The effect of administrative fortification on company continuity

Abstract

This study aims to examine the impact of managerial entrenchment on the firm's going concern. The research was conducted on the financial data of 98 samples, encompassing 100% of the companies in the non-Islamic commercial banking sector listed in the regular market of the Iraqi Stock Exchange, adhering to international financial reporting standards from 2016 to 2022.

Variables were quantitatively measured, utilizing indicators of managerial ownership percentage, ownership concentration, CEO tenure, and board dependence to measure managerial entrenchment. Additionally, the Altman Z''-Score model, 2005, specific to emerging financial markets, was employed to assess the firm's going concern.

Regression analysis revealed an inverse influence of certain managerial entrenchment mechanisms on the firm's going concern.

Consequently, the study proposes several recommendations, including the necessity for stakeholders to familiarize themselves with diverse managerial entrenchment strategies due to their significant impact on firm performance and outcomes. Furthermore, it underscores the importance of assessing and evaluating threat levels to the firm's going concern in local financial markets using the Altman Z'-Score 2005 model, specifically designed for emerging financial markets and compatible with Iraqi financial markets. Additionally, continuous board oversight is crucial for optimizing executive management authority, as it profoundly affects the company's performance, value, and continuity