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Article
Publication date: 26 September 2023

Melissa Carlisle, Melanie I. Millar and Jacqueline Jarosz Wukich

This study examines shareholder and board motivations regarding corporate social responsibility (CSR) to understand boards' stewardship approaches to environmental issues.

Abstract

Purpose

This study examines shareholder and board motivations regarding corporate social responsibility (CSR) to understand boards' stewardship approaches to environmental issues.

Design/methodology/approach

Using content analysis, the authors classify CSR motivations in all environmental shareholder proposals and board responses of Fortune 250 companies from 2013 to 2017 from do little (a shareholder primacy perspective) to do much (a stakeholder pluralism perspective). The authors calculate the motivational dissonance for each proposal-response pair (the Talk Gap) and use cluster analysis to observe evidence of board stewardship and subsequent environmental disclosure and performance (ED&P) changes.

Findings

Board interpretations of stewardship are not uniform, and they regularly extend to stakeholders beyond shareholders, most frequently including profit-oriented stakeholders (e.g. employees and customers). ED&P changes are highest when shareholders narrowly lead boards in CSR motivation and either request both action and information or information only. The authors observe weaker ED&P changes when shareholders request action and the dissonance between shareholders and boards is larger. When shareholders are motivated to do little for CSR, ED&P changes are weak, even when boards express more pluralistic motivations.

Research limitations/implications

The results show the important role that boards play in CSR and may aid activist shareholders in determining how best to generate change in corporate CSR actions.

Originality/value

This study provides the first evidence of board stewardship at the proposal-response level. It measures shareholder and board CSR motivations, introduces the Talk Gap, and examines relationships among proposal characteristics, the Talk Gap, and subsequent ED&P change to better understand board stewardship of environmental issues.

Details

Accounting, Auditing & Accountability Journal, vol. 37 no. 3
Type: Research Article
ISSN: 0951-3574

Keywords

Article
Publication date: 5 October 2023

Ajaz Ul Islam

The purpose of this study is to provide a holistic view of the emergence of shareholder activism (SA) in India. However, specifically, this study aims at fulfilling the research…

Abstract

Purpose

The purpose of this study is to provide a holistic view of the emergence of shareholder activism (SA) in India. However, specifically, this study aims at fulfilling the research gap by discussing the policy and legal advancement in the area of SA and investigating the chronological evolution of SA, manifestations of SA, motives of SA, outcome of SAs and impact of SA on the financial performance of the firm.

Design/methodology/approach

This study used a mixed methodology (both qualitative and quantitative) to draw inferences, including content analysis, descriptive statistics, independent sample t-test and paired sample t-test. The data has been collected from the annual reports of the sample companies and the Prowess database. Return on assets and return on equity have been used as measures of financial performance while investigating the difference in financial performance between firms subjected to SA and firms not subjected to SA.

Findings

The findings of this study suggest that there has been significant growth in the occurrence of SA incidents in India in the past decade, with shareholders prominently manifesting by opposing the proposals at annual general meetings/extraordinary general meetings, mostly involving governance-related demands. The findings from the independent sample t-tests revealed that there has been a significant difference in the financial performance of the sample subjected to SA and firms not subjected to SA. Furthermore, the results of the paired sample t-test provide strong evidence of significant improvement in the financial performance of firms’ post-SA.

Practical implications

The findings of this study have implications for various stakeholders. The findings of this study suggest that SA has been relatively more successful in the Indian context and may encourage minority shareholders to follow active participation through shareholder proposals and votes rather than a passive strategy to trade and exit. For firms, it can provide valuable inferences about the emergence of SA and how it has a positive impact on the financial performance of the firm, which can lead to a change in the perception of investors and promoters who perceive SA as a threat (Gillan and Starks 2000; Hartzell and Starks, 2003). For policymakers, it can act as a tool to investigate whether the regulatory changes have been able to bring the intended transparency, accountability and enhanced shareholder participation. This will encourage policymakers to be more agile, as their efforts are bearing fruit. This will also act as a guide to formulating future policies and regulations.

Originality/value

This study is an effort to provide a holistic view of SA scenarios in a developing economy setting like India, where SA is a very recent phenomenon. Although there are studies in the area of SA, there is a dearth of studies that have investigated the various dimensions of SA in the Indian context in a very systematic and extensive manner, investigating all the different dimensions of SA. Furthermore, this study also intends to investigate the impact of SA, which is normally perceived as a threat to financial performance and provide valuable contrasting evidence.

Article
Publication date: 7 June 2023

Mohammad Mehdi Mohammadi, Mehdi Safari Gerayli, Maryam Shahri, Hasan Valiyan and Farhad Dehdar

The citizen-shareholder approach in the capital market is considered a knowledge-enhancing and emerging concept in financial and accounting offerings. Its reliable background in…

Abstract

Purpose

The citizen-shareholder approach in the capital market is considered a knowledge-enhancing and emerging concept in financial and accounting offerings. Its reliable background in management and human sciences makes it an essential basis for protecting the interests of shareholders and investors. Shareholders are considered a necessary part of the social platforms that are companies and regulatory institutions in the capital market; beyond being obligated to protect their material and intellectual rights, they are responsible for developing norms and facilitating investment values and gaining trust through mutual interactions based on respect for their interests. The purpose of this paper is to perform interactive qualitative analysis of the requirements for protecting the rights of citizens of capital market shareholders.

Design/methodology/approach

The methodology of the research is mixed, so that in the qualitative part, through content screening, the dimensions related to the protection of the citizen rights of the capital market shareholders were identified through a systematic review of 10 research in the period of 2017–2022. Then, the reliability of the specified dimensions was examined through Delphi analysis; in the quantitative part of the research, the criteria identified through the pairwise comparison matrix were first determined by the level of their relationships to determine based on the pattern of systemic representation of drivers and the consequences of requirements to protect the rights of citizens of capital market shareholders.

Findings

The research results in the qualitative part indicated the existence of 12 primary themes; during the two stages of Delphi analysis, three themes were removed, and a total of nine themes entered the quantitative phase. The results in a quantitative part indicate the creation of specialized and active committees of the board of directors as the primary driver and the reliability and timely disclosure of information in the long term as a systemic consequence.

Originality/value

To the best of the authors’ knowledge, this is the first research that presents the new concept of citizen shareholders to strengthen the requirements of protecting the rights of shareholders in the capital market while developing new theoretical literature.

Details

Qualitative Research in Financial Markets, vol. 16 no. 2
Type: Research Article
ISSN: 1755-4179

Keywords

Article
Publication date: 11 July 2023

Patrick Velte

This paper aims to review empirical research on the relationship between institutional ownership (IO) and board governance (85 studies).

Abstract

Purpose

This paper aims to review empirical research on the relationship between institutional ownership (IO) and board governance (85 studies).

Design/methodology/approach

Based on agency and upper echelons theory, the heterogeneous monitoring function of specific types and the nature of institutional investors on board composition, compensation and chief executive officer (CEO) characteristics will be focused.

Findings

The author found that most studies have referred to archival studies, analyzed the impact of board governance on IO, focused on CEO characteristics, neglected IO heterogeneity and advanced regression models to address endogeneity concerns. In line with the theoretical framework, the relationship between total IO and board governance is heterogeneous. However, specific types such as foreign, dedicated and pressure-resistant institutions represent active monitoring tools and push for increased board governance.

Research limitations/implications

The author provided useful recommendations for future research from a content and methodological perspective, e.g. the need for analyzing the impact of IO on sustainable board governance and other characteristics of top management team members, e.g. the chief financial officer.

Practical implications

As many regulatory bodies implemented regulations to promote shareholder rights and board governance, this literature review highlights the connections of both corporate governance mechanisms. Managers should conduct a careful and timely investor analysis and change the composition and compensation of the board of directors in line with institutional investors’ preferences.

Originality/value

This analysis makes useful contributions to prior research by focusing on IO and board governance, whereas the author structured the heterogeneous variables and results within the structured literature review. The authors guides researchers, regulatory bodies and business practice in this corporate governance topic.

Details

Corporate Governance: The International Journal of Business in Society, vol. 24 no. 2
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 2 January 2024

Colin Gilson and Sarah Bouraga

This paper aims to explore the problem of power imbalance within decentralized autonomous organizations (DAOs) and propose potential solutions that could contribute to enhancing…

Abstract

Purpose

This paper aims to explore the problem of power imbalance within decentralized autonomous organizations (DAOs) and propose potential solutions that could contribute to enhancing the democratic nature of DAOs.

Design/methodology/approach

In this paper, the authors apply a qualitative methodology. Using a thematic coding analysis, the authors process data collected from interviews with 11 experts.

Findings

Multiple factors contribute to the perceived lack of democracy within DAOs, such as token concentration and effective stakeholder communication. Next, quadratic voting has the potential to enhance democracy within DAOs, but this mechanism must be implemented mindfully. Finally, the results were nuanced when it comes to the effectiveness of liquid democracy in DAOs to enhance voter participation and representation.

Originality/value

To the best of the authors’ knowledge, this paper is one of the first research contributions to propose recommendations to address the power imbalance within DAOs and to contribute to the advancement of decentralized decision-making structures.

Details

Digital Policy, Regulation and Governance, vol. 26 no. 2
Type: Research Article
ISSN: 2398-5038

Keywords

Book part
Publication date: 4 March 2024

Oswald A. J. Mascarenhas, Munish Thakur and Payal Kumar

This chapter addresses one of the most crucial areas for critical thinking: the morality of turbulent markets around the world. All of us are overwhelmed by such turbulent…

Abstract

Executive Summary

This chapter addresses one of the most crucial areas for critical thinking: the morality of turbulent markets around the world. All of us are overwhelmed by such turbulent markets. Following Nassim Nicholas Taleb (2004, 2010), we distinguish between nonscalable industries (ordinary professions where income grows linearly, piecemeal or by marginal jumps) and scalable industries (extraordinary risk-prone professions where income grows in a nonlinear fashion, and by exponential jumps and fractures). Nonscalable industries generate tame and predictable markets of goods and services, while scalable industries regularly explode into behemoth virulent markets where rewards are disproportionately large compared to effort, and they are the major causes of turbulent financial markets that rock our world causing ever-widening inequities and inequalities. Part I describes both scalable and nonscalable markets in sufficient detail, including propensity of scalable industries to randomness, and the turbulent markets they create. Part II seeks understanding of moral responsibility of turbulent markets and discusses who should appropriate moral responsibility for turbulent markets and under what conditions. Part III synthesizes various theories of necessary and sufficient conditions for accepting or assigning moral responsibility. We also analyze the necessary and sufficient conditions for attribution of moral responsibility such as rationality, intentionality, autonomy or freedom, causality, accountability, and avoidability of various actors as moral agents or as moral persons. By grouping these conditions, we then derive some useful models for assigning moral responsibility to various entities such as individual executives, corporations, or joint bodies. We discuss the challenges and limitations of such models.

Details

A Primer on Critical Thinking and Business Ethics
Type: Book
ISBN: 978-1-83753-312-1

Article
Publication date: 5 March 2024

Maria Ilieva

This study aims to build on the well-documented case of the Olympus scandal to dissect how social networks and corporate culture enabled corporate elites to commit fraud across…

Abstract

Purpose

This study aims to build on the well-documented case of the Olympus scandal to dissect how social networks and corporate culture enabled corporate elites to commit fraud across multiple generations of leaders.

Design/methodology/approach

A flexible pattern matching approach was used to identify matches and mismatches between behavioural theory in corporate governance and the patterns observed in data from diverse sources.

Findings

The study applies the behavioural theory of corporate governance from different perspectives. Social networks and relationships were essential for the execution of the fraud and keeping it secret. The group of corporate elites actively created opportunities for committing misappropriation. This research presents individuals committing embezzlement because the opportunity already exists, and they can enrich themselves. The group of insiders who committed the fraud elaborated the rationalizations to others and asked outside associates to help rationalise the activities, while usually individuals provide rationalizations to themselves only.

Practical implications

The social processes among actors described in this case can inform the design of mechanisms to detect these behaviours in similar contexts.

Originality/value

This study provides both perspectives on the fraud scandal: the one of the whistle-blowers, and the opposing side of the transgressors and their associates. The extant case studies on Olympus presented the timeframe of the scandal right after the exposure. The current study dissects the events during the fraud execution and presents the case in a neutral or a negative light.

Details

Critical Perspectives on International Business, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1742-2043

Keywords

Article
Publication date: 18 January 2024

Benedikt Kirsch, Tim Sauer and Henning Zülch

Since the beginning of the 2000s, investors have more frequently invested into professional football clubs, thereby radically changing the industry landscape. This review's…

Abstract

Purpose

Since the beginning of the 2000s, investors have more frequently invested into professional football clubs, thereby radically changing the industry landscape. This review's purpose is to analyze and synthesize the state of research to understand motives, roles and implications of football club investors, and to provide recommendations for further research.

Design/methodology/approach

The paper presents an integrative literature review by identifying relevant English articles based on the search terms investor, owner, investment, ownership, shareholder and stakeholder in combination with soccer or football. Around 2,431 articles were reviewed. A total of 129 relevant articles was analyzed and synthesized within eight subject areas.

Findings

Investors in professional club football is a young research stream with a clear European focus. Investor motives and roles are diverse and implications are multidimensional. Investors mostly aim for indirect returns rather than pure profit- or win-maximization.

Research limitations/implications

Football clubs comprise an own investment class for which the identified, unique specifics must be considered to develop a financially successful investment model. Thorough academic research of investors' inherent characteristics, investor-club pairings and the pillars of long-term strategies for successful investor-club liaisons are avenues of future research. Furthermore, the results illustrate the need for research outside of Europe.

Originality/value

The paper is the first systematic, integrative review of existing literature in the domain of equity investments into professional club football. The findings genuinely show that, depending on the investor type and ownership structure, investors have a wide impact in professional club football.

Details

Sport, Business and Management: An International Journal, vol. 14 no. 2
Type: Research Article
ISSN: 2042-678X

Keywords

Article
Publication date: 27 March 2024

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.

Details

Management Decision, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0025-1747

Keywords

Article
Publication date: 31 October 2022

Alice Chin, Ooi Chin Lye and Khakan Najaf

One of the significant components of a firm's overall sustainability is establishing and nurturing governance. This study attempts to understand how politically connected firms…

Abstract

Purpose

One of the significant components of a firm's overall sustainability is establishing and nurturing governance. This study attempts to understand how politically connected firms maintain sustainability measures in terms of risk-taking strategies. This paper has two purposes. The first purpose is to provide empirical evidence on the politically connected (PC) firms' corporate risk-taking and performance. The second purpose is to investigate the moderating impact of PC firms' risk on corporate performance.

Design/methodology/approach

To conduct the analysis to test our hypothesis efficiently, data has been collected from Bloomberg and annual reports of all Malaysian PC and non-PC companies. The final sample comprises 561 firms over the investigation period 2010–2019. The methodology entails Ordinary Least Squares (OLS) regressions of the impact of the PC firms on corporate risk-taking and performance. The authors also conduct t-tests of the equality of means of corporate risk-taking and performance between PC and non-PC companies.

Findings

The authors’ results show that politically connected firms undertake significant less corporate risk and relish higher financial performance than their counterparts. It implicatively insinuates that the presence of a politician on the board enables the management to mitigate the risk-taking, which makes the firms more profitable. The authors’ results corroborate network theory, suggesting that political ties alleviate the agency issue and safeguard the shareholders' interest.

Research limitations/implications

The study's results were important as they highlighted the sustainable development of PC and non-PC companies, offering insights to researchers, policymakers, regulators, financial report users, investors, environmental unions, employees, clients and society.

Originality/value

This paper is novel since it is unique in evaluating sustainable practice in PC and non-PC firms.

Details

Asia-Pacific Journal of Business Administration, vol. 16 no. 2
Type: Research Article
ISSN: 1757-4323

Keywords

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