks to find the impact of each one of the three major banking regulations principles namely (1) minimum requirements (2) supervisory review and (3) market discipline on the outcome of banking performance shall be undertaken. This means that the three principles will serve as the independent variables of the study with banking performance acting as dependent variable. References International Financial Law Review, (2005) Why the FSA must improve its enforcement team. International Financial Law Review, Sep 2005, p1. Jeon, H., & Choi, B. (2012) The relationship between employee satisfaction and customer satisfaction. The Journal of Services Marketing, 265, pp.332-341. Kabigting, L. C. (2011) Corporate Governance Among Banks Listed In The Philippine Stock Exchange. Journal of International Business Research, Special Issue, 10(2), pp.59-68. Kaufman, A. and Englander, E. (2007) A Team Production Proposal to the Shareholder - Stakeholder Quarrel: The OECD Principles of Corporate Governance. SSRN Working Paper Series, Nov 2007. Read More