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1 – 10 of 284This study aims to examine whether a change in the regulatory requirement toward gender quota for corporate leadership significantly affects the demand and therefore, it increases…
Abstract
Purpose
This study aims to examine whether a change in the regulatory requirement toward gender quota for corporate leadership significantly affects the demand and therefore, it increases the presence of women directors and women CEOs. Examining the supply-side, the study also examines whether the supply for women directors and women CEOs based on the presence of qualified women who currently hold upper, middle, or lower management positions is positively related with the presence of women directors and women CEOs. Furthermore, based on the critical mass hypothesis, this study examines whether the presence of women CEOs and critical mass for women directors bring significant impacts on firms' financial and environmental, social and corporate governance (ESG) performance during the subsequent period.
Design/methodology/approach
Using the multivariate regression analysis, this study empirically examines the impact of the shift in the demand for women directors and CEOs from the enactment of the Greek Law 4403/2016 on gender quota for corporate leadership. This study also examines the impact of the supply for women in corporate leadership, measured by the percentage of women who hold upper, middle, or lower management positions, on the presence of women directors and CEOs. Then, this study examines the impact of women directors and women CEOs on firms' subsequent financial and ESG performance.
Findings
Based on a sample of 71 publicly listed Greek firms and 20 Cyprus listed firms as a control group during 2006–2019, the study finds evidence that both the supply-side and the demand-side bring positive effects on greater women participation in corporate boards. However, there is no evidence that the supply and demand affect the presence of women CEOs. The presence of women CEOs has a positive effect on ESG through environmental and social pillars. The study finds evidence to support the critical mass hypothesis that firms with three or more women boards tend to have higher financial and ESG performance.
Social implications
Understanding the supply and demand for gender diversity in corporate leadership in countries that are considered as lagging is critical to foster the global objective to level the playing field for women to participate in corporate management leadership as important part the United Nations Sustainable Development Goal (UNSDG) 5.5. The positive impact of women directors on corporate financial and social performance can be achieved, especially when the critical mass is reached. This highlights the importance of greater gender representations in corporate boards and top executive level in order to make a meaningful social change.
Originality/value
This study demonstrates that the supply of women who currently hold corporate management positions has positive influence on the presence of women boards. This study also demonstrates that a national legislation that promotes gender diversity for corporate board has a positive impact on board gender diversity among Greek listed firms. This study also highlights the importance of integrating the critical mass perspective in considering the impact of supply and demand for women in corporate leadership on firms' financial and ESG performance.
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Memiyanty Abdul Rahim, Nur ’Ain Syahirah Shaharuddin and Norazah Mohd Suki
The purpose of this study is to examine the level of Shariah governance disclosure among Islamic banks in Malaysia and the Gulf Cooperation Council (GCC) countries (i.e. Kuwait…
Abstract
Purpose
The purpose of this study is to examine the level of Shariah governance disclosure among Islamic banks in Malaysia and the Gulf Cooperation Council (GCC) countries (i.e. Kuwait, Bahrain, United Arab Emirates, Qatar, Oman and Saudi Arabia). On top of that, the effect of Shariah governance disclosure on Islamic banks financial performance is investigated.
Design/methodology/approach
Data underwent quantitative content analysis and a mean comparison of the Shariah governance disclosure mechanisms as well as multiple regression analysis. Shariah governance information is obtained from the Islamic banks' official websites and the Bursa Malaysia Exchange.
Findings
The results of the content analysis revealed that the level of Shariah governance disclosure among Malaysian Islamic banks has been more pronounced than in the GCC countries. Additionally, the multiple regression analysis results specified that of the five Shariah governance disclosure mechanisms, the Shariah committee emerged as the strongest determinant in the financial performance of the Islamic banks, followed by transparency and disclosure.
Practical implications
Islamic banks should emphasise publishing Shariah governance information in annual reports to reflect superior accounting practices as assessed by certified Shariah auditors with an effective monitoring system.
Originality/value
The empirical findings are vital for serving as a guideline for Islamic banks in Malaysia and the GCC countries to disclose their practice of Shariah governance and gain empirical insights into its effect on firms’ financial performance. Following that, Islamic banks would improve their accounting practices while adhering to Shariah principles, strengthen internal controls and boost their brand reputation.
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This study aims to (1) validate the efficacy of contractual and relational governance in enhancing operational performance and (2) explore the influence of product complexity on…
Abstract
Purpose
This study aims to (1) validate the efficacy of contractual and relational governance in enhancing operational performance and (2) explore the influence of product complexity on the effectiveness of these governance mechanisms, thereby determining the optimal approach for varying levels of product complexity.
Design/methodology/approach
By utilizing a comprehensive theoretical framework encompassing transaction cost economics, social exchange theory and contingency theory, this research explores the intricate interplay between governance mechanisms, product complexity and operational performance, drawing insights from a dataset comprising 246 responses within Mainland China’s manufacturing sector. To rigorously test the proposed hypotheses, this study employed a hierarchical regression analysis.
Findings
The findings of this study are summarized as follows: (1) while both contractual governance and relational governance have a significant impact on operational performance, relational governance is found to be more effective than contractual governance in enhancing operational performance; and (2) the moderation effect of product complexity is evident, as it weakens the impact of contractual governance while simultaneously enhancing the positive influence of relational governance on operational performance.
Originality/value
The study uncovers a moderation effect of product complexity on the relationship between governance mechanisms and operational performance. This finding adds an original contribution to the literature by highlighting how product complexity can interact with governance strategies, providing practical insights for industries dealing with varying levels of product complexity.
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Natalia Aversano, Diana Ferullo, Giuseppe Nicolò and Nadia Ardito
The present research aims to understand the performance disclosure levels provided by Italian healthcare organisations (HCOs). The authors conducted this study to assess the…
Abstract
Purpose
The present research aims to understand the performance disclosure levels provided by Italian healthcare organisations (HCOs). The authors conducted this study to assess the transparency of HCOs' performance reporting processes by examining the amount and the type of information disclosed in Annual Performance Reports (APRs).
Design/methodology/approach
The present study uses a qualitative research methodology based on manual content analysis. The APRs of a sample of 171 Italian public HCOs were analysed.
Findings
Results evidence that the APRs provide a sufficient level of disclosure of performance information, putting high attention on the epidemiological conditions; however, the APRs do not present a strong information function for stakeholders' decision-making purposes. The Italian HCOs APRs are not easily understandable because the APRs are not very concise and present information mainly in discursive terms with limited graphic support.
Originality/value
To the best of the authors' knowledge, this is the first research investigating both the extent and type of performance information reported by Italian HCOs in the APRs, considering the particular contextual conditions caused by the most significant challenge the healthcare (HC) sector has faced in recent years: the epidemiological crisis of the coronavirus disease 2019 (COVID-19). The study also explores whether APRs are currently used by HCOs as a merely regulatory requirement or as an information tool for accountability and decision-making purposes.
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Shiv Shankar Kumar, Kumar Sanjay Sawarni, Subrata Roy and Naresh G
The objective of this paper is to investigate the effect of working capital efficiency (WCE) and its components on the composite financial performance of a sample of Indian firms.
Abstract
Purpose
The objective of this paper is to investigate the effect of working capital efficiency (WCE) and its components on the composite financial performance of a sample of Indian firms.
Design/methodology/approach
Our sample includes 796 non-financial listed firms from 2015–16 to 2021–22. Sample firms’ profitability, liquidity, solvency, cash flow management, and financial and operational leverage have been used to classify them into companies with high composite financial performance (HCFP) and with low composite financial performance (LCFP) by using K-Means Clustering technique. A composite financial performance score (CFPS) of 1 has been assigned to HCFP and 0 to LCFP. We have used logistic regression models with fixed effect to estimate the effect of cash conversion cycle (CCC) and its components, i.e. inventory days, accounts receivable days and accounts payable days on CFPS in the presence of control variables such as growth, leverage, firm size, and age.
Findings
The study finds that CCC and inventory days are inversely associated with CFPS. This finding shows that the firms’ WCE leads to superior financial performance on a composite basis.
Research limitations/implications
The research findings are based on samples drawn from the population of the listed Indian non-financial companies. Since the operation, financial practices, working capital policies, and management styles of firms vary greatly among nations, the results of this study should be extended to firms in other countries after taking into account the degree of resemblance to the sample firms.
Practical implications
The findings of this study hold significant value for industry practitioners, as they provide guidance in determining the optimal allocation of funds for working capital and devising strategies for effectively managing inventory levels, credit sales, and vendor payments in order to increase the overall value of the company. This study aims to help investors in building their investment portfolios by identifying companies with superior composite financial performance. Investors can enhance the construction of their investment portfolios by strategically selecting companies that demonstrate superior overall performance.
Social implications
The results of our study will help companies improve their WCM strategies to enhance their overall value, and their significance increases manifold during economic downturns. Business firms that perform well by efficiently managing their working capital have a multiplier effect on the economy and society at large in the form of GDP contribution, labor income, taxes to the government, investment in capital assets, and payments to suppliers.
Originality/value
To understand the impact of WCE on firms’ performance, the extant working capital literature focuses on some specific characteristics such as profitability, valuation, solvency, and liquidity. The limitation of employing a single parameter is its inability to present the comprehensive performance evaluation of firms. This study is among the earliest studies that focus on the holistic evaluation of WCE's impact on the composite performance of a company.
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Palmira Piedepalumbo, Ludovica Evangelista, Daniela Mancini and Elisabetta Magnaghi
This study aims to propose a longitudinal analysis of motivations for Integrated Reporting (IR) adoption, internal changes, the benefits of IR implementation and compliance…
Abstract
Purpose
This study aims to propose a longitudinal analysis of motivations for Integrated Reporting (IR) adoption, internal changes, the benefits of IR implementation and compliance challenges.
Design/methodology/approach
The authors analyse a longitudinal case study of an Italian-listed company (Eni) participating in the IR-Pilot Programme (PP) and covering 10 years of IR adoption. The analysis was based on a mixed-method approach that included semi-structured interviews, content analysis of annual reports and triangulation with other data sources. Results are discussed regarding institutional theory, legitimacy theory and diffusion of innovation theory.
Findings
The study suggests that motivations for adopting IR change over time and participation in the IR-PP helps Eni acquire a comprehensive and substantial integrated view of value creation over time, makes integrated culture a key factor for strategic business sustainability and confirms the readiness of early adopters to comply with the non-financial Directive (NFD).
Originality/value
This study, among the few longitudinal case studies, provides organisations, regulators and academics with insights into the motivations driving the successful adoption and implementation of IR and the NFD. The results may help companies consider one of the tools currently deemed to bring sustainability into action and participation in pilot groups.
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Francesco Paolone, Matteo Pozzoli, Meghna Chhabra and Assunta Di Vaio
This study aims to investigate the effects of board cultural diversity (BCD) and board gender diversity (BGD) of the board of directors on environmental, social and governance…
Abstract
Purpose
This study aims to investigate the effects of board cultural diversity (BCD) and board gender diversity (BGD) of the board of directors on environmental, social and governance (ESG) performance in the European banking sector using resource-based view (RBV) theory. In addition, this study analyses the linkages between BCD and BGD and knowledge sharing on the board of directors to improve ESG performance.
Design/methodology/approach
This study selected a sample of European-listed banks covering the period 2021. ESG and diversity variables were collected from Refinitiv Eikon and analysed using the ordinary least squares model. This study was conducted in the European context regulated by Directive 95/2014/EU, which requires sustainability disclosure. The original population was represented by 250 banks; after missing data were excluded, the final sample comprised 96 European-listed banks.
Findings
The findings highlight the positive linkages between BGD, BCD and ESG scores in the European banking sector. In addition, the findings highlight that diversity contributes to knowledge sharing by improving ESG performance in a regulated sector. Nonetheless, the combined effect of BGD and BCD negatively impacts ESG performance.
Originality/value
To the best of the authors’ knowledge, this is the first study to measure and analyse a regulated sector, such as banking, and the relationship between cultural and gender diversity for sharing knowledge under the RBV theory lens in the ESG framework.
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Janet Kyogabiirwe Bagorogoza, Jaap van den Herik, Andrea de Waal and Bartel van de Walle
The study examines the mediating effect of knowledge management (KM) in the relationship between the high-performance organisation (HPO) framework and high performance in…
Abstract
Purpose
The study examines the mediating effect of knowledge management (KM) in the relationship between the high-performance organisation (HPO) framework and high performance in financial institutions (FIs) in Uganda. The paper aims to develop a framework that promotes high performance in the FIs.
Design/methodology/approach
The conceptual model was tested on a sample of 28 financial instituitions using structural equation model.
Findings
The findings revealed that the high-performance framework is significantly related to high performance and KM is related high performance. KM mediates the relationship between the high-performance framework and high performance.
Research limitations/implications
The findings revealed that the high-performance framework is significantly related to high performance and KM is related high performance. KM mediates the relationship between the high-performance framework and high performance.
Practical implications
The findings revealed that the high-performance framework is significantly related to high performance and KM is related high performance. KM mediates the relationship between the high-performance framework and high performance.
Originality/value
This study makes several empirical and theoretical contributions, addressing the gap in the literature about the role of the HPO framework in strategic management. This study tests the relationship between the HPO and the firm's performance by taking the mediating effects of KM. The designed model highlights a significant organisational performance approach that can influence the finance sector positively.
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Ivo Hristov, Matteo Cristofaro and Riccardo Cimini
This study aims to investigate the impact of stakeholders’ nonfinancial resources (NFRs) on companies’ profitability, filling a significant gap in the literature regarding the…
Abstract
Purpose
This study aims to investigate the impact of stakeholders’ nonfinancial resources (NFRs) on companies’ profitability, filling a significant gap in the literature regarding the role of NFRs in value creation.
Design/methodology/approach
Data from 76 organizations from 2017 to 2019 were collected and analyzed. Four primary NFRs and their key value drivers were identified, representing core elements that support different dimensions of a company’s performance. Statistical tests examined the relationship between stakeholders’ NFRs and financial performance measures.
Findings
When analyzed collectively and individually, the results reveal a significant positive influence of stakeholders’ NFRs on a firm’s profitability. Higher importance assigned to NFRs correlates with a higher return on sales.
Originality/value
This study contributes to the literature by empirically bridging the gap between stakeholder theory and the resource-based view, addressing the intersection of these perspectives. It also provides novel insights into how stakeholders’ NFRs impact profitability, offering valuable implications for research and managerial practice. It suggests that managers should integrate nonfinancial measures of NFRs within their performance measurement system to manage better and sustain companies’ value-creation process.
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Santushti Gupta and Divya Aggarwal
This study aims to empirically examine environment, social, and governance (ESG) as an effective strategy to reduce major impediments for a corporation in the form of costs of…
Abstract
Purpose
This study aims to empirically examine environment, social, and governance (ESG) as an effective strategy to reduce major impediments for a corporation in the form of costs of capital (COC) and systematic risk, especially for emerging markets such as India.
Design/methodology/approach
A sample of 114 Indian firms from eight prominent industries based on Thomson Reuters classification (TRBC) are used in the study. A panel regression with industry-fixed effects is carried out to account for industry heterogeneity. For robustness, the authors also carry out a matched sample analysis.
Findings
The authors observe a negative and significant relationship between ESG performance with COC and systematic risk, respectively. For the pillar-wise analysis, the authors observe that only governance performance is negatively and significantly related to COC whereas the environmental and social performances are negative and insignificant. For ESG pillar level analysis for beta, the authors observe that all pillars are negative and significant, thus making a case for how firms can fine-tune their ESG strategies according to each pillar.
Research limitations/implications
As the ESG concept is still in a very nascent stage, data availability is a definite challenge in India.
Practical implications
As ESG is increasingly becoming relevant for multiple stakeholders, this study aims to provide evidence that can potentially guide the regulators, practitioners, and academicians to address the contemporary needs of these stakeholders, while also doing good for the firm in the traditional sense.
Social implications
The transition to a sustainable economy is a challenge for emerging economies, especially for a country like India where stakeholders are not only varied but also huge in number. With this study's contribution towards an incremental understanding of ESG, Indian regulators and policymakers can bring forward mandates as to ESG compliances that are rewarding for the firms and give them enough impetus towards complying with ESG norms.
Originality/value
The extant literature on ESG majorly discusses the relationship between ESG performance and financial performance. This study addresses the lacuna of the relationship of ESG with COC and beta in the Indian context.
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