International Journal of Business Governance and Ethics (35 papers in press)
How does CEO incentive matter for corporate social responsibility disclosure Evidence from global corporations based in the USA
by Hien Thi Tran, Hanh Song Thi Pham
Abstract: This study investigates the effect of each component of CEO compensation, including cash-based component (salary and bonus), equity-based component (stock grant and stock option), and other perks on disclosure of corporate social responsibility (CSR) information of global firms. The study uses 2SLS IV estimation method and a sample of 580 US-based firms in a seven-year period. The study finds that equity-based remuneration has a significant and positive impact on a firm's CSR disclosure while CEO salary, bonus, and other perquisites have significant detrimental effects on CSR disclosure. The paper indicates that a CEO's motivation for CSR reporting
might arise from stock grant and option; meanwhile, salary, bonus and other perks could demotivate the CEO in this regard. Our findings offer insight into designing CEO compensation packages to meet shareholders' interests and stakeholders' expectations for a sustainable business.
Keywords: corporate social responsibility; CSR; disclosure; CEO; incentive; compensation; remuneration.
Ethical decision making practices in SMEs: the role of risk acceptance and confidence level
by Mohammad Rashed Hasan Polas, Mosab I. Tabash, Asghar Afshar Jahanshahi, Valentina Gomes Haensel Schmitt
Abstract: The aim of this study is to examine the factors influencing ethical business decision-making on environmental issues, among employees of SMEs. To do so, a survey study was performed with 394 top managers of SMEs in the UAE using a questionnaire, and the data was statistically evaluated using SmartPLS 3.0. The results suggest that prior technology use has significant positive relationships with ethical decision-making and the level of risk acceptance. Furthermore, perceived competitive pressure has significant positive relationships with ethical decision-making and confidence level. In comparison, the level of risk acceptance and confidence level have significant positive relationships with ethical decision-making. Results also demonstrate that the level of risk acceptance mediates the relationship between prior technology use and ethical decision-making. There is also a significant and positive association between perceived competitive pressure and ethical decision-making with a mediating impact of the confidence level.
Keywords: confidence level; ethical decision making; empirical study; risk acceptance; structural equation modelling; SEM; United Arab Emirates; UAE.
Corporate governance and corporate sustainability performance: evidence from the emerging Asian economies
by Linh-TX Nguyen
Abstract: This study investigates the relationship between corporate governance and corporate sustainability performance in the emerging Asian markets where the central role of sustainable development was perceived after the 2008 global financial crisis. We base our study on the triple bottom line approach that incorporates three dimensions of sustainability: economic, environmental, and social performance. A governance index comprising ten firm-specific provisions is proposed to summarise internal corporate governance. Consistent with agency theory, we confirm that firms with better corporate governance have better corporate sustainability performance. We also determine which main factors drive the governance-sustainability relation. The findings have practical implications for firms, shareholders, and policy makers by emphasising the role of corporate governance in assessing and enhancing corporate sustainability performance.
Keywords: agency theory; Asia; corporate governance; corporate sustainability performance.
Going beyond social corporate responsibility: possible new directions in tourism
by Andrea Giampiccoli, Oliver Mtapuri
Abstract: This paper advances a framework model within which CSR should work. The ambition was to broaden the conceptualisation of CSR but remaining open to new innovative ideas about CSR incentives. This paper is conceptual in nature. There are many CSR practices, approaches, and dimensions. This paper argues that for CSR to be effective, it needs collaboration and integrated with inputs from all stakeholders for holistic results. This paper proposes that there is a need to go beyond a voluntary CSR, which is company/industry self-regulated and charity/philanthropic, but to embed CSR within industries undergirded by legally enforceable regulations. The main aim is to achieve structural changes in the tourism industry to ensure that CSR is not just a charity/philanthropic activity. This new approach intends to change the structure of CSR. A changed structure is a fundamental framework within which CSR should work.
Keywords: tourism; corporate social responsibility; CSR; community-based tourism; CBT; pro-poor tourism; PPT; sustainable tourism.
Implementing mandatory corporate social responsibility in India: assessing progress made by corporates and NGOs
by Suresh Kalagnanam, Priya Nair Rajeev
Abstract: CSR in India is mandated through Section 135 of the Companies Act (2013), covering the practice and reporting of social responsibility projects. This paper examines Indias CSR framework and reports findings on governance, planning, and implementation from a survey of and non-governmental organisations (NGOs). Overall findings reveal several positive aspects and inform us of the challenges that companies and NGOs consider essential. First, an overwhelming majority of companies focused on three investment areas: health, education, and the environment. Second, 88% of companies undertook long-term continuing projects, a positive signal from a social development perspective. Third, 68% reported that their CSR strategy was aligned with their core business strategy. Fourth, a significant majority of the companies have established the required structure for policy development, planning, and periodic monitoring from a governance perspective. Finally, findings on NGOs indicate several elements of preparedness; however, the retention of talented employees is a continual challenge.
Keywords: mandatory corporate social responsibility; corporate performance; NGOs; governance; planning; implementation; reporting; accountability; corporate-NGO partnerships.
Do deviations from shareholder democracy harm sustainability? An empirical analysis of multiple voting shares in Europe
by Marco Fasan, Elise Soerger Zaro, Cláudio Soerger Zaro, Cesare Schiavon, Ernesto-Marco Bagarotto
Abstract: This paper builds on previous literature on corporate governance and sustainability by studying the relation between the adoption of multiple voting shares (MVS) and environmental, social and governance (ESG) performance. More specifically, it hypothesises that controlled companies with MVS have lower sustainability performance than controlled companies without MVS because of different shareholders incentives. We rely on a proprietary dataset that includes 1,940 firm-year observations from 11 European countries, between 2016 and 2018 and we conduct multivariate analyses. To account for endogeneity and to further strengthen the results, we performed a difference-in-differences (diff-in-diff) analysis. We find that companies controlled by a dominant shareholder through MVS have lower sustainability performance compared to controlled companies without MVS.
Keywords: sustainability; corporate governance; multiple voting shares; MVS; short termism; environmental; social and governance; ESG.
Evidence of ethics and misconduct in a multinational corporation: motives for growth of corrupt environments in todays business world
by Christian T. Elbaek, Panagiotis Mitkidis
Abstract: Unethical behaviour, such as corruption and fraud, is a massive problem in todays business world. Research in the fields of business ethics and moral psychology has presented compelling evidence of a series of behavioural concepts that might influence an individuals propensity to engage in unethical conduct. Yet, it is still unknown how these concepts apply to more ecologically valid contexts such as real-world scandals on unethical behaviour. Motivated by this, we use empirical qualitative evidence from one of Denmarks largest corruption scandals to explore how well renowned concepts within business ethics and moral psychology hold up in the real world, when looking into both what causes unethical behaviour and how it could be minimised. We find evidence that catalysts of immoral conduct in the case company are well supported by some of the most well-researched concepts in the research area, and our research indicates a possible real-world interaction between concepts.
Keywords: business ethics; corruption; moral psychology; empirical qualitative evidence.
Determinants of CEO compensation in the FTSE100 constituent firms
by Tasawar Nawaz, Aoxing Pang
Abstract: The main objective of this paper is to examine the determinants of CEO compensation in the UK public listed companies. Our analysis, based on the sample drawn from the FTSE100 constituent firms, suggest that firm financial performance measured by return of assets (ROA), influence CEO compensation with the impact being most pronounced for the CEO total compensation. Results further suggest that corporate governance characteristics such as board size and CEO role duality have direct implications for CEO compensation. These attributes, however, differentially determine the various components of CEO compensation. Although the results of this research help to elucidate the importance of corporate outcomes, board attributes and CEO traits in explaining the determinants of CEO compensation in the UK public listed companies, these findings have important economic implications for the corporate sector, regulators, investors, market analysts, academics and the public, which extend beyond the UK market.
Keywords: CEO compensation; firm performance; governance mechanisms; FTSE100; United Kingdom.
Can board governance and financial performance be a matter for corporate disclosure tones?
by Zainab Abdulwahed Al-Alalwani, Gehan A. Mousa
Abstract: The study investigates the effect of board characteristics and firm performance on disclosure tones by considering DICTION five master variables namely activity, optimism, certainty, realism and commonality tones using a sample of 779 annual reports of GCC listed firms (2012 to 2018). Disclosure tones of the sampled GCC firms were measured through corporate narrative disclosures by DICTION 7.0 software. Then, the ordinary least square regression analysis was conducted. The main findings of the study show that firm performance has a significant effect on disclosure tones in terms of activity, optimism, certainty, and realism tones except for commonality reported tone. Board characteristics have different effects on the five disclosure tones. The study offers a unique contribution to accounting literature as it is one of the first studies in the Gulf region that seeks to examine the relationship between disclosure tones and firm performance as well as board governance.
Keywords: disclosure tones; firm performance; board characteristics; GCC countries.
Firm financial performance and sustainability reporting: the role of institutional investors' ownership
by Hafizah Abd-Mutalib, Nor Atikah Shafai
Abstract: The relationship between firm financial performance and sustainability reporting (SR) has been extensively researched previously, but with inconsistent results. By incorporating the coercive isomorphism of the institutional theory, this study examines if the relationship is moderated by the ownership of institutional investors. Using data from a sample of 270 Malaysian public listed firms, the study tests two ordinary least square (OLS) regression models. The results show that firm performance and institutional ownership have a positive link to SR. Further examination however discloses a negative moderation of institutional ownership on the relationship between firm performance and SR, thus fail to support the indication that institutional investors coerce the investee firms to utilise their firm performance for sustainability activities. This study adds to SR-related literature by providing reliable and objective findings and directions for future studies in this context.
Keywords: sustainability reporting; financial performance; institutional investors; institutional ownership; ordinary least square; OLS.
Implementation of whistleblowing policies. The case of listed companies in Spain
by Elisa Baraibar Diez, María D. Odriozola
Abstract: To Shh, or not to Shh: that is the question. Paraphrasing Hamlet, one of the main ethical dilemmas for workers and organisations can be represented: to blow the whistle or to remain silent when facing a wrongdoing. Whistleblowing is analysed from psychological, normative and organisational points of view, but the implementation in the company is less represented. And it should not be like that, since internal whistleblowing mechanisms allow organisational wrongdoing staying inside the organisation, where it can be remedied and its reputational effects, alleviated. With a content analysis methodology, this paper analyses disclosed information about the implementation of whistleblowing mechanisms in Spanish listed companies (Ibex35), a country where corruption scandals have once again brought to the fore the problem of reporting wrongdoing. The implementation of whistleblowing mechanisms is heterogeneous in terms of denominations, channels and procedures, identifying weak points in the reporting of irregularities in CSR and sustainability reports.
Keywords: whistleblowing; whistleblowing mechanisms; whistleblowers; ethics; business ethics; human resources; human resources management; sustainable HRM; Spain.
When silence is golden? Virtuous silence in the organisation: its conceptualisation, key characteristics, and values
by Shih Yung Chou, Charles Ramser, Katelin Barron
Abstract: Perhaps one of the most pervasive behaviours in organisations is individual silence. Although individual silence may be triggered by various motives, prior research has predominantly discussed individual silence from the dark side. Thus, individual silence has been viewed as a dysfunctional and antisocial workplace behaviour. In this article, we take a bright perspective by incorporating virtues into the discussion of individual silence. Specifically, we propose the concept of virtuous silence to capture individuals' inclination to remain silent in order to feel, think, and act in ways that contribute to the common good within the organisation. Additionally, virtuous silence contains the following key characteristics: 1) it is driven by an individual's natural propensity for righteousness and collective prosperity; 2) it is a dyadic behaviour; 3) it is a communicative behaviour that focuses on engaging oneself and others in deeper thinking and reasoning. Theoretical contributions and managerial implications are discussed.
Keywords: virtuous silence; individual silence; virtues; organisational prosperity.
Board of directors' configurations and the performance of banks: lessons learned from the global financial crisis
by Nicola Cucari, Michele Simoni, Antonio Renzi
Abstract: Our paper analyses the characteristics of the boards of directors of the best performing listed Italian banks during the last global financial crisis (from 2008 to 2015). Through a fuzzy-set qualitative comparative analysis (fsQCA), the study identifies three different board configurations (archetypes) that these banks adopted: a committee-based board, a gender diversity-based board, and a large size-based board. Although different in some of their characteristics, these configurations share the rationale of favouring the advisory services that the board can provide to managers in their decision-making activities. These services, in turn, are particularly valuable in a time of high risk and uncertainty for banks. With its results, the paper contributes to the literature on the relationship between board characteristics and organisational performance and to a better understanding of the configurations that can best serve when firms decision making, for various reasons, becomes particularly complex and can benefit from board support. Our results also contribute to further detail the governance characteristics of banks in the Italian context.
Keywords: board of directors; board role; financial performance; bank governance; qualitative comparative analysis.
Striving towards better governance and a knowledge-based economy: impact of intangible resources on firm performance
by Kanwal Iqbal Khan, Syed Khurram Abbas Sherazi, Hafsa Hamida
Abstract: The nexus between corporate governance, intellectual capital, and firm performance is imperative for developing countries striving towards being more knowledge-based. This paper investigates the influence of innovation and competitive advantage on the relationship between intellectual capital, corporate governance, and firm performance. An industry-wise analysis of the non-financial sector of Pakistan is conducted. In order to assess corporate governance and intellectual capital, internal mechanisms of corporate governance and modified value-added intellectual coefficient were used. Data were collected from primary and secondary sources. A multi-group analysis was conducted to examine the industry-wise performance of the firms. The findings indicate that innovation and competitive advantage partially mediate the relationship of corporate governance, intellectual capital, and firm performance. This study is one of the first attempts to investigate the multi-group analysis of the non-financial sector of Pakistan concerning mechanisms of corporate governance and intellectual capital. The findings will help the non-financial sector of Pakistan to develop strategies and focus on intangible resources that can add value to their firms.
Keywords: corporate governance; competitive advantage; firm performance; intellectual capital; innovation; non-financial sector; modified value-added intellectual coefficient.
The ethics of talent management practices in China, exploring the role of guanxi in talent recruitment and talent development
by Shuai Zhang
Abstract: This paper explores talent management (TM) ethics in China, specifically examines the role of Chinese guanxi in TM practices. Guanxi in the Chinese business context has been widely acknowledged amongst Western academics and business managers, and there is a growing literature on TM and its ethics. However, guanxi-related behaviours and ethical issues arising from TM practices operation have been overlooked but need to be addressed. This paper explores the roles of guanxi in talent recruitment and development with views of TM ethics. 15 interviews were conducted in a case company to explore how guanxi factors impact its talent recruitment and development activities. The roles of guanxi are analysed based on the ethics of elitist TM. This paper also identifies several ethical dilemmas related to guanxi in TM practices. This paper recommends that TM practitioners take account of guanxi effects to discuss TM ethics in Chinas context.
Keywords: talent management; ethics; guanxi; China.
Do gender-diverse boards lead to selection of female CEOs: a study of life insurance firms in the USA
by B. Elango
Abstract: In recent years, one overarching corporate governance goal in the corporate world has been to increase the number of female CEOs of firms. It has been argued that one approach to achieve this goal is through a gender-diverse board. This study empirically tests to see if a relationship exists between gender-diverse boards and female CEOs. This study focuses on a sample of firms in the USA operating in the life insurance segment of the financial services industry, with data from hand-collected and secondary data sources. Findings indicate that a greater number of women on a companys board of directors leads to a greater likelihood that a firm will have a female CEO. This finding is quite robust in the alternate specifications of the model tested, offering confidence in the study findings.
Keywords: female; CEO; corporate governance; gender-diverse board; female CEO; logit modelling; financial services industry; life insurance.
A cross-cultural comparison of attitudes towards business ethics
by Jakub Procházka, Michal Jirásek
Abstract: This study focuses on the cross-cultural differences in attitudes towards business ethics. It contains a systematic review of published studies that have used the attitudes towards business ethics questionnaire (ATBEQ) for measuring students attitudes. Since business students represent future business leaders, they are an important focus of study in terms of ethical attitudes. Moreover, this subject is worth exploring cross-culturally, because of the growing interconnectedness of the business world. The study compares attitudes across ten samples from different countries and highlights the similarities and major differences. The study also draws attention to the recurring shortcomings of past research into ethical attitudes.
Keywords: ATBEQ; business students; ethical attitudes; cross-cultural comparison; systematic review.
Do board characteristics matter for the dividend policy of state-owned companies? Evidence from Russia
by Irina V. Berezinets, Yulia B. Ilina, Marat V. Smirnov, Tengiz G. Ambardnishvili
Abstract: This article seeks to contribute to the literature on corporate governance with particular focus on state-owned enterprises (SOEs). We put our analysis into the context of Russian SOEs operating in an economy with a high level of the state presence, and investigate the relationship between board characteristics and the dividend policy of SOEs. Specifically, we add to the studies on corporate governance in emerging markets by consideration of professional attorneys, a special category of mandated directors and a unique feature of boards of Russian SOEs. We analysed a panel of 1,226 firm-year observations for 2009-2012, the specific period of incremental innovations in SOEs' governance. Generally, our results support the agency theory and demonstrate that an increase in the proportion of independent directors and professional attorneys and an increase in the dividend payouts occur simultaneously, while the proportion of executives on the board is negatively related to the payout ratio.
Keywords: board of directors; dividend policy; corporate governance; state-owned enterprises; emerging markets; Russia.
Director categorisation and monitoring efficiency
by Samira Abi Dames, Bilal Al-Dah, Mustafa Dah
Abstract: This paper examines the impact of director co-option on the relationship between board structure and firm monitoring. Though non-co-opted independent directors enhance internal monitoring, co-opted independent directors seem to be the worst monitors. We do not observe a substantial difference in the monitoring functionality of co-opted and non-co-opted inside board members. Our paper suggests that co-opted independent directors are the main driving factor behind the converse association between co-opted boards and internal monitoring. We conclude that the efficiency of board monitoring should not be analysed solely based on director classification or director co-option, but rather a combination of both.
Keywords: director co-option; board structure; monitoring efficiency.
Corporate governance and firm performance of listed Indian companies
by Premananda Sethi, Tarak Nath Sahu, Sudarshan Maity
Abstract: The present study investigates the interrelationship of corporate governance parameters like board independence and corporate board meetings. The other important control variables like age, leverage, firms liquidity and size of the firm have been employed to analyse the alliance between corporate governance, vertical agency cost and performance of the firm. The study considers data corresponding to a panel of seventy six non-financial firms during 2010-2019 listed in the National Stock Exchange, India. The study tries to empirically evaluate the association between corporate governance parameters and performance of the firm. By selecting the static panel data regression, researchers found no significant impact of corporate board meeting and board independence on firm performance. The study also documents a positive and significant relationship between board independence and asset utilisation ratio. Further, corporate board meetings have a negative relationship with vertical agency crisis.
Keywords: corporate governance; firm performance; vertical agency crisis.
Updating UK CSR legislation and potentials for voluntary application
by William Hyslop, Dilshad Sarwar, Amin Hosseinian-Far
Abstract: UK legislation is to follow the moral views of society, has begun to incorporate CSR into legislation, forcing companies to conform the voluntary inclusion of CSR into the business framework beyond the legislated minima. Although the incorporation of CSR is a relatively new concept, the relevant legislation does not address certain key points; this allows some companies to find loopholes within the law and perform actions that are damaging the environment, but are technically still within the constraints of the legislation. The absence of a structured assessment of legislations in the UK, against CSR guidelines has left legal escapes which some companies may exploit to avoid their social responsibility. To study the reality of this, thematic analysis was used to identify areas of CSR that are currently present within the UK legislation. Further, thematic analysis was also conducted on Carrolls sustainability pyramid to establish the main areas of CSR that are absent from the selected UK legislation. Accordingly, this study outlines a structured assessment of the current UK legislation in relation to CSR activities. Furthermore, we have provided a set of recommendations that can be espoused by the UK legislators.
Keywords: corporate social responsibility; CSR; thematic analysis; CSR pyramid; UK legislations; sustainable business practices; UK.
Do corporate governance mechanisms restrain earnings management? Evidence from Nigeria
by Olojede Paul, Erin Olayinka, Adetula Dorcas
Abstract: This paper examines the effect of corporate governance mechanisms on earnings management within the Nigerian context. The study adopted the panel generalised least square regression to analyse the data. A sample size of 49 companies was selected from the non-financial companies listed on the Nigerian Stock Exchange for six years (2012-2017). Overall, corporate governance mechanisms jointly have not restrained the possibility of earnings management in Nigeria, but the degree of impact by individual corporate mechanisms showed mixed results. From the analysis, five corporate governance variables (ownership concentration, managerial ownership, board size, gender diversity, and audit committee independence) have positive relationship with earnings management. This indicates that an increase in any of these variables increases managers' latitude for using earnings management to manage the firms earnings. This confirms ineffectiveness of all these variables in restraining earnings management. In contrast, two variables (CEO duality and board independence) contribute to the reduction of earnings management of the selected firms in Nigeria. However, CEO duality is not statistically significant. Given the findings, the study recommends stricter compliance and enforcement to the corporate governance codes and appropriate legislation. Besides, more independent directors' representation on the board should be encouraged.
Keywords: corporate failures; corporate governance mechanisms; earnings management; non-financial listed companies; Nigeria.
Governance and the prevention of fraud in charities in England and Wales
by Saffet Aras Uygur, Christopher J. Napier
Abstract: Despite increasing public attention and media coverage of fraud, no solution to this problem has been designed specifically for the not-for-profit sector. This study focuses on charities in England and Wales and examines variables derived from a content analysis of 42 fraud and 42 no-fraud charities annual reports and financial statements. We use logistic regression to explain and predict fraud in the charity sector. We examine whether a range of governance-type variables are significantly related to the likelihood of fraud in charities. We find that smaller boards, which imply a small cosy environment for governance, are associated with a greater likelihood of fraud, suggesting that larger boards enhance monitoring in the not-for-profit sector. Also, a low or zero-level of grant funding is associated with a greater likelihood of fraud, implying that monitoring by long-term donors is also important in curbing fraud.
Keywords: fraud; fraud in the not-for-profit sector; board size; logistic regression; England.
Governance in non-profit organisations: a plural or ambiguous research field? Bibliometrics and definitions of a broad concept
by Guillaume Plaisance
Abstract: This article focuses on the concept of non-profit governance and the associated literature. It proposes a bibliometric analysis and a study of the definitions of non-profit governance to examine the ambiguity of the concept, decried by some researchers. Others rather think that it is a question of plurality. Two hundred seventy-seven articles were selected from Scopus as well as from the main publishers of scientific journals in management sciences. A bibliometric analysis (main authors, preferred journals, date of publication, countries, etc.) is complemented by a lexicometric and linguistic analysis of keywords, abstracts and definitions of non-profit governance. The results indicate a strong inspiration towards for-profit governance, a focus on the board of directors and a plurality of definitions of non-profit governance. This article therefore opens up many new research perspectives, complementary to those already stated by researchers who have constructed research agendas.
Keywords: bibliometric analysis; bibliometrics; definition; governance; non-profit governance; non-profit organisations.
The influence of corporate social responsibility perception on employees' job performance: an evidence from Vietnam
by Bui Nhat Vuong
Abstract: The objective of this study is to examine the effect of corporate social responsibility perception (CSRP) on job performance through the mediating role of work attitude (job satisfaction and employee commitment), and the moderating roles of income level. Survey data were collected from 626 employees who are working in small and medium enterprises in Vietnam. Results from the partial least squares structural equation modelling (PLS-SEM) using the SmartPLS 3.0 program showed that employees CSR perception is positively related to job performance. Besides, this relationship was partially mediated by job satisfaction and employee commitment. Additionally, the interaction effect analysis also confirmed that the positive relationship between CSR perception and work attitude will increase significantly in higher-income employees than low-income employees. Furthermore, employees with more experience tended to have more performance than employees with less experience. This finding implied that managers should develop appropriate CSR to enhance employees positive work attitudes and behaviours.
Keywords: corporate social responsibility perception; CSRP; job satisfaction; employee commitment; job performance; income.
Corporate governance and financial performance of firms listed on Asian Pacific stocks: evidence from Malaysia, Thailand and Singapore
by Ibrahim Khalifa Elmghaamez, Xin Yao Gan
Abstract: This study examines the impact of corporate governance on the financial performance of Asia Pacific stocks in three Asian countries: Malaysia, Thailand and Singapore. By including a sample of 159 firms listed on three Asian stock markets from 2013 to 2017, this study found that the effects of corporate governance mechanisms vary significantly among the three Asian markets. Specifically, this study shows that board size has positively influenced listed firms financial performance in the Singapore Exchange. However, our findings show that board size has negatively affected listed firms financial performance in Thailands Stock Exchange. In addition, our results reveal that board independence has negatively influenced listed firms financial performance in Bursa Malaysia. Finally, this study provides implications for regulatory authorities in the Asian stock markets to separate between chairman and CEO roles since most Asian firms are owned and directed by business families.
Keywords: corporate governance mechanisms; financial performance; return on assets; Malaysia; Thailand; Singapore; Asian stock markets.
The Chair-CEO chronological age gap and bank performance: the effects of financial crisis shock
by Vu Quang Trinh, Ngan Duong Cao, Loc Thanh Phan, Mary Nanyondo
Abstract: This study investigates the effect of the Chair-CEO chronological age gap on the performance of commercial banks listed on the London Stock Exchange. We examine either the Chair-CEO generational gap (a minimum age gap of 20 years) or the Chair-CEO age difference (+ /- or absolute). We find significant evidence for the hypothesis that the Chair-CEO age dissimilarity is likely to increase bank performance. Additional identification attempts include the use of the 2007-2009 financial crisis as an exogenous shock to monitoring needs. We find that during the crisis, the positive linkage between age difference and bank performance was more intensified.
Keywords: chair; CEO; age dissimilarity; banks; board of directors; performance.
Does increase in female representation on boards impact banks' value: a case of an emerging economy
by Riyanka Baral, R.L. Manogna, Debasis Patnaik, Aswini Kumar Mishra
Abstract: This paper aims to study female participation on bank boards and the effect of gender diversity on publicly listed Indian bank's performance. Banks were subdivided into large and small banks based on market capitalisation. Gender diversity is measured using various variables. Return on assets (ROA) and return on equity (ROE) are taken as a proxy to assess bank performance. A balanced panel data set of 20 banks with duration of 2008-2018 was executed to evaluate the relationship between gender diversity and performance of the banks. The result suggests that there is a value addition to the bank due to the existence of a female CEO in large banks and the presence of women on board in small banks. Few banks seem to meet the minimum requirement set by the regulator. These findings bear policy implications for the banking sector. Emphasis should be put on ways for women to undertake roles in top echelons of management which can enhance the framework of corporate governance.
Keywords: corporate governance; banks; performance; gender; board of directors.
Determinism vs. solidarism: the philanthropic approach of foundations
by Giacomo Boesso, Fabrizio Cerbioni, Kamalesh Kumar, Giulia Redigolo
Abstract: Extant research shows that foundations adopt two broad management approaches for achieving their strategic outcomes. One body of literature focuses on the deterministic approach, in which foundations are managed like for-profit organisations. The other argues for managing foundations with a solidarist approach, in which foundations are guided by the solidarity of interests found in natural interdependencies of various members of the society. Proponents of each of these two approaches argue that their approach would result in generating better social value. Based on the survey of 201 leaders of Italian foundations, and supplemented by data collected from archival sources, this study investigates the association between the approach adopted and performances. Results of the study support the capacity of both approaches to generate positive performances if properly implemented, while, on the opposite, foundations that lack a clear management approach, report lower social performance and asset utilisation.
Keywords: managing foundations; strategic philanthropy; solidarism; determinism.
Role of ethical organisational culture on employee job satisfaction: an empirical study
by Shaji Joseph, Anil Jadhav, Bhamini Vispute
Abstract: The aim of this study is to understand impact of ethical culture of information technology (IT) organisation on employee job satisfaction. In this study, we have identified the constructs of ethical culture of IT organisations on the basis of review of literature and proposed a model indicating the relationship between the identified constructs and job satisfaction. The study is done especially for employees of IT organisations in Pune, India, based on a survey of 124 employees working in IT firms. We have analysed the impact of organisations' ethical culture constructs namely equal opportunity, fairness in promotion process, impartiality in grievance handling, ethical leadership, and ethical policy on employee job satisfaction. Results of the analysis revealed that ethical policy, impartiality in grievance handling, and fairness in promotion process have significant impact on job satisfaction of the employees, whereas equal opportunity and ethical leadership has no significant impact on job satisfaction of employees.
Keywords: business ethics; ethical culture; job satisfaction; ethical leadership; ethical climate.
Social undermining and organisational attitudes: the moderating role of personality traits
by Vahid Yousefian Arani, Marjan Fayyazi
Abstract: Social undermining is an interpersonal insidious misbehaviour and is significantly associated with employee's outcomes if it repeats over time. The purpose of this article is to investigate the impact of social undermining (SU) on employee's attitudes including organisational commitment (OC), job satisfaction (JS) and job involvement (JI). Moreover, we study the moderating role of personality traits including conscientiousness and neuroticism, on the impact of SU on job attitudes. Regression analysis was used to analyse the data collected from 158 questionnaires completed by employees in an Iranian public institution. Results show that SU by co-workers and supervisors has a considerable effect on employee's job attitudes. The main contribution of the paper is that we found conscientiousness has a moderating role on the effect of SU on OC, affective commitment, normative commitment and JI, and neuroticism has a moderating role on the effect of SU on normative commitment and JS.
Keywords: social undermining; organisational attitudes; job satisfaction; organisational commitment; job involvement; personality traits; neuroticism; conscientiousness.
Special Issue on: Environmental, social and Governance (ESG) Disclosure Ethical Consideration And Implications
Sustainability reporting and assurance in Gulf Cooperation Council countries: what is missing?
by Abdulhadi H. Ramadan, Mahmoud Nassar, Mohammad Haroun Sharairi, Mohammed Hassan Makhlouf, Khalil Nimer
Abstract: This study explores the sustainability reporting (SR) and assurance market in the Gulf Cooperation Council (GCC) region from the Big 4 auditors perspectives, and investigates the drivers and barriers of SR and assurance in the GCC region. We have interviewed ten representatives of auditing firms (i.e., members of Big 4) in the GCC region. The results of study reveal the immaturity of the SR and assurance market in the region but are hopeful for the future contingent upon certain factors. In addition, the voluntary nature of SR, the cost of reporting and assurance, and religious concerns among others are primary barriers in front of the eagerness of firms to adopt SR and its assurance. Reputation building and accessing international markets among others are the main motivations for the adoption of SR and assurance. The interviewees have firmly expressed that there is no direct relationship between SR assurance and financial report audit.
Keywords: sustainability report; assurance; Gulf Cooperation Council; GCC; Big 4; interview.
Do investors care about corporate environmental responsibility engagement?
by Khaldoon Albitar, Siming Liu, Khaled Hussainey, Gaoke Liao
Abstract: We aim to investigate the effect of corporate environmental responsibility (CER) engagement on investors reactions. We also explore heterogeneity of this impact among different types of companies and different companys market performance. We use panel data models and quantile regression based on data related to firms listed on the A-share China security market and the final sample consists of 3,776 firm-year observations. The
results show that CER engagement has a significant positive impact on investors' investment decisions. Further, investors are more sensitive to CER engagement of high energy-consumption companies and no matter the company is a state-owned or a non-state-owned, CER engagement has a significant positive impact on investors' reactions. CER engagement has a significant positive impact on investors' reactions in all quantiles except one and the promoting effect increases first and then decreases with the growth of corporate market value from lower to upper quantiles.
Keywords: investor's reaction; corporate environmental responsibility; high energy-consumption; corporate market performance; heterogeneity.
Emergent themes of social and environmental reporting in the UK retail banks
by Mohamed Saeudy, Khaled Hussainey
Abstract: We examine current practices in the development and communication of social and environmental reporting (SER) in the UK retail banks. Empirical data was triangulated between semi-structured interviews with bank executives, bank sustainability reports, and third-party sustainability entrepreneur initiatives (termed 'SEIs') to identify current practices and growth areas. We use social contract theory to examine how these social and environmental retail banks developed their SER practices. Our findings reveal that SER practices are crucial for pursuing more positive social and environmental values. We clarify the role of SER as a form of integrated reporting (IR) to assess and improve the usefulness of the IR reporting practices. The SER practices also appear to have benefited from the presence of a number of SEIs in the sampled banks who specialise in commercialising social and environmental projects. In addition, methodical analyses of SER components assist managers and regulators in determining which components are meaningful to stakeholders.
Keywords: social and relationship capital; integrated reporting; sustainable banking; social contract; value creation.
Business utilitarian ethics and green lending policies: a thematic analysis on the Swedish global retail and commercial banking sector
by Bruno F. Abrantes, Emelie Ström
Abstract: The pioneering work on environmental regulation in Sweden and that country's leading position in sustainability rankings has paradoxically passed almost unnoticed by academics. To this fact should be added, the scant attention given to the Nordic banking system. Becoming immersed into the realm of Swedish commercial banking ethics, we have focused on one of the top three commercial banks in the country, to map its corporate sustainability policies (CSP) and the compliance of the lending business process (LBP) to these policies. A descriptive-explanatory research framework utilises a critical case with a phronetic design. Data collected through interviews was manipulated under the Thematic Analysis method. We found a unique understanding of act-utilitarianism, in which, policies and practices are set to prevent financial risks and environment rebounds, as they are symbiotic. This allowed us to enlarge the body of knowledge on Nordic banking's sustainable governance, and design the green lending model (GLM).
Keywords: business ethics; corporate governance; corporate social responsibility; CSR; green lending model; GLM; sustainable banking; utilitarianism; global retail and commercial banking; GRCB; corporate sustainability policies; CSP; lending business process; LBP.