Showing papers on "Corporate governance published in 2017"
TL;DR: The basic law of corporate governance has achieved a high degree of uniformity across developed market jurisdictions, and continuing convergence toward a single, standard model is likely as discussed by the authors, which is sometimes said that the shareholder-oriented model of corporate law is well suited only to those jurisdictions in which one finds large numbers of firms with widely dispersed share ownership, such as the United States and the United Kingdom.
Abstract: The basic law of corporate governance—indeed, most of corporate law—has achieved a high degree of uniformity across developed market jurisdictions, and continuing convergence toward a single, standard model is likely. It is sometimes said that the shareholder-oriented model of corporate law is well suited only to those jurisdictions in which one finds large numbers of firms with widely dispersed share ownership, such as the United States and the United Kingdom. The core legal features of the corporate form were already well established in advanced jurisdictions one hundred years ago, at the turn of the twentieth century. Thus, just as there was rapid crystallization of the core features of the corporate form in the late nineteenth century, at the beginning of the twenty-first century we are witnessing rapid convergence on the standard shareholder-oriented model as a normative view of corporate structure and governance.
1,080 citations
TL;DR: A critical assessment of the often exaggerated benefits of blockchain technology found in the literature is presented and a shift from a technology-driven to need-driven approach in which blockchain applications are customized to ensure a fit with requirements of administrative processes is pleaded.
686 citations
TL;DR: Bodin reviews studies and cases that elucidate when, if, and how collaboration can be effective and what kind of environmental problems are most fruitfully addressed in this way and provides general conclusions about the benefits and constraints of collaborative approaches to environmental management and governance.
Abstract: BACKGROUND Current and future generations are confronted with the complex task of devising sustainable solutions to environmental problems. The coming decade might determine whether humanity will be able to set a course toward a future of continued prosperity on a planet whose ecosystems will deliver the needed goods and services. A crucial piece of this puzzle is achieving effective collaboration among different public and private actors and stakeholders. Calls for solving environmental problems through collaborative governance emphasize benefits from local to global scales—from artisanal fishermen avoiding the overfishing of local fish stocks by together agreeing upon sustainable practices, to states jointly committing to implement adequate measures to reduce greenhouse gas emissions. Although commonly advocated, achieving successful collaborations when confronted with complex environmental problems spanning geographical scales and jurisdictional boundaries is an area where substantial knowledge gaps remain. ADVANCES A growing amount of empirical evidence shows the effectiveness of actors engaged in different collaborative governance arrangements in addressing environmental problems. However, studies also show that actors sometimes collaborate only as a means of advocating their own interests, while largely lacking a willingness to contribute towards jointly negotiated solutions to common problems. Hence, collaboration is sometimes unable to deliver any tangible outcomes, or merely produces symbolic outcomes such as aggregated wish lists where conflicts of interest are left untouched. Clearly, no single blueprint exists for how to succeed by using collaborative approaches to solve environmental problems. One way of approaching this puzzle is through the lenses of the participating actors and the ways in which they engage in collaboration with each other. This approach entails directing attention to who the actors are, what their interests and motives are, who they collaborate with, and how the structures of such “collaborative networks” relate to the actors’ joint abilities to address different environmental problems. Emerging insights from recent research suggest that the effectiveness of different collaborative network structures in addressing environmental problems depends on how those problems unfold with respect to the following characteristics: (i) varying levels of risk that actors free-ride on others’ efforts; (ii) varying levels of knowledge gaps, signifying different needs for social learning and deliberation among actors with different backgrounds, experiences, and interests; and (iii) whether these problems are, for all practical purposes, permanent or just temporary. Also, long-standing research questions regarding whether governance structures that are adequately aligned with ecosystem structures and processes are more effective have recently been addressed empirically. Early results suggest several ways in which misalignments between the structure of a collaborative network and the biophysical environment reduce the ability to address environmental problems effectively. OUTLOOK A more nuanced understanding of whether collaborative governance is the most effective way of solving environmental problems is needed. The capacity of collaborative governance to deliver sustainable solutions for any given environmental problem ranges from highly effective to essentially worthless. Future efforts must establish which factors determine the exact location of any collaborative arrangement on this continuum. Emerging insights suggest that where a collaborative arrangement falls on the spectrum results from a complex interplay between several factors. The characteristics of the underlying collective action problem are one factor. Others are the characteristics of the underlying biophysical system and how these align with the ways in which collaborative governance arrangements are constructed, institutionally embedded, and managed. Finally, the patterns in which actors collaborate with each other (or do not) is a factor that potentially determines the effects that the other factors have on a collaborative arrangement’s ability to solve environmental problems.
551 citations
TL;DR: In this article, a survey and content analysis of 76 empirical research articles was conducted to understand the factors driving corporate social responsibility disclosure in both developed and developing countries. And they found that firm characteristics such as company size, industry sector, profitability, and corporate governance mechanisms predominantly appear to drive the CSR reporting agenda.
Abstract: Based on a survey and content analysis of 76 empirical research articles, this article reviews the factors driving Corporate Social Responsibility (CSR) disclosure in both developed and developing countries. We find that firm characteristics such as company size, industry sector, profitability, and corporate governance mechanisms predominantly appear to drive the CSR reporting agenda. Furthermore, political, social, and cultural factors influence the CSR disclosure agenda. We find crucial differences between the determinants of CSR disclosure in developed and developing countries. In developed countries, the concerns of specific stakeholders, for example, regulators, shareholders, creditors, investors, environmentalists and the media are considered very important in disclosing CSR information. In developing countries, CSR reporting is more heavily influenced by the external forces/powerful stakeholders such as international buyers, foreign investors, international media and international regulatory bodies (e.g. the World Bank). Furthermore, in contrast to developed countries, firms in developing countries perceive relatively little pressure from the public with regards to CSR disclosure. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment
532 citations
TL;DR: In this paper, 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 is investigated based on the Carbon Disclosure Project as a sustainability initiative supported by institutional investors.
Abstract: 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.
502 citations
TL;DR: The 17 Sustainable Development Goals (SDGs) of the United Nations present a novel approach to global governance where goal-setting features as a key strategy as discussed by the authors. But their collective success will depend on the extent to which states formalize their commitments, strengthen related global governance arrangements, translate the global ambitions into national contexts, integrate sectoral policies, and maintain flexibility in governance mechanisms.
456 citations
TL;DR: This article developed a network-based climate stress-test methodology and applied it to large Euro Area banks in a "green" and a "brown" scenario, finding that direct and indirect exposures to climate-policy-relevant sectors represent a large portion of investors' equity portfolios, especially for investment and pension funds.
Abstract: The urgency of estimating the impact of climate risks on the financial system is increasingly recognized among scholars and practitioners. By adopting a network approach to financial dependencies, we look at how climate policy risk might propagate through the financial system. We develop a network-based climate stress-test methodology and apply it to large Euro Area banks in a ‘green’ and a ‘brown’ scenario. We find that direct and indirect exposures to climate-policy-relevant sectors represent a large portion of investors’ equity portfolios, especially for investment and pension funds. Additionally, the portion of banks’ loan portfolios exposed to these sectors is comparable to banks’ capital. Our results suggest that climate policy timing matters. An early and stable policy framework would allow for smooth asset value adjustments and lead to potential net winners and losers. In contrast, a late and abrupt policy framework could have adverse systemic consequences.
454 citations
TL;DR: Liu et al. as mentioned in this paper used Rankins' ratings over the 2009 to 2013 period to show that a greater gender balance in top-management supports stronger CSR performance in Chinese listed firms.
433 citations
TL;DR: In this article, the authors show that firms that transition to independent boards focus on more crowded and familiar areas of technology, and that the citation increase comes mainly from incremental patents in the middle of the citation distribution; the numbers of uncited and highly cited patents do not change significantly.
433 citations
TL;DR: This paper investigated the effect of environmental, social, and governance (ESG) activities and their disclosure on firm value, and found that ESG strengths increase firm value and weaknesses decrease it, while disclosure plays a crucial moderating role by mitigating the negative effect of weaknesses and attenuating the positive effect of strengths.
426 citations
TL;DR: In this paper, the authors evaluate the potential implications of these changes for managers, institutional investors, small shareholders, auditors, and other parties involved in corporate governance, and propose that the lower cost, greater liquidity, more accurate record-keeping and transparency of ownership offered by blockchains may significantly upend the balance of power among these cohorts.
Abstract: Blockchains represent a novel application of cryptography and information technology to ageold problems of financial record-keeping, and they may lead to far-reaching changes in corporate governance. During 2015 many major players in the financial industry began to invest in this new technology, and stock exchanges have proposed using blockchains as a new method for trading corporate equities and tracking their ownership. This essay evaluates the potential implications of these changes for managers, institutional investors, small shareholders, auditors, and other parties involved in corporate governance. The lower cost, greater liquidity, more accurate record-keeping, and transparency of ownership offered by blockchains may significantly upend the balance of power among these cohorts.
TL;DR: The authors survey the literature on environmental, social and governance disclosures and performance and their effects on firm value and highlight stylised observations coming from the most recent work that has not yet become part of the ‘conventional wisdom' in the field.
Abstract: This paper not only attempts to survey the burgeoning literature on environmental, social and governance disclosures and performance and their effects on firm value, but its focus also lies on highlighting stylised observations coming from the most recent work that has not yet become part of the ‘conventional wisdom’ in the field. In addition, it outlines some of the crucial knowledge gaps and interesting questions that have not, as of yet, been addressed and thus outlines a potential agenda for future research on socially responsible investing. Lastly, it introduces the papers published in this special issue of the British Accounting Review.
TL;DR: In this paper, the effects of diversity in the board of directors on corporate policies and risk were examined using a multidimensional measure, and it was found that greater board diversity leads to lower volatility and better performance.
TL;DR: In this paper, the authors examined the relation between board gender diversity and economic results in Spain, the second country in the world to legally require gender quotas in boardrooms and historically characterized by a minimal female participation in the workforce.
Abstract: In recent years, several countries have enacted guidelines and/or mandatory laws to increase the presence of women on the boards of companies. Through these regulatory interventions, the aim is to eradicate the social and labor grievances that women have traditionally experienced and which has relegated them to smaller-scale jobs. Nevertheless, and despite the advances achieved, the female representation in the boardroom remains far from the desired levels. In this context, it is now necessary to enhance the advantages of board gender diversity from both ethical and economic points of view. This article examines the relation between board gender diversity and economic results in Spain: the second country in the world to legally require gender quotas in boardrooms and historically characterized by a minimal female participation in the workforce. Based on a sample of 125 non-financial firms listed on the Madrid Stock Exchange from 2005 to 2009, our findings show that in the period analyzed the increase of the number of women on boards was over 98 %. This suggests that compulsory legislation offers an efficient framework to execute the recommendation of Spanish codes of good governance by means of the increase in the number of women in the boards of firms. Furthermore, we find that the increase in the number of women on the boards is positively related to higher economic results. Therefore, both results suggest that gender diversity in boardrooms should be incremented, mandatory laws being a key factor to do so.
TL;DR: In this article, the authors investigated the mediation effect of CSR outcomes on the relationship between CSR governance and financial performance and found that whether companies implement CSR Governance successfully to generate good CSR outcome plays an important role influencing companies' financial performance.
TL;DR: In this paper, the notion of ensuring and enhancing public value as a key governance aim for the transition of the mobility system has been proposed, and modes and methods of governance that could be deployed to steer the transition are discussed.
Abstract: There is an active contemporary debate about how emerging technologies such as automated vehicles, peer-to-peer sharing applications and the ‘internet of things’ will revolutionise individual and collective mobility. Indeed, it is argued that the so-called ‘Smart Mobility’ transition, in which these technologies combine to transform how the mobility system is organised and operates, has already begun. As with any socio-technical transition there are critical questions to be posed in terms of how the transition is managed, and how both the benefits and any negative externalities of change will be governed. This paper deploys the notion of ensuring and enhancing public value as a key governance aim for the transition. It sets out modes and methods of governance that could be deployed to steer the transition and, through four thematic cases explores how current mobility governance challenges will change. In particular, changing networks of actors, resources and power, new logics of consumption, and shifts in how mobility is regulated, priced and taxed – will require to be successfully negotiated if public value is to be captured from the transition. This is a critical time for such questions to be raised because technological change is clearly outpacing the capacity of systems and structures of governance to respond to the challenges already apparent. A failure to address both the short and longer-term governance issues risks locking the mobility system into transition paths which exacerbate rather than ameliorate the wider social and environmental problems that have challenged planners throughout the automobility transition.
TL;DR: In this article, the authors investigated whether the financial profile of a firm is associated with superior environmental, social and governance (ESG) performance, considering firms from Brazil, Russia, India, China and South Africa (the so-called BRICS countries).
TL;DR: The drivers and outcomes of, and barriers to, 27 recent cases of managed retreat—involving the resettlement of approximately 1.3 million people—are evaluated.
Abstract: Managed retreat is a potentially important climate change adaptation option, providing an alternative to structural protection or accommodation measures to manage natural hazard risk. However, its application faces challenges given the projected scale of climate-induced displacement and the difficulties of resettlement. We evaluate the drivers, barriers and outcomes of 27 recent cases of managed retreat that have resettled approximately 1.3 million people. A conceptual model based on two key factors—who benefits from retreat and who initiates it—organizes the diverse set of cases into four quadrants. Different sociopolitical dimensions emerge as particularly influential in each quadrant. The model establishes a foundation for understanding and anticipating case-specific complexities. It can be used to unpack the landscape of managed retreat and evaluate its potential future applications. Managed retreat is a potentially important climate change adaptation option. In this article the drivers and outcomes of, and barriers to, 27 recent cases of managed retreat—involving the resettlement of approximately 1.3 million people—are evaluated.
TL;DR: In this article, the authors comprehensively review the academic literature on board gender composition and develop a conceptual framework that clarifies the causal processes underlying both women's access to boards and the effects of women's presence on boards.
Abstract: In recent years, the composition of boards and, particularly, the inclusion of women on boards has attracted significant scholarly interest and public debate. In this article, I comprehensively review the academic literature on board gender composition. Using the systematic review method, I ask whether women directors really are different from men on boards, what factors shape board gender composition, how board gender composition affects organizational outcomes, and finally, why board gender quotas and other forms of regulation are introduced and what outcomes can be expected. Based on my findings, I develop a conceptual framework that clarifies the causal processes underlying both women's access to boards and the effects of women's presence on boards. Finally, I offer a research agenda designed to enrich our understanding of board gender composition.
TL;DR: In this article, the authors analyze the role of the board of directors in relation to the disclosure of socially responsible information, with a focus on the application of the Global Reporting Initiative guidelines related to CSR.
TL;DR: In this paper, the authors examined whether companies employ corporate social responsibility (CSR) to improve employee engagement and mitigate adverse behavior at the workplace (e.g., shirking, absenteeism).
Abstract: Research summary: This study examines whether companies employ corporate social responsibility (CSR) to improve employee engagement and mitigate adverse behavior at the workplace (e.g., shirking, absenteeism). We exploit plausibly exogenous changes in state unemployment insurance (UI) benefits from 1991 to 2013. Higher UI benefits reduce the cost of being unemployed and hence increase employees' incentives to engage in adverse behavior. We find that higher UI benefits are associated with higher engagement in employee-related CSR. This finding suggests that companies use CSR as a strategic management tool—specifically, an employee governance tool—to increase employee engagement and counter the possibility of adverse behavior. We further examine plausible mechanisms underlying this relationship.
Managerial summary: This study examines whether companies employ corporate social responsibility (CSR) to improve employee engagement and mitigate adverse behavior at the workplace (e.g., shirking, absenteeism). We find that companies react to increased risk of adverse behavior by strategically increasing their investment in employee-related CSR (e.g., work-life balance benefits, health and safety policies). Our findings have important managerial implications. In particular, they suggest that CSR may help companies motivate and engage their employees. Hence, companies dealing with employees that are unmotivated, regularly absent, or engage in other forms of adverse behavior, may find it worthwhile to design and implement effective CSR practices. Further, our findings suggest that CSR can be used as employee governance tool. Accordingly, managers could benefit from integrating CSR considerations into their strategic planning. Copyright © 2015 John Wiley & Sons, Ltd.
TL;DR: In this article, the authors reviewed evidence from the peer-reviewed and grey literatures related to the role of stakeholder engagement (both externally-driven and self-organized engagement) in biodiversity conservation at the local scale using both quantitative and qualitative approaches.
TL;DR: It is argued that, compared to reality construction by traditional mass media, algorithmic reality construction tends to increase individualization, commercialization, inequalities, and deterritorialization and to decrease transparency, controllability, and predictability.
Abstract: This article explores the governance by algorithms in information societies. Theoretically, it builds on (co-)evolutionary innovation studies in order to adequately grasp the interplay of technolog...
Posted Content•
01 Jan 2017TL;DR: In this paper, the authors investigated the relationship between corporate efficiency and corporate sustainability to determine whether firms concerned about environmental, social and governance (ESG) issues can also be efficient and profitable.
Abstract: This study investigated the relationship between corporate efficiency and corporate sustainability to determine whether firms concerned about environmental, social and governance (ESG) issues can also be efficient and profitable. We applied data envelopment analysis to estimate corporate efficiency and investigated the nonlinear relationship between corporate efficiency and ESG disclosure. Evidence shows that corporate transparency regarding ESG information has a positive association with corporate efficiency at the moderate disclosure level, rather than at the high or low disclosure level. Governance information disclosure has the strongest positive linkage with corporate efficiency, followed by social and environmental information disclosure. Moreover, we explored the relationship between particular ESG activities and corporate financial performance (CFP), including corporate efficiency, return on assets and market value. We found that most of the ESG activities reveal a non-negative relationship with CFP. These findings may provide evidence about voluntary corporate social responsibility (CSR) strategy choices for enhancing corporate sustainability.
TL;DR: In this article, the effects of board characteristics and sustainable compensation policy on carbon reduction initiatives and greenhouse gas (GHG) emissions of a firm were examined. But, they did not find any relationship between corporate governance variables and GHG emissions.
Abstract: This study examines the effects of board characteristics and sustainable compensation policy on carbon reduction initiatives and greenhouse gas (GHG) emissions of a firm. We use firm fixed effect model to analyse data from 256 non-financial UK firms covering a period of 13 years (2002–2014). Our estimation results suggest that board independence and board gender diversity have positive associations with carbon reduction initiatives. In addition, environment-social-governance based compensation policy is found to be positively associated with carbon reduction initiatives. However, we do not find any relationship between corporate governance variables and GHG emissions of a firm. Overall, our evidence suggests that corporate boards and executive management tend to focus on a firm's process-oriented carbon performance, without improving actual carbon performance in the form of reduced GHG emissions. The findings have important implications for practitioners and policymakers with respect to the effectiveness of internal corporate governance mechanisms in addressing climate change risks, and possible linkage between corporate governance reform and carbon related policies.
TL;DR: In this article, the authors explored the relationship between corporate social irresponsibility (CSI) and financial risk and found that firms receiving higher CSI coverage face higher financial risk, and that the reach of the reporting media outlet is a critical condition for this relationship.
Abstract: Research summary: This article explores the relationship between corporate social irresponsibility (CSI) and financial risk. We posit that media coverage of CSI generates risk by providing conditions that increase the potential for stakeholder sanctions. Through analyzing an international panel of 539 firms during 2008–2013, we find that firms receiving higher CSI coverage face higher financial risk. We show that the reach of the reporting media outlet is a critical condition for this relationship. Once the outlet has a high reach, the severity of CSI coverage is a boundary condition that further reinforces the effect. Our findings complement existing theory about the risk-mitigating effect of corporate social responsibility by illuminating the risk-generating effect of CSI coverage. For executives, these insights suggest complementary strategies for corporate risk management.
Managerial summary: This article examines the effect of negative news on financial risk. It shows that negative media articles regarding environmental, social, and governance (ESG) issues increase a firm's credit risk. It also provides a detailed analysis of the impact of an article's reach and severity, i.e., how many readers are exposed to the article and how harshly it criticizes the firm. The results allow to quantitatively assess the risk that emanates from negative ESG news. For executives, three strategies are derived for limiting a firm's exposure to this risk: balancing corporate social responsibility programs with operational safety programs, reporting suboptimal environmental and social performance transparently and proactively, and avoiding acquisition targets and markets with a legacy of negative news. Copyright © 2017 John Wiley & Sons, Ltd.
TL;DR: In this paper, the authors evaluate the deep changes in urban governance that follow attempts to address climate change and how, in turn, attempts to govern climate change in urban areas reconfigure discourses informing the politics of climate change.
TL;DR: In this article, the authors explore how public managers can use insights about public sector innovation and public value governance to make more than incremental progress in remedying society's most pressing needs.
Abstract: This article explores how public managers can use insights about public sector innovation and public value governance to make more than incremental progress in remedying society’s most pressing needs. After outlining the features of public innovation, it considers some traditional barriers to achieving it. It then considers the usefulness of the public value framework for managers seeking to design innovative solutions for complex problems, and examines the type of leadership that is likely to foster collaborative innovation and public value. It finishes by offering levers for achieving innovation by adopting design logics and practices associated with inclusive, experimentalist governance.
TL;DR: In this paper, a correlation and regression analysis was carried out to evaluate possible links between ESGP as determined by the Asset4 database of Thomson Reuters and accounting and market-based measures of FINP (Return on Assets [ROA] and Tobin's Q).
Abstract: Purpose
The purpose of this paper is to concentrate on environmental, social and governance performance (ESGP) in total and divided in each component and evaluate their impact on financial performance (FINP).
Design/methodology/approach
The study covers a sample selection of companies listed on the German Prime Standard (DAX30, TecDAX, MDAX) for the business years 2010-2014 (412 firm-year observations). A correlation and regression analysis was carried out to evaluate possible links between ESGP as determined by the Asset4 database of Thomson Reuters and accounting and market-based measures of FINP (Return on Assets [ROA] and Tobin’s Q).
Findings
ESGP has a positive impact on ROA but no impact on Tobin’s Q. Furthermore, by analyzing the three different components of ESGP, governance performance has the strongest impact on FINP in comparison to environmental and social performance.
Originality/value
The analysis makes a key contribution to the empirical corporate social responsibility (CSR) research as the author breaks down ESGP into their three components and include both accounting-based and market-based FINP measures for the German setting for the first time. Not only companies but also regulators and researchers are affected by the notion that CSR and FINP are close together and should be lead to a successful stakeholder management.