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1 – 10 of over 2000Mehtap Aldogan Eklund and Pedro Pinheiro
This paper aims to investigate whether executive compensation, corporate social responsibility (CSR)-based incentives, environmental social and governance (ESG) performance and…
Abstract
Purpose
This paper aims to investigate whether executive compensation, corporate social responsibility (CSR)-based incentives, environmental social and governance (ESG) performance and firm performance are the significant predictors of CSR committees, in addition to CEO, firm and corporate governance characteristics, from the tenet of stakeholder and managerial power theories.
Design/methodology/approach
Switzerland is an exemplary country from the perspective of corporate governance and executive compensation. This empirical study includes a panel data set of listed Swiss companies, so fixed-effect logistic regression has been used.
Findings
It has been found that the companies that offer CSR-based incentives and higher compensation to their CEOs and have better ESG performance are more likely to have CSR committees.
Practical implications
This empirical paper fills the gap in the literature, guides practitioners about the factors that influence the creation and efficiency of CSR committees, and inspires regulatory bodies to ponder on a mandatory CSR committee to form resilient and sustainable organizations worldwide.
Social implications
COVID-19 has re-emphasized the prominence of sustainability and the stakeholder approach. Thus, this paper indicates that CSR committees require the adaption and implementation of a holistic sustainability policy that integrates both external and internal factors and thereby provides a whole process for sustainability issues.
Originality/value
The impact of CSR committees on corporate social performance (CSP) has already been investigated. However, the predictors of CSR committees have been less scrutinized in the literature.
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XiaoYan Jin and Sultan Sikandar Mirza
Digitalization is increasingly important for promoting authentic CSR practices. Firms with higher CSR levels motivate their employees to pursue their goals and demonstrate their…
Abstract
Purpose
Digitalization is increasingly important for promoting authentic CSR practices. Firms with higher CSR levels motivate their employees to pursue their goals and demonstrate their social responsibility. However, the literature has not adequately examined how firm-level digitalization influences corporate sustainability from a governance perspective. This study aims to fill this gap by exploring how digitalization affects CSR disclosure, a key aspect of sustainability, at the firm level. Furthermore, this study also aims to investigate how governance factors, such as management power, internal control and minority shareholder pressure, moderate this effect.
Design/methodology/approach
This study employs a fixed effect model with robust standard errors to analyze how digitalization and CSR disclosure are related and how this relationship is moderated by governance heterogeneity among Chinese A-share companies from 2010 to 2020. The sample consists of 2,339 firms, of which 360 are SOEs and 1,979 are non-SOEs. To ensure robustness, this study has excluded the observations in 2020 to avoid the effects of COVID-19 and used an alternative measure of CSR disclosure based on the HEXUN CSR disclosure index. Furthermore, this study also explores the link in various corporate-level CSR settings.
Findings
The regression findings reveal that: First, Chinese A-share firms with higher digitalization levels disclose less CSR information. This finding holds for both SOEs and non-SOEs. Second, stronger management power has a negative moderating effect that weakens the link between digitalization and CSR disclosure, and this effect is mainly driven by SOEs. Third, internal control attenuates the negative association between firm digitalization and CSR disclosure, which is more pronounced in SOEs. Finally, minority shareholders exacerbate the negative relationship between digitalization and CSR disclosure, and this effect is more evident in non-SOEs. These results are robust to excluding the potential COVID effect and using an alternative HEXUN CSR disclosure index measure.
Originality/value
Digitalization and sustainability have been widely discussed at a macro level, but their relationship at a micro level has been largely overlooked. Moreover, there is hardly any evidence on how governance heterogeneity affects this relationship in emerging economies, especially China. This paper addresses these issues by providing empirical evidence on how digital transformation influences CSR disclosure in China, a context where digitalization and CSR are both rapidly evolving. The paper also offers implications for both practitioners and policymakers to design appropriate digital strategies for firm development from diverse business perspectives.
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Christiana Osei Bonsu, Chelsea Liu and Alfred Yawson
The role of chief executive officer (CEO) personal characteristics in shaping corporate policies has attracted increasing academic attention in the past two decades. In this…
Abstract
Purpose
The role of chief executive officer (CEO) personal characteristics in shaping corporate policies has attracted increasing academic attention in the past two decades. In this review, the authors synthesize extant research on CEO attributes by reviewing 232 articles published in 29 journals from the accounting, finance and management literature. This review provides an overview of existing findings, highlights current trends and interdisciplinary differences in research approaches and identifies potential avenues for future research.
Design/methodology/approach
To review the literature on CEO attributes, the authors manually collected peer-reviewed articles in accounting, finance and management journals from 2000 to 2021. The authors conducted in-depth analysis of each paper and manually recorded the theories, data sources, country of study, study period, measures of CEO attributes and dependent variables. This procedure helped the authors group the selected articles into themes and sub-themes. The authors compared the findings in various disciplines and provided direction for future research.
Findings
The authors highlight the role of CEO personal attributes in influencing corporate decision-making and firm outcomes. The authors categorize studies of CEO traits into three main research themes: (1) demographic attributes and experience (including age, gender, culture, experience, education); (2) CEO interactions with others (social and political networks) and (3) underlying attributes (including personality, values and ideology). The evidence shows that CEO characteristics significantly affect a wide range of specific corporate policies that serve as mechanisms through which individual CEOs determine firm success and performance.
Practical implications
CEO selection is one of the most crucial decisions made by corporations. The study findings provide valuable insights to corporate executives, boards, investors and practitioners into how CEOs’ personal characteristics can impact future firm decisions and outcomes that can, in turn, inform the high-stake process of CEO recruitment and selection. The study findings have significant practical implications for corporations, such as contributing to executive training programs, to assist executives and directors attain a greater level of self-awareness.
Originality/value
Building on the theoretical foundation of upper echelons theory, the authors offer an integrated theoretical framework to consolidate existing empirical research on the impacts of CEO personal attributes on firm outcomes across accounting and finance (A&F) and management literature. The study findings provide a roadmap for scholars to bridge the interdisciplinary divide between A&F and management research. The authors advocate a more holistic and multifaceted approach to examining CEOs, each of whom embodies a myriad of personal characteristics that comprise their unique identity. The study findings encourage future researchers to expand the investigation of the boundary conditions that magnify or moderate the impacts of CEO idiosyncrasies.
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Madhur Bhatia and Rachita Gulati
The purpose of the paper is to explore the long-run impact of board governance and bank performance on executive remuneration. More specifically, the study addresses two…
Abstract
Purpose
The purpose of the paper is to explore the long-run impact of board governance and bank performance on executive remuneration. More specifically, the study addresses two objectives. First, the authors investigate the long-run relationship between pay and performance hold for the Indian banking industry. Second, the authors explore the moderating role of the board in explaining the relationship between executive pay and performance.
Design/methodology/approach
The study uses multivariate panel co-integration approaches, i.e. fully modified and dynamic ordinary least square, to explain the co-integrating relationship between executive pay, governance and performance of Indian banks. The analysis is conducted for the period from 2005 to 2018.
Findings
The results of co-integration tests reveal a long-run relationship between executive pay, board governance and bank performance. The long-run estimates produce evidence in favour of the dynamic agency theory, suggesting that the implications of asymmetric information can be mitigated by associating the current executive pay with the bank performance in the previous periods. The finding of this study reveals that improvements in the board quality serve as a monitoring tool to constrain excessive pay and moderate the executives’ pay. Furthermore, the interaction of performance and board governance negatively impacts pay, supporting a substitution approach. It implies that setting optimal pay packages for executives necessitates enhanced and efficient board governance practices.
Practical implications
The study recommends significant policy implications for regulators and the board of directors that executive pay significantly responds to the bank’s performance and good board governance practices in the long run.
Originality/value
This paper provides novel evidence of long-run pay-performance-governance relation using a panel co-integration approach.
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Siwen Song, Adrian (Wai Kong) Cheung, Aelee Jun and Shiguang Ma
This paper aims to empirically examine the impact of mandatory CSR disclosure on the CEO pay performance sensitivity.
Abstract
Purpose
This paper aims to empirically examine the impact of mandatory CSR disclosure on the CEO pay performance sensitivity.
Design/methodology/approach
Using the mandatory requirement of CSR disclosure as an exogenous shock, the authors compare the changes in CEO pay performance sensitivity for treatment firms with control firms through a difference-in-difference (DiD) approach.
Findings
The authors find that mandatory CSR disclosure enhances CEO pay performance sensitivity. The results also show that monitoring CEO power is a conduit through which mandatory CSR disclosure affects CEO pay performance sensitivity. The positive impact is more profound in firms with a powerful CEO, i.e. one who is politically well-connected, holds dual roles as both CEO and Chairman, and/or has had a long tenure. Furthermore, the increased CEO pay performance sensitivity after the mandate is prominent among state-owned enterprises (SOEs) only.
Practical implications
The findings of this paper have implications for other economies with similar institutional backgrounds as China. Although the mandatory CSR disclosure does not require firms to spend on CSR investment, the mandatory CSR disclosure alters firm behaviour, and mitigates agency problems.
Originality/value
This paper contributes to the studies on the impact of CSR disclosure on firms' behaviour. To the authors' knowledge, this is the first study to examine the effects of mandatory CSR disclosure on CEO pay performance sensitivity using the quasi-natural experiment settings.
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This study aims to examine the effects of local tournament incentives on environmental, social and governance (ESG) disclosure and the quality of such disclosures among Chinese…
Abstract
Purpose
This study aims to examine the effects of local tournament incentives on environmental, social and governance (ESG) disclosure and the quality of such disclosures among Chinese A-share listed companies. Furthermore, it seeks to investigate the moderating roles of CEO duality, institutional investors’ shareholding and product market competition in this relationship.
Design/methodology/approach
This study uses a quantitative approach, and data from A-share listed companies in China spanning from 2012 to 2021. To test the proposed hypotheses, the authors conduct hierarchical regression analysis along with a series of robustness tests to ensure the validity of our findings.
Findings
The findings of this study indicate that local tournament incentives have a positive impact on companies’ propensity to disclose ESG information, yet they negatively influence the quality of these disclosures. Additionally, the presence of CEO duality and product market competition attenuate this relationship, whereas the shareholding of institutional investors serves to strengthen it.
Practical implications
This study’s findings can aid policymakers and regulators in China and other emerging economies in policies that promote high-quality ESG information disclosure, taking into account local tournament incentives. Furthermore, the study underscores the importance of maintaining robust corporate governance structures within firms to ensure that CEOs’ self-serving motivations do not undermine ESG disclosure.
Originality/value
This study adds to the ongoing discourse on the significance of ESG disclosure in emerging economies by analyzing the influence of executive promotion incentives on ESG disclosure from an external labor market standpoint. By exploring the potential self-serving motivations of CEOs in promoting ESG values and practices within organizations, this paper addresses a gap in the existing literature.
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Ferdy Putra and Doddy Setiawan
This paper aims to synthesize the diverse literature on nomination and remuneration committees and provide avenues for future research.
Abstract
Purpose
This paper aims to synthesize the diverse literature on nomination and remuneration committees and provide avenues for future research.
Design/methodology/approach
This study provides a comprehensive literature review of theoretical and empirical studies published in reputable international journals indexed by Scopus.
Findings
The literature review reveals several aspects of the nomination and remuneration committee. These aspects have been classified into the definition of the nomination and remuneration committee, dimensions of the nomination and remuneration committee, measurement and research review results, reasons for conflict empirical findings, company dynamics and research on moderators, as well as recommending future research.
Research limitations/implications
Our literature review shows that nomination and remuneration committees play a role in improving board performance and company performance, reducing agency conflicts and improving corporate governance to provide implications for companies, regulators and investors and pave the way for future research.
Originality/value
This paper identifies issues related to nomination and remuneration committees, their theoretical and practical implications and avenues for future research.
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Isah Shittu and Ayoib Che-Ahmad
The purpose of this study is to examine the impact of selected corporate governance (CG) variables on the equity value multiple (EVM) of listed firms in Nigeria.
Abstract
Purpose
The purpose of this study is to examine the impact of selected corporate governance (CG) variables on the equity value multiple (EVM) of listed firms in Nigeria.
Design/methodology/approach
The research used data obtained from 100 firms listed on the Nigerian Stock Exchange (NSE) from 2014 to 2018. A generalized method of moment was used to estimate the relationship, whereas principal component analysis was used to generate composite values of EVMs.
Findings
Findings reveal a significant association between board size, board independence, board gender diversity, managerial shareholding, audit committee independence, disclosure of CG information and EVM at a 1% level of significance.
Research limitations/implications
This study was limited to firms that disclosed information on CG and EVMs.
Practical implications
These empirical findings lend support to agency theory, which suggests the use of various CG variables as a way of reducing principal-agent conflicts. It also lends support to resource dependency theory from a gender diversity perspective.
Originality/value
The study is a pioneering effort toward unlocking the relationship between some CG variables and the EVMs, focusing on firms listed on the NSE.
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Jianhui Jian, Haiyan Tian, Dan Hu and Zimeng Tang
With the growing concern of various sectors of society regarding environmental issues and the promotion of sustainable development, green technology innovation is generally…
Abstract
Purpose
With the growing concern of various sectors of society regarding environmental issues and the promotion of sustainable development, green technology innovation is generally considered to be conducive to the long-term development of enterprises. However, because of the existence of agency problems, managers may have shortsighted behaviors. Then how will managers' shortsighted behaviors affect enterprises' green technology innovation?
Design/methodology/approach
This paper uses machine learning-based text analysis methods to construct a manager myopia index based on the data from A-share listed companies on the Shanghai and Shenzhen Stock Exchanges from 2015 to 2020. We examine the impact of manager myopia on green technology innovation in companies.
Findings
Our study finds that manager myopia significantly inhibits green technology innovation in companies. However, when multiple large shareholders coexist and the proportion of institutional investors' holdings is high, it can alleviate the inhibitory effect of manager myopia on green innovation. Heterogeneity tests show that the impact of manager myopia on green technology innovation is relatively significant in non-state-owned and manufacturing companies, as well as in the electricity industry. Robustness tests demonstrate that our conclusions remain valid after using propensity score matching to eliminate endogeneity problems.
Originality/value
From the perspective of corporate governance, this paper incorporates managers' shortsightedness, multiple large shareholders and institutional investors' shareholding ratios into the same logical framework, analyzes their internal mechanisms, helps improve corporate governance, enhances green innovation capabilities and has strong implications for the implementation of national innovation-driven development strategies and the achievement of “carbon peak” and “carbon neutrality” targets.
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Misal Ijaz, Naila Sadiq and Syeda Fizza Abbas
This paper aims to investigate the impact of retrenchment strategy on firm performance in the context of Pakistani firms while considering the moderating role of chief executive…
Abstract
Purpose
This paper aims to investigate the impact of retrenchment strategy on firm performance in the context of Pakistani firms while considering the moderating role of chief executive officer (CEO) power. By examining the influence of CEO duality and CEO share ownership on the relationship, this study contributes to strategic management and corporate governance knowledge within the Pakistani business environment.
Design/methodology/approach
A quantitative approach was used to analyze the relationship using data from annual financial statements. The sample consisted of 76 companies from the KSE-100 index from the year 2015 to 2020. Random effects regression models were used, along with hierarchical regression to explore the moderating effect of CEO power.
Findings
The findings demonstrate that the implementation of a retrenchment strategy positively impacts firm performance in Pakistani firms. The study also reveals that CEO power plays a crucial role in strengthening the relationship between retrenchment strategy and firm performance. Moreover, the study highlights the importance of considering the temporal sequence, size and age of firms when examining the impact of CEO power and retrenchment strategy on firm performance.
Research limitations/implications
The study enhances the understanding of the contingent nature of retrenchment strategies and the influence of CEO power in the Pakistani business context. Practically, the research contributes to strategic management and corporate governance dynamics, facilitating the development of strategies that enhance firm performance and sustainability in Pakistan.
Originality/value
This research provides original insights by specifically focusing on the Pakistani context and analyzing the interplay between retrenchment strategy, CEO power and firm performance. The study adds to the limited literature on the relationship between retrenchment and performance in the Pakistani business environment. Additionally, it highlights the significance of CEO power as a critical factor in determining the success of retrenchment.
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