Purpose The perception of the relevance of risk management reports and the system of internal controls permeates the risk management of multinational companies. Shedding light on perceived relevance, on the one hand, can serve as a guide for improvements in communication between headquarters and subsidiaries; on the other hand, it can lead to greater involvement of subsidiaries in company policies. Thus, this study aims to analyze the relevance of internal controls for risk management in the perception of its executors and reviewers in a multinational company. Design/methodology/approach A survey was conducted with the executors and reviewers of the internal controls of a multinational company. To the collected data, structural equation modeling was applied. Findings The perceived relevance of internal controls by the subsidiaries directly and positively influences the perceived relevance of the reporting of their specific and standardized reports for all subsidiaries. In addition, the perception of the relevance of standardized reports for all subsidiaries demonstrates a direct and positive influence on the familiarity with the regulations regarding the reporting of internal controls. Originality/value To the best of the authors’ knowledge, this paper is the first to examine the relevance of internal controls for risk management in the perception of its executors and reviewers of subsidiaries of a multinational company. In this way, it provides a useful contribution to the literature and insights to promote improvements in the communication process between headquarters and subsidiaries of different countries regarding risk management reports and the system of internal controls.
{"title":"Relevance of internal controls for risk management: empirical evidence from the perception of its executors and reviewers in a multinational company","authors":"I. Beuren, V. Machado, Alexsson Jr Dall Agnol","doi":"10.1108/cg-05-2022-0200","DOIUrl":"https://doi.org/10.1108/cg-05-2022-0200","url":null,"abstract":"\u0000Purpose\u0000The perception of the relevance of risk management reports and the system of internal controls permeates the risk management of multinational companies. Shedding light on perceived relevance, on the one hand, can serve as a guide for improvements in communication between headquarters and subsidiaries; on the other hand, it can lead to greater involvement of subsidiaries in company policies. Thus, this study aims to analyze the relevance of internal controls for risk management in the perception of its executors and reviewers in a multinational company.\u0000\u0000\u0000Design/methodology/approach\u0000A survey was conducted with the executors and reviewers of the internal controls of a multinational company. To the collected data, structural equation modeling was applied.\u0000\u0000\u0000Findings\u0000The perceived relevance of internal controls by the subsidiaries directly and positively influences the perceived relevance of the reporting of their specific and standardized reports for all subsidiaries. In addition, the perception of the relevance of standardized reports for all subsidiaries demonstrates a direct and positive influence on the familiarity with the regulations regarding the reporting of internal controls.\u0000\u0000\u0000Originality/value\u0000To the best of the authors’ knowledge, this paper is the first to examine the relevance of internal controls for risk management in the perception of its executors and reviewers of subsidiaries of a multinational company. In this way, it provides a useful contribution to the literature and insights to promote improvements in the communication process between headquarters and subsidiaries of different countries regarding risk management reports and the system of internal controls.\u0000","PeriodicalId":47880,"journal":{"name":"Corporate Governance-The International Journal of Business in Society","volume":null,"pages":null},"PeriodicalIF":5.6,"publicationDate":"2023-03-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80509993","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 In recent years, the role of environmental, social and governance (ESG) disclosure has become crucial. The aim of this paper is to study how corporate governance affects one part of ESG disclosure: anti-corruption disclosure. Design/methodology/approach This study examined 140 corporate social responsibility (CSR) reports from companies listed on the Italian stock markets and 50 CSR reports from other companies, then this study analysed the adoption of the Global Reporting Initiative (GRI) standard no. 205. Findings The results show a low level of disclosure, and that corporate governance issues matter. In particular, the analysis found a positive relationship between the presence of female and outside members, the number of board members and the level of anti-corruption disclosure. Research limitations/implications This study acknowledges some limitations. Firstly, the research is based on a one-year sample. Secondly, the research hypotheses are confirmed only when considered in relation to a single section of the GRI standards. Thirdly, this study has a bias towards relatively large enterprises. Practical implications It could be worthwhile introducing a soft regulation regarding the composition of the board of directors that requires a certain quantitative and qualitative composition. Originality/value To the best of the authors’ knowledge, this is one of the few studies, the first in Italy, that sheds light on anti-corruption disclosure and its determinants.
{"title":"Corporate governance and anti-corruption disclosure","authors":"Pietro Previtali, P. Cerchiello","doi":"10.1108/cg-06-2022-0275","DOIUrl":"https://doi.org/10.1108/cg-06-2022-0275","url":null,"abstract":"\u0000Purpose\u0000In recent years, the role of environmental, social and governance (ESG) disclosure has become crucial. The aim of this paper is to study how corporate governance affects one part of ESG disclosure: anti-corruption disclosure.\u0000\u0000\u0000Design/methodology/approach\u0000This study examined 140 corporate social responsibility (CSR) reports from companies listed on the Italian stock markets and 50 CSR reports from other companies, then this study analysed the adoption of the Global Reporting Initiative (GRI) standard no. 205.\u0000\u0000\u0000Findings\u0000The results show a low level of disclosure, and that corporate governance issues matter. In particular, the analysis found a positive relationship between the presence of female and outside members, the number of board members and the level of anti-corruption disclosure.\u0000\u0000\u0000Research limitations/implications\u0000This study acknowledges some limitations. Firstly, the research is based on a one-year sample. Secondly, the research hypotheses are confirmed only when considered in relation to a single section of the GRI standards. Thirdly, this study has a bias towards relatively large enterprises.\u0000\u0000\u0000Practical implications\u0000It could be worthwhile introducing a soft regulation regarding the composition of the board of directors that requires a certain quantitative and qualitative composition.\u0000\u0000\u0000Originality/value\u0000To the best of the authors’ knowledge, this is one of the few studies, the first in Italy, that sheds light on anti-corruption disclosure and its determinants.\u0000","PeriodicalId":47880,"journal":{"name":"Corporate Governance-The International Journal of Business in Society","volume":null,"pages":null},"PeriodicalIF":5.6,"publicationDate":"2023-02-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81237169","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 study is to examine the impact of managerial ability on corporate tax risk and long-term tax avoidance using the upper echelons theory. Design/methodology/approach This study uses a quantitative method with regression models, using a sample of listed firms on the Indonesia Stock Exchange from 2011 to 2018. Findings The regression results report that managerial ability negatively influences tax risk and positively impacts long-run tax avoidance. Companies with more able managers have a relatively lower tax risk and greater long-run tax avoidance. The results reveal that firms with managers that possess greater abilities are more committed to long-run tax avoidance while concurrently maintaining a lower level of their tax risk. The impacts the authors report are statistically significant and robust, as proved by a series of robustness checks and additional tests. Research limitations/implications This study only includes firms from one developing country. Practical implications The empirical results might be of interest to board members while envisaging the benefits and costs of appointing and hiring managers, as well as to the tax authority and the other stakeholders interested in apprehending how managerial ability influences corporate tax risk and long-run tax avoidance practices simultaneously. Originality/value This study proposes and tests an explanation for the impact of managerial ability on corporate tax risk and long-run avoidance simultaneously in the context of an emerging country.
{"title":"The impact of managerial ability on corporate tax risk and long-run tax avoidance: empirical evidence from a developing country","authors":"A. Saragih, Syaiful Ali","doi":"10.1108/cg-08-2022-0346","DOIUrl":"https://doi.org/10.1108/cg-08-2022-0346","url":null,"abstract":"\u0000Purpose\u0000The purpose of this study is to examine the impact of managerial ability on corporate tax risk and long-term tax avoidance using the upper echelons theory.\u0000\u0000\u0000Design/methodology/approach\u0000This study uses a quantitative method with regression models, using a sample of listed firms on the Indonesia Stock Exchange from 2011 to 2018.\u0000\u0000\u0000Findings\u0000The regression results report that managerial ability negatively influences tax risk and positively impacts long-run tax avoidance. Companies with more able managers have a relatively lower tax risk and greater long-run tax avoidance. The results reveal that firms with managers that possess greater abilities are more committed to long-run tax avoidance while concurrently maintaining a lower level of their tax risk. The impacts the authors report are statistically significant and robust, as proved by a series of robustness checks and additional tests.\u0000\u0000\u0000Research limitations/implications\u0000This study only includes firms from one developing country.\u0000\u0000\u0000Practical implications\u0000The empirical results might be of interest to board members while envisaging the benefits and costs of appointing and hiring managers, as well as to the tax authority and the other stakeholders interested in apprehending how managerial ability influences corporate tax risk and long-run tax avoidance practices simultaneously.\u0000\u0000\u0000Originality/value\u0000This study proposes and tests an explanation for the impact of managerial ability on corporate tax risk and long-run avoidance simultaneously in the context of an emerging country.\u0000","PeriodicalId":47880,"journal":{"name":"Corporate Governance-The International Journal of Business in Society","volume":null,"pages":null},"PeriodicalIF":5.6,"publicationDate":"2023-02-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75770641","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}
E. Mamatzakis, Christos Alexakis, Khamis Al Yahyaee, Vasileios Pappas, A. Mobarek, Sabur Mollah
Purpose This paper aims to investigate the impact of corporate governance practices on cost efficiency and financial stability for a sample of Islamic and conventional banks. In the analysis, the author uses a set of corporate governance variables that include, the board size, board independence, director gender, board meetings, board attendance, board committees, chair independence and CEO characteristics. Design/methodology/approach The author uses corporate governance data of Islamic banks that is unique in this field. In the analysis, the author also uses stochastic frontier analysis and panel vector autoregression models to quantify long-run and short-run statistical relationships between the operational efficiency of Islamic Banks and corporate governance practices. Findings According to the results, Islamic and conventional banks exhibit important differences in the effects of corporate governance practices on cost efficiency and financial stability. Results show that with a blind general adoption of corporate governance practices, Islamic banks may suffer a loss in their value since the adoption of the third layer of binding practices, over and above the already existing ones, imposed by the Sharia Board and the Board of Directors, may lead to cumbersome business operations. This conclusion is of importance to Islamic Banks since they struggle to survive in a very competitive international environment. Practical implications The author believes that the results may be of a certain value to regulators, policymakers and managers of Islamic banks. Based on the results, the author postulate that Islamic banks should select carefully international corporate governance practices. Social implications Islamic banks should not adopt additional third layer of binding practices as that would result lower performance and instability that would be damaging for the economy Originality/value This study employs a unique sample of Islamic banks that includes corporate governance data hand collected. Our findings of the corporate governance impact on Islamic banks performance and stability are therefore unique in the literature.
{"title":"Does corporate governance affect the performance and stability of Islamic banks?","authors":"E. Mamatzakis, Christos Alexakis, Khamis Al Yahyaee, Vasileios Pappas, A. Mobarek, Sabur Mollah","doi":"10.1108/cg-05-2022-0217","DOIUrl":"https://doi.org/10.1108/cg-05-2022-0217","url":null,"abstract":"\u0000Purpose\u0000This paper aims to investigate the impact of corporate governance practices on cost efficiency and financial stability for a sample of Islamic and conventional banks. In the analysis, the author uses a set of corporate governance variables that include, the board size, board independence, director gender, board meetings, board attendance, board committees, chair independence and CEO characteristics.\u0000\u0000\u0000Design/methodology/approach\u0000The author uses corporate governance data of Islamic banks that is unique in this field. In the analysis, the author also uses stochastic frontier analysis and panel vector autoregression models to quantify long-run and short-run statistical relationships between the operational efficiency of Islamic Banks and corporate governance practices.\u0000\u0000\u0000Findings\u0000According to the results, Islamic and conventional banks exhibit important differences in the effects of corporate governance practices on cost efficiency and financial stability. Results show that with a blind general adoption of corporate governance practices, Islamic banks may suffer a loss in their value since the adoption of the third layer of binding practices, over and above the already existing ones, imposed by the Sharia Board and the Board of Directors, may lead to cumbersome business operations. This conclusion is of importance to Islamic Banks since they struggle to survive in a very competitive international environment.\u0000\u0000\u0000Practical implications\u0000The author believes that the results may be of a certain value to regulators, policymakers and managers of Islamic banks. Based on the results, the author postulate that Islamic banks should select carefully international corporate governance practices.\u0000\u0000\u0000Social implications\u0000Islamic banks should not adopt additional third layer of binding practices as that would result lower performance and instability that would be damaging for the economy\u0000\u0000\u0000Originality/value\u0000This study employs a unique sample of Islamic banks that includes corporate governance data hand collected. Our findings of the corporate governance impact on Islamic banks performance and stability are therefore unique in the literature.\u0000","PeriodicalId":47880,"journal":{"name":"Corporate Governance-The International Journal of Business in Society","volume":null,"pages":null},"PeriodicalIF":5.6,"publicationDate":"2023-02-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78441128","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 Opportunities for shareholder value creation from deep decarbonization in fossil fuel and related industries may be unlocked with a permanent change in corporate governance practices. The purpose of this study is to highlight the conceptual links between corporate collaborations, decarbonization and equity value creation to enable the large-scale reallocation of funds necessary to halve carbon emissions by the end of this decade. Design/methodology/approach Consistent with shareholder value maximization, the author uses the constant dividend growth framework to show that a permanent change in corporate governance practices can impact expectations of future cash flows and required rates of return. This study includes a simulation to explore how perpetual corporate collaborations on decarbonization that influence the key equity value drivers can add value to the equity of collaborative firms. Findings Perpetual corporate collaborations with key stakeholders focused on equity value drivers hold great potential for accelerating the reallocation of funds to low-carbon assets. Simulation results suggest that relatively small changes, especially in required rates of return, may result in substantial increases in equity values for collaborative leaders in deep decarbonization. Originality/value This study identifies new sources of shareholder value from long-term corporate collaborations with key stakeholders on deep decarbonization. A collaborative focus on important equity value drivers can attract capital also to hard-to-abate industries and initiate sharp cuts in carbon emissions. Corporate governance practices, thus, reformed render shareholder value creation incentive compatible with rapidly decarbonizing global supply chains, making it possible to meet climate action goals by 2030.
{"title":"Corporate collaborations, decarbonization and equity value creation","authors":"Carolin D. Schellhorn","doi":"10.1108/cg-06-2022-0241","DOIUrl":"https://doi.org/10.1108/cg-06-2022-0241","url":null,"abstract":"\u0000Purpose\u0000Opportunities for shareholder value creation from deep decarbonization in fossil fuel and related industries may be unlocked with a permanent change in corporate governance practices. The purpose of this study is to highlight the conceptual links between corporate collaborations, decarbonization and equity value creation to enable the large-scale reallocation of funds necessary to halve carbon emissions by the end of this decade.\u0000\u0000\u0000Design/methodology/approach\u0000Consistent with shareholder value maximization, the author uses the constant dividend growth framework to show that a permanent change in corporate governance practices can impact expectations of future cash flows and required rates of return. This study includes a simulation to explore how perpetual corporate collaborations on decarbonization that influence the key equity value drivers can add value to the equity of collaborative firms.\u0000\u0000\u0000Findings\u0000Perpetual corporate collaborations with key stakeholders focused on equity value drivers hold great potential for accelerating the reallocation of funds to low-carbon assets. Simulation results suggest that relatively small changes, especially in required rates of return, may result in substantial increases in equity values for collaborative leaders in deep decarbonization.\u0000\u0000\u0000Originality/value\u0000This study identifies new sources of shareholder value from long-term corporate collaborations with key stakeholders on deep decarbonization. A collaborative focus on important equity value drivers can attract capital also to hard-to-abate industries and initiate sharp cuts in carbon emissions. Corporate governance practices, thus, reformed render shareholder value creation incentive compatible with rapidly decarbonizing global supply chains, making it possible to meet climate action goals by 2030.\u0000","PeriodicalId":47880,"journal":{"name":"Corporate Governance-The International Journal of Business in Society","volume":null,"pages":null},"PeriodicalIF":5.6,"publicationDate":"2023-02-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89117907","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 the corporate lifecycle on the corporate governance practices of firms in the Republic of Korea. Design/methodology/approach The authors use five corporate lifecycle measures and corporate governance scores from Black et al. (2012) to estimate governance-prediction models inclusive of corporate lifecycles measures for a sample of 497 Republic of Korea firms over the 1998–2004 period. Findings The authors find little evidence which points to a corporate governance lifecycle for firms in the Republic of Korea. The findings suggest that factors other than firm lifecycle best explain the corporate governance practices of firms in Korea. Originality/value Using a battery of lifecycle measures and corporate governance indexes and subindexes, the authors believe this paper represents the most rigorous study yet to study the corporate governance lifecycle in an emerging market economy, namely, the Republic of Korea.
{"title":"The corporate governance lifecycle in emerging markets – the case of the Republic of Korea","authors":"Bridget McNally, Thomas O'Connor","doi":"10.1108/cg-10-2022-0422","DOIUrl":"https://doi.org/10.1108/cg-10-2022-0422","url":null,"abstract":"\u0000Purpose\u0000This paper aims to examine the impact of the corporate lifecycle on the corporate governance practices of firms in the Republic of Korea.\u0000\u0000\u0000Design/methodology/approach\u0000The authors use five corporate lifecycle measures and corporate governance scores from Black et al. (2012) to estimate governance-prediction models inclusive of corporate lifecycles measures for a sample of 497 Republic of Korea firms over the 1998–2004 period.\u0000\u0000\u0000Findings\u0000The authors find little evidence which points to a corporate governance lifecycle for firms in the Republic of Korea. The findings suggest that factors other than firm lifecycle best explain the corporate governance practices of firms in Korea.\u0000\u0000\u0000Originality/value\u0000Using a battery of lifecycle measures and corporate governance indexes and subindexes, the authors believe this paper represents the most rigorous study yet to study the corporate governance lifecycle in an emerging market economy, namely, the Republic of Korea.\u0000","PeriodicalId":47880,"journal":{"name":"Corporate Governance-The International Journal of Business in Society","volume":null,"pages":null},"PeriodicalIF":5.6,"publicationDate":"2023-02-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"76128453","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 investigate the impact of family management and ownership structure, including foreign ownership and business group ownership, on corporate performance. Design/methodology/approach Using an agency perspective and a quantitative research methodology, this study examines listed firms in Pakistan from 2009 to 2018. Findings The results suggest that family management and concentrated leadership constrain, whereas family leadership, foreign ownership and group ownership strengthen monitoring effectiveness and corporate performance. These findings imply that the shareholder governance logic offers optimal solutions in an emerging economy, as relational governance may activate agency problems. Originality/value The findings are consistent with the relevance of relational governance mechanisms in the form of family leadership. However, the results suggest that emerging economies require a hybrid governance model to address their unique agency problems, thereby underlining context relevance in corporate governance scholarship. Furthermore, this research adopts a thick view of institutions to clarify institutional embeddedness and corporate governance contextuality in an emerging economy.
{"title":"Explicating the contextuality of corporate governance through ownership structure and family management: evidence from an emerging economy","authors":"Arshad Hasan, Zahid Riaz, F. Nakpodia","doi":"10.1108/cg-08-2022-0332","DOIUrl":"https://doi.org/10.1108/cg-08-2022-0332","url":null,"abstract":"\u0000Purpose\u0000This study aims to investigate the impact of family management and ownership structure, including foreign ownership and business group ownership, on corporate performance.\u0000\u0000\u0000Design/methodology/approach\u0000Using an agency perspective and a quantitative research methodology, this study examines listed firms in Pakistan from 2009 to 2018.\u0000\u0000\u0000Findings\u0000The results suggest that family management and concentrated leadership constrain, whereas family leadership, foreign ownership and group ownership strengthen monitoring effectiveness and corporate performance. These findings imply that the shareholder governance logic offers optimal solutions in an emerging economy, as relational governance may activate agency problems.\u0000\u0000\u0000Originality/value\u0000The findings are consistent with the relevance of relational governance mechanisms in the form of family leadership. However, the results suggest that emerging economies require a hybrid governance model to address their unique agency problems, thereby underlining context relevance in corporate governance scholarship. Furthermore, this research adopts a thick view of institutions to clarify institutional embeddedness and corporate governance contextuality in an emerging economy.\u0000","PeriodicalId":47880,"journal":{"name":"Corporate Governance-The International Journal of Business in Society","volume":null,"pages":null},"PeriodicalIF":5.6,"publicationDate":"2023-01-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81284116","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 shed light on an essential role that “female directors” on boards of companies in sub-Saharan Africa play towards corporate financial performance enhancement. The study observes how board gender diversity moderates the relationship between earnings management (EM) and financial performance of firms in sub-Saharan Africa from a dynamic perspective. Design/methodology/approach The study’s sample comprises 105 companies listed on the respective stock markets of nine sub-Saharan African countries. The data are collected from annual reports over the period 2007–2019, a total of 1,166 firm-year observations. Panel data models are used in the analyses. Findings The study finds that the performance effect of EM is contingent on board diversity and this finding persists even after controlling for dynamic endogeneity, simultaneity and unobserved time-invariant heterogeneity inherent in the EM and performance relationship. Research limitations/implications The findings should be understood within the context that, only available annual reports and audited financial statements that were filed with respective capital markets of the nine surveyed countries are used as source of information. Originality/value The current study is unique, in that, it is the first panel multi-cross-country investigation within Africa to introduce gender diversity in the study of the relationship between EM and firm performance. It therefore extends the agency theory by using gender diversity as a moderating variable in the EM–firm performance nexus.
{"title":"Women on boards, firm earnings management (EM) and performance nexus: does gender diversity moderate the EM–performance relationship?","authors":"Emmanuel Mensah, J. M. Onumah","doi":"10.1108/cg-06-2022-0262","DOIUrl":"https://doi.org/10.1108/cg-06-2022-0262","url":null,"abstract":"\u0000Purpose\u0000This paper aims to shed light on an essential role that “female directors” on boards of companies in sub-Saharan Africa play towards corporate financial performance enhancement. The study observes how board gender diversity moderates the relationship between earnings management (EM) and financial performance of firms in sub-Saharan Africa from a dynamic perspective.\u0000\u0000\u0000Design/methodology/approach\u0000The study’s sample comprises 105 companies listed on the respective stock markets of nine sub-Saharan African countries. The data are collected from annual reports over the period 2007–2019, a total of 1,166 firm-year observations. Panel data models are used in the analyses.\u0000\u0000\u0000Findings\u0000The study finds that the performance effect of EM is contingent on board diversity and this finding persists even after controlling for dynamic endogeneity, simultaneity and unobserved time-invariant heterogeneity inherent in the EM and performance relationship.\u0000\u0000\u0000Research limitations/implications\u0000The findings should be understood within the context that, only available annual reports and audited financial statements that were filed with respective capital markets of the nine surveyed countries are used as source of information.\u0000\u0000\u0000Originality/value\u0000The current study is unique, in that, it is the first panel multi-cross-country investigation within Africa to introduce gender diversity in the study of the relationship between EM and firm performance. It therefore extends the agency theory by using gender diversity as a moderating variable in the EM–firm performance nexus.\u0000","PeriodicalId":47880,"journal":{"name":"Corporate Governance-The International Journal of Business in Society","volume":null,"pages":null},"PeriodicalIF":5.6,"publicationDate":"2023-01-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85026491","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 Individual investors are experiencing serious sentiment shifts that influence their financial activities due to the COVID-19 pandemic while socially responsible investment (SRI) has garnered attention worldwide. This study aims to explore how individual investors’ sentiments and investment choices altered in reaction to the COVID-19 pandemic. Design/methodology/approach We surveyed 1,219 individual investors in Japan, the USA and Germany using an online questionnaire and performed a cross-sectional analysis using logit and ordered logit regressions. Findings This study found that individual investor sentiment affects SRI after COVID-19, but not necessarily in the same manner. Return-focused aspects negatively affect their SRI, while relationship-oriented social issues positively affect it. In addition, the relationship differs by nation. Japanese investors anticipate shorter term SRI returns than the US and German investors. Only Japanese investors’ SRI decisions were impacted by the relationship-oriented social factors including the environment, diversity and employee rights and welfare. Research limitations/implications This study emphasizes the need for precise motivation characterization when evaluating the same issue. The author also identified the variance and characteristics among countries, which differ from previous research. Practical implications An academically credible image of the relationship will enable business managers to find appealing strategies. This study also suggests country-specific investor relations strategies. Originality/value This study differentiates return- and relationship-oriented social motivations for SRI into 14 components, thus clarifying the relationship mechanism between the COVID-19 pandemic and individual investors’ SRI behavior. Moreover, no study has compared individual investor sentiment and investment behavior affected by the pandemic in the three countries.
{"title":"The impact of the COVID-19 pandemic on motivating factors affecting individual investors’ socially responsible investment decision: a comparative analysis of the USA, Germany and Japan","authors":"Miho Murashima","doi":"10.1108/cg-08-2022-0342","DOIUrl":"https://doi.org/10.1108/cg-08-2022-0342","url":null,"abstract":"\u0000Purpose\u0000Individual investors are experiencing serious sentiment shifts that influence their financial activities due to the COVID-19 pandemic while socially responsible investment (SRI) has garnered attention worldwide. This study aims to explore how individual investors’ sentiments and investment choices altered in reaction to the COVID-19 pandemic.\u0000\u0000\u0000Design/methodology/approach\u0000We surveyed 1,219 individual investors in Japan, the USA and Germany using an online questionnaire and performed a cross-sectional analysis using logit and ordered logit regressions.\u0000\u0000\u0000Findings\u0000This study found that individual investor sentiment affects SRI after COVID-19, but not necessarily in the same manner. Return-focused aspects negatively affect their SRI, while relationship-oriented social issues positively affect it. In addition, the relationship differs by nation. Japanese investors anticipate shorter term SRI returns than the US and German investors. Only Japanese investors’ SRI decisions were impacted by the relationship-oriented social factors including the environment, diversity and employee rights and welfare.\u0000\u0000\u0000Research limitations/implications\u0000This study emphasizes the need for precise motivation characterization when evaluating the same issue. The author also identified the variance and characteristics among countries, which differ from previous research.\u0000\u0000\u0000Practical implications\u0000An academically credible image of the relationship will enable business managers to find appealing strategies. This study also suggests country-specific investor relations strategies.\u0000\u0000\u0000Originality/value\u0000This study differentiates return- and relationship-oriented social motivations for SRI into 14 components, thus clarifying the relationship mechanism between the COVID-19 pandemic and individual investors’ SRI behavior. Moreover, no study has compared individual investor sentiment and investment behavior affected by the pandemic in the three countries.\u0000","PeriodicalId":47880,"journal":{"name":"Corporate Governance-The International Journal of Business in Society","volume":null,"pages":null},"PeriodicalIF":5.6,"publicationDate":"2023-01-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80587125","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}
{"title":"Beyond Shareholder Value: A Framework for Stakeholder Governance","authors":"Aymen Sajjad","doi":"10.1108/cg-02-2023-578","DOIUrl":"https://doi.org/10.1108/cg-02-2023-578","url":null,"abstract":"","PeriodicalId":47880,"journal":{"name":"Corporate Governance-The International Journal of Business in Society","volume":null,"pages":null},"PeriodicalIF":5.6,"publicationDate":"2023-01-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"72446073","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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