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The business world today is witnessing ever-growing disruption. This study highlights corporate social responsibility (CSR) as an effective strategy for firms in disrupted industries to consider in order to differentiate themselves and to increase their chance of survival facing disruption.

In this study, the authors test the hypotheses using a multilevel modeling (MLM) design to capture the group and intergroup effects at the industry level and at the firm level. The empirical analysis is based on a panel sample of 1,193 firms over the 10-year period from 2010 to 2019.

The empirical analysis indicates that CSR has a positive impact on corporate financial stability and the effect is especially significant for firms in disrupted industries. Further investigation suggests that this positive effect largely runs through traits of the social pillar, such as human rights, employee relations, customer protection, product responsibility and community impact. The results are robust after controlling for other firm-specific characteristics and after addressing endogeneity concerns.

This study examines whether, and through which channel, CSR helps enhance corporate financial stability and mitigate bankruptcy risk in disrupted industries. To the best of the authors' knowledge, this study is the first attempt to explore the use of CSR as an effective strategic response to disruption. Further analysis indicates that the social capital built through CSR plays an important role in helping enhance corporate financial stability.

Sustainability is essential to the ongoing operations of banks, though it is much less clear how Islamic corporate governance (ICG) promotes economic sustainability (ES) and thereby prevents bankruptcy. To explore the unexplored, this study aims to examine the efficacy of ICG in preventing bankruptcy and enhancing the ES of Islamic banks operating in Pakistan.

The current study measures ES through Altman's Z-score to analyze the level of the industry's stability and consequently examines the effect of ICG on the ES of Islamic banks in Pakistan for the post-financial-crises period. Using the country-level data, this study utilized a fixed-effect model and two-stage least squares (2SLS) techniques on balanced panel data spanning from 2009 to 2020 to provide empirical evidence.

The empirical results unveiled that board size and meetings have a significant positive influence on the ES while managerial ownership demonstrated an unfavorable effect on ES. Interestingly, the insignificant effect of women directors became significant with the inclusion of controlled variables. Overall, the findings indicate that ICG is an efficient tool for promoting ES in Islamic banks and preventing them from the negative effects of emerging crises.

The findings provide concrete insights for policymakers, regulators and other concerned stakeholders to execute a sturdy corporate governance system that not only oversees the economic, social and ethical aspects but also provides measures to alleviate the impacts of potential risks like the COVID-19 pandemic.

Examining the role of ICG in alleviating bankruptcy risk is an informative and useful endeavor for all social actors.

To the best of the authors’ knowledge, this study is one of the first efforts to provide evidence-based insights on the role of ICG in preventing bankruptcy and offers a potential research direction for ES.

The authors examine how the major board reforms recently implemented by countries around the world affect firms' choice of debt.

Using a quasi-experimental setting of major board reforms around the world that aim to improve board-related governance practices in various areas, this study investigates the impact of effective board monitoring on corporate debt choice. The authors employ difference-in-differences-type quasi-natural experiment method and path analysis for hypotheses testing.

The authors find that the implementation of board reforms is positively associated with firms' preference for public debt financing over bank debt. However, this effect tends to weaken after the fourth year following the implementation of board reforms. In additional analyses, the authors find that “rule-based” reforms have a more pronounced effect on firms' choice of debt than do “comply-or-explain” reforms. Both (1) strengthened firm-level internal governance practices that address concerns about the agency cost of debt and (2) reduced information asymmetries play important roles in facilitating firms' debt choice, but the evidence suggests that the former is the economic mechanism through which country-level reforms affect corporate debt choice.

The study extends the literature examining the heterogeneity of corporate debt choices in a global setting and the literature on the consequences of corporate governance reforms.

The findings demonstrate the effectiveness of the corporate board reforms implemented in countries around the world, addressing concerns from critics about their potential harm or ineffectiveness.

The results indicate that country-level board reforms reduce the extent to which shareholder–creditor conflicts harm shareholders.

This study aims to examine the impact of board characteristics on debt choice.

The sample comprises of unique nonfinancial firms listed in the FTSE 350 over the period 2011–2018. This study uses Tobit and OLS regressions to check the impact of board characteristics on debt choice. The results are robust to the battery of robust checks.

This study finds that board size and board independence are positively associated with public debt. However, CEO duality and board meetings frequency are inversely associated with public debt. Overall, the findings are consistent with the “financial intermediation theory” that the firms with weak governance rely on bank financing, and firms with better corporate governance go for public debt.

This study offers significant insights for investors and policymakers.

This study offers new insights regarding the role of board characteristics in firms’ debt choice by showing the significant impact of board characteristics on debt choice. The findings indicate that the board’s efficient internal monitoring may substitute external monitoring by the bank.

This paper aims to investigate the impact of the implementation of the critical audit matters (CAMs) disclosure requirement and the subsequent relationship between CAM disclosures and audit report lag, as well as audit fees in the USA.

This study used difference-in-differences analyses to investigate the impact that the implementation of the requirement for auditors to report CAMs on their audit report has on the audit process. It also used levels regression models to examine the relationship that CAM disclosures have with audit report lag and audit fees.

This study found that the implementation of the CAM disclosure requirement in the USA reduced audit report lag while not significantly affecting audit fees. This suggests that the CAM disclosure requirement may increase the cooperation between auditors and managers and improve the efficiency of the audit process.

This study’s results are informative for assessing the economic impact of requiring CAM disclosures, which should be of importance to regulators, auditors and accounting researchers.

This study used different approaches to investigate two aspects of the CAM disclosure requirement – the effect of the implementation of the disclosure requirement and the subsequent effects related to CAM reporting outcomes. Unlike many previous studies investigating CAM disclosures, which relied on experiments and questionnaires, this study used actual CAM disclosure data in the USA to investigate the impact on audit report lag and audit fees.

The study aims to evaluate the financial distress position of selected sample banks in India. The top 10 banks with the highest levels of gross non-performing assets (NPA) under both public and private sector ownerships have been chosen for the study. Application of the Altman Z-score model has been used to compare both ownership banks’ financial distress for five years from 2017 to 2021. Based on the study’s findings, it was found that private sector banks demonstrated better financial stability than their public sector counterparts. Specifically, the average Z-score of the selected sample banks was higher than the safe zone threshold of 2.9 during the study period.

This paper examines contextual factors that affect the association between board gender diversity and firm performance.

The authors use a global sample of listed firms in the tourism industry in 30 countries from 2015 to 2020.

First, firm performance is positively associated with the proportion of female directors on a board. Second, the positive association between firm performance and the proportion of female directors on the board is higher in (1) countries with stronger shareholder rights, (2) countries with stronger securities law regulation stipulating disclosure of board diversity, (3) countries with stronger economic empowerment of women, and (4) during the COVID-19 crisis. Third, corporate financial distress risk is lower in firms with higher proportion of female directors on the board. Fourth, the negative association between corporate financial distress risk and the proportion of female directors on the board is more pronounced in (1) countries with stronger securities law regulations stipulating disclosure of board gender diversity, (2) countries with stronger economic empowerment of women, and (3) during the COVID-19 crisis.

The results indicate that contextual factors (comprising country-level corporate governance structures, economic empowerment of women and economic crisis) can affect the association between board gender diversity and firm performance.

This study aims to investigate the impact of corporate social responsibility (CSR) on the financial distress (FD) of firms listed on the Pakistan Stock Exchange (PSX). Furthermore, the moderating effect of corporate governance (CG) on the CSR–distress relationship is investigated in this study.

The final sample of the study includes 117 companies from 2008 to 2021. The sample firms' CSR engagement is assessed using a multidimensional financial approach, and the likelihood of FD is determined using Altman's Z-score. The governance level is measured using the governance index, which includes 29 governance provisions. To achieve the research objectives, the system generalized method of moments estimator is used. Furthermore, several tests are performed to assess the robustness of the study's findings. The analysis was carried out using STATA software version 15.

The authors find that CSR is significantly inversely related to FD. The governance mechanism was discovered to be inversely related to FD. Furthermore, corporate governance strengthens the negative relationship between CSR and FD. In addition, the authors find that CSR is significantly inversely related to FD in firms with strong CG mechanisms but has no effect on FD in firms with weak CG mechanisms.

The findings of this study provide policymakers, business managers, regulators and investors with a better understanding of the relationship between the quality of CSR investments and the likelihood of FD in Pakistani firms, as well as the role of CG in this context.

This study contributes to our understanding of the role of CG in the CSR-distress relationship in an emerging market. This suggests that policymakers should prioritize CG quality while anticipating the impact of CSR on corporate FD.

The purpose of this study is to examine the impact of financial distress (FD) on investment-cash flow sensitivity (ICFS) of Indian firms.

The study uses the system generalized method of moments (GMM) technique to investigate the effect of FD on ICFS of Indian firms during the period from 2001 to 2019.

Using FD measures like Ohlson's bankruptcy method, Altman's Z-score model and financial-distress ratio, the researchers find that FD increases ICFS and negatively affects corporate investment. The researchers’ findings explain that FD increases restrictions on external financing, which makes cash flow more important for corporate investment. Additionally, the researchers find that the effects of FD on ICFS are weak (strong) for bigger and group affiliated (smaller and standalone) firms. The study’s findings are robust to several measures of FD, group affiliation and firm size.

First, the researchers find that FD affects the ICFS, therefore, financially distressed firms should have sufficient internal funds or external funds for investment. Second, lending agencies should also consider the firms' FD condition before providing funds to secure their money. Third, investors should be very careful while investing in a financially distressed firm as we find that financially distressed firms face a decline in their investment which might reduce firm profitability.

This study contributes to the existing literature by providing empirical evidence by analyzing the impact of FD on ICFS in the context of India. As per the authors’ knowledge, this is the first-ever attempt to examine the effect of FD on ICFS.

The study hypothesized that the impact of board diversity on financial distress (FD) is not direct but rather mediated by the firm’s corporate social responsibility (CSR) activities. Consequently, the purpose of this study is to examine the impact of CSR as a mediator in the board diversity–FD relationship.

The study examined six board diversity dimensions – age, gender, nationality, education and tenure in 81 nonfinancial Pakistan Stock Exchange (PSX)-listed firms from 2010 to 2021. The CSR engagement of the sample firms is evaluated using a multidimensional financial approach and the likelihood of FD is computed using Altman’s Z-score. The system-generalized method of moments estimator is used to meet the study objectives. In addition, several tests are run to determine the robustness of the study’s findings.

Based on the procedure for mediation analysis outlined by Baron and Kenny (1986), the authors found that CSR is significantly inversely associated with the likelihood of FD. Second, board diversity variables age, gender and national diversity were positively associated with CSR. Third, board age, gender and national diversity are significantly inversely related to FD. Finally, it was found that there is partial mediation between board age diversity and FD, whereas full mediation is shown between board age diversity and FD and between board nationality diversity and FD.

This study provides practical insights into PSX’s board diversity for companies, regulators and policymakers.

This research studies the connection between board diversity and FD. In addition, the current study extended the analysis by testing for the first time the mediating role of CSR in the diversity–distress relationship, particularly in the context of an emerging economy.