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Article
Publication date: 9 November 2015

Li Sun, Grace Johnson and Fuad Rahman

– The purpose of this study is to examine the association between the financial expertise of the chief financial officer (CFO) and concerns about corporate governance.

Abstract

Purpose

The purpose of this study is to examine the association between the financial expertise of the chief financial officer (CFO) and concerns about corporate governance.

Design/methodology/approach

Consistent with prior research, the authors used four variables, including certified public accountant (CPA) certification, Master of Business Administration degree, age of CFO and length of CFO tenure, to measure CFO’s financial expertise. The authors hypothesize a negative association between CFO expertise and concerns about corporate governance.

Findings

Regression analysis revealed that the CPA certification is negatively associated with governance concerns at a significant level. The results suggest that stakeholders show less concerns about a company’s corporate governance mechanism when the CFO has a CPA certification. In particular, the results support the recommendation by the American Institute of Certified Public Accountants that a CFO of a public firm should have a CPA certification.

Originality/value

The study is important in the following ways. First, the study delivers new evidence on the link between CFO financial expertise and corporate governance. This contributes to the CFO financial expertise literature and the corporate governance literature. Second, according to Standard and Poor’s, equity index investing has grown more popular over the past 30 years. The study delivers useful information to index investors who invest in S & P SmallCap 600 Index. Third, regulators have put a large amount of resources to discover ways to strengthen firms’ corporate governance. Thus, the results should be of interest to policy makers who design and implement guidelines on corporate governance mechanisms.

Details

International Journal of Law and Management, vol. 57 no. 6
Type: Research Article
ISSN: 1754-243X

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Article
Publication date: 3 October 2016

Charles P. Cullinan, Lois S. Mahoney and Pamela Roush

This paper examines whether shareholders consider corporate social responsibility (CSR) performance when voting on corporate governance change proposals submitted by…

Abstract

Purpose

This paper examines whether shareholders consider corporate social responsibility (CSR) performance when voting on corporate governance change proposals submitted by dissident shareholders. These proposals recommend changes to the corporate governance status quo and are made by dissident shareholders who are dissatisfied with the company’s existing governance practices.

Design/methodology/approach

Using 195 governance change proposals voted on during 2013, the paper examines the relationship between CSR performance (obtained from the MSCI database) and the level of voting support for these proposals.

Findings

This study finds that shareholder support for corporate governance change proposals submitted by dissident shareholders is positively related to firms’ CSR concerns, especially environmental concerns.

Research limitations/implications

The findings suggest that shareholders may be concerned with the potentially adverse effects of weak CSR performance, especially poor environmental performance, and may support changes to corporate governance structures when a company’s CSR and environmental performance is weaker.

Originality/value

As the first research to examine the relationship between CSR and proposed changes to corporate governance, this study provides unique insights into shareholder perceptions of the value of CSR based on shareholders’ support (or lack thereof) for governance changes proposed by dissident shareholders.

Details

Social Responsibility Journal, vol. 12 no. 4
Type: Research Article
ISSN: 1747-1117

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Article
Publication date: 4 April 2008

Güler Aras and David Crowther

The purpose of this paper is to show that corporate governance is fundamental to the continuing operation of any corporation; hence much attention has been paid to the…

Abstract

Purpose

The purpose of this paper is to show that corporate governance is fundamental to the continuing operation of any corporation; hence much attention has been paid to the procedures of such governance. Similarly sustainability is fundamental to the continuing operation of any corporation, and is arguably the fashionable concept of the moment. While it is clear what is generally meant by corporate governance it is much less clear what is meant by sustainability and the paper starts by investigating this concept.

Design/methodology/approach

For two such fundamental concepts however it would seem that there should be a relationship between the two, although little work has been undertaken on exploring this relationship. The central part of this paper is therefore based upon an exploration of the relationship between governance and sustainability, by investigating the FTSE100 companies and their corporate governance policies.

Findings

This analysis found some strengths – and hence cause for optimism – and some weaknesses – and hence cause for concern. Areas where further work is needed are identified.

Research limitations/implications

The paper has implications in enhancing the understanding of the necessary components of corporate governance, although it is necessarily limited by the size of the sample.

Originality/value

This paper increases the understanding of the relationship between corporate governance, sustainability and sustainable development.

Details

Management Decision, vol. 46 no. 3
Type: Research Article
ISSN: 0025-1747

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Article
Publication date: 17 February 2012

Andreas Kyriakos Georgiou, Nicos Koussis and Ioannis Violaris

The purpose of this paper is to review the evidence regarding the link between accounting education and the industry, with particular emphasis on the links between…

Abstract

Purpose

The purpose of this paper is to review the evidence regarding the link between accounting education and the industry, with particular emphasis on the links between accounting education and firm performance. In particular, the paper investigates corporate governance education and its relation to firms’ performance, to improve the content of business‐related programs at Frederick University.

Design/methodology approach

Survey analysis, action research and literature review are used in order to apply the findings of corporate governance research on course programmes at the university.

Findings

The main recommendation of the research is that new modules have to be introduced for both the accounting and finance and business administration degrees so as to meet the increasing need for corporate governance education. This is reflected in the interviews of managers, the student questionnaires, the faculty interviews and the literature review on the subject. These new modules will serve the increasing needs of the Cyprus business world towards better corporate governance practices. These modules should cover the main theoretical aspects concerning corporate governance and the empirical findings concerning corporate governance education and its relation with performance.

Originality/value

The paper provides new insights as to how corporate governance research could be applied to business‐related degree courses at a university in Cyprus.

Details

Higher Education, Skills and Work-Based Learning, vol. 2 no. 1
Type: Research Article
ISSN: 2042-3896

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Article
Publication date: 9 February 2015

Marty Stuebs and Li Sun

– This paper aims to draw on the stakeholder theory to examine the association between corporate governance and social responsibility.

Abstract

Purpose

This paper aims to draw on the stakeholder theory to examine the association between corporate governance and social responsibility.

Design/methodology/approach

This paper hypothesized that corporate governance is positively associated with corporate social responsibility (CSR), and good corporate governance also leads to good social responsibility in the following year. Corporate governance was measured by using the corporate governance index provided by Brown and Caylor (2006, 2009). CSR data come from Kinder, Lydenberg and Domini (KLD), Inc.

Findings

Regression analysis documents significant evidence to support a positive association between corporate governance and social responsibility. Evidence suggests that good governance leads to good CSR performance.

Originality/value

The results should interest managers who engage in behavior leading to or maintaining strong corporate governance mechanisms, financial analysts who conduct research on corporate governance and firm performance and policymakers who design and implement guidelines on corporate governance mechanisms. Moreover, results of this study can increase individual investors’ confidence in investing in companies with stronger corporate governance.

Details

International Journal of Law and Management, vol. 57 no. 1
Type: Research Article
ISSN: 1754-243X

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Book part
Publication date: 16 October 2014

Martin Stuebs and Li Sun

This chapter examines the association between corporate governance and environmental performance. The purpose of governance mechanisms is to build trust by ensuring that…

Abstract

This chapter examines the association between corporate governance and environmental performance. The purpose of governance mechanisms is to build trust by ensuring that corporate responsibilities, including environmental responsibilities, are met. We obtain corporate governance data from the Investor Responsibility Research Center, Inc’s (IRRC’s) governance and director database and additional corporate governance and environmental performance data from Kinder, Lydenberg, and Domini’s (KLD’s) database. Our analyses document a significant positive association between corporate governance and environmental performance. Moreover, we find that corporate governance is positively related to environmental strengths, and negatively related to environmental concerns. Our findings contribute to and extend our understanding of the relationship between governance and performance and have important implications for policy makers, managers, investors, and others.

Details

Accounting for the Environment: More Talk and Little Progress
Type: Book
ISBN: 978-1-78190-303-2

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Book part
Publication date: 22 August 2017

David Crowther and Shahla Seifi

In this chapter the operation of governance in a variety of contexts is shown to be both essential and problematic. Reasons involve contextual and cultural differences as…

Abstract

In this chapter the operation of governance in a variety of contexts is shown to be both essential and problematic. Reasons involve contextual and cultural differences as well as different understandings. This led to a consideration of the desirability of global governance and the problems in regulating international markets. The relationship of governance with sustainability and with corporate social responsibility is also examined. In doing so this chapter provides an introduction to the volume and sets the scene for the other contributions.

Details

Modern Organisational Governance
Type: Book
ISBN: 978-1-78714-695-2

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Book part
Publication date: 1 January 2008

Preye Edward Gesiye Angaye and David Gwilliam

Purpose – This paper seeks to contribute to the debate on the role of corporate governance in developing, emerging and transition economies by focusing on the nature and…

Abstract

Purpose – This paper seeks to contribute to the debate on the role of corporate governance in developing, emerging and transition economies by focusing on the nature and practice of corporate governance in listed companies in Nigeria – a country which has experienced both economic growth and political turbulence over the past three decades and which too has experienced significant corporate failures in particular in the banking and insurance sectors. It does this against a contextual background which discusses issues of ethnicity, gender and power relationships and their relevance to governance in Nigeria.

Methodology – Archival and documentary analysis supported and underpinned by semi-structured interviews with 20 stakeholders in governance processes in Nigeria.

Findings – The analysis of the interviews highlighted the general support of the interviewees for corporate governance procedures and practices in Nigeria to continue to develop in line with those in more developed economies. However, concerns were expressed as to the inadequacies of aspects of the Nigerian governance regulatory infrastructure, in particular in relation to mechanisms for implementation and enforcement within a framework where there was limited confidence that either voluntary adherence to codes of good practice or market-driven regulation and control would be effective.

Contrary to the researchers’ expectations, the majority of the interviewees articulated the perspective that ethnicity, gender and power relationships were not of significance in the determination of the actuality of practice. However, a minority did identify these considerations to be of key importance, albeit frequently not overtly acknowledged or portrayed as such by parties associated with governance practices.

Research limitation(s) – The interviewees were drawn from a cross section of stakeholders from the business, government, regulatory and academic environment in Nigeria but the exigencies of conducting interview research in Nigeria and the difficulties of obtaining agreement from, and access to, interviewees meant that the potential for self-selection bias has to be considered when evaluating the study findings.

Practical Implication(s) – The research paper provides a platform for policy formulation on corporate governance in Nigeria.

Originality and value of paper – The paper builds on a number of previous studies of governance in Nigeria (for example, Oyejide & Soyibo, 2001; Yakasai, 2001; Ahunwan, 2002; Okike, 2007) in particular by means of the use of semi-structured interviews to provide a rich field of insight into the actuality of practice.

Details

Corporate Governance in Less Developed and Emerging Economies
Type: Book
ISBN: 978-1-84855-252-4

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Article
Publication date: 1 October 2001

John Holland

Explores the central role that private information on corporate intangibles plays in the private corporate governance role of financial institutions (FIs). The…

Abstract

Explores the central role that private information on corporate intangibles plays in the private corporate governance role of financial institutions (FIs). The institutional fund managers’ (FMs) private understanding of many qualitative or intellectual capital factors driving corporate performance was the basis for wide‐ranging corporate governance influence concerning financial performance and conventional Cadbury‐style corporate governance issues. This was primarily a private, implicit corporate governance process by FIs and their FMs during good corporate performance. Also reveals how the nature of FM corporate governance influence became more interventionist with adverse changes in corporate performance factors, in FI‐side influence factors and in environmental circumstances. The qualitative intangible factors, especially board and top management qualities, were central to this more proactive form of intervention. Finally, discusses the case results within the research literature on the corporate governance role of FIs, identifies new directions for research and discusses policy implications briefly.

Details

Accounting, Auditing & Accountability Journal, vol. 14 no. 4
Type: Research Article
ISSN: 0951-3574

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Article
Publication date: 1 January 2006

Chris Durden and Richard Pech

Decision speed, flexibility, and innovation have often been cited as key ingredients to business success on the turbulent twenty‐first century business landscape. Sets out

Abstract

Purpose

Decision speed, flexibility, and innovation have often been cited as key ingredients to business success on the turbulent twenty‐first century business landscape. Sets out to argue that the increasing emphasis on legal and regulatory compliance, the push for which can be attributed to the spectacular collapses of WorldCom and Enron, will burden management with decision‐making speed‐bumps as opposed to protecting shareholders' interests.

Design/methodology/approach

The impact of legal and regulatory compliance is discussed within the business decision‐making context. Businesses succeed or fail in a dynamic environment where the smallest advantage can push one competitor ahead of another. Arguments in favour of increasing legal compliance are debated and the impacts of proposed regulatory compliance issues are discussed within the context of the competing business firm and its need for speed and flexibility.

Findings

The issue of increasing and stricter compliance for business is far‐reaching. Attempting to protect shareholder interests through further measures of compliance will only introduce further operating complexities for management while increasing costs and reducing decision speeds and flexibility. The impact on firms forced to compete under such conditions will be considerable, particularly if they find themselves on an international landscape competing against firms not burdened with the same regulatory requirements.

Originality/value

This paper is based on original work by the authors commencing with issues surrounding shareholders versus stakeholders, followed by a debate concerning corporate governance mechanisms and a discussion concerning the consequences and impacts of levying further regulatory burdens on business and managers.

Details

Corporate Governance: The international journal of business in society, vol. 6 no. 1
Type: Research Article
ISSN: 1472-0701

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