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Does Corporate Governance Cure Financial Distress? Case Study Analysis Of Distressed Firms

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  • Otivbo Faith Amede

    (University of Benin, Faculty of Management Sciences)

  • Ofuan James Ilaboya

    (University of Benin, Faculty of Management Sciences)

Abstract

The paper examined the concepts of corporate governance and financial distress. This was achieved by a review of case studies. The review of literature showed that few studies have actually attempted to address the question of whether corporate governance can cure a financially distressed firm. In an attempt to fill this gap, the study this paper examined corporate governance cases of firms that were financially distressed or eventually collapsed. The idea is to be able to take a position as to whether corporate governance can be used as an antidote to financial distress. To achieve this objective, the paper conducted a case study analysis of financial distress cases from different jurisdictions (Multinational, African and Nigerian firms). Documentary evidences on financial distress and challenges of corporate governance were also reviewed. The result of the case study analyses showed that corporate governance can be a cure for financially distressed firms with a condition that key stakeholders in the firm implement the corporate governance provisions.

Suggested Citation

  • Otivbo Faith Amede & Ofuan James Ilaboya, 2024. "Does Corporate Governance Cure Financial Distress? Case Study Analysis Of Distressed Firms," Economic Thought and Practice, Department of Economics and Business, University of Dubrovnik, vol. 33(1), pages 251-269, june.
    • Handle: RePEc:avo:emipdu:v:33:y:2024:i:1:p:251-269
    DOI: 10.17818/EMIP/2024/1.12
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    References listed on IDEAS

    as
    1. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    2. Nwidobie, Barine Michael, 2016. "Corporate Governance Practices and Dividend Policies of Quoted Firms in Nigeria," International Journal of Asian Social Science, Asian Economic and Social Society, vol. 6(3), pages 212-223, March.
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    More about this item

    Keywords

    Corporate governance; financial distress;

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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