Showing papers on "Corporate governance published in 2018"

Towards a Theory of Ecosystems

Abstract: The recent surge of interest in “ecosystems” in strategy research and practice has mainly focused on what ecosystems are and how they operate. We complement this literature by considering when and why ecosystems emerge, and what makes them distinct from other governance forms. We argue that modularity enables ecosystem emergence, as it allows a set of distinct yet interdependent organizations to coordinate without full hierarchical fiat. We show how ecosystems address multilateral dependences based on various types of complementarities - supermodular or unique, unidirectional or bidirectional, which determine the ecosystem’s value-add. We argue that at the core of ecosystems lie non-generic complementarities, and the creation of sets of roles that face similar rules. We conclude with implications for mainstream strategy and suggestions for future research.

AI4People—An Ethical Framework for a Good AI Society: Opportunities, Risks, Principles, and Recommendations

Abstract: This article reports the findings of AI4People, an Atomium—EISMD initiative designed to lay the foundations for a “Good AI Society”. We introduce the core opportunities and risks of AI for society; present a synthesis of five ethical principles that should undergird its development and adoption; and offer 20 concrete recommendations—to assess, to develop, to incentivise, and to support good AI—which in some cases may be undertaken directly by national or supranational policy makers, while in others may be led by other stakeholders. If adopted, these recommendations would serve as a firm foundation for the establishment of a Good AI Society.

Corporate Governance and Sustainability Performance: Analysis of Triple Bottom Line Performance

Abstract: The study empirically investigates the relationship between corporate governance and the triple bottom line sustainability performance through the lens of agency theory and stakeholder theory. We claim, in fact, that no single theory fully accounts for all the hypothesised relationships. We measure sustainability performance through manual content analysis on sustainability reports of the US-based companies. The study extends the existing literature by investigating the impact of selected corporate governance mechanisms on each dimension of sustainability performance, as defined by the GRI framework. Our approach allows to identify which governance mechanisms foster triple bottom line performance, also revealing that some mechanisms fit only specific dimension(s) of sustainability. The fact-based findings provide support for a new beginning in the theorising process in which the theories must try not only to provide rationale for the impact of corporate governance on sustainability, but also to explain which dimension of sustainability might be more affected. The most important implication for practitioners is the support for sustainability practices, which may be gained through implementation of particular corporate governance mechanisms. The findings contribute also to the improvement of the ongoing standard setting process, in particular as it concerns the in-depth revision of the economic dimension of sustainability carried out under the new GRI framework.

Corporate Social Responsibility in Developing Countries as an Emerging Field of Study

Abstract: Given the rising interest in corporate social responsibility (CSR) globally, its local expressions are as varied as they are increasingly visible in both developed and developing countries. This paper presents a multilevel review of the literature on CSR in developing countries and highlights the key differentiators and nuanced CSR-related considerations that qualify it as a distinctive field of study. This review entails a content analysis of 452 articles spanning two-and-a-half decades (1990–2015). Based on this comprehensive review, the authors identify the key differentiating attributes of the literature on CSR in developing countries in relation to depictions of how CSR is conceived or ‘CSR Thinking’ and depictions of how CSR is practiced and implemented or ‘CSR Doing’. The authors synthesize from there five key themes that capture the main aspects of variation in this literature, namely: (1) complex institutional antecedents within the national business system (NBS); (2) complex macro-level antecedents outside the NBS; (3) the salience of multiple actors involved in formal and informal governance; (4) hybridized and other nuanced forms of CSR expressions; and (5) varied scope of developmental and detrimental CSR consequences. The paper concludes by accentuating how the nuanced forms of CSR in the developing world are invariably contextualized and locally shaped by multi-level factors and actors embedded within wider formal and informal governance systems.

Mapping interactions between the sustainable development goals: lessons learned and ways forward

Abstract: Pursuing integrated research and decision-making to advance action on the sustainable development goals (SDGs) fundamentally depends on understanding interactions between the SDGs, both negative ones (“trade-offs”) and positive ones (“co-benefits”). This quest, triggered by the 2030 Agenda, has however pointed to a gap in current research and policy analysis regarding how to think systematically about interactions across the SDGs. This paper synthesizes experiences and insights from the application of a new conceptual framework for mapping and assessing SDG interactions using a defined typology and characterization approach. Drawing on results from a major international research study applied to the SDGs on health, energy and the ocean, it analyses how interactions depend on key factors such as geographical context, resource endowments, time horizon and governance. The paper discusses the future potential, barriers and opportunities for applying the approach in scientific research, in policy making and in bridging the two through a global SDG Interactions Knowledge Platform as a key mechanism for assembling, systematizing and aggregating knowledge on interactions.

Blockchain Technology for Healthcare: Facilitating the Transition to Patient-Driven Interoperability

Abstract: Interoperability in healthcare has traditionally been focused around data exchange between business entities, for example, different hospital systems. However, there has been a recent push towards patient-driven interoperability, in which health data exchange is patient-mediated and patient-driven. Patient-centered interoperability, however, brings with it new challenges and requirements around security and privacy, technology, incentives, and governance that must be addressed for this type of data sharing to succeed at scale. In this paper, we look at how blockchain technology might facilitate this transition through five mechanisms: (1) digital access rules, (2) data aggregation, (3) data liquidity, (4) patient identity, and (5) data immutability. We then look at barriers to blockchain-enabled patient-driven interoperability, specifically clinical data transaction volume, privacy and security, patient engagement, and incentives. We conclude by noting that while patient-driving interoperability is an exciting trend in healthcare, given these challenges, it remains to be seen whether blockchain can facilitate the transition from institution-centric to patient-centric data sharing.

Diversity of Board of Directors and Environmental Social Governance: Evidence from Italian Listed Companies

Abstract: This study investigates the association between environmental, social, and governance (ESG) disclosure and diversity of the board of directors (BoD) in Italian listed companies. Diversity of BoD in terms of gender diversity, CSR committees, board average, and independent directors are examined as to their influence on voluntary ESG disclosure. This rating is highly relevant to managers and investors considering ESG issues in their decision-making process. The factors that drive or hinder ESG disclosure are gaining importance. Despite the relevance of the topic, in Italy there is a scarce amount of literature regarding diversity in the BoD. The data set includes ESG data for more than 54 Italian companies for the period 2011–2014. The results indicate that firm's CSR disclosure is associated with independent director and committee CSR. In addition, women on BoDs is negatively correlated while the age of the board is not significant. Based on this study, shareholders and policymakers will have a deeper knowledge on the significant roles that board diversity is playing as a determinant of ESG disclosure. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment

Plastic pollution of the world's seas and oceans as a contemporary challenge in ocean governance.

Abstract: The pervasive nature of marine plastic pollution was highlighted at the recent United Nations Environment Assembly This meeting saw strong commitments for action, but at the same time reinforced the challenges for contemporary ocean governance in addressing marine plastic pollution

Do ESG Controversies Matter for Firm Value? Evidence from International Data

Abstract: The aim of this paper is to investigate the relationship between environmental, social, and governance (ESG) controversies and firm market value. We use a unique dataset of more than 4000 firms from 58 countries during 2002–2011. Primary analysis surprisingly shows that ESG controversies are associated with greater firm value. However, when interacted with the corporate social performance (CSP) score, ESG controversies are found to have no direct effect on firm value while the interaction appears to be highly and significantly positive. Building on this evidence, we attempt to explore the channels through which CSP may enhance market value. Conducting sample split analysis indicates that higher CSP score has an impact on market value only for high-attention firms, those firms which are larger, perform better, located in countries with greater press freedom, more searched on the Internet, more followed by analysts, and have an improved corporate social reputation. Thus, our findings provide new insights on the role of firm visibility through which firms can profit from their CSP.

Corporate Board and Corporate Social Responsibility Assurance: Evidence from China

Abstract: This paper investigates the association between board characteristics and the company’s corporate social responsibility (CSR) assurance decision in China. By examining 2054 firm-years of Chinese listed companies with CSR reports from 2008 to 2012, we find that firms with a large board size, more female directors, and separation of CEO and chairman positions are more likely to engage in CSR assurance. Gender diversity also influences the CSR assurance provider choice. However, board independence and overseas background of the CEO do not affect the CSR assurance decision. Inconsistent with our prediction, firms with foreign directors are less likely to engage in voluntary CSR assurance. In summary, this research provides in-depth insights into the determinants of Chinese firms’ voluntary CSR assurance.

Corporate Social Responsibility and Investment Efficiency

Abstract: Using a sample of 21,030 US firm-year observations that represents more than 3000 individual firms over the 1998–2012 period, we investigate the relationship between Corporate Social Responsibility (CSR) and investment efficiency. We provide strong and robust evidence that high CSR involvement decreases investment inefficiency and consequently increases investment efficiency. This result is consistent with our expectations that high CSR firms enjoy low information asymmetry and high stakeholder solidarity (stakeholder theory). Moreover, our findings suggest that CSR components that are directly related to firms’ primary stakeholders (e.g. employee relations, product characteristics, environment, and diversity) are more relevant in reducing investment inefficiency compared with those related to secondary stakeholders (e.g. human rights and community involvement). Finally, additional results show that the effect of CSR on investment efficiency is more pronounced during the subprime crisis. Taken together, our results highlight the important role that CSR plays in shaping firms’ investment behaviour and efficiency.

Role of Country- and Firm-Level Determinants in Environmental, Social, and Governance Disclosure

Abstract: In recent years, companies receive pressure to release environmental, social, and governance (ESG) disclosure, since these are perceived as critical issues by society. Despite this pressure, ESG disclosure practices considerably vary by firm. Prior academic literature investigated country- and firm-level factors determining such variation, alternatively adopting the institutional and legitimacy theory. By combining these theories in a unique framework, this study investigates the extent to which social structures (i.e., institutional theory) and social legitimization (i.e., legitimacy theory) influence ESG disclosure practices and each pillar. Results obtained using a cross-country sample of 14,174 firm-year observations during 2005–2012 provide evidence that country-level characteristics such as a political system (legal framework and corruption), labor system (labor protection and unemployment rate), and cultural system (Social Cohesion and Equal Opportunities) significantly affect firms’ ESG disclosure practices. However, their impact is heterogeneous in that they either reduce or enhance disclosure levels and may differ by pillar. Results for firm-level characteristics related to a firm’s visibility (analysts coverage, cross-listing, leverage, and size) demonstrate a positive and homogeneous effect on ESG disclosure and each pillar. These results inform policy makers and regulators aiming to enhance ESG disclosure levels of the risk they incur when managing variables related to social structure and the benefits of exposing firms to higher visibility.

Why is the global governance of plastic failing the oceans

Abstract: On some measures, the global governance of plastic is improving. Curbside recycling and community cleanups are increasing. Companies like Toyota, Walmart, and Procter & Gamble are reducing waste to landfill. And all around the world, as research consolidates and activism intensifies, towns, cities, and legislatures are banning some uses of plastic, such as for grocery bags and as microbeads in consumer products. Yet the amount of plastic flowing into the oceans is on track to double from 2010 to 2025. Why? Partly, the dispersal, durability, and mobility of microplastics make governance extremely hard. At the same time, the difficulty of governing plastic has been rising as production accelerates, consumption globalizes, pollution sources diversify, and international trade obscures responsibility. As pressures and complexities mount, the global governance of plastic – characterized by fragmented authority, weak international institutions, uneven regulations, uncoordinated policies, and business-oriented solutions – is failing to rein in marine plastic pollution. In large part, as this article demonstrates, this governance landscape reflects industry efforts to resist government regulation, deflect accountability, and thwart critics, coupled with industry advocacy of corporate self-regulation and consumer responsibility as principles of governance. These findings confirm the need for more hard-hitting domestic regulation of industry as well as an international plastics treaty to scale up local reforms.

Redefining the Smart City: Culture, Metabolism and Governance

Abstract: The Smart City concept is still evolving and can be viewed as a branding exercise by big corporations, which is why the concept is not being used by the United Nations (U.N.). Smart Cities tend to represent the information, communication, and technological (ICT) industry alone without considering the values and cultural and historical profiles that some cities hold as legacies. However, the technology inherent in Smart Cities promises efficiencies and options that could allow cities to be more “inclusive, safe, resilient, and sustainable” as required by the U.N. agenda including cultural heritage. There is a notable lack of Smart City application to cultural and historical urban fabrics. Instead, the modernist new town approach has emerged under this new rubric leading to many problems such as urban decay and unsustainable car dependence. This study therefore presents a review of the literature on the nature, challenges, and opportunities of Smart Cities. A new Smart Cities framework is proposed based on the dimensions of culture, metabolism, and governance. These findings seek to inform policy makers of an alternative viewpoint on the Smart City paradigm, which focuses on urban outcomes rather than technology in isolation.

Exploring the Relationship Between Business Model Innovation, Corporate Sustainability, and Organisational Values within the Fashion Industry

Abstract: The objective of this paper is to examine the relationship between business model innovation, corporate sustainability, and the underlying organisational values. Moreover, the paper examines how the three dimensions correlate with corporate financial performance. It is concluded that companies with innovative business models are more likely to address corporate sustainability and that business model innovation and corporate sustainability alike are typically found in organisations rooted in values of flexibility and discretion. Business model innovation and corporate sustainability thus seem to have their origin in the fundamental principles guiding the organisation. In addition, the study also finds a positive relationship between the core organisational values and financial performance. The analysis of the paper is based on survey responses from 492 managers within the Swedish fashion industry.

Smart governance in the context of smart cities: A literature review

Abstract: This literature review has focused on smart governance as an emerging domain of study that attracts significant scientific and policy attention. More specifically, this paper aims to provide more insight in the definitions of and relationships between smart governance and concepts such as smart and electronic government, in the context of smart cities. The literature review shows that smart government can be considered as a basis for developing smart governance, through the application of emergent information and communication technologies (ICT) for governing. Smart governance as the intelligent use of ICT to improve decision-making through better collaboration among different stakeholders, including government and citizens, can be strongly related to government approaches. In this case ICT-based tools, such as social media, and openness can be factors that increase citizen engagement and support the development of new governance models for smart government. Smart governance may also have an important role in smart city initiatives, which require complex interactions between governments, citizens and other stakeholders. Based on the literature review, this paper coins a definition of ‘smart city governance’ and contributes to developing a framework for building new, smart governance models addressing the challenges of the digital society, collaborative governance, information sharing, citizen engagement, transparency and openness.

Ethical governance is essential to building trust in robotics and artificial intelligence systems.

Abstract: This paper explores the question of ethical governance for robotics and artificial intelligence (AI) systems. We outline a roadmap-which links a number of elements, including ethics, standards, regulation, responsible research and innovation, and public engagement-as a framework to guide ethical governance in robotics and AI. We argue that ethical governance is essential to building public trust in robotics and AI, and conclude by proposing five pillars of good ethical governance.This article is part of the theme issue 'Governing artificial intelligence: ethical, legal, and technical opportunities and challenges'.

Environmental Policy, Sustainable Development, Governance Mechanisms and Environmental Performance

Abstract: We investigate the effects of environmental policy (Climate Change Act – CCA), sustainable development frameworks (Global Reporting Initiative – GRI; UN Global Compact - UNGC) and corporate governance (CG) mechanisms on environmental performance (Carbon Reduction Initiatives – CRIs and Actual Carbon Performance – GHG emissions) of UK listed firms. We use generalised method of moments (GMM) estimation technique to analyse data consisting of 2,245 UK firm-year observations over the 2002-2014 period. First, we find that the CCA has a positive effect on CRIs, and this effect is stronger in better-governed firms. Second, we find that the GRI-based framework is positively associated with CRIs. Third, we find that firms with poor CG structures have lower actual carbon performance compared with their better-governed counterparts. Overall, our evidence suggests that firms can symbolically conform to environmental policy (CCA) and sustainable development frameworks (GRI, UNGC) by engaging in CRIs without necessarily improving actual environmental performance (GHG emissions) substantively.

Society-in-the-loop: programming the algorithmic social contract

Abstract: Recent rapid advances in Artificial Intelligence (AI) and Machine Learning have raised many questions about the regulatory and governance mechanisms for autonomous machines. Many commentators, scholars, and policy-makers now call for ensuring that algorithms governing our lives are transparent, fair, and accountable. Here, I propose a conceptual framework for the regulation of AI and algorithmic systems. I argue that we need tools to program, debug and maintain an algorithmic social contract, a pact between various human stakeholders, mediated by machines. To achieve this, we can adapt the concept of human-in-the-loop (HITL) from the fields of modeling and simulation, and interactive machine learning. In particular, I propose an agenda I call society-in-the-loop (SITL), which combines the HITL control paradigm with mechanisms for negotiating the values of various stakeholders affected by AI systems, and monitoring compliance with the agreement. In short, `SITL = HITL + Social Contract.'

Vandal: A Scalable Security Analysis Framework for Smart Contracts

Abstract: The rise of modern blockchains has facilitated the emergence of smart contracts: autonomous programs that live and run on the blockchain Smart contracts have seen a rapid climb to prominence, with applications predicted in law, business, commerce, and governance Smart contracts are commonly written in a high-level language such as Ethereum's Solidity, and translated to compact low-level bytecode for deployment on the blockchain Once deployed, the bytecode is autonomously executed, usually by a %Turing-complete virtual machine As with all programs, smart contracts can be highly vulnerable to malicious attacks due to deficient programming methodologies, languages, and toolchains, including buggy compilers At the same time, smart contracts are also high-value targets, often commanding large amounts of cryptocurrency Hence, developers and auditors need security frameworks capable of analysing low-level bytecode to detect potential security vulnerabilities In this paper, we present Vandal: a security analysis framework for Ethereum smart contracts Vandal consists of an analysis pipeline that converts low-level Ethereum Virtual Machine (EVM) bytecode to semantic logic relations Users of the framework can express security analyses in a declarative fashion: a security analysis is expressed in a logic specification written in the \souffle language We conduct a large-scale empirical study for a set of common smart contract security vulnerabilities, and show the effectiveness and efficiency of Vandal Vandal is both fast and robust, successfully analysing over 95\% of all 141k unique contracts with an average runtime of 415 seconds; outperforming the current state of the art tools---Oyente, EthIR, Mythril, and Rattle---under equivalent conditions

Challenges of blockchain technology adoption for e-government: a systematic literature review

Abstract: The ability of blockchain technology to record transactions on distributed ledgers offers new opportunities for governments to improve transparency, prevent fraud, and establish trust in the public sector. However, blockchain adoption and use in the context of e-Government is rather unexplored in academic literature. In this paper, we systematically review relevant research to understand the current research topics, challenges and future directions regarding blockchain adoption for e-Government. The results show that the adoption of blockchain-based applications in e-Government is still very limited and there is a lack of empirical evidence. The main challenges faced in blockchain adoption are predominantly presented as technological aspects such as security, scalability and flexibility. From an organizational point of view, the issues of acceptability and the need of new governance models are presented as the main barriers to adoption. Moreover, the lack of legal and regulatory support is identified as the main environmental barrier of adoption. Based on the challenges presented in the literature, we propose future research questions that need to be addressed to inform how the public sector should approach the blockchain technology adoption.

Next-Generation Innovation Policy and Grand Challenges

Abstract: The paper explores transformative ways to address Grand Challenges, while locating them in a broader diagnosis of ongoing changes. Coping with Grand Challenges is a challenge in its own right, for policy as well as for science, technology, and innovation actors. The paper presents building blocks for a next generation of innovation policies, and it discusses the opportunities offered by new constellations of actors and their concertation. Future innovation policy designs can build on ‘creative corporatism’, a concept in which governments (or related international alliances) can adopt the crucial role of facilitating broader, more diverse ‘varieties of cooperation’ in advanced capitalist economies.

Corporate social responsibility and firm financial performance: the mediating role of productivity

Abstract: This study treats firm productivity as an accumulation of productive intangibles and posits that stakeholder engagement associated with better corporate social performance helps develop such intangibles. We hypothesize that because shareholders factor improved productive efficiency into stock price, productivity mediates the relationship between corporate social and financial performance. Furthermore, we argue that key stakeholders’ social considerations are more valuable for firms with higher levels of discretionary cash and income stream uncertainty. Therefore, we hypothesize that those two contingencies moderate the mediated process of corporate social performance with financial performance. Our analysis, based on a comprehensive longitudinal dataset of the U.S. manufacturing firms from 1992 to 2009, lends strong support for these hypotheses. In short, this paper uncovers a productivity-based, context-dependent mechanism underlying the relationship between corporate social performance and financial performance.

Board gender diversity and ESG disclosure: evidence from the USA

Abstract: The purpose of this paper is to investigate the relationship between corporate debt-like compensation and the value of excess cash holdings.,The environmental, social and governance (ESG) disclosure score provided by Bloomberg is used as a proxy for the extent of corporate social responsibility (CSR). The empirical analysis is based on a sample of 379 firms that made up the Standard & Poor’s 500 Index over the period 2010-2015. In order to take into account the endogeneity problem between board gender diversity and ESG disclosure, a fixed effect model with lagged board variables is used.,Two main results arise from this study. First, no significant relationship is found between board gender diversity and ESG disclosure. Second, the evidence also partially confirms critical mass theory, as below three female directors the relationship between board gender diversity and ESG disclosure is not statistically significant. However, beyond that, no significant relationship was found.,Reasonable theoretical arguments drawn from stakeholder theory suggest that board gender diversity may have a positive effect on ESG disclosure. The empirical evidence presented neither supports, nor denies stakeholder theory. However, the results may be improved by enlarging the frontiers of this research in time and space, increasing the perimeter of qualitative data integrated in this investigation.,This paper offers theoretical and empirical arguments for the feminization of corporate boards, not only in the name of equality between women and men and organizational justice, but also in the light of organizational performance (examined through the prism of governance). Transparency, analyzed using the proxy of ESG disclosure, is strongly and positively correlated with a feminization of boards, if the proportion of women is significant and sufficient to be able to prevent and surpass the “invisibilization” phenomenon, which is based on the marginalization of passive ultra-minorities, reduction to silence, marginalization (disqualification of women voice or exit strategy), assimilation or the endorsement of stigma.,First, this makes a theoretical contribution to the diversity and governance literature by examining the effect of WOCB on ESG disclosure through the stakeholder theory (Freeman, 2010). Second, the authors contribute to the CSR literature (cf. Byron and Post, 2016) by documenting specifically the effect of board gender diversity on CSR disclosures through ESG. Indeed, ESG research mainly concentrates on firm financial performance (Galbreath, 2013). No study has examined the relationship between WOCB and ESG disclosure. Finally, from an empirical standpoint, an FE model with lagged board variables (Liu et al., 2014) is used to fully address the endogeneity problems in the relationship between WOCB and ESG disclosure that may occur because of differences in unobservable characteristics across firms or reverse causality (Boulouta, 2013).