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The purpose of this paper is to integrate the context of sustainability in a framework for greater corporate accountability.

Applied conceptual research.

This literature review shows that current corporate accountability frameworks forces companies to focus on a narrow source for value creation based on imperfect economic theories inadequate response to societal issues and misleading measurement systems. The current conceptual accountability frameworks are dramatically inadequate in the context of escalating sustainability issues and needs of both society and business. The business responses, through corporate social responsibility (CSR) initiatives, voluntary sustainability reports and industry standards are only a poor attempt to address the fundamental sustainable development challenges. Economic theory has defined externalities as residual to the market and as market failure requiring government intervention.

This paper proposes a direct valuation and formal accounting of externalities on the corporate balance sheet, with an offsetting appraisal of the social licence to operate for the corporation, thus creating a meaningful and integrated basis for accountability.

The current definition and understanding of corporate accountability is challenged. The paper presents a broad grounding in relevant literature for change to the current corporate accountability framework. The main contribution of this paper towards theory development is that meaningful corporate accountability framework in the context of sustainability can connect social progress to the economic value of the firm's strategy.

This paper aims to examine two important issues in corporate social responsibility (CSR) scholarship. First, the study problematises CSR as a form of self-regulation. Second, the research explores how CSR strategies can enable firms to recognise and internalise their externalities while preserving shareholder value.

This study uses a tinged shareholder model to understand the interactions between an organisation’s CSR approach and the effect of relevant externalities on its CSR outcomes. In doing this, the case study qualitative methodology is adopted, relying on data from one Fidelity Bank, Nigeria.

By articulating a tripodal thematic model – governance of externalities in the economy, governance of externalities in the social system and governance of externalities in the environment, this paper demonstrates how an effective combination of these themes triggers the emergence of a robust CSR culture in an organisation.

This research advances the understanding of the implication of internalising externalities in the CSR literature in a relatively under-researched context – Nigeria.

The data of this study allows to present a governance model that will enable managers to focus on their overarching objective of shareholder value without the challenges of pursuing multiple and sometimes conflicting goals that typically create negative impacts to non-shareholding stakeholders.

The purpose of this article is to study how we may identify the link between rising externality costs and corporate social responsibility (CSR) by using a market‐centric approach to CSR.

The paper uses indicators measuring CSR performances triggered by rising externality costs due to EU legislation on electric and electronic equipment (EEE). The case study includes three leading companies in the global electric appliances industry.

The EU legislation on EEE has increased the externality costs of the electric appliances industry. Some companies only meet the minimum requirements of the legislation, while others go beyond what is required and engage in CSR. It is found that the strongest CSR impact is related to output externalities in the authors' sample in the EEE sector, while the strongest CSR impact in the clothing sector, in an earlier study, is related to input externalities.

The findings suggest that governments need to adapt their CSR policies not only to general sector‐specific features, but in addition to the potential for reducing negative externalities in different parts of the value chain in each sector.

This article contributes to a better understanding of how government policies raise the externality costs of industries, which in turn lead these industries to strengthen their CSR performance. The study also demonstrates the usefulness of a market centric approach to CSR.

This paper aims to present an approach to quantify in financial terms the value that companies create and reduce for society, based on the KPMG true value methodology. This methodology was developed to quantify the socio-economic and environmental value created and reduced by businesses in a format that can easily be understood and used by business leaders to affect key business decisions based on quantitative data. The paper looks at the business drivers for the development of the methodology and the implications and initial results for companies adopting it.

Following a brief introduction of the methodology, and the factors leading up to its development, this paper will present three recent cases of companies that have applied the methodology, their motivation for using it and what some of the initial results have been. The authors led the development of the KPMG true value methodology and have been involved in the application of the methodology across various sectors and companies. Other consultants involved in the implementation of the methodology within the companies in the case studies (below) were also interviewed for this paper.

The three cases above represent very different companies from various sectors. Although the approach and implementation of the KPMG true value methodology was similar across all three companies, the results, application of the results and subsequent benefits to the company in question were divergent. To date, only a handful of corporations have measured and publicly disclosed their societal value creation, but momentum is building, and, in this age of internalization, more and more companies will likely follow suit. Corporations that choose a methodology and apply it in a consistent fashion can only stand to benefit from the insights the experience brings.

This paper provides insight into the KPMG true value methodology and how it has been applied within several large companies from different sectors. Because of confidentiality issues, the companies have been anonymised, and some specific quantitative data have been omitted. This paper does not look in detail at how indicators are calculated, because of space limitations. Given the fact that the methodology has only relatively recently been introduced, long-term results are not yet available. As the methodology further develops over time, there will be considerable opportunities for academic research around the methodology, for example, looking at how the creation of value for society relates to shareholder value or environmental, social and governance performance over time.

This paper provides examples of how companies have integrated socio-economic and non-financial metrics with standard financial metrics and some of the implications this can have on corporate decision-making processes.

The KPMG true value methodology was introduced in 2014 with the publication of the 2014 KPMG report “A New Vision of Value: Connecting corporate and societal value creation” (available on-line). This paper is one of the first publications in an academic journal on this topic. In writing this paper, the authors do not assume that readers have previous knowledge of the methodology, and, as such, have borrowed extensively from “A New Vision of Value” in explaining the methodology. This paper, however, goes on to highlight and reflect on the experiences of some of the first companies from different sectors to use the methodology since its launch more than two years prior.

The purpose of this study is firm value management through corporate finance policy design and scenario analysis to maximize the firm value.

The study develops a system dynamics model for an oil firm and incorporates the financial and physical processes to perform the firm valuation. The model is simulated under the current and alternative investment, capital structure and dividend policies of the case firm, assuming different oil and gas price and tax rate scenarios to identify which combination of policies maximizes the firm value.

The simulation results suggest that lowering the volume of investments, increasing the debt ratio and reducing the dividend payments from the current level increases the share price, given increased oil and gas price expectations and lower tax rates. However, the total firm value outperforms with increased investments toward the end of the simulation period. In case of decreased oil and gas price expectations, lower volume of investments, lower debt ratio and lower dividend payments increase the share prices, given lower taxes.

This study entails significance as it provides a comprehensive financial planning model for an oil firm, which incorporates the complex interactions of key financial and physical processes of the firm. The study contributes to debates on corporate finance policies by integrating multiple theories, accounting for accumulation processes and feedback loops and their non-linear interactions. The study proposes the consideration of combined impact of policies for firm value management.

The purpose of this paper is to model the role that stakeholders, and especially social responsible consumers play in the process of finding a win–win solution to control production related negative externalities. In this regard, when information asymmetries are present and consumers become knowledgeable about them, consumers with d-preferences for corporate social responsibility (CSR) type of products becomes the driver of the firm strategy.

To accomplish the goals of this paper, the authors proceed to develop a series of theoretical models wherein the social gains and costs of alternative modes of intervention are illustrated. The authors begin with a standard Pigouvian tax model and construct a stakeholder equivalent tax model and finalize the analysis with consumers acting in a shared social responsible behavior with firms as the optimal solution model.

The authors show that proactive disclosure of information asymmetries regarding negative externalities develops a shared social responsibility between consumers and firms. Market-based solutions to the externality problem are achieved under this setting. This solution is preferred to a Pigouvian tax and to a stakeholder equivalent tax. It is concluded that shared social responsibility is the result of the interaction of consumers with d-preferences and the reaction of a socially responsible “firm” willing, and the authors are able to incorporate these preferences as drivers for its strategy.

The main limitation of this paper is in its theoretical nature and specific applications to one case, that of negative externalities in production processes. The implication of this is that the model herein developed needs to be put to the empirical test.

The overall social implications indicate that active reduction of information asymmetries is welfare improving and preferred to government intervention.

This paper is original as it makes use of economic principles to develop a parsimonious model to demonstrate that proactive actions of a firm in response to consumers and stakeholders demands leads to an overall social welfare improvement when negative externalities deriving from production are incorporated into the decision making process of both consumers and firms. These decisions prove superior to government regulations.

Considering the network externalities of online selling, this paper builds three different online direct selling models: manufacturer direct selling (MN model), network platform direct selling (NN model) and retailer direct selling (RN model). The optimal advertising and pricing decision and corporate profits under each selling model are investigated.

Combining the characteristics of online direct selling, this paper formulates direct selling models that are dominated by different companies as Stackelberg game models. Numerical analyses are carried out, along with the comparison of the equilibrium solutions for each model.

The authors' research shows that increasing network externalities is conducive to the development of enterprises. The network platform's profit is the lowest in the RN model and the highest in the NN one. The comparison of manufacturers' profits between the MN model and the NN model primarily depends on consumers' sensitivities for sales price and advertising promotion level. The manufacturer does not benefit from the RN model due to the lowest efficiency.

Coupled with three different online direct selling models and detailed analyses of the optimal solutions, this study has enriched the theoretical foundation of online direct selling. Moreover, this study extends the research of network externalities to the field of e-commerce, revealing the network externalities' influence on the decision-making of the e-supply chain.

The purpose of this paper is to constructively critique KPMG’s “True Value methodology” which seeks to quantify in financial terms the value companies create or reduce for society.

This paper is based on a review of documents produced by KPMG detailing its methodology and corporate reports in the public domain of the True Value methodology applied in practice. The critique is divided into two sections. The first section reviews KPMGs methodological view of a bounded economic reality and offers potential starting points and limitations for a conceptual framing of the “methodology”. Practical insights on applying the methodology are offered in the second section.

The True Value methodology helps its producers understand the potential risk to future earnings posed by current externalities being internalised. KPMG’s socio-economic framing of future scenarios and financial valuation of environmental and social impacts is limited to a standardised commercial viewpoint. Potential opportunities exist for producers to involve stakeholders in the application of the methodology to form a more inclusive and pluralist conception of risk and values for social and environmental impacts.

This paper offers timely insights for companies using and considering the use of the “True Value” methodology and stakeholders considering their engagement in the application process and/or use of its findings.

The study is a constructive critique of this contemporary, financial practice of accounting for externalities developed by KMPG.

This paper examines how the inferred motives for corporate philanthropy relate to the types of charitable causes supported.

Published data were obtained for 256 publicly traded and private corporations from a variety of sources.

The results demonstrated that a number of motives were not significantly related to total charitable giving, but were related to how charitable funds were distributed to various charitable causes. Thus, the study provides insights on the strategic use of corporate charity as means of achieving various business objectives and advancing a theoretical understanding of corporate philanthropy strategies.

This study only investigated some of the presumed motives for corporate philanthropy. Even for the motives investigated in this study, no attempt was made to examine all the motivational factors that determine the level of need for a specific motive. Thus, while the present study provides some of the first evidence of a relationship between motivational factors and data on the types of charitable causes supported, there are other motivational factors that could be investigated in future studies.

The results have a number of implications for managers of nonprofit organizations such as marketing/targeting potential donors. Additionally, the results could be useful for managers of for profit firms in terms of comparing corporate strategies with competing firms.

The study provides a framework for investigating the relationship between motivational factors and types of charitable causes supported.