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1 – 10 of 591Elisa Menicucci and Guido Paolucci
This study explored how board diversity affects environmental, social, and governance (ESG) performance in the Italian banking sector. Specifically, this study examined whether…
Abstract
Purpose
This study explored how board diversity affects environmental, social, and governance (ESG) performance in the Italian banking sector. Specifically, this study examined whether the presence of specific corporate governance (CG) characteristics (board diversity) in Italian Cooperative Credit banks is related to ESG dimensions.
Design/methodology/approach
The authors examined a sample of 247 Italian Cooperative Credit banks for the period 2017–2021 and developed an econometric model by applying unbalanced panel data with firm fixed effects and controls per year. To verify the research hypotheses, the authors analyzed board diversity in terms of board attributes variables (size, gender diversity, age, activity, independence and corporate social responsibility/sustainability committee (CSR) and measured ESG dimensions using the ESG score provided by Refinitiv.
Findings
The findings suggest that board size, independence and the existence of a CSR/sustainability committee positively affect banks' ESG performance, while no significant relationship between board average age and ESG performance was found. The study also explored how the critical mass of women on a board affects ESG performance by testing the positive impact of gender diversity on ESG dimensions only up to a certain threshold of female directors.
Research limitations/implications
This study is highly relevant to managers and investors who consider ESG issues in their decision-making processes. The findings support regulators by offering insights into ways to improve ESG performance through the specific design and application of governance mechanisms.
Practical implications
From a practical perspective, this investigation has implications for both practitioners and regulators, suggesting that chief executive officers (CEOs) and managers should pay more attention to CG aspects to improve ESG performance and that policy-makers should give greater consideration to these aspects of CG in their efforts to enhance ESG performance.
Originality/value
This study offers an in-depth analysis of banks' ESG practices and attempts to bridge the gap in the literature on ESG in the Italian banking industry. This study is the first to investigate the relationship between CG variables and ESG dimensions in this context.
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Nomanyano Primrose Mnyaka-Rulwa and Joseph Olorunfemi Akande
Agency theory motivated this study, posing that leverage mitigates the agency problem. The aim was to examine whether leverage influences the relationship between…
Abstract
Purpose
Agency theory motivated this study, posing that leverage mitigates the agency problem. The aim was to examine whether leverage influences the relationship between executive-employee pay gaps (EEPGs) and firm performance. The study was conducted in the mining and retail sectors between 2012 and 2021.
Design/methodology/approach
Two EEPGs were featured based on their executive fixed pay and variable incentives accumulation. Proxies of firm performance were headline earnings per share; return on assets; earnings before interest, tax, depreciation and amortisation; and return on stock price. Data were collected from 76 JSE-listed firms in the retail and mining sectors and analysed using the two-step generalised method of moments.
Findings
The results revealed the hybrid implication of the pay gap for firm performance in the retail and mining sectors of South Africa, depending on the performance measures emphasised. More importantly, the study shows that with the moderating effects of leverage, firms can improve their performance while shrinking the pay gap.
Practical implications
The results have implications for policy addressing income inequality, debt management, executive compensation and regulatory reforms in South Africa concerning productivity and remuneration decisions.
Originality/value
The article provides specific literature for retail and mining industries on pay gaps, shows that it is possible to reduce the pay gap without compromising performance and suggests a new measure of performance that is more attuned to pay gap effect measurement.
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Collins G. Ntim, Teerooven Soobaroyen and Martin J. Broad
The purpose of this paper is to investigate the extent of voluntary disclosures in UK higher education institutions’ (HEIs) annual reports and examine whether internal governance…
Abstract
Purpose
The purpose of this paper is to investigate the extent of voluntary disclosures in UK higher education institutions’ (HEIs) annual reports and examine whether internal governance structures influence disclosure in the period following major reform and funding constraints.
Design/methodology/approach
The authors adopt a modified version of Coy and Dixon’s (2004) public accountability index, referred to in this paper as a public accountability and transparency index (PATI), to measure the extent of voluntary disclosures in 130 UK HEIs’ annual reports. Informed by a multi-theoretical framework drawn from public accountability, legitimacy, resource dependence and stakeholder perspectives, the authors propose that the characteristics of governing and executive structures in UK universities influence the extent of their voluntary disclosures.
Findings
The authors find a large degree of variability in the level of voluntary disclosures by universities and an overall relatively low level of PATI (44 per cent), particularly with regards to the disclosure of teaching/research outcomes. The authors also find that audit committee quality, governing board diversity, governor independence and the presence of a governance committee are associated with the level of disclosure. Finally, the authors find that the interaction between executive team characteristics and governance variables enhances the level of voluntary disclosures, thereby providing support for the continued relevance of a “shared” leadership in the HEIs’ sector towards enhancing accountability and transparency in HEIs.
Research limitations/implications
In spite of significant funding cuts, regulatory reforms and competitive challenges, the level of voluntary disclosure by UK HEIs remains low. Whilst the role of selected governance mechanisms and “shared leadership” in improving disclosure, is asserted, the varying level and selective basis of the disclosures across the surveyed HEIs suggest that the public accountability motive is weaker relative to the other motives underpinned by stakeholder, legitimacy and resource dependence perspectives.
Originality/value
This is the first study which explores the association between HEI governance structures, managerial characteristics and the level of disclosure in UK HEIs.
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Matteo Rossi, Giuseppe Festa, Salim Chouaibi, Monica Fait and Armando Papa
This study aims to examine the potential effect that business ethics (BE) in general and corporate social responsibility (CSR) more specifically can exert on the voluntary…
Abstract
Purpose
This study aims to examine the potential effect that business ethics (BE) in general and corporate social responsibility (CSR) more specifically can exert on the voluntary disclosure (VD) of intellectual capital (IC) for the ethically most engaged firms in the world.
Design/methodology/approach
The research design is based on an inductive approach. As part of the global quantitative investigation, the authors have analyzed the impact of BE and CSR on the transparent communication of the IC. The data under analysis have been investigated using multiple linear regression.
Findings
Based on a sample of 83 enterprises emerging as the most ethical companies in the world, the results have revealed that the adoption of ethical and socially responsible approach is positively associated with the extent of VD about IC. This finding may help attenuating the asymmetry of information and the conflict of interest potentially arising with corporate partners. Hence, IC-VD may stand as an evidence of ethical and socially responsible behaviors.
Practical implications
Global and national regulators and policymakers can be involved by these results when setting social reporting standards because they suggest that institutional and/or cultural factors affect top management's social reporting behavior in the publication of the IC information.
Social implications
Direct and indirect stakeholders, if supported by ethical and socially responsible behaviors of the company, could assess more in detail the quality of the disclosed information concerning the IC.
Originality/value
Most of the studies that have been conducted in this field have examined the effect of BE and CSR on the firm's overall transparency, neglecting their potential effect on IC disclosure. This study is designed to fill in this gap through testing the impact of ethical and socially responsible approaches specifically on IC-VD.
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Mohammad Nasih, Nadia Anridho, Nadia Klarita Rahayu and John Nowland
The authors analyzed the relationship between chief executive officer (CEO) facial masculinity and the level of corporate social responsibility disclosure (CSRD).
Abstract
Purpose
The authors analyzed the relationship between chief executive officer (CEO) facial masculinity and the level of corporate social responsibility disclosure (CSRD).
Design/methodology/approach
The authors conducted research for 2011–2019, covering companies listed on the Indonesian Stock Exchange. This study used an ordinary least squares regression, the coarsened exact matching (CEM) and propensity score matching (PSM) procedure in testing the hypothesis.
Findings
Based on the results of analysis, it is known that CEO facial masculinity is negatively related to corporate CSR disclosure levels. However, this negative relationship can be mitigated through governance mechanisms: the audit committee.
Research limitations/implications
This paper provides implications in the field of research, especially regarding the biological attributes of CEOs in relation to CSR.
Originality/value
As many previous studies focused on the managerial aspect of the CEO, this study focused on the biological aspect of CEO. To the authors’ knowledge, this study is among the first to attempt to investigate this issue in an emerging market.
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This study aims to evaluate the short-term impact of brokerage analysts’ recommendations on abnormal returns using a sample selected from the S&P BSE 100 in the Indian context…
Abstract
Purpose
This study aims to evaluate the short-term impact of brokerage analysts’ recommendations on abnormal returns using a sample selected from the S&P BSE 100 in the Indian context. The efficient market hypothesis, specifically, its semi-strong form, is tested for “Buy” stock recommendations published in the electronic version of Business Standard. The crucial issue is, are there any abnormal returns that can be earned following a recommendation? If so, how quickly do prices incorporate the information value of these recommendations? It tests the impact of analyst recommendations on average abnormal returns (AARs) and standardized abnormal returns (SRs) to determine their statistical significance.
Design/methodology/approach
Using a sample of stock recommendations published in the e-version of Business Standard, the event study methodology is used to determine whether AARs and SRs are significantly different from zero for the duration of the event window by using several significance tests.
Findings
The findings indicate a marginal opportunity for profit in the short term, restricted to the event day. However, the effect does not persist, i.e. the market is efficient in its semi-strong form implying that investors cannot consistently earn abnormal returns by following analysts’ recommendations. Post the event date, the market reaction to analyst recommendations becomes positive, however, insignificant until the ninth day after the recommendation providing support to the underreaction hypothesis given by Shliefer (2000) and post-recommendation price drift documented by Womack (1996). The study contributes by using different statistical tests to determine the significance of returns.
Practical implications
There are important implications for traders, investors and portfolio managers. The speed with which market prices incorporate publicly available information is useful in formulating trading strategies. However, stock characteristics such as market capitalization, volatility and level of analyst coverage need to be incorporated while making investment decisions.
Originality/value
The study contributes by using different statistical tests to determine the significance of returns.
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The need for robust governance standards in financial institutions requires no overemphasis. However, instances of governance failures have been a recurring global phenomenon…
Abstract
Purpose
The need for robust governance standards in financial institutions requires no overemphasis. However, instances of governance failures have been a recurring global phenomenon. This paper examines the key elements of governance in financial institutions, evaluates reasons for failures and suggests ways to strengthen governance and prevent such failures.
Design/methodology/approach
The author follows a descriptive design and a behavioural approach to understand the governance issues in financial institutions.
Findings
The author identifies key elements of governance, and the potential reasons for failures and highlights that the structure of boards, thrust on the adoption of best practices and regulatory guidelines are necessary but not sufficient to ensure failsafe governance standards. The author emphasises the need for recognition of behavioural factors and a focus on continuous monitoring and red flagging of the conduct of key stakeholders by the third and fourth lines of defence. An effective whistle-blower policy, a clear focus on organisational culture and the subjugation of individuals to the systems can improve the robustness of the governance standards in financial institutions.
Originality/value
To the best of the author's knowledge and belief, the observations and suggestions made in the paper are original. The paper contributes by offering a nuanced perspective for strengthening governance in financial institutions.
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Christine Prince, Nessrine Omrani and Francesco Schiavone
Research on online user privacy shows that empirical evidence on how privacy literacy relates to users' information privacy empowerment is missing. To fill this gap, this paper…
Abstract
Purpose
Research on online user privacy shows that empirical evidence on how privacy literacy relates to users' information privacy empowerment is missing. To fill this gap, this paper investigated the respective influence of two primary dimensions of online privacy literacy – namely declarative and procedural knowledge – on online users' information privacy empowerment.
Design/methodology/approach
An empirical analysis is conducted using a dataset collected in Europe. This survey was conducted in 2019 among 27,524 representative respondents of the European population.
Findings
The main results show that users' procedural knowledge is positively linked to users' privacy empowerment. The relationship between users' declarative knowledge and users' privacy empowerment is partially supported. While greater awareness about firms and organizations practices in terms of data collections and further uses conditions was found to be significantly associated with increased users' privacy empowerment, unpredictably, results revealed that the awareness about the GDPR and user’s privacy empowerment are negatively associated. The empirical findings reveal also that greater online privacy literacy is associated with heightened users' information privacy empowerment.
Originality/value
While few advanced studies made systematic efforts to measure changes occurred on websites since the GDPR enforcement, it remains unclear, however, how individuals perceive, understand and apply the GDPR rights/guarantees and their likelihood to strengthen users' information privacy control. Therefore, this paper contributes empirically to understanding how online users' privacy literacy shaped by both users' declarative and procedural knowledge is likely to affect users' information privacy empowerment. The study empirically investigates the effectiveness of the GDPR in raising users' information privacy empowerment from user-based perspective. Results stress the importance of greater transparency of data tracking and processing decisions made by online businesses and services to strengthen users' control over information privacy. Study findings also put emphasis on the crucial need for more educational efforts to raise users' awareness about the GDPR rights/guarantees related to data protection. Empirical findings also show that users who are more likely to adopt self-protective approaches to reinforce personal data privacy are more likely to perceive greater control over personal data. A broad implication of this finding for practitioners and E-businesses stresses the need for empowering users with adequate privacy protection tools to ensure more confidential transactions.
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