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The intensity of carbon emissions has led to the serious problem of global warming, and the consequences in terms of climatic disasters are gaining increasing attention worldwide. As the energy sector is responsible for most global emissions, developing clean energy is crucial to combat climate change. This study aims to examine the relationship between corporate governance and renewable energy (RE) consumption and explore the interaction between RE production and RE use.

The study adopts an econometric framework of a panel model, followed by the robustness check using alternative methods, including logit regressions. The bivariate probit model is used to analyze the interaction between the decision to use and the decision to produce RE. The analysis is based on a sample of 3,896 firms covering 45 countries worldwide.

The results reveal that appropriate governance mechanisms positively impact RE consumption. These include the existence of a sustainability committee; environmental, social and governance-based compensation policy; financial performance-based compensation; sustainability external audit; transparency; board gender diversity; and board independence. Firms with appropriate governance mechanisms are more likely to produce and use RE than others. Finally, while RE use positively impacts firm value and environmental performance, the authors find no significant effect on current profitability.

This study goes beyond previous research by exploring the impact of multiple governance mechanisms. To the best of the authors’ knowledge, this is also the first study examining the relationship between RE use and firm value. Overall, the findings suggest that RE transition requires, first of all, establishing appropriate governance mechanisms within companies.

Although principal–agent theory has gained a prominent place in research, its negative image of self-serving managers is frequently criticized. Thus, the purpose of this paper is to examine how existing theories of agency and stewardship can be combined by using behavioral characteristics.

This study reviewed articles on the behavior of agents and stewards from the domains of finance, economics, management, corporate governance and organizational research. Additional theoretical and meta-analytical empirical literature from the fields of psychology and sociology was used to account for general patterns of human behavior.

The results indicate that goal congruency and the perception of fairness can serve as moderators distinguishing agency theory and stewardship theory. Goal congruency can be achieved by stipulating psychological ownership. The perception of distributive and procedural fairness is demonstrated by two major corporate governance mechanisms: performance-based compensation and board monitoring. The results are summarized in six hypotheses that allow a situational, customized corporate governance. These hypotheses can be tested in future research.

Prior work either focused on the merits of principal-agent theory or advocates the utilization of positive management theories, such as stewardship theory. However, little work has been done on bridging the gap between both constructs and develop a more extensive view of management theory.

Today, the global education market is one of the faster growing sectors, and it has attracted several new actors or what we call educational brokers who are now responsible for shaping national agendas. The newer actors in education are vastly different for the former players in that whereas previous actors engrossed national educational systems through the provision of technical assistance to meet international standards, best practices, and benchmarks, these newer players are for-profit entities that emphasize austerity, leanness, human resource maximization, performance targets, and competition. Therefore, in this new educational landscape, national governments are seen as “clients” who receive “expert” advice from “external consultants” that have an assortment of experiences across different sectors. Education governance is no longer a statist endowed but one that incubates in laborites of best practices resonates with existing case studies and results driven based on Big Date collected. We argue that educational brokers are responsible for the emergence of a hybrid form of education governance that use business and market techniques to reform strategies within the education sector. We conclude by suggesting that collectively educational brokers are using what we call “educational sub-prime mechanisms” – higher interest rates, reduced quality collateral, and less advantageous terms to counterweight higher credit risk – to manage educational portfolios and newer forms of educational risk.

The performance of service supply chains in terms of service levels and cost efficiency depends not only on the effort of service providers but also on the inputs of sub-contractors and the customer. In this sense, performance-based contracting (PBC) entails increased financial risk for providers. Allocating and managing risk through contractual relationships along the service supply chain is a critical issue, and yet there is scant empirical evidence regarding what factors influence, and how, provider willingness to bear PBC-induced risk. This paper aims to address this gap.

The paper draws on agency theory and two cases of logistics service supply chains, in the food retail and automotive industries respectively, to identify key influencing factors. Data were collected through semi-structured interviews with 30 managers of providers and sub-contractors and review of 35 documents, notably contracts and target letters.

Four influencing factors were found: performance attributability within the service supply chain; relational governance in service supply chain relationships; provider risk and reward balancing; and provider ability to transfer risk to sub-contractors. The propositions developed address how these factors influence provider willingness to bear PBC-induced risk.

The factors identified are external to the provider mindset and refer to the management of contractual relationships and service delivery interactions along the service supply chain. The paper contributes to agency theory by stressing the risk allocation implications of bi-directional principal-agent relations in service supply chains.

The study suggests ways in which providers can increase their capacity to bear and manage financial risk related to PBC design.

The paper identifies factors that influence provider willingness to bear financial risk induced by PBC in service supply chains.

An important feature in managing road infrastructures is the growing use of performance-based contracts (PBCs) in the delivery of maintenance. The expectations are high. But there are also risks connected to PBC. The main question for road agencies is: how to achieve as much as possible of the expected advantages while limiting the possible disadvantages? The purpose of this paper is to answer that question and explore how PBC of maintenance can be improved.

Based on theoretical constructs this paper investigates the strategies of the English Highways Agency and the Dutch Rijkswaterstaat, when outsourcing the maintenance of their existing road infrastructures and the effects of their strategies.

The paper finds that road agencies should focus on the process of interaction of the main actors involved, rather than the performance measurement systems (PMS) itself. The agencies should adjust their governance to the degree of uncertainty. PBC requires an informed and knowledgeable principal.

The in-depth study is limited to two road agencies. More systematic research is needed in linking theoretical constructs with empirical evidence from more road agencies. The method applied in this paper can be used for further research.

The lessons drawn from the case studies offer potential benefits to other road authorities that use or consider PBC as their method of delivery of maintenance.

Where only few empirical studies have investigated in detail the actual achievements of PBC in road maintenance, this empirical research aims to fill that gap.

Performance-based contracting (PBC) plays an increasingly important role in the defense industry. This paper aims to investigate factors that influence service provider’s willingness to accept PBC-induced risks. It also shows how these risks could be managed in a military service supply chain.

The case study focused on the relationship between a service provider and a customer that acted on behalf of other users in the defense sector. The contract involved the sustainment of a military engine in a complex supply chain.

The service provider’s performance attributability appeared to have a strong impact on its willingness to take PBC-induced risks. For the parts where the service provider did not have full control over the service performance, exclusions and Service Level Agreements (SLAs) were used to manage and mitigate the risks associated with uncontrolled performance. The service provider’s willingness to accept PBC-induced risks was also affected by its ability to make accurate forecasts, the applied growth path and the length of the contract.

This case has specific characteristics, unique by time (maturity of the technical system and supply chain) and place (market). It is recommended that results are tested in other research settings.

Organizations should be aware of the factors that influence a service provider’s willingness to bear PBC-induced risks. Customers should limit PBC to those parts of a contract where risks are of an acceptable level. Also, it is recommended to follow a phased growth path when it is not possible to make accurate forecasts in a PBC context.

This study is the first to address critical issues concerning the identification and management of risks under PBC in the defense industry.

While anecdotal evidence suggests that performance-based contracts (PBCs) may foster innovation in buyer-supplier relationships, the understanding of the underlying mechanisms is limited to date. The purpose of this paper is to draw on transaction cost economics and agency theory to develop a theoretical model that explains how PBCs may lead to innovation.

Using data on 106 inter-organizational relationships from the Dutch maintenance industry, the authors investigate how the two main features of PBCs – low-term specificity and performance-based rewards – affect incremental and radical innovation.

The authors find that term specificity has an inverse-U-shaped effect on incremental innovation and a non-significant negative effect on radical innovation. Furthermore, pay-for-performance has a stronger positive effect on radical innovation than on incremental innovation. The findings suggest that in pursuit of incremental innovation, organizations should draft contracts with low, but not too low, term specificity and incorporate performance-based rewards. Radical innovation may be achieved by rewarding suppliers for their performance only.

The findings suggest that in pursuit of incremental innovation, organizations should draft contracts with low, but not too low, term specificity and incorporate performance-based rewards. Radical innovation requires rewarding suppliers for their performance only.

Based on the institutional background of mandatory requirement of performance-based executive equity incentives, this paper aims to investigate the impacts of executive equity incentives, vesting periods and vesting performance conditions on corporate innovation.

The empirical analysis is based on the detailed data of equity incentives in China’s listed companies from 2006 to 2014, the Tobit method is implemented to estimate the regression coefficients, and the instrumental variable (IV) approach, Heckman two stage regression, propensity score matching and difference-in-difference models are adopted to solve the problem of endogeneity in several robust tests.

This paper documents that equity incentives and vesting periods are significantly and positively related to corporate innovation measured by R&D investment and patent applications, yet requirements on vesting performance impede corporate innovative activities. Specifically, compared with non-equity incentive companies, the R&D investment and the number of patent applications of equity incentive companies are 40 and 46.2 per cent higher, respectively. A one year increase in equity incentive duration can correspondingly increase the R&D investment by 15 per cent and the patent applications by 18.3 per cent. However, a one standard deviation increase in industry-adjusted ROE target reduces corporate R&D investment by 5 per cent and the patent applications by 8.39 per cent. The main empirical findings still hold after several robust tests.

This paper confirms that the impact of performance-based compensation system on corporate innovation depends on its structure. Specifically, the empirical findings suggest that equity incentive plans being correctly designed can enhance corporate innovative activities, but myopic managers will damage the corporate innovation.

This paper investigates the influence of equity incentive structure on equity incentive effect based on the institutional background of mandatory requirement of performance-based executive equity incentives. It provides an opportunity to understand the mystery of equity incentives, which helps to enrich the structure of equity incentive theoretically. The empirical evidence confirms the importance of tolerating short-term failure and extending the horizon of managerial decision-making on promoting innovation. Overall, the research indicates that only well-designed equity incentive plans can promote innovation, which contributes to regulators and practitioners to form a rational understanding of the premise of equity incentives in promoting innovation and provides a reference for their decision-making.

This study aims to examine the relationship between board composition (i.e. non‐executive directors, family directors, role duality and board size) and bank performance, using a sample of nine listed Kuwait banks over the 2006 to 2010 period.

The study uses ordinary least squares (OLS) and two‐stage‐least squares (2SLS) to test such a relationship and to address endogeneity in explanatory variables.

The results provide some evidence that board composition of banks relates to their performance. According to the OLS regression results, only board size and proportion of non‐executive directors negatively affect bank performance. Meanwhile, the 2SLS results indicate that role duality positively affects a bank's performance while board size affects a bank's performance negatively.

Although the model has explained a significant part of the variation in performance, still unexplained is a material part that represents the “noise” of the model. Data availability limited the ability to study other aspects of corporate governance mechanisms such as number of audit committee members on board. The sample size is small; thus, in future research, the sample size could be increased by including a longer period of time or different countries such as members of the Gulf Cooperation Council (GCC) (Kuwait, Bahrain, Qatar, Oman, United Arab Emirates, and Saudi Arabia).

Given the importance of effective boards in monitoring bank values, more actions and rules need to take place in Kuwait to improve the efficacy of boards in protecting shareholders and their interests in Kuwaiti banks. Regulators may mandate a corporate governance code or adopt the OECD corporate governance principles as a starting point in Kuwait. Kuwaiti companies may use the findings to make appropriate choices about board appointments and best governance to improve performance. Investors also may use the findings to understand Kuwaiti companies. Such findings may assist them to diversify their investment portfolios.

This study asserts to provide insights on the relationship between bank performance and board composition in Kuwait. The study extends prior research and investigates the roles of board of directors in banks in the context of an emerging market characterized by weak shareholder protection and highly concentrated ownership.

This study aims to investigate the immediate impact of a newly released code of governance on the financial performance of Nigerian companies. Tests are carried out to determine whether firms that comply more with the code experience better performance.

The governance change of Nigerian listed firms after the newly released code is classified into ex ante good governance change or ex ante bad governance change; the differences in performance between the good governance change firms and bad governance change firms are then compared. Since firms in any year can change more than one governance indicator, an index of aggregate governance change is computed and the performance of firms from two extreme governance rankings is compared.

It is found that in the immediate period after the release of the code, Nigerian firms reorganised their governance mechanism, and this sometimes involved substitution among mechanisms. However, the performance increase accrued to any firm with reorganisation towards a good mechanism could have been eroded when the same firm instituted a change towards another mechanism that matches the definition of bad change. This therefore makes an attempt to differentiate performance based on governance change (pre‐ and post‐new code) difficult and insignificant.

This study contributes to the scarce literature on corporate governance and firm performance in developing countries. Specifically, it can be regarded as the first study to test the immediate impact of a new code of governance on Nigerian firms. Equally, the adopted methodology makes it the first study to compute and test an aggregate index of governance change for Nigeria.