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This paper aims to present a vital strand that is part and parcel of an informed discussion towards the adoption of labour-friendly practices (LFP). This study is intended to examine the influence of LFP on five dimensions: job performance (JP), employee satisfaction (ES), corporate governance (CG), customer satisfaction (CS) and organizational performance (OP).

The study was conducted on top and middle-level management personnel in several companies across the United Arab Emirates (UAE). A total of 1,000 questionnaires was distributed personally and via email of which 366 usable responses were analysed using confirmatory factor analysis and structural equation modelling (SEM).

The results reinforce the premise that LFP positively and significantly influences value maximization.

This paper affirmed that what is good for the employees (or other stakeholders) is also good for shareholders, but within the constraints of an ideal context, where the shareholders subscribe to strict ethical principles and the stakeholders act with their moral agency intact. Thus, the discussion of LFP comprises not just about what is satisfying for the employees but also what is conducive for optimal value creation. The empirical findings were, however, more compatible within the agency theory framework because of the non-instrumentality that was observed too ideal and philosophical for the stakeholder theory of value creation.

This study aims to examine the impact of employee treatment on stock price crash risk in emerging markets. The study further sheds light on the economic channels and boundary conditions between employee treatment and crash risk.

This study employs a large-scale archival dataset of Chinese A-share listed firms covering 2010 to 2021. To establish causality, the study leverages multi-way fixed effects, Oster’s test, change regression and instrumental variable methods to alleviate endogeneity concerns.

The results reveal that employee-friendly treatment leads to a lower crash risk. Moreover, improving internal control quality and enhancing firm reputation appear to be the two plausible economic channels through which employee treatment mitigates crash risk. Cross-sectionally, the documented impact is more evident for human-capital-intensive firms, firms with weaker external monitoring and those operating in fiercely competitive industries.

This study is among the first to show that employee treatment has a favorable consequence for shareholder benefit through reducing crash risk. The study thus adds to the ongoing debate regarding the relationship between employee treatment and shareholder wealth. The study also extends the nascent literature on the role of rank-and-file employees in shaping corporate information landscapes.

The purpose of this paper is to examine how employee satisfaction affects firm value around the financial crisis.

The authors use the 2008 financial crisis as exogenous shocks to firms to mitigate endogenous concern that employee satisfaction and firm value can be jointly determined. The authors compare firm value of two groups of firms: the firms on the Fortune magazine’s list of “100 Best Companies to Work For” and matched firms that are not on the list. The authors employ difference-in-difference approaches in the tests.

The authors find that when the crisis happens, the best companies experience larger decreases in firm value than comparable firms. In addition, such decreases in firm value only exist among the best companies with high financial flexibility. The authors also show that job satisfaction alone does not create firm value during the financial crisis; only when interacted with high financial flexibility, employee satisfaction leads to high firm value. Finally, the authors document that best companies do not have any advantage in the recovery of firm value after the crisis, regardless of their level of financial flexibility.

There is considerable debate on whether job satisfaction leads to performance or performance leads to satisfaction (Luthans, 1998). The authors show that the impact of employee satisfaction on firm value changes over time. The authors also identify a crucial factor that impacts the value-creation of employee satisfaction: financial flexibility. The findings suggest that the ambiguous results documented in prior literature can be due to the different sample periods and the failure to identify the impact of financial flexibility in previous studies.

The findings provide helpful implications to the business community. The evidence suggests that to reap the benefits of employee satisfaction, companies need to manage their financial flexibility to buffer against potential negative shocks while having strong corporate governance mechanism to mitigate agency concerns. Moreover, the study provides an investment recommendation to socially responsible investment (SRI) and suggests that it is better off implementing dynamic SRI investment strategies according to economic condition.

The evidence suggests that the economic value of employee satisfaction is related to firms’ financial flexibility and economic conditions.

The authors contribute to the literature by showing that the impact of employee satisfaction on firm value changes over time. The test design not only allows the authors to study the effect of employee satisfaction on firm value at a particular point in time, but also helps the authors examine the variation in the effect over economic cycles. This paper also contributes to the literature on SRI. The authors identify a crucial factor that impacts the value-creation of employee satisfaction: financial flexibility.

Employees play a vital role in the success of a corporation. While boards of directors are created to protect shareholders’ interests, it is unclear if these directors also ensure employee welfare. In this vein, our paper examines the relationship between board leadership structure and employee well-being.

The authors employ several analysis techniques, including univariate analysis, ordinary least squares (OLS) regressions, two-stage least squares (2SLS) regressions, propensity score matching methodology, the Heckman Selection model and difference-in-differences analysis. The sample comprises USA public firms for the period 1998–2018.

Our findings indicate that having an independent chairperson can significantly benefit the welfare of employees, especially for firms with overly powerful chief executive officers (CEOs) and during times of financial distress.

Independent leadership structure is one of the crucial board characteristics that have not been examined to explain employee welfare at firms. We find that an independent chairperson can mitigate the negative effect of overly powerful CEOs on employee benefits. Importantly, independent chairpersons are beneficial for employees in difficult times and when CEOs are busy with daily activities.

This study aims to empirically examine the underlying cultures of corporate social responsibility (CSR) activities contributing toward employee: compensation and benefits (CB); diversity and labor rights (DLR); and training, safety and health (TSH), with a view of supporting both business corporations and policymakers in effectively designing and implementing employee-related CSR strategies in the global market.

The proposed empirical model, namely, pooled ordinary least square (OLS) regression, is tested against a novel proprietary data set of 8,940 corporations from 48 countries across nine different regions. The prototypical models of cultural configurations are benchmarked against Hofstede’s country cultural scores on six dimensions to categorize the lists of countries in which the three specific employee-related CSR activities would appear to be culturally appropriate, as well as difficult to implement.

The study offers the cultural configuration models to identify the potential nature and range of cultural values that seem to support CSR activities contributing toward employee: CB – high power distance, high individualism, low masculinity, low uncertainty avoidance, medium long-term orientation and either relatively medium or low indulgence; DLR – medium power distance, medium individualism, low masculinity, high uncertainty avoidance, either relatively medium or low long-term orientation and medium indulgence; TSH – medium power distance, medium individualism, low masculinity, high uncertainty avoidance, medium long-term orientation and medium indulgence. The study further categorizes countries (cultural areas) in which these three specific employee-related CSR activities would appear to be culturally appropriate, as well as difficult to implement.

The findings provide both the motivation and a starting point for further academic inquiries. First, future research should further explore how specific industry and firm size have an impact on firms’ employee-related CSR activities. Second, the dynamic relationship of national culture and employee-related CSR activities over time should also be examined. Finally, appropriate management techniques or interventions to overcome the cultural constraints that prevent business corporations from promoting employee physical and mental fineness should also be fruitful area for further investigation.

The study offers meaningful strategic implications of employee-related CSR activities for business corporations and policymakers. Specifically, the cultural configuration models, together with the practical framework, should serve as a benchmark for evaluating a likelihood of successful implementation on a particular employee-related CSR activity in a given context and for customizing business corporations’ CSR strategies and activities to fit within a cultural environment of the host country in which they operate. For policymakers dealing with employee rights and labor standards, the findings can be applied to assess foreign investor’s preferences regarding employee-related CSR engagement and activities.

This is the first study to develop the cultural configuration models that provide business corporations culturally meaningful insights into how to effectively design and implement their employee-related CSR strategies in the global market. The study also offers a practical framework – a set of countries in the global marketplace where employee-related CSR activities are likely to be implemented successfully, or encounter challenges and difficulties.

This study aims to investigate the question concerning whether tournament incentives motivate chief executive officers (CEOs) to be socially responsible.

Data from all A-share Chinese companies listed on the Shanghai and Shenzhen stock exchanges for the period from 2010 to 2015 are used. To draw inferences from the data, ordinary least squares (OLS) regression and cluster OLS are used as a baseline methodology. To control for the possible issue of endogeneity, firm-fixed-effects regression, two-stage least squares regression and propensity score matching are used.

A reliable evidence is found that tournament incentives motivate CEOs to be more socially responsible. Additional analysis reveals that the positive effect of CEO tournament incentives on corporate social responsibility performance (CSRP) is more pronounced in state-owned firms than it is in non-state-owned firms. The study’s findings are consistent with tournament theory and the conventional wisdom hypothesis, which proposes that better incentives lead to competitiveness, which improves financial and social performance.

The study’s findings have implications for companies and regulators who wish to enhance CSRP by giving tournament incentives to top managers. Investment in social responsibility may reduce the conflict between executives and employees and improve the corporate culture.

This study contributes to the existing literature by providing the first evidence that CEOs’ tournament incentives play a vital role in CSRP. The study’s findings contribute to tournament theory.

This article aims to examine the influence of chief executive officer (CEO) internal political beliefs on labor relations. Prior research has paid little attention to channels through which the internal personal value system of managers enhances or deteriorates firm value. The authors provide evidence consistent with CEOs adopting labor policies impacting incumbent management–labor relationships based upon their political ideologies.

The research design tests the impact of CEO political ideology on labor relation using an individual CEO’s personal information and firm affiliation, employee lawsuit information, financial contributions to candidates and committees, and firm financial information. The authors compiled a sample of 4,354 unique CEOs from 2,558 US firms that are covered by ExecuComp and used 18,404 firm-year observations for the study’s analysis. A Heckman two-stage estimation process is used to address a potential sample selection bias and match the requirements of exclusion and relevance criteria.

Findings indicate that firms led by Republican-leaning CEOs are more likely to be sued by their employees, especially for violating union rights. Moreover, the findings of the study uncovered that Republican-leaning CEOs have fewer cases dismissed or withdrawn compared to Democrat-leaning CEOs and are also less likely to settle court cases prior to trial. Results indicate that Republican-leaning CEOs are associated with more substantial decreases in firm value compared to Democrat-leaning CEOs when facing labor allegations. The authors further show that firm value is lower for all firms facing litigation, with the magnitude of the decrease being more pronounced for firms with Republican CEOs.

Firm affiliations are identified using ExecuComp, employee lawsuit information from the National Labor Relations Board (NLRB), financial contributions to candidates and committees from the Federal Election Committee (FEC) website, and financial information from Compustat. To the extent that these websites are inaccurate, such as financial contributions being underreported, the findings reported here may understate the relationships reported in this article.

The authors capture CEO political ideology using political contributions. There may be other means, such as physical space and personal effort, by which one could also estimate the party and intensity of CEO political ideology. This information is unavailable.

While presidential politics has four-year cycles, managerial finance is a daily activity. While political affiliation is most clearly measurable through monetary contributions, one can see implications of manager political leaning through their relationship with labor throughout the election cycle.

The analyses of this study indicate that labor unions are more likely to sponsor lawsuits and stronger allegations in firms with Republican CEOs and show that withdrawal, settlement or dismissal rates are lower when firms are managed by Republican managers, resulting in higher subsequent legal costs and potentially damaged employee morale. Also, this paper investigates whether lawsuits have a greater negative consequence on firm value when the firm is run by a Republican CEO. The authors find that lawsuits significantly lower Tobin's Q for Republican-led firms compared to companies with Democratic and apolitical CEOs. The authors further show that firm value is lower for all firms facing litigation, with the magnitude of the decrease being more pronounced for firms with Republican CEOs.

The purpose of this paper is to examine the media coverage of corporate social performance (CSP), as well as the ultimate impact that such coverage has on the financial performance of corporate entities.

Based on a sample of financial holding companies (FHC) listed on the Taiwan Stock Exchange, the authors select the two most popular newspapers in Taiwan, to construct the unique media coverage of CSP activity database.

First, the quantity of news articles about social activities of FHCs is positively correlated with financial performance. Second, the authors find that news articles about FHCs’ positive social activities for shareholders will trigger a positive evaluation by shareholders; however, news articles about FHCs’ positive (negative) social activities for employees will trigger a negative (positive) evaluation by shareholders. But if the news articles about FHCs’ positive social activities for employees are initiated by the media, rather than by the company itself, they will trigger a positive evaluation by shareholders.

The average shareholders may praise management for one particular CSP activity of a positive nature, whereas they may criticize another CSP activity, despite it being generally regarded outside of the firm as also being positive in nature. It therefore becomes clear that when setting out to investigate whether “doing good” actually does translate into “doing well,” the authors should not attempt to total different kinds of information on CSP; In this paper, the authors emphasize that they need to be analyzed separately.