Nuryanah, Siti (2011) Measuring and Managing the Value of Companies Using A Financial Optimization Model: A Corporate Governance Perspective. In: Proceedings of the Annual International Conference on Operations Research and Statistics (ORS 2011). Operations Research and Statistics & Global Science and Technology Forum (GSTF), pp. 160-164.

Abstract

Phenomenal corporate collapses and financial crises have been repeated and responses urging implementation of good corporate governance (GCG) have been made, but why is there still company failure and why is it that a company which claims to have GCG still cannot achieve value maximization? The purpose of this paper is to develop an integrated financial model using an optimization approach for measuring and managing the value of companies to achieve GCG. The model uses discounted cash flow valuation model and is based on accurate and reliable accounting information so that it provides sound financial management strategies to manage the value of the company. The integrated financial model offers a significant contribution to the literature because it provides a managerial application model showing interactivity between individual governance variables, as well as considering external governance mechanisms. This would be of significant benefit to organizations pursuing GCG practice as well as managing their companies’ values. From an academic point of view, this research would fill the vacuum of an integrated financial application model which encompasses both corporate governance practices and external regulatory environments.

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