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Many scholars have linked Corporate Governance (CG) and performance or CG, capital structure of banks or market structure. The decision to use the capital market or debt in order to obtain the necessary capital to finance firms’ operations is a critical factor for the formulation of corporate environment, because it contributes to the ownership concentration or diffusion and to corporate risk exposure level. The paper’s goal is to link all these three dimensions and to address the issue of whether performance and capital structure are the decisive factors of good corporate governance or vice versa and whether these dimensions are the drivers of banks’ financial health, strategic robustness and survival effectiveness. Furthermore, the paper is seeking to detect the differences (if any) among banking systems across Europe. To do that a double sample is selected (covering the period from 2004 to 2013). The first sample is comprised by European banks that merged. The second sample is comprised by European banks that survived the last merger & acquisition wave and the systemic shock of the double crises of 2002 and 2008. A combined ratio of performance (ROAA or ROEA) and debt to equity (DE or debt aggravation) is used to determine if there is a connection between capital structure and CG quality of banks. Panel data methodology is used. The econometric results show that there are no significant differences between the strata that are used for this research. There is no common factor or driver between the banking systems of Europe. This is an indication that the convergence theory of corporate governance systems is yet confirmed

The economic crisis has caused great changes in Greek economy, which are obvious in the banking field as well. Under the light of these unpleasant circumstances, the banking system was (and maybe still is) in danger of collapsing, a possibility that would probably affect countries abroad. In order to avoid this collapse, the sustainable banks were further supported and the non-sustainable were purged. This strategy aimed to stabilize the financial system through bank mergers and acquisitions. The strategy chosen to support and purge the banks was to proceed to mergers and acquisitions. These mergers and acquisitions are realized by the bank employees and they are highly related to them as they intend to stabilize the employees’ uncertain future. In October 2012 a field research was realized in order to record the employees’ point of view when it comes to both their profession as it is now and the case of bank mergers and acquisitions. After processing the findings of the research, we extract the following conclusion, among others: bank mergers and acquisitions have a negative impact on the majority of the employees that seem to be worried about the limitation of their professional perspectives, the emergence of bad working conditions and ultimately a possible discharge. The findings of the research confirm the growing anxiety and uncertainty among the bank employees. In case of merger or acquisition, the employees prefer that either of these procedures will be held with another Greek bank rather than with a foreign bank. There is a new “wave” of mergers and acquisitions coming in the banking field in Greece, confirming thus the general sense shared by the community and the outcomes of the economic crisis.

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.

The goal of the paper is to detect the factors that affect financial performance of the European banks and the cross – sectional differences that may exist. The European banking sector is interesting due to its special characteristics and structure. The stability of the sector is based on structural elements (competition, capital structure, regulation, etc.) and its performance. The paper addresses the issue of the banking sector performance using two different econometric approaches. In both blocks of research ROA is used ROA as a performance index for Europe’s banks. The first approach has been realized by using four econometric methods [LAD (least absolute deviations), RREG (robust regression), ordinary least squares (OLS) and Quantile regressions] and the second approach is panel data regressions (Fixed and Random Effects) and tries to find if there are differences among different panels of European banks (PIGS-not PIGS, North-South, Entity type, Corporate governance system). The independent variables used in both groups of research can be categorized into six groups of indicators: ratings (country and bank), size, ownership, corporate governance, capital adequacy or capital structure and loan growth. The data used for the empirical analysis cover the period from 2004 to 2011, is focused on the twenty seven (27) European Union countries. The statistical results show that performance of banks in Europe is dependent on predictable factors and on factors like the credit ratings. The results also show that the European banking sector is not homogenized. There are significant differences in size, spatial distribution, performance, financial structure, etc. This results are important because as performance is not homogenized and the factors that determine performance have different weight in each subsystem, the European banking system is not isomorphic. Hence, each subsystem must have a different set of rules and strategies to enhance performance. The results are especially important for policy makers and explaining the events of the recent history.

During the last decades Europe has started a policy of convergence. The establishment of European Central Bank and the Euro as a common currency are two critical time and crucial points of the convergence effort. The crises of 2002 and 2008 have raised the issue of stability, status and structure of the European banking system. Ranking agencies have been used to evaluate the financial and governance adequacy of banks. The paper attempts to find the factors that determine the ranking system of banks in Europe and it’s capability of predict good performance in governance and performance.The methodology presented in this paper consists of two main blocks of research. The first block of research uses a constructed binary variable for Fitch’s ranking for Europe’s banks. The construction of the variable is based on the value of evaluation. The best value (AAA has value 24, A- has value 18 and B- has value 9 and so on. Good rank value (Fitch binary variable = 1) is considered to be above A- (value 18) and bad ranking below that number (Fitch binary variable = 0). Three econometric methods (Probit, Logit, OLS) have been used to create a system that predicts the good value of Fitch rank.The second block uses the average numerical value of Fitch ranking system for every bank calculated previously in order to create econometric models that can explain and clarify the factors that affect the ranking system. Three econometric methods (Ordinary Least Squares, Least Absolute Deviations, and Robust Regression) have been used to create a system that predicts the value of Fitch rank. The independent variables used in both groups of research can be categorized into seven groups of indicators: performance, size, ownership, corporate governance, capital adequacy or capital structure, locality-country ranking, and loan growth. Each group has more that on variable. The data used for the empirical analysis cover the period from 2004 to 2011, is focused on the twenty seven (27) European Union countries and only commercial and cooperative banks. The total number of banks, initially, collected from Bankscope were 4.573. After the analysis of outliers the sample was reduced to 4.536 banks (2.873 active and 1.663 inactive).The final sample is comprised only from data of active banks (in 2012). The initial data were filtered even more, new ratios were calculated and only major banks have been used as sample. The statistical results show that the rating system and especially Fitch’s ratings are determined by four main factors (performance, locality-country risk, governance and capital adequacy). The paper’s value and innovation is that it has given a systemic approach to find indicators of ranking process and it has excluded four groups of indicators as non-statistically important (ownership, size, capital structure and growth). Although some of the factors were expected to be either significant or having little effect (e.g. performance-capital adequacy, size), others are unexpected (e.g. governance, capital structure). The results show a large dependence of bank ranking to country ranking and so the macroeconomic environment is largely the most significant factor.

The crises of 2002 and 2008 have raised the issue of banking sector’s ranking system efficiency. The credit rating agencies (CRAs) are crucial for the modern financial market. The impact that the ratings have is indisputable. This paper is seeking to find the factors that affect the ratings and to create a prediction mechanism. The originality of the paper is based on the fact that it utilizes a number of different variables (ownership status, corporate governance, etc.), and the hypothesis is innovative because it addresses the issue of divergence–convergence of the European banking sector and its respective ratings. In order to do that, all ranking evaluations have been matched with a numerical value (i.e., AAA has value 24, A- has value 18, and B- has value 9). A good grade is considered to be above A- (value 18) and a bad grade below that number. Seven groups of indicators are examined: performance, size, ownership, corporate governance, capital adequacy or capital structure, sovereign–country ranking, and loan growth. Three econometric methods (probit, logit, and OLS) have been used to create a system that predicts the rating grade. The independent variable is binary (good grade = 1/bad grade = 0). Inactive banks have been excluded from the sample. This paper provides a model for predicting the factors that affect the grade of the bank rating. Many of the factors, which other studies have pointed out, are found to be statistically important in our models, too. This paper contributes to the literature by establishing a unique framework for the European banks and identifying the factors that affect the rating grade by giving an answer to the issue of an isomorphic banking sector in Europe. It shows that there are significant differences among the various geographical regions [variables cgsys, ns, European countries with major economic problems or those under stress (Portugal, Ireland, Spain, and Greece)].

Legal initiatives have a significant impact on the inner and outer corporate environment. Recent scandals and developments have triggered a wave of regulative and voluntary initiatives to improve corporate governance (CG) quality. The legislators legislate, but how feasible, effective is the implementation of these laws and how congruent with the countries characteristics is under doubt. The paper argues that the Greek Law on Corporate Governance had no effect on the fundamental elements of the corporate environment. Seven hypotheses are test using three different econometric methodologies (Panel data, Probit and Ordinal Probit Regression) are used. The legalistic approach drives the corporation to a mechanistic compliance and hence looses the freedom to make innovative decisions (Donaldson, 2003) or create costs that do not have a positive impact on financial performance, organizational stability, etc. The paper pinpoints the legal disarrays and their impact on the firm and argues that there is a need for a new set of principles and laws that focus on the real issues of corporate governance rather than the size, structure and leadership of the administrating bodies or the disclosure mechanisms.

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.