| Article Details : |
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| | | Article Name : | | | Relative Influence of Ownership Structure and
Board Structure on Potential Organizational
Bankruptcy | | Author Name : | | | KHURRAM AZIZ FANI1, VINA JAVED KHAN, QADEER RAHAT, RAMAISA AQDAS RANA | | Publisher : | | | Bridge Center | | Article URL : |  | | | Abstract : | | | Recent corporate scandals and involvement of senior
management in fraudulent activities have raised serious concerns over
the way organizations are managed and the role of management. The
aim of research was to analyze the relative influence of ownership
pattern and board structure on potential organizational bankruptcy.
Secondary data related to bankruptcy of organization, CEO’s
compensation, CEO’s shareholding, CEO/Chairman duality and
presence of institutional stakeholders was extracted from annual
reports of Pakistani companies. Multiple regression analysis was used
to achieve research objectives. Findings revealed that CEO’s duality,
CEO’s shareholding, CEO’s compensation, and institutional block
holdings had significant impact on potential bankruptcy of selected
enterprises. Our results implied that if CEO’s compensation is linked
to organizational performance/chances of bankruptcy, then CEO will
put efforts to improve organizational performance and to reduce the
likelihood of insolvency of the enterprise. Also, institutional
shareholders exercise high care while investing in a company and once they invest in an enterprise, they track the performance of the
organization, which avoid situations leading to organizational
bankruptcies. It is recommended that organizations should develop
performance management measures, separate CEO and Chairman’s
position, link CEO’s compensation with organizational performance,
award shares to directors of the company and remove barriers from
institutional shareholding. | | Keywords : | | | Organizational bankruptcy, Ownership structure, Board
structure
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