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Public debt has been troubling and troubles the governments of the countries, particularly those that in the recent years had fragile economies, some of which needed support programs such as Greece, Portugal, Cyprus and Ireland or Spain and Italy. The concern of governments and European authorities was to calculate the debt, in terms of GDP, its serviceability and sustainability, and its repayment in such a way that would mitigate the risk of future default. This study aims at assessing the debt of a country by taking into account the probability of future default. It uses actuarial techniques to estimate a burning cost similar to the one of life insurance protection schemes. The approach used in this study indirectly prices the debt through the calculation of the reserve needed to avoid the default of a country.

The inactivity of banks may be the result of a number of events, such as merger & acquisition (M&A), liquidation, default-bankruptcy, etc. All these phenomena of inactivity contribute to the same result, the reform of the European banking sector and they may have the same causes. The paper will address the issue of inactivity and will try to detect its causes using econometric models. Six groups of indicators are examined: performance, size, ownership, corporate governance, capital adequacy or capital structure and loan growth. Three econometric methods (Probit, Logit, OLS) have been used to create a system that predicts inactivity. The results of the econometric models show that from the six groups of indicators, four have been found to be statistically important (performance, size, ownership, corporate governance). Two have a negative impact (ownership, corporate governance) on the probability of inactivity and two positive (performance, size). The paper’s value and innovation is that it has given a systemic approach to find indicators of inactivity and it has excluded two groups of indicators as non-statistically important (capital adequacy or capital structure and growth).

The current crisis has been seen as the result of a “few bad apples”. The paper argues that the crisis is systemic and based on fallacies and misconceptions in the design and function of the economic – corporate system. Organizational and economic theories are based on hypotheses that lead to faulted decisions on how the system should be regulated and designed. The paper proposes that a new theory is needed. Disjoint approaches of the current situation are not suitable. Law, Organization theory, Economics, Finance and Accounting need to converge in order to formulate a theory that encompasses all factors and it is holistic. Introduction of corporate governance systems that are as dynamic as the organizational, ownership, product and capital market are, are necessary in order to create a stable and effective corporate environment.

Remuneration is considered to be closely connected with financial performance (positively), firm size (positively), the organizational structure (negatively) and corporate governance mechanisms (negatively). Furthermore, a connection of ownership structure and executives’ remuneration has been well established (theoretically and empirically) in the literature (agency theory). The paper examines if these relationships are valid in Greece. Greece hasn’t the characteristics of an Anglo-Saxon country. Overall the study has shown that remuneration levels in Greece are defined by a different set of factors than the ones that are prominent in an Aglo-Saxon country. Notably, fundamental financial measures of performance are more widely used. The age of firms and corporate governance quality have a catalytic impact on remuneration levels.

Purpose – The purpose of this paper is to propose a new approach to designing enterprise systems (ES). The goal is to create an information system that can be more efficient and able to contribute to a more stable and efficient corporate governance system.Design/methodology/approach – The new design approach is based on a retrospective analysis of the evolution of enterprise systems and the emerging business requirements.Findings – The new ES (Holistic Information System) does not diminish the problem of Corporate Governance (CG). The design and implementation of ES, according to modern CG principles and guidelines, can help all parties make rational decisions (through the power of logic and not through the logic of power), facilitate the market for corporate control, the flow of information and hence the efficiency of the CG system.Practical implications – The new framework can help information systems designers to understand and create a more holistic system. Also, it can help stakeholders understand th...

The chapter explores the relation among sovereign debt ratings, individual bank ratings and bank financial status. Credit Rating Agencies (CRA) are crucial to the function of financial markets. Two main blocks of models have been designed to investigate the above relations. The first block uses a constructed binary variable for Fitch’s ranking of European banks. The second block tries to identify the relation between financial performance and ratings. The data used for the empirical analysis, covering the period from 2004 to 2011, focus on the commercial banks of the 27 European Union countries. The statistical results show the close relation among sovereign debt, bank ratings and performance. The statistical importance of this relation is an indicator that external—exogenous factors (CRA) can play a significant role in formulating the economic environment, especially in times of crisis.

The crises of 2002 and 2008 have raised the issue of banking sector’s ability to absorb the effects of the crises. The inactivity of banks may be the result of a number of events, such as merger & acquisition (M&A), liquidation, default-bankruptcy, etc. Bankruptcy has been found to be a phenomenon that doesn’t happen often. On the contrary, M&As and liquidation are the main inactivity phenomena.The paper will address the issue of inactivity and will try to detect its causes using econometric models. Six groups of indicators are examined: performance, size, ownership, corporate governance, capital adequacy or capital structure and loan growth. Three econometric methods (Probit, Logit, OLS) have been used to create a system that predicts inactivity.The results of the econometric models show that from the six groups of indicators, four have been found to be statistically important (performance, size, ownership, corporate governance). Two have a negative impact (ownership, corporate governance) on the probability of inactivity and two positive (performance, size). This finding is consistent with the theory. The paper’s value and innovation is that it has given a systemic approach to find indicators of inactivity and it has excluded two groups of indicators as non-statistically important (capital adequacy or capital structure and growth).

It is the first paper that fully analyzes the disclosure status (legal and practical) through corporate web sites in Greece. The paper proposes that transparency and disclosure status should become a key performance indicator for the quality of management and for the quality of information released by the firm. The hypothesis is that disclosure of information, as a measure of corporate governance quality, should have a strong relation with firm performance. The paper seeks to establish a connection between the newly enforced IFRS and Corporate Governance in Greece by examining information disclosure of listed firms in their corporate sites on the Internet (WWW). Both initiatives (IFRS and CG reforms) have a common ground and that is the disclosure of information as they both advocate that a firm must release all material information to the shareholders and other stakeholders. This paper tries to find the impact of these initiatives in promoting transparency and accountability in Greek listed firms. The paper seeks to find the relationship between performance-corporate governance and information disclosure so that academics, practitioners, vendors and managers can formulate principles, strategies and practices to enhance the level of corporate governance and firms’ communication with the stakeholders. The basic driver for the paper is the OECD’s principles (2004) of Corporate Governance and the fact that all the major documents and research for the issues of CG are related, directly or indirectly, with the disclosure of information. The problem is determination of which information is necessary or mandatory to participate in management or to control the decision and actions of the controlling stakeholder and at what cost-channel of dissemination or format?Bhimani and Soonawalla (2005) argue that disclosure is a corporate responsibility. Information is the necessary basis for the decision making process and accountability. The basic anti-motives for disclosure are the costs of disclosure, the loss of competitive advantage (Welch and Rotbarg, 2006; Makadok, 2003), the security of information (Burns, 2001) and the rigidity of corporate functions. Internet has some advantages (low cost, directness of information, accessibility, rich format and the capability to connect directly with the Enterprise System) that make it the most appropriate mean of corporate information dissemination.The corporate web sites of 294 Greek listed firms have been reviewed in order to identify whether there is adequate information for a shareholder or a potential investor to take a rational decision. Twenty nine (29) information issues were identified and used. Four broad categories of information were identified: namely, general information for the firm (eleven issues), financial information (nine issues), Board of Directors (BoD) composition (six issues) and General Shareholders’ Meeting (GSM) information (3 issues). A cluster analysis is used to find commonalities of disclosure among the firms or commonalities of disclosure among the variables used. The sample was divided in groups according to: a) Capitalization (60 biggest with the rest) and b) Median of performance measurement (ROA, ROE, Tobin’s Q). A correlation matrix has been calculated.To further examine the relation between financial performance and disclosure the authors have divided the sample using cluster analysis and independent sample t-test was used to test the hypothesis of the same mean between the clusters. Two sets of controls have taken place. The first set is used to examine the relation of disclosure with financial performance. The second one examines the opposite relation of financial performance with disclosure status.The results of the data analysis show that Greek firms are disclosing only the mandatory (by law) information. They do not release, voluntary, information, especially, information about the decision making process, the evaluation of the management team. Information dissemination (disclosure) transparency is not related with financial performance. The paper is a first step in identifying the drivers of enhancing disclosure regimes. Further research should be done for the relationship between disclosure and ownership, disclosure and market volatility, etc.

The corporation environment is a battlefield. Key players are competing to gain power and control. The paper aims to analyze the power and control function within the firm. To do that three basic clusters of people (CEO/Management, Board of Directors, General Shareholders’ Meeting) are recognized and analyzed. The analysis takes place using five categories (goal/scope/interest, Strategy, Allies, Foes, Tools, Instruments, Weapons and Preferable Environment). The authors take into account the legal and regulatory framework (corporate law, corporate governance law and codes), the codes of ethics, good practices, principles of corporate governance (OECD, 2004) the market’s needs because they are basic drivers and regulators of how the delegation of power and control takes place and how balance is established. The paper shows that power and control is concentrated, legally, at the top of the organizational pyramid, but in reality the only cluster that has the ability (well formulated strategy, tools and allies) to enforce its will on others is the CEO/Management Cluster.

PurposeThis paper seeks to establish a benchmark for the evaluation of the quality of corporate governance (CG) and to detect the factors that affect it in Greece.Design/methodology/approachAn index of corporate governance quality is constructed using binary variables. Data from annual reports are used to identify the mechanisms and practices of corporate governance. An ordinal probit model is used to identify the drivers of corporate governance.FindingsCG quality in Greece is quite low, in terms of international best practices. The main drivers of CG quality are firm size, leadership or power concentration and board characteristics. Greek firms' CG quality depends mainly on the balance of power within the firm, rather than performance or market for corporate control.Research limitations/implicationsData for the constructed index have been collected from the annual reports, and not from questionnaires.Practical implicationsThe study provides evidence that there is a different set of factors that affect CG quality from those in Anglo‐Saxon countries. The paper addresses the issue of the relevance of proposed CG mechanisms to real CG problems. By identifying the factors that have an impact on CG quality, policy makers can focus on them to create a legal‐regulatory framework that can improve the level of CG.Originality/valueThe paper not only measures CG, but pinpoints its formulating factors as well. Furthermore, the need for new benchmarking tools to address the fundamental elements of the corporate environment (i.e. ownership concentration, the lack of a market for corporate control, etc.) in continental Europe is highlighted.

Purpose – M&A differences are based on three levels: preconditions, payment methods and motives-drivers. The paper’s purpose is to determine the motives, preconditions and methods of M&As in Greece and to compare them with the ones that are recorded in the studies for the Anglo-Saxon countries. Design/methodology/approach – The data used are collected from annual reports. A model was constructed using Probit regression methodology. The paper focused on the decision to adopt the M&A strategy (of the M&A strategy adoption). Findings – The paper argues that the M&A activity in Greece wasn’t the result of a convergence trend (a shift in the fundamental elements of the Greek business environment), but rather an extraordinary event. The preconditions and motives that are reported for the Anglo-Saxon countries are either none existing or weak in comparison in the case of Greece. In Anglo-Saxon countries M&As changed the business and organizational model, whereas in Greece the fundamental characteristics remained the same. Research limitations/implications – Data have been collected from the annual reports of the 60 biggest in capitalization firms in the Greek Stock Exchange. Practical implications – The fact that there are different businesses and organizational models across Europe is a factor that must be taken into account in designing and implementing policies and regulations that promote the idea of a common market with complete freedom of movement and the same rules and regulations. Originality/value – This is the first paper that uses Probit methodology to study M&As in Greece and complements a growing body of literature studying the M&A phenomenon in Europe.

Corporate Governance (CG) and Enterprise Systems (ESs) have attracted a great deal of attention from academics and practitioners. Financial scandals (Enron, WorldCom, etc.) and information system breakdowns are common nowadays. This paper argues that these failures are closely correlated. It shows the correlation and makes some suggestions about how the information systems should be designed and implemented and how corporate governance can benefit from the new design approach. Regulation, voluntary codes and good practices as a motive for adopting new systems (organisational and informational) play a crucial role in selecting the course of action and strategy. The synergies between CG and ESs can lead to a more stable corporate environment and improved organisational performance.