PurposeThis paper aims to move beyond the limits of creating shared value (CSV) by presenting a norms-driven framework for creating shared value.Design/methodology/approachThis paper combines insights from organizational studies and philosophy to critique CSV and to articulate an alternative model for integrating the pursuit of profit with social needs and demands.FindingsCSV poses significant challenges for managers due to the problem of bounded rationality. Rather than merely engaging in a logic of consequence, this paper argues that managers should integrate norms-based reasoning within the cognitive process of strategic management.Originality/valueThis paper critiques an existing framework for creating shared value and proposes a new framework.
{"title":"The Limits of Consequential Reasoning in Shared Value Creation","authors":"Jooho Lee","doi":"10.1108/CR-08-2016-0049","DOIUrl":"https://doi.org/10.1108/CR-08-2016-0049","url":null,"abstract":"PurposeThis paper aims to move beyond the limits of creating shared value (CSV) by presenting a norms-driven framework for creating shared value.Design/methodology/approachThis paper combines insights from organizational studies and philosophy to critique CSV and to articulate an alternative model for integrating the pursuit of profit with social needs and demands.FindingsCSV poses significant challenges for managers due to the problem of bounded rationality. Rather than merely engaging in a logic of consequence, this paper argues that managers should integrate norms-based reasoning within the cognitive process of strategic management.Originality/valueThis paper critiques an existing framework for creating shared value and proposes a new framework.","PeriodicalId":261299,"journal":{"name":"POL: Integrity Practices (Topic)","volume":"38 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-09-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131454774","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 paper examines the equity market reaction to events associated with the passage of a directive in the European Union (EU) mandating increased nonfinancial disclosure, which affected firms listed on EU exchanges or having significant operations in the EU. The mandated disclosures relate to firms’ environmental, social, and governance performance. Using a cross-country sample, we first document an on average negative market reaction to events increasing the likelihood of passage for this regulation, consistent with equity investors anticipating net costs with the directive’s passage for most firms. Exploiting cross-sectional variation, we then predict and document a more negative market reaction for firms having: (i) low pre-directive nonfinancial disclosure levels, consistent with investors anticipating these future disclosures to reveal worse-than-expected news; (ii) weaker performance on nonfinancial issues, consistent with expectations for these firms to incur future costs to internalize current externalities; and (iii) lower ownership by institutional asset owners, consistent with such investors demanding further disclosures than mandated by the directive. The average market reaction for firms with superior nonfinancial performance and disclosure in our sample is positive, suggesting that investors expect net benefits from the passage of the directive for these firms.
{"title":"Market Reaction to Mandatory Nonfinancial Disclosure","authors":"J. Grewal, Edward J. Riedl, George Serafeim","doi":"10.2139/ssrn.2657712","DOIUrl":"https://doi.org/10.2139/ssrn.2657712","url":null,"abstract":"This paper examines the equity market reaction to events associated with the passage of a directive in the European Union (EU) mandating increased nonfinancial disclosure, which affected firms listed on EU exchanges or having significant operations in the EU. The mandated disclosures relate to firms’ environmental, social, and governance performance. Using a cross-country sample, we first document an on average negative market reaction to events increasing the likelihood of passage for this regulation, consistent with equity investors anticipating net costs with the directive’s passage for most firms. Exploiting cross-sectional variation, we then predict and document a more negative market reaction for firms having: (i) low pre-directive nonfinancial disclosure levels, consistent with investors anticipating these future disclosures to reveal worse-than-expected news; (ii) weaker performance on nonfinancial issues, consistent with expectations for these firms to incur future costs to internalize current externalities; and (iii) lower ownership by institutional asset owners, consistent with such investors demanding further disclosures than mandated by the directive. The average market reaction for firms with superior nonfinancial performance and disclosure in our sample is positive, suggesting that investors expect net benefits from the passage of the directive for these firms.","PeriodicalId":261299,"journal":{"name":"POL: Integrity Practices (Topic)","volume":"19 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128620591","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}
Corporate governance is traditionally defined as the system of laws, regulations and practices, to promote enterprise, accelerate performance and ensure accountability and to run the business in a manner that enhances stakeholder’s value. We are fortunate that one of the world’s most complete manuscripts on the science of Governance was penned by Kautilya, the most celebrated scholar of ancient India. Imagine the vision of this eminent scholar in third century B.C., his discussions on administration and management are strikingly modern and scientific which covers almost all aspects of Governance which are relevant even in the present days. According to him, and which in fact is, the crux of the truth about an ideal king, is summed up in four Sanskrit lines which is translated below. Which means that “In the happiness and well being of the subjects , lies the well being of the king , in the welfare of the subjects , is the welfare of the king ; what is desirable and beneficial to the subjects and not his personal desires and ambitions , is desirable and beneficial for the king.” Inspite of having all set definitions of corporate governance from the ancient Indian manuscripts to latest management fundamentals, we are still struggling with the bad question of Good Governance in Indian corporate world. Some unpleasant developments taking place in Indian corporate world have led us to think again on good corporate Governance. The “SATYAM” matter raised big issues for good Governance. It also raised issues for accountants for a better transparency in balance sheets and annual reports. The tendency of window dressing led to loss of faith in persons dealing with accounts and chartered accountants who were entrusted the task of furnishing annual reports to public at large. Enron’s debacle is another great example of problem of governance which included independence of auditors, audit committee functioning, and accounting obfuscination. After some major unpleasant episodes all over the world including India, matter was debated and researches concluded that it was the result of lack of integrity of some of chief executive officers or chief financial officers. Some issues that often come up in good governance are honesty, ethics, morality, dharma, justice, integrity, values, credibility etc. The formation of a new government in Delhi has arisen new hopes among the Indian Public that the political system will also gear up to this revolutionary change and will lead to better ethics, moral examples to new generation for a good Governance. Increasing number of cases of failure of good governance in Indian corporate world lead us to think that some exemplary punishment and decisions in such cases are awaited or the strong political will to curb such activities by any way i.e. by enacting or modifying penalties for such criminals which play with public money. A large number of companies after raising money through share market, have vanished from the scene ,
{"title":"Good Governance in Indian Corporates: Some Issues","authors":"D. K. Gupta","doi":"10.2139/SSRN.1627690","DOIUrl":"https://doi.org/10.2139/SSRN.1627690","url":null,"abstract":"Corporate governance is traditionally defined as the system of laws, regulations and practices, to promote enterprise, accelerate performance and ensure accountability and to run the business in a manner that enhances stakeholder’s value. \u0000We are fortunate that one of the world’s most complete manuscripts on the science of Governance was penned by Kautilya, the most celebrated scholar of ancient India. Imagine the vision of this eminent scholar in third century B.C., his discussions on administration and management are strikingly modern and scientific which covers almost all aspects of Governance which are relevant even in the present days. According to him, and which in fact is, the crux of the truth about an ideal king, is summed up in four Sanskrit lines which is translated below. \u0000Which means that “In the happiness and well being of the subjects , lies the well being of the king , in the welfare of the subjects , is the welfare of the king ; what is desirable and beneficial to the subjects and not his personal desires and ambitions , is desirable and beneficial for the king.” Inspite of having all set definitions of corporate governance from the ancient Indian manuscripts to latest management fundamentals, we are still struggling with the bad question of Good Governance in Indian corporate world. \u0000Some unpleasant developments taking place in Indian corporate world have led us to think again on good corporate Governance. The “SATYAM” matter raised big issues for good Governance. It also raised issues for accountants for a better transparency in balance sheets and annual reports. The tendency of window dressing led to loss of faith in persons dealing with accounts and chartered accountants who were entrusted the task of furnishing annual reports to public at large. Enron’s debacle is another great example of problem of governance which included independence of auditors, audit committee functioning, and accounting obfuscination. \u0000After some major unpleasant episodes all over the world including India, matter was debated and researches concluded that it was the result of lack of integrity of some of chief executive officers or chief financial officers. Some issues that often come up in good governance are honesty, ethics, morality, dharma, justice, integrity, values, credibility etc. The formation of a new government in Delhi has arisen new hopes among the Indian Public that the political system will also gear up to this revolutionary change and will lead to better ethics, moral examples to new generation for a good Governance. \u0000Increasing number of cases of failure of good governance in Indian corporate world lead us to think that some exemplary punishment and decisions in such cases are awaited or the strong political will to curb such activities by any way i.e. by enacting or modifying penalties for such criminals which play with public money. A large number of companies after raising money through share market, have vanished from the scene , ","PeriodicalId":261299,"journal":{"name":"POL: Integrity Practices (Topic)","volume":"14 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-08-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128475118","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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