Earnings Management and Investor Protection: An International Comparison

What makes organizations so similar? We contend that the engine of rationalization and bureaucratization has moved from the competitive marketplace to the state and the professions. Once a set of organizations emerges as a field, a paradox arises: rational actors make their organizations increasingly similar as they try to change them. We describe three isomorphic processes-coercive, mimetic, and normative—leading to this outcome. We then specify hypotheses about the impact of resource centralization and dependency, goal ambiguity and technical uncertainty, and professionalization and structuration on isomorphic change. Finally, we suggest implications for theories of organizations and social change.

The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields (Chinese Translation)

https://cws.journals.yorku.ca/index.php/cws/article/download/14795/13847

Men and Women of the Corporation

This paper investigates the effect of female representation on the board of directors on corporate response to stakeholders’ demands for increased public reporting about climate change-related risks. We rely on the Carbon Disclosure Project as a sustainability initiative supported by institutional investors. Greenhouse gas emissions measurement and its disclosure to investors can be thought of as a first step toward addressing climate change issues and reducing the firm’s carbon footprint. Based on a sample of publicly listed Canadian firms over the period 2008–2014, we find that the likelihood of voluntary climate change disclosure increases with women percentage on boards. We also find evidence that supports critical mass theory with regard to board gender diversity. These findings reinforce initiatives being undertaken around the world to promote gender diversity in corporate governance while demonstrating board effectiveness in stakeholder management.

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Board Gender Diversity and Corporate Response to Sustainability Initiatives: Evidence from the Carbon Disclosure Project

This study examines how family ownership affects the performance and capital structure of 613 Canadian firms from 1998 to 2005. In particular, we distinguish the effect of family ownership from the use of control-enhancing mechanisms. We find that freestanding family owned firms with a single share class have similar market performance than other firms based on Tobin’s q ratios, superior accounting performance based on ROA, and higher financial leverage based on debt-to-total assets. By contrast, family owned firms that use dual-class shares have valuations that are lower by 17% on average relative to widely held firms, despite having similar ROA and financial leverage.

/pdf/family-values-ownership-structure-performance-and-capital-2t429awg6n.pdf

Family values: Ownership structure, performance and capital structure of Canadian firms.

This study provides an integrated view of the combined direct and indirect effects of the main drivers of CSR performance, at country, firm and CEO levels respectively. We extend prior literature by showing that the institutional context, firm CSR governance practices, and CSRrelated compensation incentives have impacts of different magnitudes on CSR performance, as well as significant combined effects. Using an international sample of 1,272 observations over 20 countries, we document significant indirect cascading effects of the institutional setting and firm-specific governance practices on CSR performance. From a managerial perspective, we find that firms operating in countries that are less oriented towards satisfying the needs of the stakeholders still have the ability to counterbalance this institutional impact and achieve relatively high CSR performance by implementing sound firm-level CSR governance practices and incentives.

How do firms achieve corporate social performance? An integrated perspective

Cette recherche examine la gestion des resultats comptables par les dirigeants d’entreprises sujettes a des offres publiques d’achat (OPA) dans le contexte Suisse. Sur un echantillon de 50 societes suisses cibles d’OPA entre 1990 et 2002, l’analyse empirique montre une gestion significative des resultats comptables (mesuree par le niveau des accruals discretionnaires) au cours de l’annee qui precede celle de l’initiation de la transaction.

La Gestion des Résultats Comptables lors des Prises de Contrôle : Une analyse dans le Contexte Suisse

This study investigates the joint effect of corporate ownership and board of directors’ diversity configurations on the success of strategic mergers and acquisitions (M&A) decisions. Board diversity is defined as the extent to which its demographic diversity as measured by the culture, nationality, gender and experience of its directors complements its statutory diversity. A theoretical framework linking ownership, board diversity and M&A strategic decision making is proposed and tested. Based on a sample of 289 M&A decisions undertaken by Canadian firms over the period 2000-2007, demographic diversity is found to have a clear and non linear effect on M&A performance while statutory diversity is of limited influence. Ownership is found to influence the effect of diversity, making the relation finer and more precise. This has practical implications. First, statutory diversity is not sufficient for well-performing boards. Also, ownership is an important factor. The mostly advocated board diversity aimed at insuring the board’s independence is not valid across all ownership configurations. From a public policy perspective, results provide support for the principles-based approach in governance. Governance regimes should encourage the search for a balance between board diversity and the need for cohesion that best serves the firm’s purpose and obligations.

https://papers.ssrn.com/sol3/Delivery.cfm/bjom789.pdf?abstractid=2206122&mirid=1

What Makes Better Boards? A Closer Look at Diversity and Ownership

Governments and corporations around the world are increasingly pressured to manage climate-related business risks and reduce their carbon footprint. Consequently, a growing number of corporations have started implementing internal carbon pricing (ICP) programs, assigning a monetary value to their carbon emissions as a mitigation and adaptation mechanism. This paper explores the motives underlying voluntary ICP adoption and examines whether a firm's exposure to climate-related risks is a relevant driver of ICP adoption. Using a worldwide sample of firms reporting to the Carbon Disclosure Project between 2016 and 2018, we find that firm-level climate change exposure is significantly and positively related to the likelihood of ICP adoption. More specifically, the probability of adoption is largely linked to regulatory shocks and opportunity exposure. Moreover, we find that board independence acts as a moderator in the climate change exposure–ICP adoption relation. The findings of this study shed light on the factors contributing to the acceleration in ICP implementation in the context of a coordinated effort between public and private sectors to reduce global emissions. 

Climate change exposure and internal carbon pricing adoption

The generally accepted method of presentation with respect to going-concern reporting in a global context is to modify the auditor’s report with an explanatory paragraph in addition to having a separate note to the financial statements. In Canada, however, the auditor’s report is clean, and the going concern uncertainty is restricted to the endnotes. This research, using Canadian students as subjects and conducted as a between-subjects experiment, examines unsophisticated investor’s behavior to the signal conveyed by different reporting formats by auditors (U.S. versus Canadian). The results indicate that the form of the auditor’s report does significantly influence subjects’ decisions to invest and their perception of risk.

Walid Ben-Amar

Papers

How do firms achieve corporate social performance? An integrated perspective

La Gestion des Résultats Comptables lors des Prises de Contrôle : Une analyse dans le Contexte Suisse

What Makes Better Boards? A Closer Look at Diversity and Ownership

Climate change exposure and internal carbon pricing adoption

Behavioral implications of alternative going concern reporting formats