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Open Access
Article
Publication date: 13 February 2024

Luigi Nasta, Barbara Sveva Magnanelli and Mirella Ciaburri

Based on stakeholder, agency and institutional theory, this study aims to examine the role of institutional ownership in the relationship between environmental, social and…

Abstract

Purpose

Based on stakeholder, agency and institutional theory, this study aims to examine the role of institutional ownership in the relationship between environmental, social and governance practices and CEO compensation.

Design/methodology/approach

Utilizing a fixed-effect panel regression analysis, this research utilized a panel data approach, analyzing data spanning from 2014 to 2021, focusing on US companies listed on the S&P500 stock market index. The dataset encompassed 219 companies, leading to a total of 1,533 observations.

Findings

The analysis identified that environmental scores significantly impact CEO equity-linked compensation, unlike social and governance scores. Additionally, it was found that institutional ownership acts as a moderating factor in the relationship between the environmental score and CEO equity-linked compensation, as well as the association between the social score and CEO equity-linked compensation. Interestingly, the direction of these moderating effects varied between the two relationships, suggesting a nuanced role of institutional ownership.

Originality/value

This research makes a unique contribution to the field of corporate governance by exploring the relatively understudied area of institutional ownership's influence on the ESG practices–CEO compensation nexus.

Article
Publication date: 1 May 2023

John Fitzpatrick LeCounte

This study aims to contribute to the academic disciplines of entrepreneurship and management by developing a new theory that explains Founder-CEOs’ succession in family and…

Abstract

Purpose

This study aims to contribute to the academic disciplines of entrepreneurship and management by developing a new theory that explains Founder-CEOs’ succession in family and non-family firms. Many scholars failed to generate a specific theory to describe the succession of Founder-CEOs. Family firms remain complex enterprises comprising interconnectedness of cultural interests in which corporate governance occurs by families, Founder-CEOs and sometimes a board of directors.

Design/methodology/approach

This study’s design/methodology/approach reflects post-modernist epistemological and ontological perspectives for conducting systematic literature reviews. To identify relevant studies in the review, the several databases (Australian Business Dean’s Council Journal Quality List; EBSCO Database, including PsycINFO and Psych studies; Web of Science) and a mix of ranked journals from entrepreneurship, management and psychology were used.

Findings

The findings and results in this paper reflect the purpose, methodology and literature analysis culminating in 1,582 peer-reviewed studies. A total of 182 peer-reviewed studies met the criterion for review. Throughout the research process, a systematic literature review uncovered management literature gaps overlooked for decades during the theory-building process. Hence, developing a theory of Founder-CEOs succession used a combination of systematic, inductive, comparative and interactive approaches.

Originality/value

A Theory of Founder-CEOs Succession explains the strategic process of replacing a founder systematically. The promotion of, and incentives for, internal executives have been topics of great interest and deliberation among scholars and practitioners for a long time. This study contributes research implications for theory building in the academic disciplines of entrepreneurship and management by offering scholars and practitioners a theory that does not exist to describe Founder-CEOs’ succession encompassing both strategic successes and failures. By incorporating successes and failures, this study provides realistic reflections of Founder-CEOs.

Details

International Journal of Organizational Analysis, vol. 32 no. 3
Type: Research Article
ISSN: 1934-8835

Keywords

Article
Publication date: 18 April 2023

Abdul Rashid, Muhammad Akmal and Syed Muhammad Abdul Rehman Shah

This study aimed at exploring the differential effects of different corporate governance (CG) indicators on risk management practices in Islamic financial institutions (IFIs) and…

Abstract

Purpose

This study aimed at exploring the differential effects of different corporate governance (CG) indicators on risk management practices in Islamic financial institutions (IFIs) and conventional financial institutions (CFIs) of Pakistan. It also investigated the moderating role of institutional quality (IQ) in shaping the effects of CG practices on financial institutions of Pakistan.

Design/methodology/approach

A sample of 57 financial institutions including commercial banks, insurance companies and Modarba companies over the period 2006–2017 is used to carry out the empirical analysis. The authors applied the robust two-step system-generalized method of moments estimator, which is also called the dynamic panel data estimator. They also built the PCA-based composite index of CG and IQ by using different indicators to investigate the moderating role of IQ. They used three proxies for risk taking, five for CG and one for Shari’ah governance. To test the validity of the instruments, they applied the Arellano and Bond’s (1991) AR (1) and AR (2) tests and the J-statistic of Hansen (1982).

Findings

The results provided strong evidence that several individual characteristics of CG and the composite index are significantly related to the operational risk, the liquidity risk and the Z-score (a proxy for solvency risk). The results also revealed that IQ significantly and substantially contributes in reducing the level of risks. Finally, the estimation results indicated that the effects of CG on risk management are significantly different at IFIs and CFIs. This differential impact is mainly attributed to the fundamental differences in business models, operational strategies and contractual obligations of both types of institutions.

Practical implications

The findings of this study are important for enhancing our understanding of how CG relates to risk taking in Islamic and conventional financial services industries and how good quality institutions are important for formulating the governance effects on the risk-taking behavior of financial institutions. The findings suggest that a suitable size of board should be chosen to manage the risk effectively. As the findings show that the risk-taking behavior of IFIs differs from that of CFIs, the regulators and international standard setting bodies should tailor the regulatory frameworks accordingly.

Originality/value

This paper is different from the existing studies in four aspects. First, to the best of the authors’ knowledge, this is the first empirical investigation in Pakistan, which does the comparison of IFIs and CFIs while examining the impacts of CG on risk management. Second, the paper constructs the composite index of CG by considering several different indicators of governance and examines the combined effect of governance indicators on risk management process. Third, this paper adds to the growing literature on the role of IQ by investigating whether it acts as a moderator between CG structures and risk management and if yes, then whether this moderating role is different for IFIs and CFIs. Finally, the paper builds upon the existing research work on the CG effects for different types of financial institutions by proposing a single regression based analytical framework for comparing the effects across two different types of institutions, harvesting the benefits of higher degrees of freedom and avoiding/minimizing the measurement error.

Details

Journal of Islamic Accounting and Business Research, vol. 15 no. 3
Type: Research Article
ISSN: 1759-0817

Keywords

Article
Publication date: 29 June 2023

Praveen Kumar

This article investigated whether the executives' compensation and corporate governance attributes are aligned with stakeholders' demands for higher corporate voluntary…

Abstract

Purpose

This article investigated whether the executives' compensation and corporate governance attributes are aligned with stakeholders' demands for higher corporate voluntary disclosures. Moreover, the study also examined the moderating role of the auditor's reputation in the direction of association among executive compensation, corporate governance attributes, and voluntary disclosures.

Design/methodology/approach

The study used a sample of S&P BSE index constituents' 90 Indian firms for 2017–2019. The voluntary disclosure scores were fetched from the India Disclosure Index Report published by FTI Consulting. This analysis was carried out in two parts by applying four panel-data regression models in the agency and signalling theories framework. First, the study examined the association between executive compensation, board strength, composition, gender diversity, and voluntary disclosures. Second, the article investigated the moderating role of the “Big 4” in the direction of association among executive compensation, corporate governance attributes, and voluntary disclosures.

Findings

The willingness of executives to share private information with stakeholders depends on the compensation they receive from their employer. The higher compensation paid to executives leads to a higher “tone from the top,” which is better aligned with stakeholder interests. Further, the research also found that bigger board sizes, a higher proportion of independent and woman directors (indicators of good governance), and an auditor's reputation are associated with increased voluntary disclosure.

Research limitations/implications

The findings showed that the executives' compensation and corporate governance attributes are aligned with stakeholders' demand for higher voluntary information from firms. Moreover, the study also found that the “Big 4” play a moderating role in this direction. The choice of a reputed auditor indicates the firms' long-term positive future perspectives, which strengthens investor confidence in the financial market.

Practical implications

The study suggests that fair executive compensation can address the agency problem.

Originality/value

This research furnishes managers and different stakeholders with significant implications of executives' compensation, corporate governance, and auditor's reputation in the best interests of a firm through reducing potential risks of information asymmetry.

Details

Journal of Applied Accounting Research, vol. 25 no. 2
Type: Research Article
ISSN: 0967-5426

Keywords

Article
Publication date: 18 July 2023

Nicolle Montgomery, Snejina Michailova and Kenneth Husted

This study aims to adopt the microfoundation perspective to investigate undesirable knowledge rejection by individuals in organizations in the context of counterproductive…

Abstract

Purpose

This study aims to adopt the microfoundation perspective to investigate undesirable knowledge rejection by individuals in organizations in the context of counterproductive knowledge behavior (CKB). The paper advances a conceptual framework of the conditions of knowledge rejection by individuals and their respective knowledge rejection behavior types.

Design/methodology/approach

This study reviews the limited literature on knowledge rejection and outline a set of antecedents leading to rejecting knowledge as well as a set of different types of knowledge rejection behaviors. This study reviews and synthesizes articles on knowledge rejection from a microfoundation perspective.

Findings

The proposed conceptual framework specifies four particular conditions for knowledge rejection and outlines four respective knowledge rejection behavior types resulting from these conditions. Recipients’ lack of capacity leads to ineptitude, lack of motivation leads to dismissal of knowledge, lack of alignment with the source leads to disruption and doubts about the validity of external knowledge lead to resistance. The authors treat these behaviors as variants of CKB, as they can hinder the productive use of knowledge resources in the organization.

Research limitations/implications

Further investigation of both knowledge rejection causes and the resulting knowledge rejection behaviors will ensure a more thorough grasp of the relationships between them, both in terms of the inherent nature of these relationships and their dynamics that would likely be context-sensitive. Although this study focuses only on the individual level, future studies can conduct multi-level analyses of undesirable knowledge rejection, including team and organizational levels.

Practical implications

Practitioners can use the framework to identify, diagnose and manage knowledge rejection more meaningfully, accurately and purposefully in their organizations. This study offers valuable insights for managers facing undesirable knowledge rejection, and provides recommendations on how to address this behavior, improves the constructive use of knowledge resources and the effectiveness of knowledge processes in their organizations. Managers should be aware of undesirable knowledge rejection, its potential cost or concealed cost to their organizations and develop strategies to reduce or prevent it.

Originality/value

The paper contributes toward understanding the relatively neglected topic of knowledge rejection in the knowledge management field and offers a new way of conceptualizing the phenomenon. It proposes that there are two types of knowledge rejection – undesirable and desirable – and advances a more precise and up-to-date definition of undesirable knowledge rejection. Responding to calls for more research on CKBs, the study examines a hitherto unresearched behavior of knowledge rejection and provides a foundation for further study in this area.

Article
Publication date: 31 May 2023

Md Jahidur Rahman, Hongtao Zhu and Xinyi Jiang

This study aims to investigate whether auditors compromise their independence for economically important clients in family business settings.

Abstract

Purpose

This study aims to investigate whether auditors compromise their independence for economically important clients in family business settings.

Design/methodology/approach

The authors empirically examine the research question based on China for the years 2011 to 2020. The dependent variable is the auditors’ propensity to issue modified audit opinions, which is a proxy for auditor independence. The authors use relative client audit fees as a proxy for client importance. To address endogeneity issues in the selection of family firms, the authors use the two-stage least squares regression model and, subsequently, the propensity score matching and Hausman firm fixed effect modeling.

Findings

This study reveals that the propensity to issue modified audit opinions is positively correlated with client importance. Big-N auditors are more likely to issue modified audit opinions for their economically important family firm clients, whereas such evidence is not found for non-Big-N auditors. Results are consistent and robust to endogeneity test and sensitivity analysis.

Originality/value

This study enriches the literature on auditor independence and the effect of family firms’ ownership structure factors on audit reporting behavior for their economically important clients. Findings may prove useful for managers and practitioners interested in family business.

Details

Meditari Accountancy Research, vol. 32 no. 2
Type: Research Article
ISSN: 2049-372X

Keywords

Article
Publication date: 18 January 2024

Yahan Xiong and Xiaodong Fu

Users often struggle to select choosing among similar online services. To help them make informed decisions, it is important to establish a service reputation measurement…

Abstract

Purpose

Users often struggle to select choosing among similar online services. To help them make informed decisions, it is important to establish a service reputation measurement mechanism. User-provided feedback ratings serve as a primary source of information for this mechanism, and ensuring the credibility of user feedback is crucial for a reliable reputation measurement. Most of the previous studies use passive detection to identify false feedback without creating incentives for honest reporting. Therefore, this study aims to develop a reputation measure for online services that can provide incentives for users to report honestly.

Design/methodology/approach

In this paper, the authors present a method that uses a peer prediction mechanism to evaluate user credibility, which evaluates users’ credibility with their reports by applying the strictly proper scoring rule. Considering the heterogeneity among users, the authors measure user similarity, identify similar users as peers to assess credibility and calculate service reputation using an improved expectation-maximization algorithm based on user credibility.

Findings

Theoretical analysis and experimental results verify that the proposed method motivates truthful reporting, effectively identifies malicious users and achieves high service rating accuracy.

Originality/value

The proposed method has significant practical value in evaluating the authenticity of user feedback and promoting honest reporting.

Details

International Journal of Web Information Systems, vol. 20 no. 2
Type: Research Article
ISSN: 1744-0084

Keywords

Book part
Publication date: 4 April 2024

De-Wai Chou, Pi-Hsia Hung and Lin Lin

This study focuses on listed and over-the-counter (OTC) companies in the Taiwan Stock Exchange. It found that an increase in the ownership proportion of institutional investors…

Abstract

This study focuses on listed and over-the-counter (OTC) companies in the Taiwan Stock Exchange. It found that an increase in the ownership proportion of institutional investors (INs), including foreign investors, investment trusts, and dealers can enhance the informativeness of stock prices. The relationship between these factors follows an inverted U-shaped pattern, indicating that excessively high ownership ratios can actually lead to a decrease in the informativeness of stock prices. Additionally, increasing the ownership proportions of foreign investors and investment trusts can reduce the risk of stock price collapse, while dealers show no significant relationship in this regard. This study also reveals that the technical variable of the price deviation rate is an important explanatory factor for post-collapse returns. It is positively correlated with the magnitude of the price decline after a collapse, meaning that stocks with weaker pre-collapse performance experience larger post-collapse declines. When the data during the 2020 pandemic period are excluded, changes in foreign ownership ratios show a significant positive correlation with postcrash returns in both the long and short term. The significant correlation in the short term may be due to a high proportion of foreign ownership. Any reduction in this could put pressure on stock prices, and retail investors may follow suit and sell-off, using foreign investors as a reference. The significant correlation in the long term might be due to foreign investors themselves possibly also trying to avoid the pressure that their own short-term sell-offs could exert on stock prices. The changes in the ownership ratios of investment trusts and dealers indicate that medium and long-term changes have a significant impact on postcrash returns, while the changes in the major players' ownership show no significant correlation. When data from 2020 are included in the analysis, the significance of all INs decreases.

Details

Advances in Pacific Basin Business, Economics and Finance
Type: Book
ISBN: 978-1-83753-865-2

Keywords

Open Access
Article
Publication date: 13 February 2024

Kaisu Laitinen, Mika Luhtala, Maiju Örmä and Kalle Vaismaa

Insufficient productivity development in the global and Finnish infrastructure sectors indicates that there are challenges in genuinely achieving the goals of resource efficiency…

Abstract

Purpose

Insufficient productivity development in the global and Finnish infrastructure sectors indicates that there are challenges in genuinely achieving the goals of resource efficiency and digitalization. This study adapts the approach of capability maturity model integration (CMMI) for examining the capabilities for productivity development that reveal the enablers of improving productivity in the infrastructure sector.

Design/methodology/approach

Civil engineering in Finland was selected as the study area, and a qualitative research approach was adopted. A novel maturity model was constructed deductively through a three-step analytical process. Previous research literature was adapted to form a framework with maturity levels and key process areas (KPAs). KPA attributes and their maturity criteria were formed through a thematic analysis of interview data from 12 semi-structured group interviews. Finally, validation and refinement of the model were performed with an expert panel.

Findings

This paper provides a novel maturity model for examining and enhancing the infrastructure sector’s maturity in productivity development. The model brings into discussion the current business logics, relevance of lifecycle-thinking, binding targets and outcomes of limited activities in the surrounding infrastructure system.

Originality/value

This paper provides a new approach for pursuing productivity development in the infrastructure sector by constructing a maturity model that adapts the concepts of CMMI and change management. The model and findings benefit all actors in the sector and provide an understanding of the required elements and means to achieve a more sustainable built environment and effective operations.

Details

Built Environment Project and Asset Management, vol. 14 no. 2
Type: Research Article
ISSN: 2044-124X

Keywords

Article
Publication date: 10 November 2023

Muhammed Sajid, K.A. Zakkariya and Myriam Ertz

The zero-waste lifestyle (ZWL) is considered a reasonable step towards controlling waste generation and minimizing the consequences of human activities on the environment. The…

Abstract

Purpose

The zero-waste lifestyle (ZWL) is considered a reasonable step towards controlling waste generation and minimizing the consequences of human activities on the environment. The main aim of this study is to examine the behavioral antecedents of ZWL.

Design/methodology/approach

The study draws on the theoretical underpinnings of the theory of planned behavior (TPB) and the norm activation model (NAM) to develop a conceptual framework to understand the antecedents to ZWL. A cross-sectional survey among 349 randomly-selected consumers provided data analyzed with the partial least square-structural equation modeling (PLS-SEM) methodology.

Findings

The results demonstrate that personal norms, attitude, subjective norms and perceived behavioral control positively influenced the intention to adopt ZWL. Additionally, the study showed that the awareness of consequences influenced personal norms, attitudes and subjective norms. However, the study identified an intention–behavior gap in adopting ZWL.

Originality/value

This study serves as a pioneering exploration of the behavioral factors that impact the adoption of ZWL. Additionally, the paper endeavors to elucidate the underlying reasons behind the intention–behavior gap within this particular context. Consequently, the study offers substantial theoretical and practical implications aimed at promoting and fostering greater adoption of ZWL practices.

Details

Management of Environmental Quality: An International Journal, vol. 35 no. 3
Type: Research Article
ISSN: 1477-7835

Keywords

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