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This paper aims to provide greater understanding of how the composition of pay reduces agency cost to the shareholders by examining how firms pay their chief executive officers (CEOs). More specifically, this study examines the relationship between CEOs’ social capital, measured as external directorships, and their contingency pay, the proportion of their compensation that depends on achieving long-term performance goals.

The authors use a panel sample of Standard & Poor 500 CEOs to test two contrasting theoretical perspectives. From a board perspective, boards attempt to retain executives with more social capital working longer for the firms to utilize executives’ social capital and pay them more in the form of contingency pay. The CEO power perspective argues that CEOs wield social capital as a form of power to lower contingency pay in an attempt at preserving wealth.

CEO social capital does not exacerbate agency pressures. Boards reward the long-term benefits of social capital accumulated by CEOs through higher proportions of contingency pay.

The authors considered CEOs of well-capitalized, publicly-traded US-based firms. So the results may not generalizable to other contexts.

Boards do recognize and reward CEOs for their social capital, and use higher levels of contingency pay to lock in CEOs with social capital.

This is the first study to explicitly examine the impact of CEO social capital on both non-equity and equity compensation.

This study aimed to test how the effects of types of support on employees’ performance and commitment were moderated by structure of pay, namely by the degree to which pay was contingent on level of performance. The constructs of Perceived Organizational Support (POS) and Perceived Supervisor Support (PSS) were decomposed into two types, according to whether the support was directed at doing the task or at the welfare of the person. The study proceeded to examine how each type influenced performance and commitment under different pay structures.

The survey was conducted in Israel. A self‐report questionnaire was administered to a sample of managers and professionals. The questionnaire consisted of new scales for person‐focused and task‐focused support along with measures of performance, commitment and structure of pay. The main interaction predictions were tested with regression analyses.

Pay contingency interacted with task‐focused POS and with person‐focused PSS in affecting performance. The interactions related to commitment were not significant. The results justify the differentiation of support to the two types. They indicate that different kinds of support that are perceived to be provided either by the organization or by the supervisor boost performance under different pay structures. The effect of support on commitment is not affected by the structure of pay.

Similar surveys should be conducted in additional cultural contexts and with samples representing diverse populations, so that the conclusions from this research can be further generalized. In order to establish causality, a longitudinal design should be used in future research. It is also advised that performance should be measured through outside agents, for example through supervisor evaluation.

In contexts where employees’ pay is contingent upon their level of performance, employers should emphasize task‐related organizational support and supervisors should exert person‐related support in order to boost performance. A reverse pattern is effective when pay is relatively invariable, namely when it is not contingent on performance.

The study is a first attempt to differentiate organizational support, which so far has been studied as one global construct. It introduces further differentiation by proposing that features of the pay structure influence which support type is effective in influencing performance at work.

The purpose of this paper is to explore how total rewards might influence intention to stay among employees of private sector banks in India. A moderated-mediation mechanism is hypothesized, in which a system of total rewards leads to intention to stay via engagement and organizational justice (OJ) moderates the linkage of total rewards with engagement.

Perception of employees about the constructs considered has been assessed by a survey, using a structured questionnaire. Employees of private banks located in the State of Uttar Pradesh were the population for this study. A total of 17 branches of 7 private banks were covered, and the number of valid responses was 761. Hypotheses testing has been done with SPSS PROCESS command.

Hypotheses proposing mediation (engagement as mediator between total rewards and intention to stay), moderation (OJ as moderator between total rewards and engagement) and moderated mediation have found support.

Results obtained direct us to infer that in addition to the amount or value of any reward, aspects of OJ, such as equity and fairness in allocation of such reward and transparency in the procedure followed, are likely to influence the effectiveness of total rewards practices in engaging employees and motivating them to stay with their present employer.

This study adds to total rewards literature by highlighting how a total rewards system can lead to engagement, and consequently to employees’ intention to stay. Results establish OJ as an important attribute to any total rewards package to make the latter more valuable and effective.

The purpose of this editorial is to discuss the problems inherent in examining the effectiveness of corporate governance without explicit consideration of the environment faced by firms. It advocates a contingency approach to the research area, illustrating its ideas by reference to the research papers contained in this issue.

The paper discusses several papers in the literature, placing the papers in this special issue in context, and making recommendations for future research.

It is apparent that the mixed results from the vast body of research in corporate governance are potentially due to failure to adequately consider all factors affecting optimal governance practice.

Researchers should beware of assuming research findings from one environment will be replicated in another environment.

Policy makers should not assume that transferring “best practice” from one regime to another will lead to the same outcomes

This paper aims to focus on the deep‐seated ideological, economic, and social roots of the notion and practice of profit sharing in French enterprise, from a historical perspective. Although this practice is legally mandated in France today, this paper seeks to identify the historical roots of such practices and to locate them in the ideological, social, and economic domains of discourse.

The authors provide a brief review of the literature on profit sharing and identify the current knowledge on the relationship between profit sharing and firm performance, in addition to the motivations for implementing profit sharing and its non‐financial consequences.

From the mid‐nineteenth century onwards, profit sharing entailed more than just a few anecdotal experiments and actually raised a number of deep‐seated ideological, economic and social questions. The French practice of profit sharing has a profoundly “social responsibility” argument at its base. De Gaulle's argument for this was embedded in a broader rhetoric of finding a third alternative between unbridled capitalism and unrestricted socialism, and one that could ameliorate the human condition.

Psychological ownership among employees can be promoted through profit sharing and employee ownership programs.

It is critical for managers to ensure the success of profit sharing schemes by providing for higher levels of employee voice and including employee involvement programs.

Whereas the ideological basis (social responsibility), had a dominant impact in France, in the evolution of such practices leading up to their legislation other countries focused more on the instrumental and utilitarian benefits.

The authors use the approach of historical analysis of profit sharing practices in France to draw cross‐national lessons for today's managers around the globe.

Employee benefits, a critical element of total employee rewards, are important for both employers and employees. This study aims to explore the utility of employee benefits for male and female employees during the recent economic recession. In doing so, it intends to highlight an indirect deterioration of employment arrangements and equality in the workplace.

The paper draws on the findings of three repeated large-scale surveys during the Greek crisis (2012-2015, total N = 3,498).

Employees report that the availability of employee benefits has decreased during the recession and that women find more utility in them than men do. Additionally, women seem to be affected more than men by decreases in employee benefits allocation.

The present findings support calls for contingent employee reward allocation.

Employers wishing to sustain their competitive advantage by fostering inclusion and diversity and/or employers with a high female employee ratio are encouraged to consider increasing their employee benefits portfolio.

The recent economic crisis and the subsequent recession have brought about several potential negative effects, in terms of the employment conditions for women. Decreased employee benefits are a hidden negative effect of the recession for female employees and it presents multiple, potential and unforeseen consequences for gender diversity and inclusion.

To the best of the author’s knowledge, this is the first study to address non-monetary employee remuneration under the lens of gender pay differentials. It does so in a turbulent macro-economic setting.

The literature reports mixed findings on the performance impact of market orientation and a lack of attention to the moderating roles of dyadic competition and firm's age. The purpose of this paper is to explore the relationship between customer responsiveness and performance of industrial firms and to consider the moderators.

Drawing on competitive dynamics literature, a contingency model is developed. Hypotheses were tested on 350 Swedish industrial firms that market clean technology to business customers.

First, the main competitor's cost leadership weakens the positive performance impact of the industrial firm's customer responsiveness. An interpretation would be that it is difficult for product firms to overcome competition based on low costs. Second, the industrial firm's age weakens the positive performance impact of the industrial firm's customer responsiveness. This indicates that the firm's responsiveness advantage diminishes as strategies of competing firms converge.

By adding literature on competitive dynamics the study contributes to theory. The article shows that dyadic competition and firm's age matter for the relationship between customer responsiveness and performance.

The industrial firm may keep an efficient customer responsiveness strategy by reducing its vulnerability to low costs of the main competitor. Also, an ability of developing the content of the firm's responsiveness strategy would favor the strategy uniqueness and efficiency.

The article presents a new model that shows the performance impact of the industrial firm's customer responsiveness, including the moderating roles of the main competitor's competitive strategy and the firm's age. By including the contingencies, the model explains mixed findings in the literature regarding relationships between customer responsiveness and performance.

Drawing on the contingency perspective of strategy, the purpose of this paper is to extend current understanding of fit between a differentiation strategy of the industrial firm’s foreign subsidiary and key contextual boundaries.

A conceptual framework is developed in which a differentiation strategy involves the complementary approaches of innovativeness and customer responsiveness. The key boundaries consist of local competitive dynamics and the value-adding mandate assigned to the subsidiary. Detailed features of four types of differentiation strategies are identified by analysing strategies applied by subsidiaries of industrial firms operating on the US market.

Four propositions are developed regarding alignment between strategy types and the boundaries. Relationships are proposed regarding a strategy type and a context specified by rivalry/relational competitive dynamics, and a broad/narrow value-adding mandate.

The conceptual framework and the propositions may be tested by analysing statistical data on industrial firms’ subsidiaries operating in several host countries.

To increase a foreign subsidiary’s contribution to the global competitiveness of an industrial firm, an awareness of the boundaries to the subsidiary’s strategy of differentiation that may hamper the subsidiary’s performance is essential.

The conceptual framework, and the propositions, contributes to literature on the industrial firm’s global strategy because it focuses on subsidiary strategy and extends present understanding of the mechanisms that drive the effectiveness of a foreign subsidiary’s differentiation strategy.

Following the contingency perspective, this paper aims to examine if a good corporate governance structure is able to reduce earnings management made through related party transactions. The authors expect that a high-quality corporate governance influences private benefit acquisition and reduces the positive association between related party transactions and earnings management.

A two-stage least squares instrumental variable approach is used to further address endogeneity concerns in this study. The model is organized into three parts: the construction of the corporate governance indicator, the first stage regression to compute the predicted corporate governance indicator and the second stage regression (ordinary least squares multivariate regressions) to analyze the relationship between related party transactions and earnings management. The analysis focuses on a sample of Italian listed companies over the period 2007-2012.

The study finds that the interaction between sales-related party transactions and corporate governance is negatively associated with abnormal accruals, signaling that corporate governance quality reduces the positive association between sales-related party transactions and earnings management, consistently with the contingency perspective.

The research contributes to literature by empirically testing the assumption of contingency perspective. In particular, the results provide new insights to the academic community, underlying that good corporate governance mechanism helps to reduce earnings management behavior through related party transactions.

This study aims to investigate whether the presence of female directors on audit committees affects audit fees in Chinese listed companies. This study also investigates whether the audit committee’s gender diversity moderates the relationship between the firm’s inherent situational factors (e.g. audit complexity and firm risk) and audit fees. Finally, this study investigates whether the effect of the audit committee’s gender diversity on audit fees varies with within-country institutional contingencies (e.g. state-owned enterprises [SOEs] vs non-SOEs and firms that are located in more developed regions vs firms that are located in less developed regions)

This study used the data of all A-share listed companies on the Shanghai and Shenzhen stock exchanges for the period from 2009 to 2015. The authors use ordinary least squares regression as a baseline methodology, along with firm fixed effect, Deference in Deference method, two-stage least squares regression, two-stage Heckman model and generalized method of moments models to control for the possible issue of endogeneity.

The study’s findings suggest that the presence of female directors on the audit committee improves internal monitoring and communication, which reduce the perceived audit risk and the need for assurances from external auditors. The results also suggest that female directors demand high-quality audits and further assurance from external auditors when the firm is more complex and riskier. In addition, the results suggest that within-country, institutional factors play significant role in shaping the governance role of gender-diverse audit committee.

The study contributes to the agency theory by providing evidence that the interaction between agency theory and corporate governance “board composition” generates an effective monitoring mechanism and contributing to the institutional theory by finding that role of female directors on audit committee varies from context to another. In addition, this study contributes to literature review of gender diversity in the boardroom by finding the economic benefit of having female directors on audit committee. Finally, this study has implications for policy-makers in promoting regulations to legalize women presence on the board, to external auditors in assessing control risk during planning the audit, to those who responsible for appointing audit committee members.

The authors extend earlier studies by providing novel evidence on the relationship between gender-diverse audit committees and audit fees in terms of both the supply- and demand-side perspectives; that female directors moderate the relationship between firm inherent situational factors (e.g. audit complexity and firm risk) and audit fees; and that the effect of audit committees’ gender diversity on audit fees varies with sub-national institutional contingencies.