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The study aims to determine whether a relationship exists between the potential significance of corporate controversies for stakeholders and how organisations respond to them in their annual and sustainability reports.

This paper employs content analysis on annual and sustainability reports of 48 listed companies from the Refinitiv database. The logit regression was used to estimate the model.

The study revealed that the main factors increasing the probability of a controversial issue being addressed in a corporate report are the controversy’s potential significance, companies’ financial performance and lawsuits.

Our study has three major limitations. These are a relatively small sample of companies and reports, focusing on disclosures made in corporate reports and omitting other channels of communication, for example, social media, and a certain amount of subjectivity in the process of coding information.

Former studies show that corporations face a serious risk of their hypocritical strategies becoming too evident for stakeholder groups. Our findings suggest that the risk is already materialising and may undermine the idea of CSR and sustainability reporting.

Our research focuses on high-profile adverse incidents widely reported in the media, the omission of which from corporate reports seems to constitute a particular case of organised hypocrite. It also demonstrates that companies use an impression management strategy to defuse adverse publicity and that major controversies cause minor ones to be omitted from their reports.

With the increasing understanding of stakeholders on sustainability aspects for the business, companies are nowadays paying more attention to environmental and social issues. This study aims to examine the relationship between Environmental, Social, Governance (ESG) Index and firms’ value. Moreover, this study also examines how the controversy score influences the company’s value. The authors employ a dataset of 1.356 companies from 22 countries in Asia which representing the Asian market from 2014 to 2018. This study shows that ESG index score and controversy score are statistically significant, affecting the firms’ value, measured by Tobin’s Q. From the individual tests, the findings of this study indicate that ESG-environmental, ESG-social, and ESG-governance, individually affect the firms’ value. This study suggests that providing disclosure on ESG aspects is essential, not only to increase company value but also to show the company resilience and sustainability. On the other hand, ESG controversy score surprisingly indicates a positive relationship with the company value. The result implies that controversies provide a positive signal to the investor because controversies could provide a signal to the public of companies’ willingness to have transparency and accountability.

In recent years, European banks have been required to integrate environmental and social objectives into their business practices. At the same time, they have become increasingly exposed to environmental, social and governance (ESG) controversies. This paper empirically examines the relationship between the board characteristics of banks (i.e. size, gender diversity, meeting frequency, sustainability compensation incentives and the presence of a sustainability committee) and exposure to ESG-related controversies.

The empirical analysis focuses on a sample of 61 European banks between 2012 and 2021. Employing generalized method of moments (GMM) estimation, the authors examine the relationship between board characteristics and ESG controversies.

The results of the study indicate that banks featuring certain board characteristics (i.e. larger and more gender-diverse boards, facing sustainability compensation provisions and having sustainability committees) experience lesser exposure to ESG controversies. Additionally, the authors ascertain that prior instances of ESG controversies play a role in influencing current levels of such controversies. This result highlights the relevance of a bank's historical trajectory.

The authors' sample contains banks based in the European Union (EU). Future research should broaden the analysis to encompass banks operating in other advanced countries, as well as in emerging countries. This expansion would offer more insights into the relationship between board characteristics and ESG controversies under different regulatory frameworks.

The authors' findings provide relevant implications for several stakeholders, including shareholders, regulators and supervisors. Certain board characteristics should be taken into consideration to limit exposure to ESG controversies.

To the best of the authors' knowledge, this paper represents the first attempt to provide evidence of the link between strong corporate governance standards and reduced exposure to ESG controversies.

The purpose of this study is to develop a method to assess social performance. Traditionally, environment, social and governance (ESG) rating providers use subjectively weighted arithmetic averages to combine a set of social performance (SP) indicators into one single rating. To overcome this problem, this study investigates the preconditions for a new methodology for rating the SP component of the ESG by applying machine learning (ML) and artificial intelligence (AI) anchored to social controversies.

This study proposes the use of a data-driven rating methodology that derives the relative importance of SP features from their contribution to the prediction of social controversies. The authors use the proposed methodology to solve the weighting problem with overall ESG ratings and further investigate whether prediction is possible.

The authors find that ML models are able to predict controversies with high predictive performance and validity. The findings indicate that the weighting problem with the ESG ratings can be addressed with a data-driven approach. The decisive prerequisite, however, for the proposed rating methodology is that social controversies are predicted by a broad set of SP indicators. The results also suggest that predictively valid ratings can be developed with this ML-based AI method.

This study offers practical solutions to ESG rating problems that have implications for investors, ESG raters and socially responsible investments.

The proposed ML-based AI method can help to achieve better ESG ratings, which will in turn help to improve SP, which has implications for organizations and societies through sustainable development.

To the best of the authors’ knowledge, this research is one of the first studies that offers a unique method to address the ESG rating problem and improve sustainability by focusing on SP indicators.

This study aims to investigate the relationship between board gender diversity and environmental, social and governance (ESG) controversies and to determine if a critical mass of female directors has a significant impact on ESG performance.

The study analyzes a sample of non-financial companies from 13 European countries between 2004 and 2021. The primary method used to reach conclusions was the pooled ordinary least squares regression. Additionally, the study used supplementary techniques such as alternative measurement, sub-sample analysis and two-stage least squares to enhance its reliability.

The results indicate that a higher representation of women on boards is correlated with a reduction in the number of ESG controversies, particularly when there are three or more female directors. Furthermore, the relationship between board gender diversity and ESG controversies may be affected by factors such as industry, governance and a company’s environmental performance.

This study suggests that increasing women’s representation on boards may mitigate ESG controversies and improve firm reputation and performance, especially in industries with high ESG risks. Policymakers can support this through policies, targets, training and inclusive practices. The findings also inform investors and stakeholders of the relationship between board gender diversity and ESG controversies.

This study expands the understanding of the relationship between board gender diversity and sustainable accounting and finance. It focuses on the effect that having female board members has on corporate policies, which is significant for shaping global policies that promote diversity on boards.

This paper aims to investigate the effect of environmental, social and governance (ESG) controversies on the cost of equity (COE) capital, exploring the moderating role of both positive ESG performance and market securities regulation.

This paper adopts a sample of 2,599 time observations related to European listed companies for which the authors examine a set of 30 negative ESG scores across the three pillars in terms of controversies, compliance and other negative issues. This study uses the average of seven implied COE estimates.

The results show that negative ESG performance, particularly environmental controversies, increases the COE, although this impact is mitigated when associated with company efforts to improve environmental performance. Besides, environmental controversies are likely to increase the COE in countries where the market regulation is stronger, as a consequence of higher investors’ expectations towards the scrutiny role of more efficient markets against companies’ controversies.

Companies should take care seriously of environmental issues such as biodiversity, product impact and resource impact, because investors do react accordingly. As despite no direct effects of positive ESG performance are observed in terms of COE reduction, the mitigating role on the ESG controversies–COE relationship makes ESG practices still significant for European investors.

The effects of ESG performance on company financial performance should be investigated under the assumption that bad events weight more than positive ESG performance.

Because no prior studies have specifically assessed the effect of the European listed companies’ ESG controversies on their COE, this paper delivers insights into the relationship between positive and negative ESG performance and their effects on capital market financing.

The purpose of this paper is to develop the concept of managerial controversy. This concept focusses on organizational disagreements in order to understand the emergence of organization, and also postulates that researchers can better understand organizational phenomena through the ruptures that occur in an organization's everyday activities.

While the concept of controversy was initially developed to understand the emergence of outputs, this paper develops the concept of managerial controversy in order to understand the emergence of ways of working.

The concept of managerial controversy demonstrates that the authors can improve the understanding of organization by focussing on the disagreements, the associations of heterogeneous elements, the mediators, and the traces left by actors, as well as by considering the viewpoints of these actors.

The concept of managerial controversy can be used as a framework for describing the development of organization over time. This concept is suitable for management and organization scholars interested by issues related to organization and organizing.

This paper offers an analytical framework for analyzing the emergence of organizational features from ruptures. Furthermore, the concept of managerial controversy extends to not only the literature of actor-network theory, but also to the literature related to organizing.

This study aims to examine how religiosity influences brand loyalty toward religiously positioned brands (Chick-fil-A, Forever 21, etc.) when these brands engage in morally controversial actions.

Study 1 investigates how religiosity affects brand loyalty when religiously positioned brands engage in religiousness-related vs nonreligiousness-related morally controversial actions. Study 2 examines several psychological processes (reactance, forgiveness and moral decoupling) as mediators of the effects of intrinsic religiosity and extrinsic religiosity on brand loyalty for controversial religious brands.

Study 1 demonstrates that religiosity leads to positive brand loyalty for religiously positioned brands in the case of both religiousness-related and nonreligiousness-related controversies. Study 2 reveals that intrinsic religiosity (extrinsic religiosity) leads to brand loyalty through moral decoupling and forgiveness, but not through reactance, when religious brands engage in religiousness-related (nonreligiousness-related) controversies.

This research focuses on the effects of religiosity on brand loyalty for morally controversial religious brands but does not examine the effects of religious affiliation (Christianity, Islam, Hinduism, etc.). The samples include only US residents.

Religious positioning of brands can engender brand loyalty for consumers with high levels of intrinsic religiosity and/or extrinsic religiosity, even when these brands engage in morally controversial actions.

This research shows that religiosity affects brand loyalty for morally controversial religious brands and demonstrates that psychological processes used by consumers to justify support for morally controversial religious brands depend on type of religiosity (intrinsic vs extrinsic) and type of controversy (religiousness-related and nonreligiousness-related).

How can governments and survivors prepare for and manage natural disasters? Post-disaster reconstruction researchers advocate that community involvement is needed to help survivors recover effectively. This study aims to propose that cooperative goals between government officials and survivors develop guanxi relationships and constructive controversy wherein survivors voice their opinions to aid disaster recovery.

The authors adopted the critical incident technique (CIT), which has proved especially useful for studying complex issues, as well as site-intensive research for interviews and participant observation. After developing a local reputation and rapport by working in a residential resettlement area for two months, an author used the CIT to ask 118 survivors of the 2008 Sichuan earthquake to describe specific incidents when they interacted with government officials about recovery issues and then to rate survey items that measure independent and dependent variables.

Results, including structural equation analyses, support the reasoning that cooperative goals between government and survivors facilitate guanxi and constructive controversy, which in turn produced effective disaster recovery, as indicated by survivors’ social support, satisfaction, reduced stress and beliefs that government officials led effectively.

The data are self-reported and subject to biases and may not be accurate.

In addition to developing theoretical understanding, the results can have important practical implications for strengthening relationships and constructive controversy between government and survivors.

Results suggest that communities have practical ways to prepare for disasters. Structuring cooperative goals among survivors, encouraging guanxi relationships, and training in constructive controversy should promote effective recovery from natural disasters.

The paper develops theory and research on how leaders can promote community involvement for effective disaster management. The paper proposes that high-quality interpersonal relationships, also referred to guanxi, and the open-minded discussion of opposing ideas, labeled constructive controversy, are major components of effective community involvement. The paper adds to the literature by empirically documenting the utility of the Western-developed theory of cooperation and competition and the concept of constructive controversy for understanding the effectiveness of government leadership for disaster recovery in China.