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The purpose of this paper is to analyze the effects of financial restatements (FRs) on the likelihood of the top management team (TMT) dismissal. It investigates the effects of types of FRs [corrective note and reissuance of financial statement (RFS)], of FR severity and of FR related to international financial reporting standards (IFRSs) easy or difficult-to-estimate.

The authors hand-collect: data about 96 FRs from the Italian public oversight board documents; chief executive officer (CEO) name, chairman name, year of the financial statement under investigation, total assets and operating income, from their financial statement. The authors use multivariate regression to test the effects of FRs on the probability of TMT dismissal.

The authors find that the RFS leads to a higher likelihood of chairman dismissal. A greater magnitude of misrepresentation on income statements, and FRs, which decrease net income, increase the likelihood of CEO dismissal. Difficult-to-estimate IFRSs increases the likelihood of CEO dismissal.

FRs are significant determinants of the CEO/chairman dismissal. The authors show that FRs directly involving shareholders (RFS) have negative consequences on the chairman of the board of directors, while the CEO is more affected by FRs that involve technical factors (FR severity or financial statement associated with difficult-to-estimate IFRSs).

This paper investigates how past performance changes, prior CEO replacements and changes in the chairperson impact CEO turnover in public and large private businesses.

We analyze 1,679 CEO replacements documented in a sample of 1,493 Spanish public and private firms during 1998–2004 by computing dynamic binary choice models that control for endogeneity in CEO turnovers.

The results reveal that different performance horizons (short- and long-term) explain the dissimilar rate of CEO turnover between public and private firms. Private firms exercise monitoring patience and path dependency characterizes the evaluation of CEOs, while public companies' short-termism leads to higher CEO turnover rates as a reaction to poor short-term economic results, and alternative controls—ownership and changes in the chairperson—improve the monitoring of management.

Our results show the importance of controlling for path dependency to examine more accurately top executives' performance. The findings confirm that exposure to market controls affects the functioning of internal controls in evaluating CEOs and shows a short-term performance horizon that could be behind the recent moves of public firms going private or restraining shareholders' power.

This paper aims to analyze the direct and indirect effects of investor protection on forced CEO turnover.

The authors investigate 5,175 firm-year observations from 16 European countries over 2012–2018, collect data on four national investor protection indicators, identify 196 forced CEO turnovers and use multiple logistic regression models.

The results show that a reduction in the degree of investor protection significantly increases the probability of a forced change of the company’s CEO. Furthermore, when the degree of investor protection increases, directors are attributed a lower degree of responsibility in the event of a decline in earnings performance. Therefore, the relation between a decrease in profitability and a forced change of CEO is reduced.

The research is focused on countries belonging to the European Economic Area and most of the investor protection indicators are derived from surveys. Concerning policy implications, the findings suggest that regulators should focus on the effective enforcement of investor protection mechanisms.

The results confirm that characteristics at the country level have an impact on corporate decisions, highlighting the importance of increasing the degree of investor protection as a means of mitigating agency conflicts and improving stewardship.

To the best of the authors’ knowledge, this study explores a relatively underinvestigated topic as it uses investor protection indicators to jointly evaluate both direct and indirect effects on forced changes of CEO through cross-national research.

This study aims to empirically investigate the impact of the Sharīʿah Governance Framework (SGF) on improving Sharīʿah governance practices in Islamic banks in Malaysia and in addressing its related issues.

Data collection was carried out using a comprehensive questionnaire survey, which was developed primarily based on SGF-2010 and arguments in the literature. The sample for this study includes key functionaries in Sharīʿah governance including senior managers, Sharīʿah committee (SC) and Sharīʿah team members of Islamic banks in Malaysia.

The analysis of scores obtained from the questionnaire survey–including 41 items representing current significant issues in Sharīʿah governance–indicates that SGF-2010 has been successful in achieving its objectives and in addressing related issues. The results of the paired sample t-test show significant improvements in Sharīʿah governance practices in Malaysian Islamic banks in light of the aforementioned guideline by Bank Negara Malaysia.

Findings of this research suggest that among the five essential pillars of Sharīʿah governance, namely, accountability and responsibility, independence, competence, confidentiality and transparency, most of the improvements and changes brought about by SGF-2010 are attributable to accountability and responsibility. However, there is still room for improvement in other components of the SGF, particularly with regard to transparency and the independence of the SC and Sharīʿah team.

Given the importance of Sharīʿah governance and considering recent endeavours to improve Sharīʿah-compliant culture among Islamic banks in Malaysia, this research is among the first attempts to empirically and comprehensively delve into this subject and evaluate its main issues by directly contacting key players in the Islamic banking industry and providing first-hand highlights. This research also compares the findings based on SGF-2010 with the requirements of SGF-2017 and Sharīʿah Governance Policy Document (SGPD-2019), which were released after this research was completed, where applicable.

The purpose of this paper is to contribute to the relaxion on what can be done to develop ethical cultures that may be less permeable and more resilient to changes in leadership from an ethical point of view. The influence of leaders on organisational ethics is recognised, and there are even those who consider that it is not possible to maintain an ethical culture when leaders are not engaged. But, if this theory is true, all business ethics programmes that can be created, and the cultures that can gradually be developed in organisations, will always have their existence and robustness suspended at each leadership change. How to maintain an ethical culture beyond leadership?

As a strategy, we used the case study with a narrative methodology, in which a chief executive officer (CEO) and a chief compliance officer (CCO) narrate in the first person a case of perceived collapse of the ethical culture of a multinational company.

The findings point to the difficulty in maintaining ethical leadership. Key aspects to protect an organization from leadership changes are as follows: the management of the succession process, the quality of the training on ethics and the mechanisms developed by the organization to foment speak up and take notice of the situations. Moral blindness and the banality of evil that also can be observed in organizations appear as facilitating elements for collapse.

Ethical leadership is generally presented as a necessary condition for an ethical culture. However, leaders often have unethical or ethically neutral leadership. This case helps to understand the difficulties experienced by leaders in adopting ethical leadership and proposes a set of instruments and procedures that, when included in an ethical programme, can protect the company's ethical culture against unethical leaders. Some characteristics of our case study make it particularly relevant: action occurs in a multinational, a context where, by size and complexity, achieving uniformity in culture becomes particularly relevant, and actions happen in the context of a CEO succession process, something that may occur in any company and which is often a trigger for ethical misconducts. Additionally, our case is narrated by a CEO and a CCO, which makes it rare, as it is especially difficult to have access to these executives.

Existing public–private partnership (PPP) literature that explicitly adopts neo-institutional theory, tends to elucidate the impact of isomorphic pressures and organizational fields and structuration on PPP projects. This paper advances this literature by presenting the institutional work and micro-level dynamics through which actors initiate and implement a new form of project delivery. The authors show how actors enact responses to institutional structuration in the expansion and transformation of an airport from a public entity into a PPP in Saudi Arabia.

The authors use a single case study design that offers an empirically rich and thick description of events such as the dynamic processes, practices and types of institutional work carried out by actors and organizations to deliver the project under investigation.

Religious symbolic work as social integration triggered system integration work, which expanded the power capabilities of individual actors leading the project. Repair work then followed to alleviate the negative effects of disempowering the agency of actors negatively affected by the PPP model and to streamline the project implementation process.

This research offers several practical implications. For PPPs to operate successfully in contexts similar to the Gulf region, policymakers should provide strong political support and be willing to bear a considerable risk of losses or minimal outcomes during the early phases of experimentation with PPPs. Also, policymakers should not only focus their attention on technical requirements of PPPs but also associate new meanings with the normative and cultural-cognitive elements that are integral to the success of PPP implementation. In order to design strategies for change that are designed to fit the unique cultural and sociopolitical settings of each country, policymakers should empower capable individual actors and provide them with resources and access to power, which will enable them to enforce changes that diverge from institutionalized practices.

This research connected the PPP literature with theoretical frameworks drawn from neo-institutional theory and power. It would be valuable for further research, however, to connect ideas from the PPP literature with other disciplines such as psychology and social entrepreneurship. PPP research examines a recent phenomenon that can potentially be combined with non-traditional streams of research in analyzing projects. Expanding the realm of PPP research beyond traditional theoretical boundaries could potentially yield exciting insights into how the overall institutional and psychological environments surrounding projects affect their initiation and implementation.

The paper contributes new insights regarding the roles of religious symbolic work, allied with social and system integration of power relations in implementing PPP projects. It suggests a theoretical shift from structures and organizational fields – macro- and meso-levels of analysis – to individuals – micro-level – as triggers of new forms of project delivery that break with the status quo.

This paper aims to examine the effect of dividend regulation on cost stickiness (i.e. the asymmetric change in firm expense between sales increase and sales decrease) and explore the underlying mechanism.

Based on the quasi-natural experiment of the Guideline for Dividend Policy of Listed Companies issued by the Shanghai Stock Exchange (SSE) in 2013, the authors employ a difference-in-difference model to investigate the impact of dividend regulation on cost stickiness.

The authors find that the cost stickiness of treatment group firms has decreased significantly when compared with control group firms after the dividend regulation. Moreover, this effect is more pronounced among firms in lower marketization regions, in lower competition industries and those with less analyst coverage and lower cash flow levels. Further analyses show that dividend regulation reduces the cost stickiness of firms by mitigating agency problems. Finally, the conclusion holds after several robust tests, including controlling for firm fixed effect, propensity score matching (PSM), placebo test and reconstruction of expense variable.

This paper confirms that dividend regulation serves an important role in corporate governance, which reduces firms' agency costs and thereby decreases cost stickiness. The conclusions shed light on the dividend policies of listed companies and capital market regulation in the future.

The effectiveness of independent directors in making autonomous decisions for better corporate governance in organizations has often been questioned. This paper aims to investigate their role in company’s decision making in India and the reasons behind their ineffectiveness.

This paper examines the regulatory environment and ongoing reforms in which independent directors operate. It identifies crucial factors such as ownership patterns, the appointment and selection process that affect their autonomy. The analysis draws from newspaper articles, blogs, India’s regulatory requirements, The Companies Act and relevant related literature.

The findings reveal that the independence of directors remains largely in form but not in function. This paper recommends a fair and more robust selection through an independent authority, and disclosure of the resignations of independent directors. Independent directors should be given more powers and their risk-reward scheme should be analyzed.

The paper emphasizes the need for independent directors to be truly independent from the senior management, promoters, and other existing directors. It calls for tighter and more transparent appointment procedures to ensure that independent directors are not influenced by senior management and can bring objectivity to the company board.

The aim of the paper is to examine the various aspects of the 1MDB scandal including the extent and types of corruption that occurred and the action taken to deal with them. In doing this, the paper seeks to identify the reasons for the scandal and the lessons that can be learnt to avoid such a scandal in Malaysia and elsewhere in the future.

The research for the paper is based on evidence from court hearings, reports of watchdog and regulatory agencies, media reports, and various articles and books written about 1MDB.

The paper shows that most of the scandal involved embezzlement, bribery, false declarations and bond mispricing relating to extensive borrowing by 1MDB, and entailed a global network of shell companies and individuals through which the illicit money was passed. It also shows weak governance in 1MDB, poor internal controls within banks, the failure of watchdog and enforcement bodies to take the necessary action partly due to political control over them, and overall the lack of political will to deal with the scandal.

The paper builds on the findings of other papers and books written on the 1MDB scandal. It does this by linking the corruption to the borrowings of 1MDB, the international network of money-laundering and bribery through which illicit money flowed, and the poor internal controls in the organisation. It also builds on previous research by highlighting the failure of banks to identify money-laundering and of watchdog and enforcement bodies to deal with the corruption. A further value of the paper is to identify the lessons that can be learnt about combatting corruption on such a scale.

This paper aims to investigate sale with the temporary exclusion of usufruct, a format debated in classical Islamic jurisprudence. More specifically, it examines the application of this sale format in the diminishing partnership arrangement used by American Finance House LARIBA to finance house purchases. It analyzes the Sharīʿah issues and assesses the risks involved.

The research is qualitative, surveying and critically analyzing classical fiqh literature and contemporary juristic resolutions, as well as LARIBA’s financing documents. Finally, it systematically surveys the associated risk factors, first qualitatively, and then by quantifying them.

The research concludes that sale with the temporary exclusion of usufruct is a valid contract in Islamic law. When the usufruct is priced at market rate, the financing arrangement is genuinely Islamic and brings added value. Moreover, it is very effective in addressing risks for Islamic banks, particularly in countries with legal systems not designed to accommodate Islamic finance.

This study systematically examines all aspects of a contract that has not received sufficient academic attention, that has been underutilized by the Islamic finance industry and that is more fitting for implementation than many of the contracts currently being used.