Climate change is a quintessential market failure. Individual companies do not have economic incentives to reduce their carbon emissions and therefore produce more emissions than is socially desirable. However, according to a theory that is gaining increasing support among academics and market players, large asset managers (and, in particular, index fund managers) can become “climate stewards” and force companies to reduce their impact on climate change. This view is based on the premise that index fund portfolios mirror the entire economy and, therefore, internalize climate risk. According to this theory, by maximizing the value of their entire portfolio (portfolio primacy) rather than the value of the individual company (shareholder primacy), index fund managers have strong economic incentives to steer companies towards decarbonization. This Article offers the first systematic critique of this theory. First, it demonstrates that the composition of investment portfolios can distort the incentives of index funds with respect to climate risk. In particular, it shows that index funds’ incentives are strongly aligned with the interests of carbon emitters, rich countries, and large companies, but weakly aligned with the interests of firms and countries that are more vulnerable to climate change. Second, it shows that the stock market is a highly imperfect mechanism to address climate risk: stock prices do not accurately reflect future climate damages; private investors discount the distant future at a higher rate than the correct social discount rate; and public companies represent a limited (and increasingly smaller) portion of the economy. Therefore, index funds inevitably underestimate the costs of climate change and the benefits of mitigation measures. Third, it examines the agency problems and fiduciary conflicts of index fund managers, and it argues that even if index fund portfolios benefitted from climate stewardship, fund managers would have very weak incentives to take on such a role. The analysis of this Article reveals that portfolio primacy offers no adequate answer to the crucial threat of climate change. If policymakers want to use corporate governance as a tool to fight climate change, they should change the incentives of individual companies rather than trust the portfolio incentives of index funds.
{"title":"Portfolio Primacy and Climate Change","authors":"Roberto Tallarita","doi":"10.2139/ssrn.3912977","DOIUrl":"https://doi.org/10.2139/ssrn.3912977","url":null,"abstract":"Climate change is a quintessential market failure. Individual companies do not have economic incentives to reduce their carbon emissions and therefore produce more emissions than is socially desirable. However, according to a theory that is gaining increasing support among academics and market players, large asset managers (and, in particular, index fund managers) can become “climate stewards” and force companies to reduce their impact on climate change. This view is based on the premise that index fund portfolios mirror the entire economy and, therefore, internalize climate risk. According to this theory, by maximizing the value of their entire portfolio (portfolio primacy) rather than the value of the individual company (shareholder primacy), index fund managers have strong economic incentives to steer companies towards decarbonization. This Article offers the first systematic critique of this theory. First, it demonstrates that the composition of investment portfolios can distort the incentives of index funds with respect to climate risk. In particular, it shows that index funds’ incentives are strongly aligned with the interests of carbon emitters, rich countries, and large companies, but weakly aligned with the interests of firms and countries that are more vulnerable to climate change. Second, it shows that the stock market is a highly imperfect mechanism to address climate risk: stock prices do not accurately reflect future climate damages; private investors discount the distant future at a higher rate than the correct social discount rate; and public companies represent a limited (and increasingly smaller) portion of the economy. Therefore, index funds inevitably underestimate the costs of climate change and the benefits of mitigation measures. Third, it examines the agency problems and fiduciary conflicts of index fund managers, and it argues that even if index fund portfolios benefitted from climate stewardship, fund managers would have very weak incentives to take on such a role. The analysis of this Article reveals that portfolio primacy offers no adequate answer to the crucial threat of climate change. If policymakers want to use corporate governance as a tool to fight climate change, they should change the incentives of individual companies rather than trust the portfolio incentives of index funds.","PeriodicalId":22151,"journal":{"name":"SRPN: Corporate Governance (Topic)","volume":"58 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-08-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84471459","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We investigate whether social trust can mitigate insider trading profitability. Our empirical evidence shows that social trust surrounding corporations’ headquarters is negatively associated with corporate insiders’ ability for trading gains. This relation holds in a range of tests including instrumental variable methods and using social trust value from CEO’s birthplace. We further find that social trust plays a more important role in curbing insiders’ trading profitability when firms have a higher level of information asymmetry, poorer corporate governance, and when firms are non-State-owned. Finally, we show that firms headquartered in high social trust regions tend to engage in more investor communication, have a lower probability to restate financial statements, and have lower stock price synchronicity.
{"title":"Does Social Trust Mitigate Insiders’ Opportunistic Behavior? Evidence from Insider Trading","authors":"Panpan Fu, Chaoqun Ma, Yonggang Tian, X. Wang","doi":"10.2139/ssrn.3897679","DOIUrl":"https://doi.org/10.2139/ssrn.3897679","url":null,"abstract":"We investigate whether social trust can mitigate insider trading profitability. Our empirical evidence shows that social trust surrounding corporations’ headquarters is negatively associated with corporate insiders’ ability for trading gains. This relation holds in a range of tests including instrumental variable methods and using social trust value from CEO’s birthplace. We further find that social trust plays a more important role in curbing insiders’ trading profitability when firms have a higher level of information asymmetry, poorer corporate governance, and when firms are non-State-owned. Finally, we show that firms headquartered in high social trust regions tend to engage in more investor communication, have a lower probability to restate financial statements, and have lower stock price synchronicity.","PeriodicalId":22151,"journal":{"name":"SRPN: Corporate Governance (Topic)","volume":"104 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-07-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79530005","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The capacity for crisis perception and to foresee risk is central to project management where responsibility for safety is a central component informing decision making. This article examines the absence of this capacity as a cause and consequence of corporate governance failure. The example of the Grenfell Tower fire is used to illustrate the multiple inflection points within governance structures where relatively minor errors of judgement or inattention to detail individually or collectively undermine their shared purpose. The consequences of minor deficiencies include the risk of compromising the governance framework, misaligning stakeholder objectives, normalising miscommunication, mismanagement and neglect, institutionalising discrimination and, ultimately, eroding the protection measures required to prevent catastrophic events.
{"title":"The Role of Corporate Governance Failure in the Grenfell Tower Fire","authors":"Noor-ul Muzamil Khan, P. Haynes","doi":"10.2139/ssrn.3783861","DOIUrl":"https://doi.org/10.2139/ssrn.3783861","url":null,"abstract":"The capacity for crisis perception and to foresee risk is central to project management where responsibility for safety is a central component informing decision making. This article examines the absence of this capacity as a cause and consequence of corporate governance failure. The example of the Grenfell Tower fire is used to illustrate the multiple inflection points within governance structures where relatively minor errors of judgement or inattention to detail individually or collectively undermine their shared purpose. The consequences of minor deficiencies include the risk of compromising the governance framework, misaligning stakeholder objectives, normalising miscommunication, mismanagement and neglect, institutionalising discrimination and, ultimately, eroding the protection measures required to prevent catastrophic events.","PeriodicalId":22151,"journal":{"name":"SRPN: Corporate Governance (Topic)","volume":"50 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-02-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"90998318","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study conducts a comprehensive review of the literature published during 1989-2020 to identify the factors that can cause internal control weakness. This review is organized around five main groups, namely: 1) rapid growth and restructuring, 2) financial reporting complexity, 3) auditor tenure, 4) cultural differences, and 5) corporate governance. We perform an integrated literature review approach. Among the several factors found, some factors (the proportion of managerial ownership, Individualism, power distance, financial reporting complexity, rapid growth, and auditor-customer geographic distance) have a positive relationship with internal control weakness while others (the quality of the board of directors and auditing committees, directors’ compensation, and uncertainty avoidance) have a negative relationship. The findings contribute to future research by examining the factors that can cause internal control weakness from different perspectives, which will prove to be useful for investors, auditors, audit committee members, managers, and other stakeholders regarding the prevention of internal controls weaknesses through the application of solid internal controls as well as a path towards the improvement of existing problems of internal control weakness.
{"title":"Sustaining Competitive Advantage Through Good Governance and Fiscal Controls: Risk Determinants in Internal Controls","authors":"M. Rahman, R. Marjerison","doi":"10.22495/cocv18i1art3","DOIUrl":"https://doi.org/10.22495/cocv18i1art3","url":null,"abstract":"This study conducts a comprehensive review of the literature published during 1989-2020 to identify the factors that can cause internal control weakness. This review is organized around five main groups, namely: 1) rapid growth and restructuring, 2) financial reporting complexity, 3) auditor tenure, 4) cultural differences, and 5) corporate governance. We perform an integrated literature review approach. Among the several factors found, some factors (the proportion of managerial ownership, Individualism, power distance, financial reporting complexity, rapid growth, and auditor-customer geographic distance) have a positive relationship with internal control weakness while others (the quality of the board of directors and auditing committees, directors’ compensation, and uncertainty avoidance) have a negative relationship. The findings contribute to future research by examining the factors that can cause internal control weakness from different perspectives, which will prove to be useful for investors, auditors, audit committee members, managers, and other stakeholders regarding the prevention of internal controls weaknesses through the application of solid internal controls as well as a path towards the improvement of existing problems of internal control weakness.","PeriodicalId":22151,"journal":{"name":"SRPN: Corporate Governance (Topic)","volume":"29 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-09-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"76617323","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The present paper is based on the study of comparing and analyzing the equity fund schemes in respect of bare risk and return. Further the paper compares and analyzes the mutual fund schemes in respect of bare risk and return. The research also studies the average risk and average return of selected companies of Mutual Funds as well as of Equity Shares. The paper in the end, studies the relationship between the risk and return of Equity Shares and Mutual Funds.
{"title":"A Study on Performance Evaluation of Equity Share and Mutual Funds","authors":"D. Adhana","doi":"10.2139/ssrn.3691971","DOIUrl":"https://doi.org/10.2139/ssrn.3691971","url":null,"abstract":"The present paper is based on the study of comparing and analyzing the equity fund schemes in respect of bare risk and return. Further the paper compares and analyzes the mutual fund schemes in respect of bare risk and return. The research also studies the average risk and average return of selected companies of Mutual Funds as well as of Equity Shares. The paper in the end, studies the relationship between the risk and return of Equity Shares and Mutual Funds.","PeriodicalId":22151,"journal":{"name":"SRPN: Corporate Governance (Topic)","volume":"49 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-09-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85297944","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study examines whether labor plays a role in corporate governance by deterring opportunistic insider behavior. Results suggest that firms with organized labor experience statistically significant declines in opportunistic insider trading activity and profitability. We show three economic mechanisms that explain labor's disciplinary effect on opportunistic insider trading behavior: employee welfare, activist union-affiliated institutional investors, and media and political support. Further analyses suggest that labor's corporate governance reduces the incidence of illegal insider trading, enhances firm productivity and performance, and lowers insider trades' return predictability.
{"title":"Labor Voice in Corporate Governance: Evidence from Opportunistic Insider Trading","authors":"Lilian Ng, M. Pham, Jing Yu","doi":"10.2139/ssrn.3549406","DOIUrl":"https://doi.org/10.2139/ssrn.3549406","url":null,"abstract":"This study examines whether labor plays a role in corporate governance by deterring opportunistic insider behavior. Results suggest that firms with organized labor experience statistically significant declines in opportunistic insider trading activity and profitability. We show three economic mechanisms that explain labor's disciplinary effect on opportunistic insider trading behavior: employee welfare, activist union-affiliated institutional investors, and media and political support. Further analyses suggest that labor's corporate governance reduces the incidence of illegal insider trading, enhances firm productivity and performance, and lowers insider trades' return predictability.","PeriodicalId":22151,"journal":{"name":"SRPN: Corporate Governance (Topic)","volume":"6 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-08-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75719379","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The primary goal of an organization/company need to maximize its owners’ value, but a proprietor’s goal could be quite different. Consider Larry Jackson, ‘The proprietor of a neighborhood sports equipment stock. Jackson is in business to generate money, but he likes to require time without work to play golf on Fridays’’. He also incorporates a rare employee who aren't any longer very productive, but he keeps them on the payroll out of friendship and loyalty. Jackson is running the business in a very way that's in step with his own personal goals. He knows that he could make more cash if he didn’t play golf or if he replaced a number of his employees. But he's comfortable along with his choices; and since it's his business, he's liberal to make those choices. In contrast, Linda Smith is CEO of an over-sized corporation. Smith manages the company; but most of the stock is owned by shareholders who purchased it because they were searching for an investment that might help them retire, send their children to varsity, acquire a long-anticipated trip, so forth. The shareholders elected a board of directors, which then selected Smith to run the corporate. Smith and also the firm’s other managers are engaged on behalf of the shareholders, and that they were hired to pursue policies that enhance shareholder worth. Throughout this book, we focus totally on publicly owned companies; hence, we operate the belief that management’s primary goal is shareholder wealth maximization. At the identical time, the managers know that this doesn't mean maximize shareholder value “at all costs.” Managers have a responsibility to behave ethically, and that they must follow the laws and other society-imposed constraints that we discussed within the opening vignette to the current chapter. Indeed, most managers recognize that being socially responsible isn't inconsistent with maximizing shareholder value. Consider, for instance, what would happen if Linda Smith narrowly focused on creating shareholder value, but within the process, her company was unresponsive to its employees and customers, hostile to its area people, and indifferent to the consequences its actions had on the environment. Altogether likelihood, society would execute a large range of costs on the corporate. It’s going to find it hard to draw in top notch employees, its products could also be boycotted, it should face additional lawsuits and regulations, and it's going to be confronted with negative publicity. These costs would ultimately cause a discount in shareholder value. So clearly when taking steps to maximize shareholder value, enlightened managers have to also mind these society imposed constraints. It’s at now where the researcher spreads an application of literature review onto testing Corporate Social Responsibility and its IMPRESSION on Financial Presentation. Subsequently, the researcher also stresses on the importance and implications of agency theory within the context of monetary management.
{"title":"The Impression of Corporate Social Responsibility (CSR) on Corporate Financial Performance (Cfp) & the Concept and Role of Agency Theory","authors":"Faria Rahman, Payal Pandey","doi":"10.2139/ssrn.3644483","DOIUrl":"https://doi.org/10.2139/ssrn.3644483","url":null,"abstract":"The primary goal of an organization/company need to maximize its owners’ value, but a proprietor’s goal could be quite different. Consider Larry Jackson, ‘The proprietor of a neighborhood sports equipment stock. Jackson is in business to generate money, but he likes to require time without work to play golf on Fridays’’. He also incorporates a rare employee who aren't any longer very productive, but he keeps them on the payroll out of friendship and loyalty. Jackson is running the business in a very way that's in step with his own personal goals. He knows that he could make more cash if he didn’t play golf or if he replaced a number of his employees. But he's comfortable along with his choices; and since it's his business, he's liberal to make those choices. In contrast, Linda Smith is CEO of an over-sized corporation. Smith manages the company; but most of the stock is owned by shareholders who purchased it because they were searching for an investment that might help them retire, send their children to varsity, acquire a long-anticipated trip, so forth. The shareholders elected a board of directors, which then selected Smith to run the corporate. Smith and also the firm’s other managers are engaged on behalf of the shareholders, and that they were hired to pursue policies that enhance shareholder worth. Throughout this book, we focus totally on publicly owned companies; hence, we operate the belief that management’s primary goal is shareholder wealth maximization. At the identical time, the managers know that this doesn't mean maximize shareholder value “at all costs.” Managers have a responsibility to behave ethically, and that they must follow the laws and other society-imposed constraints that we discussed within the opening vignette to the current chapter. Indeed, most managers recognize that being socially responsible isn't inconsistent with maximizing shareholder value. Consider, for instance, what would happen if Linda Smith narrowly focused on creating shareholder value, but within the process, her company was unresponsive to its employees and customers, hostile to its area people, and indifferent to the consequences its actions had on the environment. Altogether likelihood, society would execute a large range of costs on the corporate. It’s going to find it hard to draw in top notch employees, its products could also be boycotted, it should face additional lawsuits and regulations, and it's going to be confronted with negative publicity. These costs would ultimately cause a discount in shareholder value. So clearly when taking steps to maximize shareholder value, enlightened managers have to also mind these society imposed constraints. It’s at now where the researcher spreads an application of literature review onto testing Corporate Social Responsibility and its IMPRESSION on Financial Presentation. Subsequently, the researcher also stresses on the importance and implications of agency theory within the context of monetary management.","PeriodicalId":22151,"journal":{"name":"SRPN: Corporate Governance (Topic)","volume":"18 1 Suppl 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-07-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75739209","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Dayong Zhang, Zhiwei Zhang, Qiang Ji, B. Lucey, Jia Liu
Adoption of renewable energy is one of the most important steps taken to cope with global warming and achieve sustainability. While its supply has seen a global boom, the adoption of renewable energy from the critical demand side faces clear challenges. This paper investigates firms’ use of renewable energy, paying special attention to factors in internal corporate governance and external governance. Based on 1,027 listed companies in 47 countries or regions, we show statistically significant evidence that both internal and external governance matter for firms’ adoption of renewable energy. We also find significant interactions between internal and external factors. Specifically, board duality and higher executive share reduce renewable energy adoption, strong external governance increases renewable energy adoption, and firms in common law systems tend to use fewer renewables. Our results are robust to different specifications, which allows us to tell an international demand-side story to complement the narrative on supply.
{"title":"Board Characteristics, External Governance and the Use of Renewable Energy: International Evidence From Public Firms","authors":"Dayong Zhang, Zhiwei Zhang, Qiang Ji, B. Lucey, Jia Liu","doi":"10.2139/ssrn.3636181","DOIUrl":"https://doi.org/10.2139/ssrn.3636181","url":null,"abstract":"Adoption of renewable energy is one of the most important steps taken to cope with global warming and achieve sustainability. While its supply has seen a global boom, the adoption of renewable energy from the critical demand side faces clear challenges. This paper investigates firms’ use of renewable energy, paying special attention to factors in internal corporate governance and external governance. Based on 1,027 listed companies in 47 countries or regions, we show statistically significant evidence that both internal and external governance matter for firms’ adoption of renewable energy. We also find significant interactions between internal and external factors. Specifically, board duality and higher executive share reduce renewable energy adoption, strong external governance increases renewable energy adoption, and firms in common law systems tend to use fewer renewables. Our results are robust to different specifications, which allows us to tell an international demand-side story to complement the narrative on supply.","PeriodicalId":22151,"journal":{"name":"SRPN: Corporate Governance (Topic)","volume":"49 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-06-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86478180","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Drawing from social capital, social network theory of stakeholder influence and stakeholder management, the purpose of this paper is to examine the relationship between board network centrality and firms’ environmental, social and governance (ESG) performance.,Using social network analysis, the authors construct five board network centrality, namely, degree centrality (the number of connections), closeness centrality (distance among firms), eigenvector centrality (the quality of connections), betweenness centrality (how often a firm sits between two other firms) and the information centrality (the speed and reliability of information), as measures of board access for social capital and timely information.,Using a sample of non-financial firms listed in the UK FTSE 350 index from 2007 to 2018, the authors find that board networks, measured by degree, closeness, eigenvector, betweenness and information centrality, has positive influence on firms’ ESG performance. Furthermore, the findings show that there is a non-linear relationship between board networks and ESG performance, and this relationship is stronger in the sectors where firms that have high product market concentration and high percentage of women board members.,This study unveils that strong board network centrality brings higher social (reputational) capital and information advantages to the firm to effectively, timely and accurately deal with the pressures from stakeholders (stakeholder management), which leads to better ESG performance.
{"title":"Board of Directors Network Centrality and Environmental, Social and Governance (ESG) Performance","authors":"M. Harjoto, Yan Wang","doi":"10.1108/cg-10-2019-0306","DOIUrl":"https://doi.org/10.1108/cg-10-2019-0306","url":null,"abstract":"Drawing from social capital, social network theory of stakeholder influence and stakeholder management, the purpose of this paper is to examine the relationship between board network centrality and firms’ environmental, social and governance (ESG) performance.,Using social network analysis, the authors construct five board network centrality, namely, degree centrality (the number of connections), closeness centrality (distance among firms), eigenvector centrality (the quality of connections), betweenness centrality (how often a firm sits between two other firms) and the information centrality (the speed and reliability of information), as measures of board access for social capital and timely information.,Using a sample of non-financial firms listed in the UK FTSE 350 index from 2007 to 2018, the authors find that board networks, measured by degree, closeness, eigenvector, betweenness and information centrality, has positive influence on firms’ ESG performance. Furthermore, the findings show that there is a non-linear relationship between board networks and ESG performance, and this relationship is stronger in the sectors where firms that have high product market concentration and high percentage of women board members.,This study unveils that strong board network centrality brings higher social (reputational) capital and information advantages to the firm to effectively, timely and accurately deal with the pressures from stakeholders (stakeholder management), which leads to better ESG performance.","PeriodicalId":22151,"journal":{"name":"SRPN: Corporate Governance (Topic)","volume":"103 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-05-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79457891","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
PurposeThis paper aims to examine two important issues in corporate social responsibility (CSR) scholarship. First, the study problematises CSR as a form of self-regulation. Second, the research explores how CSR strategies can enable firms to recognise and internalise their externalities while preserving shareholder value.Design/methodology/approachThis study uses a tinged shareholder model to understand the interactions between an organisation’s CSR approach and the effect of relevant externalities on its CSR outcomes. In doing this, the case study qualitative methodology is adopted, relying on data from one Fidelity Bank, Nigeria.FindingsBy articulating a tripodal thematic model – governance of externalities in the economy, governance of externalities in the social system and governance of externalities in the environment, this paper demonstrates how an effective combination of these themes triggers the emergence of a robust CSR culture in an organisation.Research limitations/implicationsThis research advances the understanding of the implication of internalising externalities in the CSR literature in a relatively under-researched context – Nigeria.Originality/valueThe data of this study allows to present a governance model that will enable managers to focus on their overarching objective of shareholder value without the challenges of pursuing multiple and sometimes conflicting goals that typically create negative impacts to non-shareholding stakeholders.
{"title":"Corporate Social Responsibility Strategies in Nigeria: A Tinged Shareholder Model","authors":"Emmanuel Adegbite","doi":"10.2139/ssrn.3582623","DOIUrl":"https://doi.org/10.2139/ssrn.3582623","url":null,"abstract":"PurposeThis paper aims to examine two important issues in corporate social responsibility (CSR) scholarship. First, the study problematises CSR as a form of self-regulation. Second, the research explores how CSR strategies can enable firms to recognise and internalise their externalities while preserving shareholder value.Design/methodology/approachThis study uses a tinged shareholder model to understand the interactions between an organisation’s CSR approach and the effect of relevant externalities on its CSR outcomes. In doing this, the case study qualitative methodology is adopted, relying on data from one Fidelity Bank, Nigeria.FindingsBy articulating a tripodal thematic model – governance of externalities in the economy, governance of externalities in the social system and governance of externalities in the environment, this paper demonstrates how an effective combination of these themes triggers the emergence of a robust CSR culture in an organisation.Research limitations/implicationsThis research advances the understanding of the implication of internalising externalities in the CSR literature in a relatively under-researched context – Nigeria.Originality/valueThe data of this study allows to present a governance model that will enable managers to focus on their overarching objective of shareholder value without the challenges of pursuing multiple and sometimes conflicting goals that typically create negative impacts to non-shareholding stakeholders.","PeriodicalId":22151,"journal":{"name":"SRPN: Corporate Governance (Topic)","volume":"91 9 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-04-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87741992","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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