Purpose This study, using stakeholder approach, aims to examine the impact of corporate governance and risk-taking on the performance of the top 100 nonfinancial listed firms in Vietnam from 2015 to 2019. Design/methodology/approach The theoretical and empirical studies are reviewed for rational hypotheses development. Firm performance is represented by return on assets, return on equity and Tobin’s Q. Findings Specifically, concentrated ownership structure, large workforce, being a great workplace, quick sales growth, high receivables turnover, being funded by both the state and foreigners and high-risk exposure positively affect firm performance. However, a high level of state ownership or foreign ownership, more independent members on board, large board size and chief executive officer (CEO) duality show an inverse effect. Besides, an inverted U-shaped relationship with firm performance is recognized for liquidity ratios. Originality/value This study uses three triangles, including governance, risk, and performance. The paper offers some evidence-based recommendations to improve firm performance in Vietnamese businesses.
{"title":"Stakeholder theory, risk-taking and firm performance","authors":"Thi Thanh Binh Dao, Minh Chau Phan","doi":"10.1108/cg-09-2022-0366","DOIUrl":"https://doi.org/10.1108/cg-09-2022-0366","url":null,"abstract":"\u0000Purpose\u0000This study, using stakeholder approach, aims to examine the impact of corporate governance and risk-taking on the performance of the top 100 nonfinancial listed firms in Vietnam from 2015 to 2019.\u0000\u0000\u0000Design/methodology/approach\u0000The theoretical and empirical studies are reviewed for rational hypotheses development. Firm performance is represented by return on assets, return on equity and Tobin’s Q.\u0000\u0000\u0000Findings\u0000Specifically, concentrated ownership structure, large workforce, being a great workplace, quick sales growth, high receivables turnover, being funded by both the state and foreigners and high-risk exposure positively affect firm performance. However, a high level of state ownership or foreign ownership, more independent members on board, large board size and chief executive officer (CEO) duality show an inverse effect. Besides, an inverted U-shaped relationship with firm performance is recognized for liquidity ratios.\u0000\u0000\u0000Originality/value\u0000This study uses three triangles, including governance, risk, and performance. The paper offers some evidence-based recommendations to improve firm performance in Vietnamese businesses.\u0000","PeriodicalId":47880,"journal":{"name":"Corporate Governance-The International Journal of Business in Society","volume":null,"pages":null},"PeriodicalIF":5.6,"publicationDate":"2023-05-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74070864","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}
Purpose This paper aims to examine the impact of gender diversity on boards and on top management positions on excess cash holdings. Design/methodology/approach The authors adopt the quantile regression approach to test the relation between gender diversity and excess cash holding. The sample consists of 1,235 firm-year observations for the period 2005–2017. Findings The authors find that board gender diversity negatively influences the level of excess cash. This result suggests that women appointed in the boardroom are effective in monitoring managerial actions, including financing policies. The results also show that by forcing companies to have a quota of women on their boards, the presence of women no longer has a negative impact on excess cash holdings. However, when women stand at the chief executive officer or chief financial officer position, they tend to accumulate cash for precautionary motives. These results suggest that women behave differently regarding excess cash holding as monitors compared to their role as decision-makers. Practical implications The results may be of interest to legislators who may decide to break the glass ceiling, preventing women from gaining greater access to senior management positions. This is in line with the recommendations of the AFEP-MEDEF Governance Code of 2020, which strongly recommends the recruitment of women to senior management positions. The results are also important to investors, who might be likely to trust companies in which women hold positions on boards of directors which may increase firm value. The results may also have a social impact. Indeed, the role of women in society may be enhanced if such initiatives are taken to increase their representation on leadership positions and in society in general. Social implications The results may also have a social impact. Indeed, the role of women in society may be enhanced if such initiatives are taken to increase their representation on leadership positions and in society in general. Originality/value This study investigates the role of women both as controllers and decision-makers in holding excessive amounts of cash. It also highlights new evidence on the impact the approach of appointing women on boards (enabling/coercive and market-based) can have on the relation between gender diversity and excess cash holdings.
{"title":"Women on boards and on top management positions and excess cash holdings: a quantile regression approach","authors":"Ibtissem Jilani, Faten Lakhal, Nadia Lakhal","doi":"10.1108/cg-10-2022-0435","DOIUrl":"https://doi.org/10.1108/cg-10-2022-0435","url":null,"abstract":"\u0000Purpose\u0000This paper aims to examine the impact of gender diversity on boards and on top management positions on excess cash holdings.\u0000\u0000\u0000Design/methodology/approach\u0000The authors adopt the quantile regression approach to test the relation between gender diversity and excess cash holding. The sample consists of 1,235 firm-year observations for the period 2005–2017.\u0000\u0000\u0000Findings\u0000The authors find that board gender diversity negatively influences the level of excess cash. This result suggests that women appointed in the boardroom are effective in monitoring managerial actions, including financing policies. The results also show that by forcing companies to have a quota of women on their boards, the presence of women no longer has a negative impact on excess cash holdings. However, when women stand at the chief executive officer or chief financial officer position, they tend to accumulate cash for precautionary motives. These results suggest that women behave differently regarding excess cash holding as monitors compared to their role as decision-makers.\u0000\u0000\u0000Practical implications\u0000The results may be of interest to legislators who may decide to break the glass ceiling, preventing women from gaining greater access to senior management positions. This is in line with the recommendations of the AFEP-MEDEF Governance Code of 2020, which strongly recommends the recruitment of women to senior management positions. The results are also important to investors, who might be likely to trust companies in which women hold positions on boards of directors which may increase firm value. The results may also have a social impact. Indeed, the role of women in society may be enhanced if such initiatives are taken to increase their representation on leadership positions and in society in general.\u0000\u0000\u0000Social implications\u0000The results may also have a social impact. Indeed, the role of women in society may be enhanced if such initiatives are taken to increase their representation on leadership positions and in society in general.\u0000\u0000\u0000Originality/value\u0000This study investigates the role of women both as controllers and decision-makers in holding excessive amounts of cash. It also highlights new evidence on the impact the approach of appointing women on boards (enabling/coercive and market-based) can have on the relation between gender diversity and excess cash holdings.\u0000","PeriodicalId":47880,"journal":{"name":"Corporate Governance-The International Journal of Business in Society","volume":null,"pages":null},"PeriodicalIF":5.6,"publicationDate":"2023-05-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84863083","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}
Purpose The purpose of this paper is to analyse the effect of the COVID-19 pandemic on corporate governance and internal control in general. In addition, this paper attempts to develop a new corporate governance model that flexibly addresses conditions like those brought into the business environment by COVID-19. Design/methodology/approach Thirteen semi-structured interviews were conducted with chairpersons, CEOs and directors from companies listed on the FTSE 350. Findings This study suggests a corporate governance model, which we call Eunomia, which we believe will help businesses to navigate the unusual conditions resulting from COVID-19 and similar types of crises that lead to major disruption for businesses and society. The model includes five pillars that support governance, namely, flexibility, IT infrastructure, risk management, internal control and policies and procedures. Practical implications Implications for practice and policymakers. Based on the research outcomes, the authors suggest that the board of directors establishes policies that ensure supply diversity and that businesses do not rely on a single or limited number of suppliers, thereby making themselves vulnerable to supply chain disruption with those suppliers. Originality/value This paper presents an original contribution to the accounting literature relating to corporate governance and internal control systems, specifically in terms of how businesses can optimally operate under uncontrollable conditions resulting from pandemics, and similar situations.
{"title":"Corporate governance in the COVID-19 pandemic: current practices and potential improvement","authors":"Mohammad Q. Alshhadat, K. Al-Hajaya","doi":"10.1108/cg-05-2022-0203","DOIUrl":"https://doi.org/10.1108/cg-05-2022-0203","url":null,"abstract":"\u0000Purpose\u0000The purpose of this paper is to analyse the effect of the COVID-19 pandemic on corporate governance and internal control in general. In addition, this paper attempts to develop a new corporate governance model that flexibly addresses conditions like those brought into the business environment by COVID-19.\u0000\u0000\u0000Design/methodology/approach\u0000Thirteen semi-structured interviews were conducted with chairpersons, CEOs and directors from companies listed on the FTSE 350.\u0000\u0000\u0000Findings\u0000This study suggests a corporate governance model, which we call Eunomia, which we believe will help businesses to navigate the unusual conditions resulting from COVID-19 and similar types of crises that lead to major disruption for businesses and society. The model includes five pillars that support governance, namely, flexibility, IT infrastructure, risk management, internal control and policies and procedures.\u0000\u0000\u0000Practical implications\u0000Implications for practice and policymakers. Based on the research outcomes, the authors suggest that the board of directors establishes policies that ensure supply diversity and that businesses do not rely on a single or limited number of suppliers, thereby making themselves vulnerable to supply chain disruption with those suppliers.\u0000\u0000\u0000Originality/value\u0000This paper presents an original contribution to the accounting literature relating to corporate governance and internal control systems, specifically in terms of how businesses can optimally operate under uncontrollable conditions resulting from pandemics, and similar situations.\u0000","PeriodicalId":47880,"journal":{"name":"Corporate Governance-The International Journal of Business in Society","volume":null,"pages":null},"PeriodicalIF":5.6,"publicationDate":"2023-05-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"91044073","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}
S. Suherman, Titis Fatarina Mahfirah, Berto Usman, Herni Kurniawati, D. Kurnianti
Purpose The purpose of this study was to investigate how chief executive officer (CEO) characteristics, including age, education, nationality and particularly gender, influence firm performance in a developing Southeast Asian Country (Indonesia). Design/methodology/approach The study uses balanced firm-level panel data for 203 nonfinancial companies listed on the Indonesia Stock Exchange from 2010 to 2020. Return on assets, return on equity and Tobin’s Q were used to measure firm performance. The data were analyzed using panel data regression analysis, including a fixed effects model with clustered standard errors. Findings The results indicate that female CEOs, education and nationality enhance firm performance, while CEO age can either improve or reduce firm performance. Numerous robustness checks were performed; the results were consistent with those in the main analysis. Research limitations/implications Individual characteristics should be considered when appointing CEOs. Some CEO characteristics enhance firm performance. Female CEOs bring new perspectives, while older CEOs’ longer experience adds a competitive advantage. More educated CEOs have a better ability to deal with challenging intellectual activities, and CEOs from foreign countries better understand international market regulations. However, some characteristics may reduce firm performance, for example, older CEOs are more conservative and unable to adapt to changing business environments. Originality/value This study contributes to corporate governance studies by synthesizing CEO characteristics and investigating their relationship with firm performance. Moreover, it emphasizes that developing countries such as Indonesia have different economic, legal, social and cultural environments than developed countries, especially Western countries.
{"title":"CEO characteristics and firm performance: evidence from a Southeast Asian country","authors":"S. Suherman, Titis Fatarina Mahfirah, Berto Usman, Herni Kurniawati, D. Kurnianti","doi":"10.1108/cg-05-2022-0205","DOIUrl":"https://doi.org/10.1108/cg-05-2022-0205","url":null,"abstract":"\u0000Purpose\u0000The purpose of this study was to investigate how chief executive officer (CEO) characteristics, including age, education, nationality and particularly gender, influence firm performance in a developing Southeast Asian Country (Indonesia).\u0000\u0000\u0000Design/methodology/approach\u0000The study uses balanced firm-level panel data for 203 nonfinancial companies listed on the Indonesia Stock Exchange from 2010 to 2020. Return on assets, return on equity and Tobin’s Q were used to measure firm performance. The data were analyzed using panel data regression analysis, including a fixed effects model with clustered standard errors.\u0000\u0000\u0000Findings\u0000The results indicate that female CEOs, education and nationality enhance firm performance, while CEO age can either improve or reduce firm performance. Numerous robustness checks were performed; the results were consistent with those in the main analysis.\u0000\u0000\u0000Research limitations/implications\u0000Individual characteristics should be considered when appointing CEOs. Some CEO characteristics enhance firm performance. Female CEOs bring new perspectives, while older CEOs’ longer experience adds a competitive advantage. More educated CEOs have a better ability to deal with challenging intellectual activities, and CEOs from foreign countries better understand international market regulations. However, some characteristics may reduce firm performance, for example, older CEOs are more conservative and unable to adapt to changing business environments.\u0000\u0000\u0000Originality/value\u0000This study contributes to corporate governance studies by synthesizing CEO characteristics and investigating their relationship with firm performance. Moreover, it emphasizes that developing countries such as Indonesia have different economic, legal, social and cultural environments than developed countries, especially Western countries.\u0000","PeriodicalId":47880,"journal":{"name":"Corporate Governance-The International Journal of Business in Society","volume":null,"pages":null},"PeriodicalIF":5.6,"publicationDate":"2023-05-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73490425","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}
Akouvi Gadedjisso-Tossou, T. Kouevi, Jean-Pierre Gueyié
Purpose This paper aims to assess the effects of external governance mechanisms on the performance of microfinance institutions (MFIs) in Togo. Design/methodology/approach Using annual time series data from a sample of 30 MFIs during the period 2011–2015, the authors apply panel data econometrics in their estimations. Findings The results indicate that the notation by a rating agency positively and significantly affects the financial return of MFIs. The quality and the regularity of the audits negatively and significantly influence the financial performance (measured by return on assets and operating self-sufficiency) but favorably and significantly influence social performance (increased number of active borrowers (NAB) and reduced size of loans). Furthermore, supervision increases the amount of individual loans but decreases the NAB, which means deterioration in social performance. Overall, this paper shows that external governance mechanisms significantly affect the performance of Togolese MFIs, but with varying effects depending on the mechanism considered. Research limitations/implications The sample size of 30 MFIs is small, and the geographic coverage of the study is restricted to MFIs operating in the city of Lomé, Togo. The authors did not have access to the information regarding the portfolio at risk at 30 days, even though it is a measure of financial performance. Likewise, we did not have access to the appendices to the financial statements for the calculation of prudential ratios. This method, which consists of asking the institutions using a questionnaire if they comply with prudential standards, may be biased because this study cannot verify the authenticity of the responses given that the standards are quantitative. Practical implications The study findings advocate that improving the financial and social performance of MFIs requires improving the quality of external governance mechanisms. MFIs should then pay close attention to well-functioning external governance mechanisms. Social implications As MFIs are key social actors in a society, all mechanisms that contribute to their efficiency benefit society. Originality/value This study contributes to the corporate governance literature by showing that external governance mechanisms influence performance. These external mechanisms are complementary disciplinary measures to internal governance mechanisms and other tools.
{"title":"The influence of external governance mechanisms on the performance of microfinance institutions in Togo","authors":"Akouvi Gadedjisso-Tossou, T. Kouevi, Jean-Pierre Gueyié","doi":"10.1108/cg-03-2022-0136","DOIUrl":"https://doi.org/10.1108/cg-03-2022-0136","url":null,"abstract":"\u0000Purpose\u0000This paper aims to assess the effects of external governance mechanisms on the performance of microfinance institutions (MFIs) in Togo.\u0000\u0000\u0000Design/methodology/approach\u0000Using annual time series data from a sample of 30 MFIs during the period 2011–2015, the authors apply panel data econometrics in their estimations.\u0000\u0000\u0000Findings\u0000The results indicate that the notation by a rating agency positively and significantly affects the financial return of MFIs. The quality and the regularity of the audits negatively and significantly influence the financial performance (measured by return on assets and operating self-sufficiency) but favorably and significantly influence social performance (increased number of active borrowers (NAB) and reduced size of loans). Furthermore, supervision increases the amount of individual loans but decreases the NAB, which means deterioration in social performance. Overall, this paper shows that external governance mechanisms significantly affect the performance of Togolese MFIs, but with varying effects depending on the mechanism considered.\u0000\u0000\u0000Research limitations/implications\u0000The sample size of 30 MFIs is small, and the geographic coverage of the study is restricted to MFIs operating in the city of Lomé, Togo. The authors did not have access to the information regarding the portfolio at risk at 30 days, even though it is a measure of financial performance. Likewise, we did not have access to the appendices to the financial statements for the calculation of prudential ratios. This method, which consists of asking the institutions using a questionnaire if they comply with prudential standards, may be biased because this study cannot verify the authenticity of the responses given that the standards are quantitative.\u0000\u0000\u0000Practical implications\u0000The study findings advocate that improving the financial and social performance of MFIs requires improving the quality of external governance mechanisms. MFIs should then pay close attention to well-functioning external governance mechanisms.\u0000\u0000\u0000Social implications\u0000As MFIs are key social actors in a society, all mechanisms that contribute to their efficiency benefit society.\u0000\u0000\u0000Originality/value\u0000This study contributes to the corporate governance literature by showing that external governance mechanisms influence performance. These external mechanisms are complementary disciplinary measures to internal governance mechanisms and other tools.\u0000","PeriodicalId":47880,"journal":{"name":"Corporate Governance-The International Journal of Business in Society","volume":null,"pages":null},"PeriodicalIF":5.6,"publicationDate":"2023-05-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73121795","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}
Purpose This study aims to examine the direct relationship between board gender diversity (BGD) and financial performance and the moderating role of corporate social responsibility (CSR) in the said relationship. Design/methodology/approach Using data collected from the Thomson Reuters Eikon ASSET4 database from 42 UK financial institutions listed in the ESG index for the period 2005–2019, this study used multivariate regression analysis on panel data to test the effect of BGD on financial performance and estimate the moderating effect of CSR between them. Moreover, to control the endogeneity problem, the authors conducted an additional analysis by testing the dynamic dimension of the data set through the generalized moment method. Findings The empirical results show that BGD is positively related to financial performance and that BGD increases firm performance with the moderating effect of CSR. Regarding the endogeneity problem, the existence of continuity between financial institution performances over time is demonstrated. Research limitations/implications The current paper sheds light on the importance of BGD in improving firm performance and the moderating role of CSR in strengthening the relationship between BGD and firm performance, thereby contributing to the agency theory, the resource dependency theory and the stakeholder theory. Therefore, regulators and policymakers in the UK can use the outcomes of this study to enforce the representation of female directors on boards to enhance the financial performance of financial institutions. Moreover, the findings could be useful for regulatory bodies to encourage financial institutions to practice CSR activities and disclose them in their annual reports. Originality/value To the best of the authors’ knowledge, this is the first study investigating the moderating role of CSR on the relationship between BGD and financial performance in the context of the financial sector. It is also the first study documenting that CSR reinforces the relationship between gender-diverse boards and financial institutions' performance. This study fills a research gap as it expands the existing literature that has generally focused on the impact of BGD on financial performance and has not reached similar results.
{"title":"Gender diversity, financial performance, and the moderating effect of CSR: empirical evidence from UK financial institutions","authors":"Hanen Ben Fatma, Jamel Chouaibi","doi":"10.1108/cg-11-2022-0445","DOIUrl":"https://doi.org/10.1108/cg-11-2022-0445","url":null,"abstract":"\u0000Purpose\u0000This study aims to examine the direct relationship between board gender diversity (BGD) and financial performance and the moderating role of corporate social responsibility (CSR) in the said relationship.\u0000\u0000\u0000Design/methodology/approach\u0000Using data collected from the Thomson Reuters Eikon ASSET4 database from 42 UK financial institutions listed in the ESG index for the period 2005–2019, this study used multivariate regression analysis on panel data to test the effect of BGD on financial performance and estimate the moderating effect of CSR between them. Moreover, to control the endogeneity problem, the authors conducted an additional analysis by testing the dynamic dimension of the data set through the generalized moment method.\u0000\u0000\u0000Findings\u0000The empirical results show that BGD is positively related to financial performance and that BGD increases firm performance with the moderating effect of CSR. Regarding the endogeneity problem, the existence of continuity between financial institution performances over time is demonstrated.\u0000\u0000\u0000Research limitations/implications\u0000The current paper sheds light on the importance of BGD in improving firm performance and the moderating role of CSR in strengthening the relationship between BGD and firm performance, thereby contributing to the agency theory, the resource dependency theory and the stakeholder theory. Therefore, regulators and policymakers in the UK can use the outcomes of this study to enforce the representation of female directors on boards to enhance the financial performance of financial institutions. Moreover, the findings could be useful for regulatory bodies to encourage financial institutions to practice CSR activities and disclose them in their annual reports.\u0000\u0000\u0000Originality/value\u0000To the best of the authors’ knowledge, this is the first study investigating the moderating role of CSR on the relationship between BGD and financial performance in the context of the financial sector. It is also the first study documenting that CSR reinforces the relationship between gender-diverse boards and financial institutions' performance. This study fills a research gap as it expands the existing literature that has generally focused on the impact of BGD on financial performance and has not reached similar results.\u0000","PeriodicalId":47880,"journal":{"name":"Corporate Governance-The International Journal of Business in Society","volume":null,"pages":null},"PeriodicalIF":5.6,"publicationDate":"2023-04-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75929684","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}
Purpose This paper aims to examine the effects of extractive activities on the well-being of local communities and assesses stakeholder expectations of resource benefits and the corporate social responsibility (CSR) practices of oil companies in Ghana. Design/methodology/approach The paper uses a qualitative approach based on an exploratory research design to investigate the opinions and experiences of stakeholders in the growing oil and gas industry in Ghana. Findings The empirical findings demonstrate that entry negotiated agreements and local content requirements in the offshore oil industry have minimal benefits because of the lack of linkages with the economies of local communities. Additionally, the nature of CSR practices within the extractive industry is directly traceable to the resource governance arrangements and plural logics in Ghana’s institutional context. Research limitations/implications This study only provides insights into natural resource governance and CSR issues in offshore oil and gas projects. Thus, the findings are not generalisable to the entire industry, including onshore drilling, which have other sustainability issues. Practical implications This research highlights the gap in natural resource management in Ghana and the effects of community expectations on CSR practices in the oil and gas industry. Therefore, this study posits the significance for including compliance requirements for improving the well-being of host communities in entry negotiated agreements and local contents. Originality/value By highlighting the nuanced issues in natural resource management within the oil and gas industry in Ghana, this paper makes significant contributions to the CSR and sustainability literature.
{"title":"The extractive industry and expectations of resource benefits: does CSR promote community well-being?","authors":"A. Attah, P. Amoah","doi":"10.1108/cg-11-2022-0461","DOIUrl":"https://doi.org/10.1108/cg-11-2022-0461","url":null,"abstract":"\u0000Purpose\u0000This paper aims to examine the effects of extractive activities on the well-being of local communities and assesses stakeholder expectations of resource benefits and the corporate social responsibility (CSR) practices of oil companies in Ghana.\u0000\u0000\u0000Design/methodology/approach\u0000The paper uses a qualitative approach based on an exploratory research design to investigate the opinions and experiences of stakeholders in the growing oil and gas industry in Ghana.\u0000\u0000\u0000Findings\u0000The empirical findings demonstrate that entry negotiated agreements and local content requirements in the offshore oil industry have minimal benefits because of the lack of linkages with the economies of local communities. Additionally, the nature of CSR practices within the extractive industry is directly traceable to the resource governance arrangements and plural logics in Ghana’s institutional context.\u0000\u0000\u0000Research limitations/implications\u0000This study only provides insights into natural resource governance and CSR issues in offshore oil and gas projects. Thus, the findings are not generalisable to the entire industry, including onshore drilling, which have other sustainability issues.\u0000\u0000\u0000Practical implications\u0000This research highlights the gap in natural resource management in Ghana and the effects of community expectations on CSR practices in the oil and gas industry. Therefore, this study posits the significance for including compliance requirements for improving the well-being of host communities in entry negotiated agreements and local contents.\u0000\u0000\u0000Originality/value\u0000By highlighting the nuanced issues in natural resource management within the oil and gas industry in Ghana, this paper makes significant contributions to the CSR and sustainability literature.\u0000","PeriodicalId":47880,"journal":{"name":"Corporate Governance-The International Journal of Business in Society","volume":null,"pages":null},"PeriodicalIF":5.6,"publicationDate":"2023-04-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86870849","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}
Purpose The authors study the effect of increasing environmental awareness on shareholders' activism. Specificallly, this study aims to examine whether growing environmental awareness is reflected in more aggressive environmental shareholder proposals. Design/methodology/approach This study uses the 2010 Deepwater Horizon oil spill disaster as an exogenous event that increased shareholders' environmental awareness. This study analyzes the spill’s effect on the tone of proposals about environmental issues and nonenvironmental topics. Findings After the disaster, the tone of environmental proposals (i.e. the treatment group) is significantly more negative. In contrast, the tone of nonenvironmental proposals (i.e. the control group) is unaffected. This study interprets this finding as direct evidence that the oil spill led to increased shareholder environmental activism through proposals that targeted the environmental risks surrounding the business more aggressively. By contrast, this study finds no effect of the oil spill on the tone of managers' responses to the proposals, consistent with managers refraining from emphasizing environmental threats. Originality/value Anecdotal evidence and recent studies suggest a link between environmental disasters and shareholder pressure for corporate change. However, no prior research has investigated the channel through which shareholders could have exerted such pressure or has looked for direct evidence of it in the negotiations between shareholders and managers. By finding such evidence in shareholder proposals, this study fills in this gap.
{"title":"Environmental awareness and shareholder proposals: the case of the Deepwater Horizon oil spill disaster","authors":"Carlo D’Augusta, F. Grossetti, C. Imperatore","doi":"10.1108/cg-03-2022-0139","DOIUrl":"https://doi.org/10.1108/cg-03-2022-0139","url":null,"abstract":"\u0000Purpose\u0000The authors study the effect of increasing environmental awareness on shareholders' activism. Specificallly, this study aims to examine whether growing environmental awareness is reflected in more aggressive environmental shareholder proposals.\u0000\u0000\u0000Design/methodology/approach\u0000This study uses the 2010 Deepwater Horizon oil spill disaster as an exogenous event that increased shareholders' environmental awareness. This study analyzes the spill’s effect on the tone of proposals about environmental issues and nonenvironmental topics.\u0000\u0000\u0000Findings\u0000After the disaster, the tone of environmental proposals (i.e. the treatment group) is significantly more negative. In contrast, the tone of nonenvironmental proposals (i.e. the control group) is unaffected. This study interprets this finding as direct evidence that the oil spill led to increased shareholder environmental activism through proposals that targeted the environmental risks surrounding the business more aggressively. By contrast, this study finds no effect of the oil spill on the tone of managers' responses to the proposals, consistent with managers refraining from emphasizing environmental threats.\u0000\u0000\u0000Originality/value\u0000Anecdotal evidence and recent studies suggest a link between environmental disasters and shareholder pressure for corporate change. However, no prior research has investigated the channel through which shareholders could have exerted such pressure or has looked for direct evidence of it in the negotiations between shareholders and managers. By finding such evidence in shareholder proposals, this study fills in this gap.\u0000","PeriodicalId":47880,"journal":{"name":"Corporate Governance-The International Journal of Business in Society","volume":null,"pages":null},"PeriodicalIF":5.6,"publicationDate":"2023-04-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73672442","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}
Anwar Halari, Sardar Ahmad, S. Ullah, J. Amankwah‐Amoah
Purpose Despite the importance and prevalence of corporate political activities in modern organizations, there remains limited insight on the potential relationship between political contributions and companies’ risk-taking activities. This study aims to examine the relationship between monetary political contributions of firms and corporate risk-taking activities in the context of unstable political and economic environments. Design/methodology/approach The authors use a two-step system GMM estimation to investigate the subject using a cross-country sample of 307 firms from 22 countries covered over 2002–2017. In line with previous studies, the authors control for various corporate governance mechanisms, firm-level factors and country-level characteristics. Findings The findings demonstrate that firms that make monetary political contributions exhibit lower levels of risk as measured by different proxies for risks, namely, systematic, idiosyncratic and total risk. Practical implications The results suggest that political contributions can be a useful mechanism to mitigate risk exposure. Also, the use of different risk measures and other factors for robustness fosters a better understanding of political connectedness in a more contextualized and dynamic manner. Originality/value This study seeks to contribute to the debate surrounding corporate strategy, political connectedness and corporate risk-taking by using actual monetary political contributions as an explicit measure of political connection. This study furthers scholarly understanding on the dynamics of corporate political activities using political contributions in monetary terms as a measure of political connectedness and its impact on risk-taking. Furthermore, the authors explore this topic using insights from nonmarket strategy literature and studies on political contributions.
{"title":"Corporate strategy, political contributions and corporate risk-taking","authors":"Anwar Halari, Sardar Ahmad, S. Ullah, J. Amankwah‐Amoah","doi":"10.1108/cg-07-2022-0310","DOIUrl":"https://doi.org/10.1108/cg-07-2022-0310","url":null,"abstract":"\u0000Purpose\u0000Despite the importance and prevalence of corporate political activities in modern organizations, there remains limited insight on the potential relationship between political contributions and companies’ risk-taking activities. This study aims to examine the relationship between monetary political contributions of firms and corporate risk-taking activities in the context of unstable political and economic environments.\u0000\u0000\u0000Design/methodology/approach\u0000The authors use a two-step system GMM estimation to investigate the subject using a cross-country sample of 307 firms from 22 countries covered over 2002–2017. In line with previous studies, the authors control for various corporate governance mechanisms, firm-level factors and country-level characteristics.\u0000\u0000\u0000Findings\u0000The findings demonstrate that firms that make monetary political contributions exhibit lower levels of risk as measured by different proxies for risks, namely, systematic, idiosyncratic and total risk.\u0000\u0000\u0000Practical implications\u0000The results suggest that political contributions can be a useful mechanism to mitigate risk exposure. Also, the use of different risk measures and other factors for robustness fosters a better understanding of political connectedness in a more contextualized and dynamic manner.\u0000\u0000\u0000Originality/value\u0000This study seeks to contribute to the debate surrounding corporate strategy, political connectedness and corporate risk-taking by using actual monetary political contributions as an explicit measure of political connection. This study furthers scholarly understanding on the dynamics of corporate political activities using political contributions in monetary terms as a measure of political connectedness and its impact on risk-taking. Furthermore, the authors explore this topic using insights from nonmarket strategy literature and studies on political contributions.\u0000","PeriodicalId":47880,"journal":{"name":"Corporate Governance-The International Journal of Business in Society","volume":null,"pages":null},"PeriodicalIF":5.6,"publicationDate":"2023-04-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78554224","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}
Purpose The aim of this study is to understand how board structure, size of audit committee (AC), gender diversity and ownership structure influence banks’ performance in Pakistan. This study also aims to examine how various dimensions of governance differently affect the different measures of bank performance. Design/methodology/approach This study used panel estimation techniques to quantify the impact of various elements of corporate governance on bank performance by taking annual data of 19 Pakistani banks for the period 2013–2020. The corporate governance is measured by board size, CEO duality, AC size, ownership structure and gender diversity. To get the robust results, this study measures bank performance by considering different indicators, namely, return on assets, earning per share, technical efficiency (TE) and total factor productivity. The empirical investigation is based on several well-known and well-accepted governance theories such as the agency theory, the stewardship theory, the tokenism/critical mass theory and the information asymmetry theory. Findings The findings of the study reveal that the size of board and ACs both significantly improve profitability and productivity, whereas they decrease TE. Further, the findings suggest that most of the indicators of gender diversity significantly deteriorate the performance of banks. However, ownership structure significantly improves banks’ earnings per share and TE. This study further illustrates that CEO’s duality does not have any significant impact on bank performance. This finding holds true for all the performance measures considered for this study. Practical implications The findings are of great importance to various stakeholders, especially to policymakers to know about the factors influencing different measures of performance. Specifically, based on these findings, they can devise the result-oriented strategies to enhance the financial and real performance of banks. The findings also suggest that both investors and owners should take into consideration the governance indicators while evaluating banks’ performance by using accounting, market-based, efficiency and productivity measures. Originality/value This research adds to the vast body of existing knowledge about the effectiveness of corporate governance by investigating how the different dimensions of corporate governance and gender diversity influence bank performance in a developing country, namely, Pakistan. Further, this study elaborates the domestic rules/regulations, governance theories and governance framework and practices and tries to link the empirical findings with them for better understanding the role of governance in determining the performance of the banking sector of Pakistan.
{"title":"Corporate governance and bank performance: evidence from banking sector of Pakistan","authors":"M. Athar, Sumayya Chughtai, A. Rashid","doi":"10.1108/cg-06-2022-0261","DOIUrl":"https://doi.org/10.1108/cg-06-2022-0261","url":null,"abstract":"\u0000Purpose\u0000The aim of this study is to understand how board structure, size of audit committee (AC), gender diversity and ownership structure influence banks’ performance in Pakistan. This study also aims to examine how various dimensions of governance differently affect the different measures of bank performance.\u0000\u0000\u0000Design/methodology/approach\u0000This study used panel estimation techniques to quantify the impact of various elements of corporate governance on bank performance by taking annual data of 19 Pakistani banks for the period 2013–2020. The corporate governance is measured by board size, CEO duality, AC size, ownership structure and gender diversity. To get the robust results, this study measures bank performance by considering different indicators, namely, return on assets, earning per share, technical efficiency (TE) and total factor productivity. The empirical investigation is based on several well-known and well-accepted governance theories such as the agency theory, the stewardship theory, the tokenism/critical mass theory and the information asymmetry theory.\u0000\u0000\u0000Findings\u0000The findings of the study reveal that the size of board and ACs both significantly improve profitability and productivity, whereas they decrease TE. Further, the findings suggest that most of the indicators of gender diversity significantly deteriorate the performance of banks. However, ownership structure significantly improves banks’ earnings per share and TE. This study further illustrates that CEO’s duality does not have any significant impact on bank performance. This finding holds true for all the performance measures considered for this study.\u0000\u0000\u0000Practical implications\u0000The findings are of great importance to various stakeholders, especially to policymakers to know about the factors influencing different measures of performance. Specifically, based on these findings, they can devise the result-oriented strategies to enhance the financial and real performance of banks. The findings also suggest that both investors and owners should take into consideration the governance indicators while evaluating banks’ performance by using accounting, market-based, efficiency and productivity measures.\u0000\u0000\u0000Originality/value\u0000This research adds to the vast body of existing knowledge about the effectiveness of corporate governance by investigating how the different dimensions of corporate governance and gender diversity influence bank performance in a developing country, namely, Pakistan. Further, this study elaborates the domestic rules/regulations, governance theories and governance framework and practices and tries to link the empirical findings with them for better understanding the role of governance in determining the performance of the banking sector of Pakistan.\u0000","PeriodicalId":47880,"journal":{"name":"Corporate Governance-The International Journal of Business in Society","volume":null,"pages":null},"PeriodicalIF":5.6,"publicationDate":"2023-04-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83612210","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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