Showing papers on "Corporate group published in 2013"

Hidden Connections: The Link Between Board Gender Diversity and Corporate Social Performance

Abstract: This study examines whether and how female board directors may affect corporate social performance (CSP) by drawing on social role theory and feminist ethics literature. The empirical analysis, based on a sample of 126 firms drawn from the S&P500 group of companies over a 5-year period, suggests that board gender diversity (BGD) significantly affects CSP. However, this impact depends on the social performance metric under investigation. In particular, more gender diverse boards exert stronger influence on CSP metrics focusing on ‘negative’ business practices, such as the ‘concerns’ dimension of the Kinder Lydenberg Domini, Inc. (KLD) ratings. This is because such CSP ratings have the potential to induce higher levels of ‘empathic caring’, which strongly appeals to female directors. Hence, this study reveals further hidden connections in the BGD–CSP link which have important implications for managers, nongovernmental organisations and socially responsible investors.

Institutions, Resources, and Internationalization of Emerging Economy Firms

Abstract: An important step in the internationalization process of emerging economy firms is the shift from exports to foreign direct investment (FDI). We integrate the resource- and institution-based views to suggest that firms that can use unique institutional advantages are more likely to make this shift. We test these arguments with a longitudinal sample of 28,563 firm-year observations (1989–2005). We found that firms that are affiliated with a business group, have more firm- and group-level international experience, have more technological and marketing resources, and operate in service industries are more likely to shift from exports to FDI.

Who Is Governing Whom? Executives, Governance, and the Structure of Generosity in Large U.S. Firms

Abstract: We examine how organizational structure influences strategies over which corporate leaders have significant discretion. Corporate philanthropy is a strategic activity commonly managed through a specific, differentiated organizational structure—the corporate foundation—that formalizes and constrains the influence of individual senior managers and directors on corporate strategy. Our analysis of Fortune 500 firms from 1996 to 2006 shows that characteristics of senior management and directors affect corporate philanthropic contributions. We also find that organizational structure constrains the philanthropic influence of board members, but not of senior managers, a result contrary to what existing theory would predict. We discuss how these findings advance understanding of how organizational structure and corporate leadership interact and how organizations can more effectively realize the strategic value of corporate social responsibility activities.

Corporate Social Responsibility, Corporate Governance and Earnings Quality: Evidence from Korea

Abstract: Manuscript Type Empirical Research Question/Issue How does corporate governance affect a manager's intention to promote corporate social responsibility ( CSR)? Is the relationship between financial transparency and CSR activities affected by the business group affiliation and ownership structure of firms? Research Findings/Insights CSR ratings are negatively correlated with the level of earnings management when all firms are considered. However, the relationship is weaker for chaebol firms and firms with highly concentrated ownership, which suggests that CSR practices can be abusively used by those firms to conceal their poor earnings quality. The adverse use of CSR is discouraged if the fraction of shares owned by institutional investors is high. However, no evidence is found for a similar moderating effect for foreign investors. Theoretical/Academic Implications This study suggests that the business group affiliation and the ownership structure of a firm are important factors in determining the managerial incentives to engage in CSR, which can explain the mixed results reported in previous research. In addition, the possibility of a simultaneous relationship between CSR and other key firm characteristics, such as earnings quality, should be considered when conducting research on CSR. Practitioner/Policy Implications This study provides the insight to investors and other stakeholders that the managerial incentives behind CSR activities can differ depending on a firm's characteristics. Care must be taken when assessing the CSR activities, in particular, of firms with weak corporate governance. For policy makers, it is important to ensure that CSR-related disclosures by firms are based on actual plans and are not intended to deceive stakeholders, especially when the firms are not actively monitored by external shareholders. [ABSTRACT FROM AUTHOR]

Corporate Governance and Payout Policy: Evidence from Korean Business Groups

Abstract: Using a unique, comprehensive data set from a survey on corporate governance practices among Korean listed firms, this paper shows that business group (chaebol) firms have overall stronger governance practices but weaker shareholder rights and lower dividend payout ratios than independent firms do. We also find that the adverse effect of chaebol firms’ weak shareholder rights on dividend payout ratios appears to exemplify with the onset of the global financial crisis in 2008. In addition, our regression results show that the positive correlation between good corporate governance practices and dividend payout ratios is weaker among chaebol firms. Finally, we find that improving corporate governance enhances payout policies over time but is statistically significant only for independent firms. Our results suggest that the entrenched control by chaebol firm owners that stems from their control rights much above the cash flow rights puts less weight on protecting minority shareholders, resulting in smaller distributions of dividend payments.

Adapting to the New Shareholder-Centric Reality

Abstract: After more than eighty years of sustained attention, the master problem of U.S. corporate law — the separation of ownership and control — has mostly been brought under control. This resolution has occurred more through changes in market and corporate practices than through changes in the law. This Article explores how corporate law and practice are adapting to the new shareholder-centric reality that has emerged.Because solving the shareholder-manager agency cost problem aggravates shareholder-creditor agency costs, I focus on implications for creditors. After considering how debt contracts, compensation arrangements, and governance structures can work together to limit shareholder-creditor agency costs, I turn to available legal doctrines that can respond to opportunistic behavior that slips through the cracks: fraudulent conveyance law, restrictions on distributions to shareholders, and fiduciary duties. To sharpen the analysis, I analyze two controversies that pit shareholders against creditors: a hypothetical failed LBO, and the attempts by shareholders of Dynegy Inc. to divert value from creditors through the manipulation of a complex group structure. I then consider some legal implications of a shareholder-centric system, including the importance of comparative corporate law, the challenges to the development of fiduciary duties posed by the awkward divided architecture of U.S. corporate law, the challenges for Delaware in adjudicating shareholder-creditor disputes, and the potential value of reinvigorating the traditional "entity" conception of the corporation in orienting managers and directors.

Corporate governance and payout policy: Evidence from Korean business groups

Abstract: Using a unique, comprehensive data set from a survey on corporate governance practices among Korean listed firms, this paper shows that business group (chaebol) firms have overall stronger governance practices but weaker shareholder rights and lower dividend payout ratios than independent firms do. We also find that the adverse effect of chaebol firms' weak shareholder rights on dividend payout ratios appears to exemplify with the onset of the global financial crisis in 2008. In addition, our regression results show that the positive correlation between corporate governance practices and dividend payout ratios is weaker among chaebol firms. Finally, we find that improving corporate governance enhances payout policies over time but is statistically significant only for independent firms. Our results suggest that the entrenched control by chaebol firm owners that stems from their control rights much above the cash flow rights puts less weight on protecting minority shareholders, resulting in smaller distributions of dividend payments.

Blurred Boundaries between Firms, and New Boundaries within (Large Multinational) Firms: The Impact of Decentralized Networks for Innovation

Abstract: Changes in the environment for international business activities have facilitated more open networked formations, both within and between firms. The spread of more open networks for innovation is increasingly blurring the boundaries between firms. Yet in contrast, more open relationships within large multinational corporations imply that some new boundaries are being correspondingly erected between different sub-units of the firm. A critical feature of more open structures is that internal and external networks have become more closely connected to one another.Keywords: Theory of the firm. Internal and External networks, Open networks, Innovation, Open innovation, Multinational corporationsJEL Classification: D21, F23, L14, O32I. IntroductionTo explain the existence of the firm as a mode of economic organization and coordination (although not the heterogeneity of firms), transaction cost theorists have sometimes drawn a clear and sharp distinction between the apparently purely hierarchical coordination of economic activity within the firm, and the apparently purely non-hierarchical coordination of activity between firms or between firms and other actors, at arm's length through market relationships (by extension of the analysis of Coase 1937). This approach is designed to establish whether a given set of exchange relationships is more efficiently conducted within firms in general, or instead in markets. In the simplest version of this story, there are clear and distinct boundaries between firms and markets (and hence between firms themselves, which are connected essentially just through markets), and no relevant boundaries or sub-divisions within firms.In the Schumpeterian literature, attention shifted to the role of the firm as a continuous creator of knowledge ttirough localized search efforts in and around production, which better explains firm heterogeneity (Nelson and Winter 1982; Rosenberg 1982; Nelson 1991, 2008). However, such problem-solving efforts often call forth knowledge exchanges between firms, and between firms and non-firm actors. If the flows of knowledge between firms, and the extent to which firms draw upon external capabilities rises sufficienuy, then the boundaries between firms may begin to become blurred. In large firms the evolutionary trajectories or paths of corporate technological learning also involve knowledge creation across various divisions or business units, and in multinational corporations (MNCs) they have increasingly involved knowledge creation both at home and in their foreign subsidiaries, and so knowledge often needs to flow within as well as between firms.In this latter context, the barriers to knowledge exchange between different units of a large firm can become as much of an issue as the boundaries between firms, and in particular a tension may develop between the local inter-organizational networking relationships of an intra-firm unit, and its wider international networking relationships with other parts of its corporate group. Partly as a result of this line of research on international networks for knowledge creation or innovation (Hedlund 1986; Cantwell 1995), it has become apparent that such international business networks frequently need to be comprised and to connect both internal MNC networks (usually, across national borders) and various kinds of inter-firm networks (often arranged around a subsidiary within some local or regional geographical area) (Castellani and Zanfei 2006; Cantwell and Mudambi 2011).The rise of so-called vertical specialization In some industries has helped reduce the role of in-house RD Mowery 2009; Adams, Brusoni, and Malerba 2013). This change implies a shift towards a more open structure of inter-firm network relationships, and a decline in the relative significance of any unitary pyramid-like structure of organizational hierarchy in the coordination of activity in the MNC. …

The Effects of Mergers and Acquisition on Corporate Growth and Profitability: Evidence from Nigeria

Abstract: It is a widely held view that a strategic solution to financial distress in corporate organizations is mergers and acquisitions. This view remains a presumption, which has not been empirically tested through a research study. Corporate organizations facing difficulty have in recent times often followed or are compelled by regulators to follow the path of extensive reconstruction through mergers and acquisitions, apparently as the only option to liquidation. This paper fills a gap in the literature by investigating the effects of mergers and acquisitions on the efficiency, growth and profitability of corporate organizations in the post consolidated environment of the Nigerian banking industry. The methodology used is a survey of companies incorporated in Nigeria under the Companies and Allied Matters Act [1990], which have undergone a merger or an acquisition process. The elements of the survey were selected randomly. A total of ten incorporated banks were selected using simple random sampling technique. The collected data were analyzed using key financial ratios. The results support the idea that mergers and acquisitions are not a prima facie solution to the problem of financial distress in corporate organizations. This is especially so when mergers are regulatory imposed than business environment driven. The study further revealed that while mergers and acquisitions can drive growth and profitability in some organizations, operating efficiency suffers at least in the short-term in the post merger and acquisition corporate entity. The evidence also shows that mergers and acquisitions provided only a temporary solution to financial distress and no solution at all to operating indiscipline.

Business group attributes and internationalization strategy in China

Abstract: Business groups play a critical role in the internationalization of Chinese firms, but empirical efforts on this topic are limited. This study aims to fill this gap by examining the impacts of group-specific attributes on the pursuit of different internationalization strategies. Our findings from 219 Chinese business group affiliates show that horizontal linkages among group affiliates are more positively related to asset-seeking internationalization, whereas vertical linkages are more positively related to market-seeking internationalization. We contribute to the literature by moving a step forward to examine if business group attributes are leveraged differentially in market-seeking and asset-seeking internationalization strategies.

Agency theory and the context for R&D investment: Evidence from Korea

Abstract: Pitting the theoretical assumptions of agency theory against the characteristic governance mechanisms of a state-coordinated market economy, this study examines the effects of financial structure, ownership formation and ownership identity on corporate R&D investment. Using panel data on 100 large listed Korean firms, the study provides evidence that market-based governance mechanisms facilitate R&D investment. However, the findings also indicate that the idiosyncratic organizational characteristics of a society, such as business-group affiliation and state ownership in Korea, are not active in dividend payout and are positively related to R&D investment. This suggests that strategic management of changes in corporate governance requires contextual understanding of the two contrasting governance rationales.

Impact of Corporate Governance on Corporate Performance

Abstract: Taking listing A-share companies as an example,this paper analyzes impact of corporate governance on corporate performanceUsing 6856 samples from 2005 to 2009,by regression method,we find that liquid share proportion has negative impact on corporate performance,block share proportion has positive impact on corporate performance,and institutional share proportion has positive impact on corporate performance

Comparative Corporate Governance

Abstract: The business corporation is one of the greatest organizational inventions. But it creates risks for both shareholders and third parties. To mitigate these risks, legislators, judges, and corporate lawyers have tried to learn from experiences in other jurisdictions and adapt their regulatory regimes to them. In the past three decades, this approach has led to a stream of corporate and capital market law reforms unseen before. Corporate governance, the system by which companies are directed and controlled, is today a key topic for legislation, practice, and academia all over the world. Financial crises and corporate scandals have repeatedly highlighted the need to better understand the economic, social, political, and legal determinants of corporate governance in individual countries. “Comparative Corporate Governance: A Functional and International Analysis” furthers this goal by bringing together current scholarship in law and economics with the expertise of corporate governance specialists from twenty-three countries.

The Law of Corporate Purpose

Abstract: Delaware corporate law requires corporate directors to manage firms for the benefit of shareholders, and not for any other constituency. Delaware jurists have been clear about this in their case law, and they are not coy about it in extra-judicial settings, such as speeches directed at law students and practicing members of the corporate bar. Nevertheless, the reader of leading corporate law scholarship is continually exposed to the scholarly assertion that the law is ambiguous or ambivalent on this point, or even that case law affirmatively empowers directors to pursue non-shareholder interests. It is shocking, and troubling, for corporate law scholarship to evince such confusion about the most important black letter matter in the field. While I am a critic of the “shareholder primacy norm” in corporate governance, I am nevertheless convinced that shareholder primacy is the law. In fact, the critical vantage and reformative program that I have pursued in other writing presupposes that shareholder primacy is currently the law. This article is therefore dedicated both to providing doctrinal clarification on the law of corporate purpose, and to vindicating a key presumption in a broader normative agenda.

How SMEs disclose their sustainability performance. Which variables influence the choice of reporting guidelines

Abstract: Purpose Nowadays, social and environmental reporting is approached in different ways, paths and fields by either large-, small-, or medium-sized enterprises (SMEs). However, as demonstrated by previous scholars, SMEs have been critically discussed because they provide lack of proper sustainability disclosure. The fact that the predominant approach of SMEs toward social responsibility is often “sunken” and not “explicit” can drive the lack of disclosure. Furthermore, unstructured communication practices create difficulties in measuring and reporting the sustainability reporting phenomenon in SMEs. The aim of our study is to shed light on the activity of SMEs’ sustainability reporting and disclosure, specifically, by addressing the variables that influence the choice of the guidelines used to prepare sustainability reports. Design/methodology/approach The research has been carried out by using qualitative and quantitative methodologies. The empirical evidence is based on all the Italian companies, mostly SMEs, that were certified in 2011 as having adopted both environmental (i.e., ISO14001 or EMAS) and social (i.e., SA8000) management systems. A multivariate linear regression model has been developed to address the influence of several variables (i.e., financial performance, size, time after achievement of the certifications, group/conglomerate control, etc.) on the guidelines’ choice for preparing sustainability reports. Findings Our findings demonstrate that SMEs prefer to use simple guidelines such as those guidelines that are mandatory under management system certifications. However, the sustainability disclosure driven by the adoption of international guidelines may be more complex if the SME is controlled within a group of companies or if a significant amount of time has passed since the certification date. As such, we developed a taxonomy of their different behavioral drivers according to a legitimacy theory approach. Research limitations At this stage, our study didn’t focus on the contents’ quality of the disclosure and reporting practices adopted by SMEs, which is obviously a worthwhile and important area for further research. Furthermore, the analysis took into account the impact of a number of easily accessible variables; therefore, it can be extended to investigate the effect on disclosure of other relevant variables (i.e., nature of the board of directors, age, and industrial sector in which the company operates) as well as contexts prevailing in other countries. Practical implications The study represents an important contribution for understanding how and why managers might use externally focused disclosure on social and environmental issues to benefit the company’s legitimacy. Social implications Our study provides interesting insights for policy makers who require social or environmental certification when calling for tenders or specific EU contracts, in order to put aside the “brand” or “symbol” and really focus on the disclosed practices. Originality/value Previous studies have provided only a few evidence about reporting practices and related influencing features of SMEs’ sustainability actions. As such, the study wishes to make a significant contribution to the existing literature on Corporate Social Responsibility (CSR) by providing relevant insights about the factors which influence the guidelines used by SMEs in preparing their sustainability reports.

Unsettledness in Delaware Corporate Law: Business Judgment Rule, Corporate Purpose

Abstract: This Article revisits two fundamental issues in corporate law. One — the central role of the business judgment rule in fiduciary litigation — involves a great deal of seemingly settled law, while the other — is there a mandated corporate purpose — has very little law. Using the emergent question of whether the business judgment rule should be used in analyzing officer and controlling shareholder fiduciary duties, the latter issue having recently been addressed by Chancellor Strine in the widely-heralded MFW decision, this Article proposes a fundamental rethinking of the rule’s analytical preeminence. For a variety of reasons, it is suggested that fiduciary duties should be made more prominent and the business judgment rule should be dramatically deemphasized. The policy rationales for the rule are sound, but they have no relevance for shareholders and introduce needless complexity. For directors, those rationales do not apply in the loyalty setting, and in the care setting, can be achieved by recalling simply that there is no substance to judicial review in that context.As to corporate purpose, the Article advocates that Delaware law permit a pluralistic approach in the for-profit corporate sector. Long agnostic about ultimate corporate objective, Delaware law may have turned unnecessarily toward a strict shareholder primacy focus in the 2010 eBay decision. To bring clarification and to foster flexibility, Professor Johnson recommends a legislative default provision, with an opt-out feature. This feature should be in the business corporation statute itself. Delaware’s new benefit corporation law laudably advances the goal of institutional pluralism, but does so at the ironic risk of reinforcing a belief that business corporations themselves are legally permitted only to maximize profits. Judges in a democratic society should not dictate institutional goals.

Entrepreneurial ventures, institutional voids, and business group affiliation: the case of two Brazilian start-ups, 2002-2009

Abstract: Purpose – Institutional voids – the lack of institutions that can facilitate the functioning of markets – are ubiquitous in emerging markets. Because of their newness, entrepreneurial ventures are especially susceptible to institutional vacuums. This research seeks to shed light on the role that business groups can play in the development of entrepreneurial ventures in emerging markets. Design/methodology/approach – Based on detailed fieldwork, the study describes and analyzes the creation and evolution of two biotechnology start-ups that were affiliated to a major Latin American business group. The research covers the period between their foundation and later acquisition by a multinational company. Findings – The article discusses the role that the business group affiliation had in terms of helping the start-ups to interact with multiple institutional voids. The analysis shows that the start-ups benefited from the group’s reputation and connections, experience and know-how in managing different types of businesses in the country, strong resource base, long-term vision, and strong organizational culture. Originality/value – The main contribution of this work is to show that business group affiliation can be an interesting solution that facilitates the development of entrepreneurial ventures in emerging

Business groups and the natural state

Abstract: Recent revisionist accounts of corporate governance in both business history and finance are challenging the tradition narrative, associated with Berle and Means (1932) and Chandler (1977) , in which the American model of diffuse ownership and coherent diversification is both an inevitable outcome of economic development and perhaps a normative standard for the world to follow. This essay is an attempt to rethink that narrative in light of the continued significance of the pyramidal business group as a governance structure around the world. I argue that business groups arise in response both to inadequacies in arm's-length markets and to the needs of what North et al. (2009) call the “natural state.” In this view, the quality of markets and the demands of the state are tightly interconnected phenomena. Such a perspective explains the emergence of business groups in developing countries as well as their persistence even in wealthy and sophisticated polities apart from the U.S. and the U.K. In the end, moreover, I endorse the view that the much-discussed and oft-misunderstood exceptionalism of the U.S. in corporate governance arises not only from the sophistication of American markets but also importantly from government policies toward corporate taxation and securities regulation—policies that arose from the unique Public Choice problem posed by the differential effect on the U.S. of the collapse of globalization during the middle years of the twentieth century.

The Economic History of Corporate Form in Ancient India

Abstract: The corporation is the most popular form of business organization. Moreover, as the economies of emerging markets leap forward the popularity of the corporate form continues to grow. In light of its widespread appeal, one is naturally inclined to inquire more about the corporation and how it developed over time. Many questions can be pondered including: where did the corporate form originate; how old is it; has the corporation taken the same form everywhere or have there been local variations; and what are the pre-conditions for the development of the corporate form. All these questions are important not only for their own intrinsic value, but also because of the insights they provide about the development of the corporate sector in emerging markets and about the prospects for convergence, of one kind or another, in corporate governance. Indeed, a series of important papers by Henry Hansmann & Reinier Kraakman and other authors examine these questions both in Rome and in Medieval Europe. The aim of this paper is to explore a number of these questions by examining the economic history and development of the corporate form in Ancient India. The paper finds considerable evidence that urges us toward a significant revision of the history and development of the corporate form. The examination reveals that business people on the Indian subcontinent utilized the corporate form from a very early period. The corporate form (e.g., the sreni) was being used in India from at least 800 B.C., and perhaps even earlier, and was in more or less continuous use since then until the advent of the Islamic invasions around 1000 A.D. This provides evidence for the use of the corporate form centuries before the earliest Roman proto-corporations. In fact, the use of the sreni in Ancient India was widespread including virtually every kind of business, political and municipal activity. Moreover, when we examine how these entities were structured, governed and regulated we find that they bear many similarities to corporations and, indeed, to modern US corporations. The familiar concerns of agency costs and incentive effects are both present and addressed in quite similar ways as are many other aspects of the law regulating business entities. Further, examining the historical development of the sreni indicates that the factors leading to the growth of this corporate form are consistent with those put forward for the growth of organizational entities in Europe. These factors include increasing trade, methods to contain agency costs, and methods to patrol the boundaries between the assets of the sreni and those of its members (i.e., to facilitate asset partitioning and reduce creditor information costs). Finally, examination of the development of the sreni in Ancient India sheds light on the importance of state structure for the growth of trade and the corporate form as well as on prospects for some kind of convergence in corporate governance.

Innovation Development Programmes for the State-owned Companies: First Results

Abstract: Mikhail Gershman - Senior Research Fellow, Institute for Statistical Studies and Economics of Knowledge, National Research University - Higher School of Economics. E-mail: mgershman@hse.ru Address: National Research University - Higher School of Economics, 20, Myasnitskaya str., Moscow, 101000, Russian Federation.Enhancing innovation performance in the industrial sector of the Russian economy is a long overdue. Since 2010 the government has conducted a kind of «incumbent» policy approach, encouraging mainly the largest state-owned companies. The latter are obliged to elaborate and implement innovation development programmes (IDPs) in order to accelerate modernization of the Russian economy and increase demand for innovation. This paper analyzes the results of the monitoring of STI activities undertaken by the state-owned companies in relation to implementation of innovative development programmes. It evaluates the interim results of government initiatives to foster innovation in the related business segment, notes the negative effects of excessive «compulsion» to innovate and provides recommendations for improving policy. Monitoring shows that the actual priority for most companies is modernization of fixed assets through acquisition of modern machinery and equipment. Technology adoption, along with R&D investments, significantly surpasses other possible mechanisms encouraging innovative development (including support for small and medium-sized enterprises (SMEs), education and training in innovation, co-operation with other actors in the framework of technology platforms, venture funding). The innovation outputs of the surveyed group of companies are in fact comparable to the Russian average although monitoring does not allow the assessment of corporate patent strategies or the novelty of innovative products that are produced and exported.The author argues that the fundamental policy effect through organizational changes and investments may manifest itself in the next decade. However, the quality of the corporate management, employee loyalty to structural change and organisational culture that supports innovation, would likely be more important in enhancing overall performance. Policy recommendations include: differentiation of government incentives according to the companies’ specificities, development of their external linkages with SMEs and universities, linking innovation strategies to corporate policies, and integration of IDPs into the roadmaps of technological development of Russian regions and markets.

Business Group Affiliation, Innovation, Internationalization, and Performance: A SemiParametric Analysis

Abstract: We use firm-level data provided by the fourth U.K. Community Innovation Survey (CIS4) to investigate the relationship between business group affiliation, innovation, internationalization, and firm performance. We carry out a semiparametric estimation procedure and find that: (1) firm performance is higher for those firms that join business groups rather than for stand-alone firms; (2) the introduction of innovation through organizational and/or managerial practices provides higher performance in business groups affiliated than in unaffiliated firms; (3) the joint adoption of innovations is more beneficial than the individual adoption; (4) the interplay between business group affiliation and innovation leads to better performance in those firms that face competition in international markets rather than in those whose product market is domestic only.

Of Enterprise Principles & Corporate Groups: Does Corporate Law Reach Human Rights?

Abstract: In recent years, a number of international and cross-sectoral initiatives have attempted to respond to the human rights impacts of corporations. Foremost among these is the United Nations’ 2008 “Protect, Respect, and Remedy” Framework and its Guiding Principles on Business and Human Rights, adopted in March, 2011. The Framework is noteworthy, in part, because it considers the potential intersections of corporate law and human rights. Conventional wisdom, however, maintains that corporate law is largely irrelevant to questions of human rights. It is generally viewed to be enabling, rather than prescriptive, and concerned with private contracting rather than the public interest. From a practical standpoint, human rights impacts often involve conduct by remote affiliates and business partners of vast multinational corporate organizations. Corporate law, in contrast, governs the "internal affairs" of discrete legal entities within a given jurisdiction, each protected by a limited liability shield. Questions of global corporate accountability for human rights practices have therefore been viewed as beyond its reach. This Article challenges this accepted wisdom by exploring the extent to which corporate law reaches the multinational enterprise. It argues that notwithstanding the centrality of entity-level principles within corporate law, some dimensions of corporate law in fact extend across the formal internal legal boundaries of the multinational corporation. Although corporate law enforcement mechanisms do not offer direct remedies for victims of human rights violations, corporate law is nonetheless an integral part of the emerging institutional infrastructure supporting the human rights responsibilities of corporations.

A tool to measure organizational sustainability strength

Abstract: Europe, US and other countries have awakened us for the challenges of sustainability of the economies, countries and economic organizations as well. In this context, many companies all over the world revealed disability to deal with this present environment by failing to disclose proper strategic decisions in a significant number of cases, unbalanced management practices and the general failure to make a good use of their resources efficiently and effectively in the situation of volatile markets, in order to guarantee its consolidation and stable functioning of businesses and society. These facts had also revealed that financial and economic attitude implemented by some companies, which are focused on short-term earnings, was surpassing a humanist and social vision of businesses and society and revealing a lack of ethic and corporate responsibility in transactions development and in the relations with stakeholders, incompliance with legal obligations, sometimes the manipulation of financial and other corporate data in order to boost a Beyond several factors that could be considered relevant in the framework of sustainability and according to (dimensions) that seem to be of major importance and under which businesses management needs to develop abilities to ensure the sustainability of their organizations. After a primary application of the model to two major Portuguese organizations to test it, the authors are trying to improve it by disclosing a set of organizational competences and dimensions to be analyzed at different levels of organizations in terms of their objectivity and scope of information, regarding each one of the five pillars of the model (Direction, Posture, Organization, Behavior and Evaluation). In this sense, with the adoption of focus group research technic the authors united some academic researchers and managers to analyze and develop each pillar of the proposed model. The authors are developing a study with the support of the Portuguese Construction Technological Platform regarding the main contractors of the sector in Portugal, aiming to reveal the sustainable strength indexes of each one and to disclose the pattern of sustainability robustness of this group of companies. This paper includes a literature review on several aspects of the organizational sustainability and a review about the model, coupled with the proposal of a mathematical application in order to measure an

Outward FDI, performance and group affiliation: evidence from French matched firms

Abstract: This paper investigates whether group affiliation and stakeholder's nationality affect both the propensity of engaging in outward FDI and its effects on home performance Using a sample of French manufacturers, we combine propensity-score matching with a Difference-In-Difference estimator in order to estimate the impact of outward FDI on home activities, and distinguish our results for three subsamples: independent firms, firms which belong to a French business group and foreign-owned affiliates We find that firms which are part of a French business group are more likely to engage in outward FDI and to enjoy positive effects from their investment decision than independent firms This suggests that independent firms face more obstacles in their internationalization process and that group affiliation might increase the ability of handling international development Reversely, foreign-owned firms appear less likely to engage in outward FDI and do not enjoy any significant effect on their home performance ex-post One explanation for this result might be that foreign-owned firms do not invest abroad in order to increase their own performance, but the performance of their own group

Corporate Groups and the Duty of Directors to Act in Their Company's Best Interests

Abstract: The nature of the group structure creates conflicts of interest for directors who have to reconcile both commercial and personal conflicts with this legal duty. This article examines the fiduciary duty of directors to act in the best interests of their company and highlights the complexities of this duty as it relates to corporate groups. The common law is ambiguous as demonstrated by English and Australian decisions, with cases offering different tests to determine the required standard. Landmark Australian litigation is analysed in this article: The Bell Group Ltd (in liq) v. Westpac Banking Corporation [No 9] [2008] WASC 239; and its appeal, Westpac Banking Corporation v. Bell Group Ltd (in liq) (No 3) [2012] WASC 157, where the duty to act in the best interests of a company within a corporate group is a substantive issue. Law reform proposals are also examined, including CASAC’s Corporate Groups Final Report 2000 that recommended a whole of enterprise approach be applied to the regulation of corporate groups and subsequent academic commentary. The consolidation regime that permits corporate groups to be considered as a single entity for the purposes of income taxation is also briefly considered as an example of the complexities of an enterprise approach being applied to the regulation of corporate groups.