Corporate GovernanceTable of Contents for Corporate Governance. List of articles from the current issue, including Just Accepted (EarlyCite)https://www.emerald.com/insight/publication/issn/1472-0701/vol/24/iss/8?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestCorporate GovernanceEmerald Publishing LimitedCorporate GovernanceCorporate Governancehttps://www.emerald.com/insight/proxy/containerImg?link=/resource/publication/journal/5202c6586cac8bee468e86d1ff854231/urn:emeraldgroup.com:asset:id:binary:cg.cover.jpghttps://www.emerald.com/insight/publication/issn/1472-0701/vol/24/iss/8?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestIs a critical mass of women always enough to improve firm performance? The importance of the institutional contexthttps://www.emerald.com/insight/content/doi/10.1108/CG-02-2023-0058/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to present a comprehensive theoretical framework that seeks to explore the impact of cultural, legal and social factors within the external environment on the relationship between women on corporate boards and firm performance. By investigating these boundary conditions, the paper aims to shed light on how these pressures influence the aforementioned relationship. To build the sample of companies, the authors selected companies listed on the stock exchanges of countries that represent a diverse range of institutional contexts. These contexts encompass countries with individualistic cultures, collectivist cultures, environments with mandatory gender quotas, environments without gender quotas, contexts with substantial progress toward gender equality and contexts with limited progress in achieving gender equality. To test the hypotheses, the authors used linear regression analysis as a primary analytical approach. Furthermore, they used the propensity score matching technique to address potential issues of reverse causality and unobserved heterogeneity. The findings indicate that the positive influence of a critical mass of women on corporate boards on firm performance is contingent upon the institutional context. Specifically, the authors observed that this relationship is strengthened in institutional contexts characterized by an individualistic culture, whereas it is not as pronounced in collectivist cultural contexts. Furthermore, this research provides compelling evidence that the presence of a critical mass of women on boards leads to enhanced firm performance in institutional settings where gender quotas are not binding, as opposed to settings where such quotas are enforced. Lastly, the results demonstrate that the presence of a critical mass of women on boards is associated with improved firm performance in institutional settings characterized by low progress in achieving gender equality. However, the authors did not observe the same effect in institutional contexts that have made significant strides toward gender equality. This research offers a unique perspective by investigating the relationship between women’s presence on corporate boards and firm performance across different institutional contexts. In this investigation, the authors recognize that gender diversity on corporate boards is not a one-size-fits-all solution and that its effects can be shaped by the unique institutional contexts in which companies operate.Is a critical mass of women always enough to improve firm performance? The importance of the institutional context
Maria Cristina Zaccone, Alessia Argiolas
Corporate Governance, Vol. 24, No. 8, pp.1-21

This paper aims to present a comprehensive theoretical framework that seeks to explore the impact of cultural, legal and social factors within the external environment on the relationship between women on corporate boards and firm performance. By investigating these boundary conditions, the paper aims to shed light on how these pressures influence the aforementioned relationship.

To build the sample of companies, the authors selected companies listed on the stock exchanges of countries that represent a diverse range of institutional contexts. These contexts encompass countries with individualistic cultures, collectivist cultures, environments with mandatory gender quotas, environments without gender quotas, contexts with substantial progress toward gender equality and contexts with limited progress in achieving gender equality. To test the hypotheses, the authors used linear regression analysis as a primary analytical approach. Furthermore, they used the propensity score matching technique to address potential issues of reverse causality and unobserved heterogeneity.

The findings indicate that the positive influence of a critical mass of women on corporate boards on firm performance is contingent upon the institutional context. Specifically, the authors observed that this relationship is strengthened in institutional contexts characterized by an individualistic culture, whereas it is not as pronounced in collectivist cultural contexts. Furthermore, this research provides compelling evidence that the presence of a critical mass of women on boards leads to enhanced firm performance in institutional settings where gender quotas are not binding, as opposed to settings where such quotas are enforced. Lastly, the results demonstrate that the presence of a critical mass of women on boards is associated with improved firm performance in institutional settings characterized by low progress in achieving gender equality. However, the authors did not observe the same effect in institutional contexts that have made significant strides toward gender equality.

This research offers a unique perspective by investigating the relationship between women’s presence on corporate boards and firm performance across different institutional contexts. In this investigation, the authors recognize that gender diversity on corporate boards is not a one-size-fits-all solution and that its effects can be shaped by the unique institutional contexts in which companies operate.

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Is a critical mass of women always enough to improve firm performance? The importance of the institutional context10.1108/CG-02-2023-0058Corporate Governance2023-11-22© 2023 Maria Cristina Zaccone and Alessia Argiolas.Maria Cristina ZacconeAlessia ArgiolasCorporate Governance2482023-11-2210.1108/CG-02-2023-0058https://www.emerald.com/insight/content/doi/10.1108/CG-02-2023-0058/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Maria Cristina Zaccone and Alessia Argiolas.http://creativecommons.org/licences/by/4.0/legalcode
Do women on boards break the glass ceiling or face the glass cliff?https://www.emerald.com/insight/content/doi/10.1108/CG-12-2022-0504/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to appraise the effectiveness of gender quotas in breaking the glass ceiling for women on boards (WoBs) in companies that are legally obliged to comply with quotas (listed companies and state-owned companies, LP) and in those that are not (unlisted companies and nonstate-owned companies, NLNP). Furthermore, it investigates the glass cliff phenomenon, according to which women are more likely to be appointed to apical positions in underperforming companies. A balanced panel data of the top 116 Italian companies by total assets, which are present in both 2010 and 2017, is used for estimating ANOVA tests across sectors and fixed-effects panel regression models. WoBs significantly increased in both the LP and the NLNP companies, and this increase was greater in the financial sector. Furthermore, the relationship between the percentage of WoBs and firm performance is not linear but depends on the financial corporate health. Specifically, the situation in which a woman ascends to a leadership position in challenging circumstances where the risk of failure is high (glass cliff phenomenon) is only present in companies with the lowest performance in the sample, in other words, when negative values of Roe and negative or zero values of Roa occur together. These findings have relevant policy implications that encourage the adoption of gender quotas even in specific top positions, such as CEO or president, as this could lead to a “double spillover effect” both vertically, that is, in other job positions, and horizontally, toward other companies not targeted by quotas. Practical interventions to support women in glass cliff positions, on the other hand, relate to the extent of supervisor mentoring and support to prevent women from leaving director roles and strengthen their chances for career advancement. The authors explore the ability of gender quotas to break through the glass ceiling in companies that are not legally obliged to do so, and to the best of the authors’ knowledge, for the first time, the glass cliff phenomenon in the Italian context.Do women on boards break the glass ceiling or face the glass cliff?
Erica Poma, Barbara Pistoresi
Corporate Governance, Vol. 24, No. 8, pp.22-45

This paper aims to appraise the effectiveness of gender quotas in breaking the glass ceiling for women on boards (WoBs) in companies that are legally obliged to comply with quotas (listed companies and state-owned companies, LP) and in those that are not (unlisted companies and nonstate-owned companies, NLNP). Furthermore, it investigates the glass cliff phenomenon, according to which women are more likely to be appointed to apical positions in underperforming companies.

A balanced panel data of the top 116 Italian companies by total assets, which are present in both 2010 and 2017, is used for estimating ANOVA tests across sectors and fixed-effects panel regression models.

WoBs significantly increased in both the LP and the NLNP companies, and this increase was greater in the financial sector. Furthermore, the relationship between the percentage of WoBs and firm performance is not linear but depends on the financial corporate health. Specifically, the situation in which a woman ascends to a leadership position in challenging circumstances where the risk of failure is high (glass cliff phenomenon) is only present in companies with the lowest performance in the sample, in other words, when negative values of Roe and negative or zero values of Roa occur together.

These findings have relevant policy implications that encourage the adoption of gender quotas even in specific top positions, such as CEO or president, as this could lead to a “double spillover effect” both vertically, that is, in other job positions, and horizontally, toward other companies not targeted by quotas. Practical interventions to support women in glass cliff positions, on the other hand, relate to the extent of supervisor mentoring and support to prevent women from leaving director roles and strengthen their chances for career advancement.

The authors explore the ability of gender quotas to break through the glass ceiling in companies that are not legally obliged to do so, and to the best of the authors’ knowledge, for the first time, the glass cliff phenomenon in the Italian context.

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Do women on boards break the glass ceiling or face the glass cliff?10.1108/CG-12-2022-0504Corporate Governance2024-02-05© 2024 Erica Poma and Barbara Pistoresi.Erica PomaBarbara PistoresiCorporate Governance2482024-02-0510.1108/CG-12-2022-0504https://www.emerald.com/insight/content/doi/10.1108/CG-12-2022-0504/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Erica Poma and Barbara Pistoresi.http://creativecommons.org/licences/by/4.0/legalcode
Family involvement in ownership and governance and internal auditing qualityhttps://www.emerald.com/insight/content/doi/10.1108/CG-10-2022-0405/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to investigate the impact of family involvement in ownership and governance on the quality of internal auditing. Leveraging a hand-collected data set of listed family firms from 2014 to 2020, this study uses regression analyses to investigate the impact of family ownership, family involvement on the board, family CEO and the generational stage of the family business on the quality of internal auditing. The results provide evidence that family ownership is positively associated with the quality of internal auditing, while later generational stages of family businesses have the opposite effect. Additional analyses reveal that the presence of a sustainability board sub-committee moderates the relationship between generational stages of family businesses and the quality of internal auditing function. This paper does not consider country-institutional factors and other potentially family-related antecedents or governance factors that may affect the quality of internal auditing. The results are informative for investors and non-family stakeholders interested in understanding under which conditions family-related factors influence the quality of internal auditing functions. This study offers fresh evidence regarding the relationship between family-related factors and the quality of internal auditing and board sub-committees that moderate such a relationship in family businesses.Family involvement in ownership and governance and internal auditing quality
Gianluca Ginesti, Rosalinda Santonastaso, Riccardo Macchioni
Corporate Governance, Vol. 24, No. 8, pp.46-64

This paper aims to investigate the impact of family involvement in ownership and governance on the quality of internal auditing.

Leveraging a hand-collected data set of listed family firms from 2014 to 2020, this study uses regression analyses to investigate the impact of family ownership, family involvement on the board, family CEO and the generational stage of the family business on the quality of internal auditing.

The results provide evidence that family ownership is positively associated with the quality of internal auditing, while later generational stages of family businesses have the opposite effect. Additional analyses reveal that the presence of a sustainability board sub-committee moderates the relationship between generational stages of family businesses and the quality of internal auditing function.

This paper does not consider country-institutional factors and other potentially family-related antecedents or governance factors that may affect the quality of internal auditing.

The results are informative for investors and non-family stakeholders interested in understanding under which conditions family-related factors influence the quality of internal auditing functions.

This study offers fresh evidence regarding the relationship between family-related factors and the quality of internal auditing and board sub-committees that moderate such a relationship in family businesses.

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Family involvement in ownership and governance and internal auditing quality10.1108/CG-10-2022-0405Corporate Governance2023-11-27© 2023 Gianluca Ginesti, Rosalinda Santonastaso and Riccardo Macchioni.Gianluca GinestiRosalinda SantonastasoRiccardo MacchioniCorporate Governance2482023-11-2710.1108/CG-10-2022-0405https://www.emerald.com/insight/content/doi/10.1108/CG-10-2022-0405/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Gianluca Ginesti, Rosalinda Santonastaso and Riccardo Macchioni.
Institutional isomorphic pressures: the impact for women on boardshttps://www.emerald.com/insight/content/doi/10.1108/CG-01-2023-0008/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to analyze the connection between institutional isomorphic pressures and both women serving on boards and women’s influence on boards within large American firms. This study examines a longitudinal panel data set of all Standard and Poor’s (S&P) 500 organizations across a seven-year period from 2009 to 2015. The analyses affirm that institutional isomorphic pressures impact the prevalence and influence of women on boards. Evidence suggests that coercive and normative pressures strongly impact the number of women serving as corporate directors, whereas the power of women directors is linked only to mimetic pressures. The research suggests that to increase the number of women serving as directors, the industry must first increase the overall number of women serving in senior management roles. Once women directors gain a critical mass of three women on the board, the association with the total number of women directors, the number of boards upon which they concurrently serve, the power of women directors being selected to board leadership and the influence of women directors increase. This paper extends existing board diversity work by examining institutional pressures at the international, national and firm levels. By examining the relationship between coercive, normative and mimetic pressures on both the prevalence of women on boards and the influence of women on boards, the authors illuminate certain mechanisms that shape the likelihood of board appointment and placement in more powerful positions.Institutional isomorphic pressures: the impact for women on boards
Alicia R. Ingersoll, Christy Glass, Alison Cook
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to analyze the connection between institutional isomorphic pressures and both women serving on boards and women’s influence on boards within large American firms.

This study examines a longitudinal panel data set of all Standard and Poor’s (S&P) 500 organizations across a seven-year period from 2009 to 2015.

The analyses affirm that institutional isomorphic pressures impact the prevalence and influence of women on boards. Evidence suggests that coercive and normative pressures strongly impact the number of women serving as corporate directors, whereas the power of women directors is linked only to mimetic pressures.

The research suggests that to increase the number of women serving as directors, the industry must first increase the overall number of women serving in senior management roles. Once women directors gain a critical mass of three women on the board, the association with the total number of women directors, the number of boards upon which they concurrently serve, the power of women directors being selected to board leadership and the influence of women directors increase.

This paper extends existing board diversity work by examining institutional pressures at the international, national and firm levels. By examining the relationship between coercive, normative and mimetic pressures on both the prevalence of women on boards and the influence of women on boards, the authors illuminate certain mechanisms that shape the likelihood of board appointment and placement in more powerful positions.

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Institutional isomorphic pressures: the impact for women on boards10.1108/CG-01-2023-0008Corporate Governance2023-11-21© 2023 Emerald Publishing LimitedAlicia R. IngersollChristy GlassAlison CookCorporate Governanceahead-of-printahead-of-print2023-11-2110.1108/CG-01-2023-0008https://www.emerald.com/insight/content/doi/10.1108/CG-01-2023-0008/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Corporate board, audit committee and earnings manipulation: does the corporate regulation matter? An emerging economy perspectivehttps://www.emerald.com/insight/content/doi/10.1108/CG-01-2023-0013/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to investigate the impact of the revised Code of Corporate Governance 2017 (CCG-2017) clauses pertaining to board independence, mandatory inclusion of female directors, audit committee (AC) chair independence and directors’ expertise on earnings manipulation. Using an unbalanced panel of 323 listed companies from 2015 to 2019, this study uses panel data regression models with a robust methodology called difference-in-differences to tackle the potential endogeneity. This study’s findings show that, as compared to the pre-CCG-2017 period, board- and AC-related variables increased significantly in the post-CCG-2017 period. Furthermore, financial experts on the board and board independence have a negative effect on discretionary accruals (DAs), whereas female directors and DAs are positively related, as is real activity manipulation. The AC-related variables, such as AC independence, expertise in AC, and AC chair independence, are significantly different from the preperiod to the postperiod, whereas their relationship is not according to the hypotheses of the study. Moreover, these results are robust to additional analysis of the alternative proxies for female directorship and the endogeneity problem. The findings of this study have implications for regulators and practitioners who are concerned with the functions of the board of directors (BOD). The findings of this research study show that earnings management (EM) may be reduced by independent and expert directors. However, board gender diversity is not reducing the EM. Therefore, the decision to appoint female directors to the board should be based on their business and professional attributes rather than simply filling quotas or blindly adhering to regulations. Moreover, the findings of this research may assist the regulator in encouraging listed firms to enhance board governance via independence, diversity and competency, which are useful for effective monitoring. This study fills a gap in the literature by providing the first evidence of country-specific regulation (CCG-2017), concerning the BOD and AC-related clauses on EM in Pakistan, which is missing in the relevant literature general and in Pakistan in particular.Corporate board, audit committee and earnings manipulation: does the corporate regulation matter? An emerging economy perspective
Sattar Khan, Yasir Kamal
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to investigate the impact of the revised Code of Corporate Governance 2017 (CCG-2017) clauses pertaining to board independence, mandatory inclusion of female directors, audit committee (AC) chair independence and directors’ expertise on earnings manipulation.

Using an unbalanced panel of 323 listed companies from 2015 to 2019, this study uses panel data regression models with a robust methodology called difference-in-differences to tackle the potential endogeneity.

This study’s findings show that, as compared to the pre-CCG-2017 period, board- and AC-related variables increased significantly in the post-CCG-2017 period. Furthermore, financial experts on the board and board independence have a negative effect on discretionary accruals (DAs), whereas female directors and DAs are positively related, as is real activity manipulation. The AC-related variables, such as AC independence, expertise in AC, and AC chair independence, are significantly different from the preperiod to the postperiod, whereas their relationship is not according to the hypotheses of the study. Moreover, these results are robust to additional analysis of the alternative proxies for female directorship and the endogeneity problem.

The findings of this study have implications for regulators and practitioners who are concerned with the functions of the board of directors (BOD). The findings of this research study show that earnings management (EM) may be reduced by independent and expert directors. However, board gender diversity is not reducing the EM. Therefore, the decision to appoint female directors to the board should be based on their business and professional attributes rather than simply filling quotas or blindly adhering to regulations. Moreover, the findings of this research may assist the regulator in encouraging listed firms to enhance board governance via independence, diversity and competency, which are useful for effective monitoring.

This study fills a gap in the literature by providing the first evidence of country-specific regulation (CCG-2017), concerning the BOD and AC-related clauses on EM in Pakistan, which is missing in the relevant literature general and in Pakistan in particular.

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Corporate board, audit committee and earnings manipulation: does the corporate regulation matter? An emerging economy perspective10.1108/CG-01-2023-0013Corporate Governance2023-11-10© 2023 Emerald Publishing LimitedSattar KhanYasir KamalCorporate Governanceahead-of-printahead-of-print2023-11-1010.1108/CG-01-2023-0013https://www.emerald.com/insight/content/doi/10.1108/CG-01-2023-0013/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Executive compensation, risk and performance: evidence from the USAhttps://www.emerald.com/insight/content/doi/10.1108/CG-01-2023-0017/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestGiven the serious question raised by the subprime of the 2008 global financial crisis over the rising practices of excessive rewarding of executives in the USA and European firms, the executive pay-performance nexus has emerged as a popular topic of debate in the contemporary corporate finance research. Conducted mostly on the Anglo-Saxon contexts, research outcomes have been inconclusive and dichotomous. Considering this backdrop, this study aims to investigate the endogenous relationship between executive compensation and risk taking in the context of the USA. Using a large sample of non-financial firms from 2010 to 2020 based on panel data and two-stage least square regression. In this study, the riskier corporate decision is measured as book leverage and ratio of R&D expense to total assets. Chief executive officers’ (CEO) experience and age are used as instrumental variables, and these are expected to influence compensation incentives and, hence, affect firm riskiness indirectly. Firm size, return on assets and CEO turnover are reported to affect compensation and corporate decisions, therefore, included as control variables. Given that higher executive compensation is related to riskier corporate decision in firms, this study incorporates total wealth (i.e. accumulated equity related compensation) as an additional proxy of compensation, and this selection is justifiable by the perfect contracting notion of the agency theory. The results of this study show a significant positive and increasing nexus among compensation and riskier corporate decisions. Besides, the compensation level proxied through the percentage of each form of compensation in total compensation is very important as greater equity and greater salary diminishes risk taking. The outcomes of this study have useful implications for firm stakeholders and policymakers. The level of pay measured by the percentage of each type of compensation in total compensation is of utmost importance as it can increase or decrease risk taking in corporate decisions.Executive compensation, risk and performance: evidence from the USA
Ahmed Bouteska, Taimur Sharif, Mohammad Zoynul Abedin
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

Given the serious question raised by the subprime of the 2008 global financial crisis over the rising practices of excessive rewarding of executives in the USA and European firms, the executive pay-performance nexus has emerged as a popular topic of debate in the contemporary corporate finance research. Conducted mostly on the Anglo-Saxon contexts, research outcomes have been inconclusive and dichotomous. Considering this backdrop, this study aims to investigate the endogenous relationship between executive compensation and risk taking in the context of the USA.

Using a large sample of non-financial firms from 2010 to 2020 based on panel data and two-stage least square regression. In this study, the riskier corporate decision is measured as book leverage and ratio of R&D expense to total assets. Chief executive officers’ (CEO) experience and age are used as instrumental variables, and these are expected to influence compensation incentives and, hence, affect firm riskiness indirectly. Firm size, return on assets and CEO turnover are reported to affect compensation and corporate decisions, therefore, included as control variables. Given that higher executive compensation is related to riskier corporate decision in firms, this study incorporates total wealth (i.e. accumulated equity related compensation) as an additional proxy of compensation, and this selection is justifiable by the perfect contracting notion of the agency theory.

The results of this study show a significant positive and increasing nexus among compensation and riskier corporate decisions. Besides, the compensation level proxied through the percentage of each form of compensation in total compensation is very important as greater equity and greater salary diminishes risk taking.

The outcomes of this study have useful implications for firm stakeholders and policymakers.

The level of pay measured by the percentage of each type of compensation in total compensation is of utmost importance as it can increase or decrease risk taking in corporate decisions.

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Executive compensation, risk and performance: evidence from the USA10.1108/CG-01-2023-0017Corporate Governance2024-01-08© 2023 Emerald Publishing LimitedAhmed BouteskaTaimur SharifMohammad Zoynul AbedinCorporate Governanceahead-of-printahead-of-print2024-01-0810.1108/CG-01-2023-0017https://www.emerald.com/insight/content/doi/10.1108/CG-01-2023-0017/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Sustainability reporting, board diversity, earnings management and financial statements readability: evidence from an emerging economyhttps://www.emerald.com/insight/content/doi/10.1108/CG-01-2023-0021/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to investigate the moderating effect of sustainability reporting on the relationship between the independent variables of board diversity, and earnings management and the dependent variable of readability of financial statements. The study panel data regression analysis involved 36 Kenyan-listed companies from 2016 to 2020. Key findings were that increased board diversity was found to significantly improve the readability of financial statements. Discretionary earnings management was found to significantly reduce the readability of financial statements. Sustainability reporting was found to significantly increase the readability of financial statements, and it moderated the relationship between board diversity, earnings management and financial statements readability in Kenya. The study sample of 36 non-financial listed in the Nairobi Securities Exchange was very small and was affected by the problem of thin trading; hence, caution should be adopted when interpreting the findings. The Capital Markets Authorities (CMA) as a policymaker should enforce sustainability reporting by Kenyan listed firms as there is evidence that the reporting enhances the readability of financial statements. The Institute of Certified Public Accountants as a policymaker should closely monitor the published financial statements of firms for earnings management and punish the perpetrators, as there is empirical evidence that the practice reduces the readability of financial statements. Sustainability reporting is successful as a moderating variable between readability of financial statements and determinants of readability of financial statements. This study contributes to knowledge by studying sustainability reporting as a moderating variable between the independent variables of board diversity and earnings management and the dependent variable of readability of financial statements and measured sustainability reporting using a dummy variable for the period before and after the enactment and release of CMA code of 2016 on corporate governance that required sustainability reporting by Kenyan listed companies.Sustainability reporting, board diversity, earnings management and financial statements readability: evidence from an emerging economy
James Ndirangu Ndegwa
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to investigate the moderating effect of sustainability reporting on the relationship between the independent variables of board diversity, and earnings management and the dependent variable of readability of financial statements.

The study panel data regression analysis involved 36 Kenyan-listed companies from 2016 to 2020.

Key findings were that increased board diversity was found to significantly improve the readability of financial statements. Discretionary earnings management was found to significantly reduce the readability of financial statements. Sustainability reporting was found to significantly increase the readability of financial statements, and it moderated the relationship between board diversity, earnings management and financial statements readability in Kenya.

The study sample of 36 non-financial listed in the Nairobi Securities Exchange was very small and was affected by the problem of thin trading; hence, caution should be adopted when interpreting the findings.

The Capital Markets Authorities (CMA) as a policymaker should enforce sustainability reporting by Kenyan listed firms as there is evidence that the reporting enhances the readability of financial statements. The Institute of Certified Public Accountants as a policymaker should closely monitor the published financial statements of firms for earnings management and punish the perpetrators, as there is empirical evidence that the practice reduces the readability of financial statements.

Sustainability reporting is successful as a moderating variable between readability of financial statements and determinants of readability of financial statements.

This study contributes to knowledge by studying sustainability reporting as a moderating variable between the independent variables of board diversity and earnings management and the dependent variable of readability of financial statements and measured sustainability reporting using a dummy variable for the period before and after the enactment and release of CMA code of 2016 on corporate governance that required sustainability reporting by Kenyan listed companies.

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Sustainability reporting, board diversity, earnings management and financial statements readability: evidence from an emerging economy10.1108/CG-01-2023-0021Corporate Governance2023-11-09© 2023 Emerald Publishing LimitedJames Ndirangu NdegwaCorporate Governanceahead-of-printahead-of-print2023-11-0910.1108/CG-01-2023-0021https://www.emerald.com/insight/content/doi/10.1108/CG-01-2023-0021/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Visibilizing and managing paradox: redefining the role of non-executive directorshttps://www.emerald.com/insight/content/doi/10.1108/CG-01-2023-0038/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to discuss the work of non-executive directors (NEDs) as inherently paradoxical. Paradox refers to the presence of persistent contradictions between interdependent forces. Those persistent tensions are explored, and approaches are indicated to stimulate the adaptive use of paradoxes as forces of innovation and renewal. This conceptual approach can be read as an invitation for corporate governance scholars to embrace the logic of paradox to expand the understanding of this topic. Paradox is not conceptualized as an alternative to dominant structural views, including board composition, but as a complementary conceptual perspective, a meta-theoretical lens to shed light on the tensions inherent to governance. The authors propose that paradox theory offers a fresh conceptual lens to study the role of NEDs. This approach may help NEDs to turn tensions and paradoxes visible to develop a rich understanding of their work, as well as helping them navigate the complexities of organizing, a process rich in inherent paradoxicality. Organizational paradox theory is a bourgeoning field of study, but the conceptual lens of paradox has still been underexplored in the study of corporate governance.Visibilizing and managing paradox: redefining the role of non-executive directors
Miguel Pina e Cunha, António Nogueira Leite, Arménio Rego, Remedios Hernández-Linares
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to discuss the work of non-executive directors (NEDs) as inherently paradoxical. Paradox refers to the presence of persistent contradictions between interdependent forces. Those persistent tensions are explored, and approaches are indicated to stimulate the adaptive use of paradoxes as forces of innovation and renewal.

This conceptual approach can be read as an invitation for corporate governance scholars to embrace the logic of paradox to expand the understanding of this topic. Paradox is not conceptualized as an alternative to dominant structural views, including board composition, but as a complementary conceptual perspective, a meta-theoretical lens to shed light on the tensions inherent to governance.

The authors propose that paradox theory offers a fresh conceptual lens to study the role of NEDs. This approach may help NEDs to turn tensions and paradoxes visible to develop a rich understanding of their work, as well as helping them navigate the complexities of organizing, a process rich in inherent paradoxicality.

Organizational paradox theory is a bourgeoning field of study, but the conceptual lens of paradox has still been underexplored in the study of corporate governance.

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Visibilizing and managing paradox: redefining the role of non-executive directors10.1108/CG-01-2023-0038Corporate Governance2024-01-26© 2024 Emerald Publishing LimitedMiguel Pina e CunhaAntónio Nogueira LeiteArménio RegoRemedios Hernández-LinaresCorporate Governanceahead-of-printahead-of-print2024-01-2610.1108/CG-01-2023-0038https://www.emerald.com/insight/content/doi/10.1108/CG-01-2023-0038/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
Do Indian banks perform better in corporate governance than other SAARC nations? An empirical analysishttps://www.emerald.com/insight/content/doi/10.1108/CG-02-2023-0059/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to investigate the role of corporate governance on the bank profitability of Indian banks vis-à-vis South Asian Association for Regional Cooperation (SAARC) nations. For the Corporate Governance Index, the authors examined board accountability, transparency and disclosure and audit committee, while Tobin’s Q, return on equity and return on assets are used to measure the bank’s profitability. The study used a two-stage analysis based on balanced panel data for robust findings. Sample of this study consists of 60 commercial banks from India and 60 banks from SAARC nations for the period of 2009–2021. This study used panel regression and a generalized method of moment approach using the CAMELS framework on banking industry-specific variables to determine their respective impacts. The findings of this study suggest that board accountability is positive and significantly affects the profitability of banks as indicated by return on assets, return on equity and Tobin’s Q. In contrast, the audit committee has a positive and insignificant impact on return on assets, return on equity and Tobin’s Q, while transparency and disclosure have a negative and significant impact on these metrics. Furthermore, the country dummy result shows a significant positive impact on all the bank performance parameters, implying that Indian banks have the highest degree of convergence with corporate governance as compared to other SAARC nations. This study provides insight to the regulators, policymakers and financial institutions to evaluate the role of corporate governance in emerging economies. However, the findings of the study should be interpreted with caution, as the results are sensitive to the disparity between India and other SAARC nations' government policies, climatic circumstances and cultural or religious traditions. To the best of the authors’ knowledge, this is the first attempt to gauge the performance of Indian banks vis-à-vis SAARC nations using the CAMELS framework approach. Further, findings of this study suggest some novel evidence tying corporate governance quality with the profitability of banks among SAARC nations.Do Indian banks perform better in corporate governance than other SAARC nations? An empirical analysis
Mahfooz Alam, Shakeb Akhtar, Mamdouh Abdulaziz Saleh Al-Faryan
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to investigate the role of corporate governance on the bank profitability of Indian banks vis-à-vis South Asian Association for Regional Cooperation (SAARC) nations.

For the Corporate Governance Index, the authors examined board accountability, transparency and disclosure and audit committee, while Tobin’s Q, return on equity and return on assets are used to measure the bank’s profitability. The study used a two-stage analysis based on balanced panel data for robust findings. Sample of this study consists of 60 commercial banks from India and 60 banks from SAARC nations for the period of 2009–2021. This study used panel regression and a generalized method of moment approach using the CAMELS framework on banking industry-specific variables to determine their respective impacts.

The findings of this study suggest that board accountability is positive and significantly affects the profitability of banks as indicated by return on assets, return on equity and Tobin’s Q. In contrast, the audit committee has a positive and insignificant impact on return on assets, return on equity and Tobin’s Q, while transparency and disclosure have a negative and significant impact on these metrics. Furthermore, the country dummy result shows a significant positive impact on all the bank performance parameters, implying that Indian banks have the highest degree of convergence with corporate governance as compared to other SAARC nations.

This study provides insight to the regulators, policymakers and financial institutions to evaluate the role of corporate governance in emerging economies. However, the findings of the study should be interpreted with caution, as the results are sensitive to the disparity between India and other SAARC nations' government policies, climatic circumstances and cultural or religious traditions.

To the best of the authors’ knowledge, this is the first attempt to gauge the performance of Indian banks vis-à-vis SAARC nations using the CAMELS framework approach. Further, findings of this study suggest some novel evidence tying corporate governance quality with the profitability of banks among SAARC nations.

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Do Indian banks perform better in corporate governance than other SAARC nations? An empirical analysis10.1108/CG-02-2023-0059Corporate Governance2023-11-08© 2023 Emerald Publishing LimitedMahfooz AlamShakeb AkhtarMamdouh Abdulaziz Saleh Al-FaryanCorporate Governanceahead-of-printahead-of-print2023-11-0810.1108/CG-02-2023-0059https://www.emerald.com/insight/content/doi/10.1108/CG-02-2023-0059/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The impact of CEO power on corporate tax avoidance: the moderating role of institutional ownershiphttps://www.emerald.com/insight/content/doi/10.1108/CG-02-2023-0067/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to investigate the relationship between chief executive officer (CEO) power and the level of tax avoidance of Tunisian listed companies. It also examines the moderating role of institutional ownership in this association. The sample comprises 306 firm-year observations of companies listed on the Tunis Stock Exchange during the 2013–2020 period. The results indicate that CEO power reduces tax avoidance levels. Moreover, the relationship between CEO power and tax avoidance is more pronounced in the presence of institutional ownership, suggesting that CEOs act less opportunistically when monitored by institutional investors, which results in a reduction in tax avoidance. This study suggests that CEO power and institutional shareholders’ influence are important factors in determining firms’ avoidance behavior. This study has significant implications for shareholders and regulatory bodies. Indeed, shareholders apprehend the impact of appointing a powerful CEO on tax avoidance practices. This study may also provide regulators with new insights into the influence of CEO power dimensions and institutional ownership on tax aggressiveness. This study fills the gap in the accounting literature by investigating how CEO power may impact tax avoidance behavior and provides empirical evidence on the moderating impact of institutional ownership on this relationship in an emerging economy context characterized by a weakly protected investor setting.The impact of CEO power on corporate tax avoidance: the moderating role of institutional ownership
Ahmed Atef Oussii, Mohamed Faker Klibi
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to investigate the relationship between chief executive officer (CEO) power and the level of tax avoidance of Tunisian listed companies. It also examines the moderating role of institutional ownership in this association.

The sample comprises 306 firm-year observations of companies listed on the Tunis Stock Exchange during the 2013–2020 period.

The results indicate that CEO power reduces tax avoidance levels. Moreover, the relationship between CEO power and tax avoidance is more pronounced in the presence of institutional ownership, suggesting that CEOs act less opportunistically when monitored by institutional investors, which results in a reduction in tax avoidance.

This study suggests that CEO power and institutional shareholders’ influence are important factors in determining firms’ avoidance behavior. This study has significant implications for shareholders and regulatory bodies. Indeed, shareholders apprehend the impact of appointing a powerful CEO on tax avoidance practices. This study may also provide regulators with new insights into the influence of CEO power dimensions and institutional ownership on tax aggressiveness.

This study fills the gap in the accounting literature by investigating how CEO power may impact tax avoidance behavior and provides empirical evidence on the moderating impact of institutional ownership on this relationship in an emerging economy context characterized by a weakly protected investor setting.

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The impact of CEO power on corporate tax avoidance: the moderating role of institutional ownership10.1108/CG-02-2023-0067Corporate Governance2023-10-23© 2023 Emerald Publishing LimitedAhmed Atef OussiiMohamed Faker KlibiCorporate Governanceahead-of-printahead-of-print2023-10-2310.1108/CG-02-2023-0067https://www.emerald.com/insight/content/doi/10.1108/CG-02-2023-0067/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Do CEO characteristics affect earnings management?https://www.emerald.com/insight/content/doi/10.1108/CG-02-2023-0078/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis research paper aims to examine the effect of chief executive officer (CEO) characteristics on earnings management. Research samples are manufacturing firms listed in the Indonesian Stock Exchange 2015–2021. CEO characteristics include narcissism, gender, age, tenure, experience, nationality and founding family status. Data analysis uses random-effect regression. The result shows that higher narcissism CEOs have aggressive characteristics so they will be more likely to engage in accrual and real earnings management. Female CEOs, foreign CEOs and founding-family CEOs have higher monitoring and business ethics characteristics so they will be less likely to engage in accrual and real earnings management. CEOs with higher education levels have higher thinking complexity so they will be more likely to engage in accrual earnings management with higher regulator and auditor monitoring barriers than real earnings management. CEOs with financial and accounting experience are familiar with accounting standards and auditor monitoring barriers so they will be more likely to engage in accrual earnings management than real earnings management. On the other hand, there are no effects of CEO age and tenure on earnings management. This research contributes to providing evidence of the effect of CEO characteristics on earnings management in a specific industry such as manufacturing firms and emerging markets such as Indonesia with the majority group firms being family firms.Do CEO characteristics affect earnings management?
Adhitya Agri Putra, Doddy Setiawan
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

This research paper aims to examine the effect of chief executive officer (CEO) characteristics on earnings management.

Research samples are manufacturing firms listed in the Indonesian Stock Exchange 2015–2021. CEO characteristics include narcissism, gender, age, tenure, experience, nationality and founding family status. Data analysis uses random-effect regression.

The result shows that higher narcissism CEOs have aggressive characteristics so they will be more likely to engage in accrual and real earnings management. Female CEOs, foreign CEOs and founding-family CEOs have higher monitoring and business ethics characteristics so they will be less likely to engage in accrual and real earnings management. CEOs with higher education levels have higher thinking complexity so they will be more likely to engage in accrual earnings management with higher regulator and auditor monitoring barriers than real earnings management. CEOs with financial and accounting experience are familiar with accounting standards and auditor monitoring barriers so they will be more likely to engage in accrual earnings management than real earnings management. On the other hand, there are no effects of CEO age and tenure on earnings management.

This research contributes to providing evidence of the effect of CEO characteristics on earnings management in a specific industry such as manufacturing firms and emerging markets such as Indonesia with the majority group firms being family firms.

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Do CEO characteristics affect earnings management?10.1108/CG-02-2023-0078Corporate Governance2024-01-25© 2024 Emerald Publishing LimitedAdhitya Agri PutraDoddy SetiawanCorporate Governanceahead-of-printahead-of-print2024-01-2510.1108/CG-02-2023-0078https://www.emerald.com/insight/content/doi/10.1108/CG-02-2023-0078/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
Integrating three theories of 21st-century capitalismhttps://www.emerald.com/insight/content/doi/10.1108/CG-03-2023-0093/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to help develop “business principles for stakeholder capitalism” in two steps. First, the study defines internal logic of three theories of capitalism and two variants within each theory. Second, it examines approaches to integration into modern democratic capitalism. Treating the three theories as substitutes identifies relative strengths and weaknesses; complementarity and partial overlap approaches to integration study the institutional settings within which stakeholder capitalism operates. Empirical outcomes reflect competition between market and stakeholder businesses for participants, with institutional conditions determining the scope of collective action. The approach aligns three typologies in a unique conceptual arrangement defining the three theories of capitalism: forms of capitalism, potential failures of each form and associated types of goods. The first method examines the internal logic of each theory of capitalism. The second draws on traditional narrative review of references documenting each theory of capitalism and variants together with modern Marxist anti-capitalism. Three typologies align uniquely with the theories of capitalism, each having two variants. Both variants of stakeholder capitalism are compatible with compassionate capitalism, constitutional government or polycentric governance but not with self-interest capitalism, dictatorship or Marxism. A theory of modern democratic capitalism allocates roles for private, club and social goods with empirically variable mixes occurring across countries. Competition among different types of enterprises provides an empirical test for comparative advantages of stakeholder capitalism. Future research should consider approaches for testing the proposed conceptual scheme in practice concerning capacity to deal with grand challenges, wicked problems and black swan events. Research approach is limited to logical examination of theories and literature documentation without direct empirical confirmation. The study does not address practical implications for managers and public officials or social implications concerning private incentives, stakeholder cooperation or collective action. Originality lies in shifting terms of debate about stakeholder capitalism from advocacy of substitute theories to understanding of its relationship to market capitalism and collective action capitalism. Value lies in explaining desirability of theoretical integration of three types of capitalism into a comprehensive framework for modern democratic capitalism.Integrating three theories of 21st-century capitalism
Duane Windsor
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to help develop “business principles for stakeholder capitalism” in two steps. First, the study defines internal logic of three theories of capitalism and two variants within each theory. Second, it examines approaches to integration into modern democratic capitalism. Treating the three theories as substitutes identifies relative strengths and weaknesses; complementarity and partial overlap approaches to integration study the institutional settings within which stakeholder capitalism operates. Empirical outcomes reflect competition between market and stakeholder businesses for participants, with institutional conditions determining the scope of collective action.

The approach aligns three typologies in a unique conceptual arrangement defining the three theories of capitalism: forms of capitalism, potential failures of each form and associated types of goods. The first method examines the internal logic of each theory of capitalism. The second draws on traditional narrative review of references documenting each theory of capitalism and variants together with modern Marxist anti-capitalism.

Three typologies align uniquely with the theories of capitalism, each having two variants. Both variants of stakeholder capitalism are compatible with compassionate capitalism, constitutional government or polycentric governance but not with self-interest capitalism, dictatorship or Marxism. A theory of modern democratic capitalism allocates roles for private, club and social goods with empirically variable mixes occurring across countries. Competition among different types of enterprises provides an empirical test for comparative advantages of stakeholder capitalism. Future research should consider approaches for testing the proposed conceptual scheme in practice concerning capacity to deal with grand challenges, wicked problems and black swan events.

Research approach is limited to logical examination of theories and literature documentation without direct empirical confirmation. The study does not address practical implications for managers and public officials or social implications concerning private incentives, stakeholder cooperation or collective action.

Originality lies in shifting terms of debate about stakeholder capitalism from advocacy of substitute theories to understanding of its relationship to market capitalism and collective action capitalism. Value lies in explaining desirability of theoretical integration of three types of capitalism into a comprehensive framework for modern democratic capitalism.

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Integrating three theories of 21st-century capitalism10.1108/CG-03-2023-0093Corporate Governance2024-03-20© 2024 Emerald Publishing LimitedDuane WindsorCorporate Governanceahead-of-printahead-of-print2024-03-2010.1108/CG-03-2023-0093https://www.emerald.com/insight/content/doi/10.1108/CG-03-2023-0093/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
Audit committee attributes and bank performance in Africahttps://www.emerald.com/insight/content/doi/10.1108/CG-03-2023-0098/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to evaluate how audit committee (AC) characteristics affect the performance of banks in Africa. The authors manually generated unbalanced panel data from 78 commercial banks operating in twelve (12) countries whose annual reports were published on the website of African Financials between 2010 and 2020. The results indicate that AC size has an insignificant positive association with bank performance (return on equity and Tobin’s Q). AC independence has a significant positive association with bank performance. However, AC gender diversity has a significant negative association with bank performance. Besides, AC financial expertise has a significant positive and negative association with return on equity and Tobin’s Q, respectively. The study considered only 78 banks that operate in twelve (12) African countries. Besides, the authors consider only four (4) AC attributes. The findings suggest the need to maintain a smaller AC, appoint more independent members to AC, reduce the number of women appointed to AC and ensure most AC members have financial expertise. These measures could improve bank performance in Africa. Unlike previous African studies that are mostly restricted to a country level, the study examined how AC attributes influence the performance of banks that operate in Africa.Audit committee attributes and bank performance in Africa
Umar Habibu Umar, Jamilu Sani Shawai, Anthony Kolade Adesugba, Abubakar Isa Jibril
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to evaluate how audit committee (AC) characteristics affect the performance of banks in Africa.

The authors manually generated unbalanced panel data from 78 commercial banks operating in twelve (12) countries whose annual reports were published on the website of African Financials between 2010 and 2020.

The results indicate that AC size has an insignificant positive association with bank performance (return on equity and Tobin’s Q). AC independence has a significant positive association with bank performance. However, AC gender diversity has a significant negative association with bank performance. Besides, AC financial expertise has a significant positive and negative association with return on equity and Tobin’s Q, respectively.

The study considered only 78 banks that operate in twelve (12) African countries. Besides, the authors consider only four (4) AC attributes.

The findings suggest the need to maintain a smaller AC, appoint more independent members to AC, reduce the number of women appointed to AC and ensure most AC members have financial expertise. These measures could improve bank performance in Africa.

Unlike previous African studies that are mostly restricted to a country level, the study examined how AC attributes influence the performance of banks that operate in Africa.

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Audit committee attributes and bank performance in Africa10.1108/CG-03-2023-0098Corporate Governance2024-02-16© 2024 Emerald Publishing LimitedUmar Habibu UmarJamilu Sani ShawaiAnthony Kolade AdesugbaAbubakar Isa JibrilCorporate Governanceahead-of-printahead-of-print2024-02-1610.1108/CG-03-2023-0098https://www.emerald.com/insight/content/doi/10.1108/CG-03-2023-0098/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
Difficulties experienced by Latin American oil and gas companies in the integrated adoption of practices aligned with the UN SDGshttps://www.emerald.com/insight/content/doi/10.1108/CG-03-2023-0100/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to understand the difficulties faced by Latin American oil and gas (O&G) companies in adopting integrated practices aligned with the UN Sustainable Development Goals (SDG) Agenda. A Delphi study was conducted with 14 experts with extensive knowledge and experience in the O&G sector to collect opinions and investigate sustainable practices in the Latin American context. A consensus was reached after two rounds, demonstrating a unified view of sustainability experts on the difficulties faced by O&G companies to adopt practices aligned with the SDGs. The difficulties identified through the Delphi method were allocated into five clusters named: “public sector and governments,” “civil society,” “corporate issues,” “technology and innovation” and “financial aspects.” These clusters were used to discuss the main challenges associated with implementing business practices that recognize the SDGs and their achievement as a synergistic reinforcing system rather than an additive structure. This study provides further insights into the underexplored subject relating to the challenges experienced by Latin American O&G companies in the implementation of the SDGs, adopting the perspective of academic and industry experts in this field. The findings can help professionals in O&G companies implement sustainable practices, policymakers in debates about futures laws and regulations and academic in future research.Difficulties experienced by Latin American oil and gas companies in the integrated adoption of practices aligned with the UN SDGs
Fabíola M.M.G. Borges, Rosley Anholon, Izabela Simon Rampasso, Tiago F.A.C. Sigahi, Gustavo Hermínio Salati Marcondes de Moraes, Walter Leal Filho
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to understand the difficulties faced by Latin American oil and gas (O&G) companies in adopting integrated practices aligned with the UN Sustainable Development Goals (SDG) Agenda.

A Delphi study was conducted with 14 experts with extensive knowledge and experience in the O&G sector to collect opinions and investigate sustainable practices in the Latin American context.

A consensus was reached after two rounds, demonstrating a unified view of sustainability experts on the difficulties faced by O&G companies to adopt practices aligned with the SDGs. The difficulties identified through the Delphi method were allocated into five clusters named: “public sector and governments,” “civil society,” “corporate issues,” “technology and innovation” and “financial aspects.” These clusters were used to discuss the main challenges associated with implementing business practices that recognize the SDGs and their achievement as a synergistic reinforcing system rather than an additive structure.

This study provides further insights into the underexplored subject relating to the challenges experienced by Latin American O&G companies in the implementation of the SDGs, adopting the perspective of academic and industry experts in this field. The findings can help professionals in O&G companies implement sustainable practices, policymakers in debates about futures laws and regulations and academic in future research.

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Difficulties experienced by Latin American oil and gas companies in the integrated adoption of practices aligned with the UN SDGs10.1108/CG-03-2023-0100Corporate Governance2024-01-25© 2024 Emerald Publishing LimitedFabíola M.M.G. BorgesRosley AnholonIzabela Simon RampassoTiago F.A.C. SigahiGustavo Hermínio Salati Marcondes de MoraesWalter Leal FilhoCorporate Governanceahead-of-printahead-of-print2024-01-2510.1108/CG-03-2023-0100https://www.emerald.com/insight/content/doi/10.1108/CG-03-2023-0100/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
Board structure and risk-taking behavior: evidence from the financial sector of Pakistanhttps://www.emerald.com/insight/content/doi/10.1108/CG-03-2023-0101/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe board structure (BS) is pivotal in modern corporate governance (CG). This study aims to investigate BS variables (BSIZE, BIND and chief executive officer [CEO] duality) and their correlation with risk-taking behavior indicators, enriching the understanding of how CG shapes financial institutions’ (FIs) decision-making in Pakistan. By scrutinizing data from 67 financial entities listed on the Stock Exchange of Pakistan spanning from 2011 to 2022 through panel data regression techniques, the research emphasizes that BS holds a substantial influence over the risk tendencies exhibited by these firms. Key findings suggest that board size has a positive influence, aligned with previous CG research. Smaller boards perform better and avoid excessive risk-taking, contrasting some negative relationship claims. More independent directors are recommended to curtail risk and financial disruption. Holding both CEO and chair roles reduces risk exposure, resonating with reputational and employment risk theory. It is essential to recognize that BS’s impact on risk-taking is nuanced and context-dependent. Policymakers, scholars, practitioners and investors working in the market for financial companies might greatly benefit from the empirical findings of this study. Imposing mandates on FIs to uphold adequate capital reserves functions as a safeguard against unforeseen losses, thereby diminishing the probability of unwarranted risk-taking. Prior studies in this domain predominantly focus on nonfinancial sectors. In addition, existing research often explores the relationship between BS and firm risk-taking solely within the banking sector, overlooking other FIs. This study contributes by using a comprehensive data set encompassing all types of FIs, thus extending the existing literature.Board structure and risk-taking behavior: evidence from the financial sector of Pakistan
Maryam Javed, Kashif Mehmood, Abdul Ghafoor, Asma Parveen
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

The board structure (BS) is pivotal in modern corporate governance (CG). This study aims to investigate BS variables (BSIZE, BIND and chief executive officer [CEO] duality) and their correlation with risk-taking behavior indicators, enriching the understanding of how CG shapes financial institutions’ (FIs) decision-making in Pakistan.

By scrutinizing data from 67 financial entities listed on the Stock Exchange of Pakistan spanning from 2011 to 2022 through panel data regression techniques, the research emphasizes that BS holds a substantial influence over the risk tendencies exhibited by these firms.

Key findings suggest that board size has a positive influence, aligned with previous CG research. Smaller boards perform better and avoid excessive risk-taking, contrasting some negative relationship claims. More independent directors are recommended to curtail risk and financial disruption. Holding both CEO and chair roles reduces risk exposure, resonating with reputational and employment risk theory. It is essential to recognize that BS’s impact on risk-taking is nuanced and context-dependent.

Policymakers, scholars, practitioners and investors working in the market for financial companies might greatly benefit from the empirical findings of this study. Imposing mandates on FIs to uphold adequate capital reserves functions as a safeguard against unforeseen losses, thereby diminishing the probability of unwarranted risk-taking.

Prior studies in this domain predominantly focus on nonfinancial sectors. In addition, existing research often explores the relationship between BS and firm risk-taking solely within the banking sector, overlooking other FIs. This study contributes by using a comprehensive data set encompassing all types of FIs, thus extending the existing literature.

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Board structure and risk-taking behavior: evidence from the financial sector of Pakistan10.1108/CG-03-2023-0101Corporate Governance2024-02-28© 2024 Emerald Publishing LimitedMaryam JavedKashif MehmoodAbdul GhafoorAsma ParveenCorporate Governanceahead-of-printahead-of-print2024-02-2810.1108/CG-03-2023-0101https://www.emerald.com/insight/content/doi/10.1108/CG-03-2023-0101/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
The contribution of public-private partnership (PPP) to sustainability: governance and managerial implications from a literature reviewhttps://www.emerald.com/insight/content/doi/10.1108/CG-03-2023-0103/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestBased on the theoretical background of stakeholder capitalism, the purpose of this paper is to contribute to the scientific debate on the topic of public–private partnerships (PPPs), considering in particular how this governance structure relates to the pursuit of sustainable development. Specifically, this objective will be pursued with a focus on stakeholder relations and governance aspects, to highlight enablers and barriers in change for sustainability. The systematic literature review is applied starting with the use of keywords in Web of Science, which leads to the extrapolation of 629 articles on the topic of “PPP and sustainability”. Subsequently, through various skimming steps, 75 papers are sampled. A mixed (quantitative-qualitative) approach is then followed: a co-word semantic network to identify the pattern of discourse and a more in-depth and explanatory analysis of the papers. These quantitative and qualitative tools synergistically work together to evidence the main aspects related to the aim of the paper. With reference to the governance structure and stakeholders of PPPs, the analyses highlight the shift towards a triadic type of relational governance that considers stakeholders (especially the community) in addition to public–private partners. This can improve the partnership's performance (particularly in sustainable development) and social legitimacy. With reference to the role of PPPs in the implementation of sustainable development, they have positive potential in terms of implementing sustainability and raising stakeholder awareness of it. Nevertheless, PPPs may entail risks to the implementation of sustainability. The findings lead to some concluding remarks on future research opportunities. The research leads to some managerial implications, such as the need to follow a competitive collaboration approach among stakeholders, to develop relational governance skills and related managerial tools and to incorporate sustainability aspects starting from the design of PPPs. The originality aspect of this research is the consideration of a PPP by relating it to the pursuit of sustainability. Such an inter-organizational structure could be suitable to deal with the complexity inherent in the implementation of sustainability and is peculiar in terms of governance and stakeholder relations, considering that it is characterised by the presence of several partners of different nature (public and private).The contribution of public-private partnership (PPP) to sustainability: governance and managerial implications from a literature review
Fabio De Matteis, Elio Borgonovi, Giovanni Notaristefano, Fabrizio Striani
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

Based on the theoretical background of stakeholder capitalism, the purpose of this paper is to contribute to the scientific debate on the topic of public–private partnerships (PPPs), considering in particular how this governance structure relates to the pursuit of sustainable development. Specifically, this objective will be pursued with a focus on stakeholder relations and governance aspects, to highlight enablers and barriers in change for sustainability.

The systematic literature review is applied starting with the use of keywords in Web of Science, which leads to the extrapolation of 629 articles on the topic of “PPP and sustainability”. Subsequently, through various skimming steps, 75 papers are sampled. A mixed (quantitative-qualitative) approach is then followed: a co-word semantic network to identify the pattern of discourse and a more in-depth and explanatory analysis of the papers. These quantitative and qualitative tools synergistically work together to evidence the main aspects related to the aim of the paper.

With reference to the governance structure and stakeholders of PPPs, the analyses highlight the shift towards a triadic type of relational governance that considers stakeholders (especially the community) in addition to public–private partners. This can improve the partnership's performance (particularly in sustainable development) and social legitimacy. With reference to the role of PPPs in the implementation of sustainable development, they have positive potential in terms of implementing sustainability and raising stakeholder awareness of it. Nevertheless, PPPs may entail risks to the implementation of sustainability. The findings lead to some concluding remarks on future research opportunities.

The research leads to some managerial implications, such as the need to follow a competitive collaboration approach among stakeholders, to develop relational governance skills and related managerial tools and to incorporate sustainability aspects starting from the design of PPPs.

The originality aspect of this research is the consideration of a PPP by relating it to the pursuit of sustainability. Such an inter-organizational structure could be suitable to deal with the complexity inherent in the implementation of sustainability and is peculiar in terms of governance and stakeholder relations, considering that it is characterised by the presence of several partners of different nature (public and private).

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The contribution of public-private partnership (PPP) to sustainability: governance and managerial implications from a literature review10.1108/CG-03-2023-0103Corporate Governance2024-02-27© 2024 Emerald Publishing LimitedFabio De MatteisElio BorgonoviGiovanni NotaristefanoFabrizio StrianiCorporate Governanceahead-of-printahead-of-print2024-02-2710.1108/CG-03-2023-0103https://www.emerald.com/insight/content/doi/10.1108/CG-03-2023-0103/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
A material world: how can materiality assessments be used to define organizational sustainability priorities, while taking into account the United Nations’ SDGs?https://www.emerald.com/insight/content/doi/10.1108/CG-03-2023-0106/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to contribute to existing academic work and business practice by presenting original empirical findings and by providing insights into priority setting on Sustainable Development Goals (SDGs) in organizations. From an academic viewpoint, it not only adds to previous work on the topic of SDG materiality (e.g. Van Tulder and Lucht, 2019) but also aims to contribute new insights into the steps that are crucial and influence the adoption of the SDGs in materiality assessments. It may also add to the literature by providing new knowledge on the strategic considerations that organizations may make and institutional dynamics that encourage organizations to implement the SDG materiality method. By executing a national survey research in Belgium through a collaboration between academics of Antwerp Management School, Louvain School of Management (UCLouvain) and the University of Antwerp, and supported by Belgium’s Federal Institute of Sustainable Development, the authors have obtained several insights into the SDG landscape in Belgium for various types of organizations, including companies, governmental and nongovernmental organizations and educational institutions. This research builds further on a first national survey (SDG Barometer Belgium, 2018) on the adoption and implementation of the SDGs. However, an important aim of this research is to shift the emphasis to more prominent new elements, such as whether or not organizations use the SDGs in materiality assessments. While the main part of the data for this research were collected through an online questionnaire, document analyses were conducted based on the sustainability reports of BEL 20 companies, the benchmark stock market index of Euronext Brussels consisting of 20 companies traded at the Brussels Stock Exchange, and seven interviews were held to obtain additional insights. A total of 386 organizations across sectors responded to the question “Does your organization perform a materiality analysis”, of which 210 organizations completed the question “Does your organization align the materiality analysis with the SDGs,”after an “exit route” based on a positive answer to the first question. When diving into the survey results, the authors see that no more than 12% of the 210 organizations performing a materiality analysis align their materiality analysis with the SDGs, while 14% indicate that they do not account for the SDGs at all in their materiality analyses. The results show that 41% of the organizations take into account the SDGs to a certain degree when performing their materiality analysis. Speculating on an explanation for these results, it may be the case that organizations do not yet think about coupling the SDGs to their materiality assessment, experience difficulties in practice or generally lack the knowledge for relating the SDGs to the sustainability topics that are relevant to them. This seems in line with other research (e.g. Van Tulder and Lucht, 2019), as the results of this study indicate that it seems to be difficult for organizations to relate the SDGs to the existing sustainability priorities or materiality analyses of companies. The real contribution of this paper essentially lies in the description of the Janssen Pharmaceuticals case. The company recognized that today’s internally focused approach to goal setting is not enough to address global challenges. Hence, looking at what is needed externally from a global perspective, taking into account sustainability thresholds and setting ambitions accordingly, is needed to bridge the gap between current performance and required performance. From the Janssen Pharmaceuticals case, the authors learned that external stakeholders are an extremely useful source of information to address the required performance by using the SDG framework. For sure, SDG materiality analyses are still in an early phase of development and knowledge on how to conduct such an analysis may be lacking. Future efforts – or the lack thereof – may indicate whether or not companies consider such analyses as sufficiently relevant. Although the uptake of the SDGs is in progress, it remains to be seen which, if any, materiality method will eventually turn out as a new dominant way of defining material issues. The findings presented in this study hopefully serve as a basis for further investigation of the topic.A material world: how can materiality assessments be used to define organizational sustainability priorities, while taking into account the United Nations’ SDGs?
Jan Beyne, Lars Moratis
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to contribute to existing academic work and business practice by presenting original empirical findings and by providing insights into priority setting on Sustainable Development Goals (SDGs) in organizations. From an academic viewpoint, it not only adds to previous work on the topic of SDG materiality (e.g. Van Tulder and Lucht, 2019) but also aims to contribute new insights into the steps that are crucial and influence the adoption of the SDGs in materiality assessments. It may also add to the literature by providing new knowledge on the strategic considerations that organizations may make and institutional dynamics that encourage organizations to implement the SDG materiality method.

By executing a national survey research in Belgium through a collaboration between academics of Antwerp Management School, Louvain School of Management (UCLouvain) and the University of Antwerp, and supported by Belgium’s Federal Institute of Sustainable Development, the authors have obtained several insights into the SDG landscape in Belgium for various types of organizations, including companies, governmental and nongovernmental organizations and educational institutions. This research builds further on a first national survey (SDG Barometer Belgium, 2018) on the adoption and implementation of the SDGs. However, an important aim of this research is to shift the emphasis to more prominent new elements, such as whether or not organizations use the SDGs in materiality assessments. While the main part of the data for this research were collected through an online questionnaire, document analyses were conducted based on the sustainability reports of BEL 20 companies, the benchmark stock market index of Euronext Brussels consisting of 20 companies traded at the Brussels Stock Exchange, and seven interviews were held to obtain additional insights.

A total of 386 organizations across sectors responded to the question “Does your organization perform a materiality analysis”, of which 210 organizations completed the question “Does your organization align the materiality analysis with the SDGs,”after an “exit route” based on a positive answer to the first question. When diving into the survey results, the authors see that no more than 12% of the 210 organizations performing a materiality analysis align their materiality analysis with the SDGs, while 14% indicate that they do not account for the SDGs at all in their materiality analyses. The results show that 41% of the organizations take into account the SDGs to a certain degree when performing their materiality analysis. Speculating on an explanation for these results, it may be the case that organizations do not yet think about coupling the SDGs to their materiality assessment, experience difficulties in practice or generally lack the knowledge for relating the SDGs to the sustainability topics that are relevant to them. This seems in line with other research (e.g. Van Tulder and Lucht, 2019), as the results of this study indicate that it seems to be difficult for organizations to relate the SDGs to the existing sustainability priorities or materiality analyses of companies.

The real contribution of this paper essentially lies in the description of the Janssen Pharmaceuticals case. The company recognized that today’s internally focused approach to goal setting is not enough to address global challenges. Hence, looking at what is needed externally from a global perspective, taking into account sustainability thresholds and setting ambitions accordingly, is needed to bridge the gap between current performance and required performance. From the Janssen Pharmaceuticals case, the authors learned that external stakeholders are an extremely useful source of information to address the required performance by using the SDG framework. For sure, SDG materiality analyses are still in an early phase of development and knowledge on how to conduct such an analysis may be lacking. Future efforts – or the lack thereof – may indicate whether or not companies consider such analyses as sufficiently relevant. Although the uptake of the SDGs is in progress, it remains to be seen which, if any, materiality method will eventually turn out as a new dominant way of defining material issues. The findings presented in this study hopefully serve as a basis for further investigation of the topic.

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A material world: how can materiality assessments be used to define organizational sustainability priorities, while taking into account the United Nations’ SDGs?10.1108/CG-03-2023-0106Corporate Governance2024-03-05© 2024 Emerald Publishing LimitedJan BeyneLars MoratisCorporate Governanceahead-of-printahead-of-print2024-03-0510.1108/CG-03-2023-0106https://www.emerald.com/insight/content/doi/10.1108/CG-03-2023-0106/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
Making the invisible visible: stakeholder capitalism and powerless stakeholdershttps://www.emerald.com/insight/content/doi/10.1108/CG-03-2023-0114/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestStakeholder capitalism has been proposed as an alternative way of thinking about business purpose and value creation. However, stakeholder capitalism can only work as an alternative model of business if all stakeholders and their interests are visible to and taken seriously by managers. The purpose of this paper is to untangle the challenges that invisible, marginalized and powerless stakeholders pose for theorizing about stakeholder capitalism. This paper is conceptual. The authors first briefly outline the promise of stakeholder capitalism for addressing pressing questions about value creation and stakeholder welfare. The authors then conceptualize stakeholder invisibility as the outcome of a particular stakeholder being both powerless and marginal through the prism of moral intensity theory and one of its elements: proximity. This study discusses the ways in which managers can make invisible stakeholders more visible in their decision-making. For managers truly to manage for stakeholders, as anticipated by stakeholder capitalism, all stakeholders and stakeholder interests must be visible to them. This study analyzes why sometimes they are not, how they can be made more visible and why stakeholder visibility matters for stakeholder capitalism. This study proffers three principles for business practice: ethical commitments to reduce stakeholder invisibility, analyses of business strategies to surface the contributions of marginalized and invisible stakeholders and taking rights seriously. This study provides a new perspective on stakeholder capitalism by linking the challenge in operationalizing it to the problems of stakeholder invisibility and marginality.Making the invisible visible: stakeholder capitalism and powerless stakeholders
Harry J. Van Buren, Judith Schrempf-Stirling
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

Stakeholder capitalism has been proposed as an alternative way of thinking about business purpose and value creation. However, stakeholder capitalism can only work as an alternative model of business if all stakeholders and their interests are visible to and taken seriously by managers. The purpose of this paper is to untangle the challenges that invisible, marginalized and powerless stakeholders pose for theorizing about stakeholder capitalism.

This paper is conceptual. The authors first briefly outline the promise of stakeholder capitalism for addressing pressing questions about value creation and stakeholder welfare. The authors then conceptualize stakeholder invisibility as the outcome of a particular stakeholder being both powerless and marginal through the prism of moral intensity theory and one of its elements: proximity. This study discusses the ways in which managers can make invisible stakeholders more visible in their decision-making.

For managers truly to manage for stakeholders, as anticipated by stakeholder capitalism, all stakeholders and stakeholder interests must be visible to them. This study analyzes why sometimes they are not, how they can be made more visible and why stakeholder visibility matters for stakeholder capitalism. This study proffers three principles for business practice: ethical commitments to reduce stakeholder invisibility, analyses of business strategies to surface the contributions of marginalized and invisible stakeholders and taking rights seriously.

This study provides a new perspective on stakeholder capitalism by linking the challenge in operationalizing it to the problems of stakeholder invisibility and marginality.

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Making the invisible visible: stakeholder capitalism and powerless stakeholders10.1108/CG-03-2023-0114Corporate Governance2023-11-10© 2023 Emerald Publishing LimitedHarry J. Van BurenJudith Schrempf-StirlingCorporate Governanceahead-of-printahead-of-print2023-11-1010.1108/CG-03-2023-0114https://www.emerald.com/insight/content/doi/10.1108/CG-03-2023-0114/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Gender diversity in corporate boards of companies listed on the Johannesburg Stock Exchange: a quantile regression approachhttps://www.emerald.com/insight/content/doi/10.1108/CG-03-2023-0120/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to explore the effect of female’s presence in corporate governance structures to reduce agency conflicts, using a quantile regression approach. The research investigates the relationship between company performance and boardroom gender diversity using quantile regression methods. The study uses annual data of 111 companies listed on the Johannesburg Stock Exchange from 2010 to 2020. The study reveals that women on the board impact firm return on assets and enterprise value, varying across performance distribution. This contrasts fixed effect findings but aligns with two-stage least squares. However, quantile regression indicates that female executives and independent non-executive directors have notably negative impacts in high and low-performing companies, highlighting non-uniformity in the board gender diversity effect compared with previous assumptions. The empirical findings suggest that companies with no women directors on the board are generally more likely to experience a decrease in performance and enterprise value relative to companies with women directors on the board. As recommended through the King Code of Corporate Governance, it is thus valuable to companies to ensure gender diversity on the board of directors. The research confirms through rigorous statistical analyses that corporate governance policies, principles and guidelines should include gender diversity as a requirement for a board of directors.Gender diversity in corporate boards of companies listed on the Johannesburg Stock Exchange: a quantile regression approach
Mpinda Freddy Mvita, Elda Du Toit
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to explore the effect of female’s presence in corporate governance structures to reduce agency conflicts, using a quantile regression approach.

The research investigates the relationship between company performance and boardroom gender diversity using quantile regression methods. The study uses annual data of 111 companies listed on the Johannesburg Stock Exchange from 2010 to 2020.

The study reveals that women on the board impact firm return on assets and enterprise value, varying across performance distribution. This contrasts fixed effect findings but aligns with two-stage least squares. However, quantile regression indicates that female executives and independent non-executive directors have notably negative impacts in high and low-performing companies, highlighting non-uniformity in the board gender diversity effect compared with previous assumptions.

The empirical findings suggest that companies with no women directors on the board are generally more likely to experience a decrease in performance and enterprise value relative to companies with women directors on the board. As recommended through the King Code of Corporate Governance, it is thus valuable to companies to ensure gender diversity on the board of directors.

The research confirms through rigorous statistical analyses that corporate governance policies, principles and guidelines should include gender diversity as a requirement for a board of directors.

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Gender diversity in corporate boards of companies listed on the Johannesburg Stock Exchange: a quantile regression approach10.1108/CG-03-2023-0120Corporate Governance2024-03-13© 2024 Emerald Publishing LimitedMpinda Freddy MvitaElda Du ToitCorporate Governanceahead-of-printahead-of-print2024-03-1310.1108/CG-03-2023-0120https://www.emerald.com/insight/content/doi/10.1108/CG-03-2023-0120/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
Does an effective audit committee influence firm performance? –The moderation role of knowledge intensityhttps://www.emerald.com/insight/content/doi/10.1108/CG-03-2023-0123/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine the relationship between audit committee (AC) effectiveness and firm performance (FP) with the moderation of knowledge intensity while observing the varying effect of each AC characteristic’s influence on its effectiveness. This study examines 133 companies covering five years from 2016 to 2020 using the partial least squares-structural equation model and weighing AC effectiveness-related characteristics through multiple regression between AC characteristics and the AC effectiveness construct. The results indicate that the knowledge intensity of the firms negatively influences the relationship between their AC effectiveness and FP, implying that the ACs are not sophisticated enough to monitor the knowledge component of the firm’s assets. Among AC characteristics, six attributes have a significant positive impact, two have a negative impact and three have no significant influence on AC effectiveness while influencing FP. Apart from guiding the regulators, managers and other stakeholders to choose an appropriate mix of AC characteristics for enhancing FP, the study contributes to the existing literature by providing evidence that ACs are ineffective in monitoring the knowledge assets of the company compared to physical assets. This study is pioneering in investigating the moderation role of knowledge intensity on the relationship between AC effectiveness and FP. While providing a comprehensive and holistic view of AC effectiveness by considering 11 AC characteristics’ individual as well as aggregate effects on FP, it removes the obsolescence of earlier research in the Indian context owing to the latest regulatory reforms.Does an effective audit committee influence firm performance? –The moderation role of knowledge intensity
Abhisheck Kumar Singhania, Nagari Mohan Panda
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine the relationship between audit committee (AC) effectiveness and firm performance (FP) with the moderation of knowledge intensity while observing the varying effect of each AC characteristic’s influence on its effectiveness.

This study examines 133 companies covering five years from 2016 to 2020 using the partial least squares-structural equation model and weighing AC effectiveness-related characteristics through multiple regression between AC characteristics and the AC effectiveness construct.

The results indicate that the knowledge intensity of the firms negatively influences the relationship between their AC effectiveness and FP, implying that the ACs are not sophisticated enough to monitor the knowledge component of the firm’s assets. Among AC characteristics, six attributes have a significant positive impact, two have a negative impact and three have no significant influence on AC effectiveness while influencing FP.

Apart from guiding the regulators, managers and other stakeholders to choose an appropriate mix of AC characteristics for enhancing FP, the study contributes to the existing literature by providing evidence that ACs are ineffective in monitoring the knowledge assets of the company compared to physical assets.

This study is pioneering in investigating the moderation role of knowledge intensity on the relationship between AC effectiveness and FP. While providing a comprehensive and holistic view of AC effectiveness by considering 11 AC characteristics’ individual as well as aggregate effects on FP, it removes the obsolescence of earlier research in the Indian context owing to the latest regulatory reforms.

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Does an effective audit committee influence firm performance? –The moderation role of knowledge intensity10.1108/CG-03-2023-0123Corporate Governance2023-11-06© 2023 Emerald Publishing LimitedAbhisheck Kumar SinghaniaNagari Mohan PandaCorporate Governanceahead-of-printahead-of-print2023-11-0610.1108/CG-03-2023-0123https://www.emerald.com/insight/content/doi/10.1108/CG-03-2023-0123/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Corporate social responsibility performance and social reputation via corporate social responsibility awarding: is there a threshold effect?https://www.emerald.com/insight/content/doi/10.1108/CG-03-2023-0128/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine the potential threshold effect in the association between corporate social responsibility (CSR) performance and social reputation. This study includes an international and cross-sector sample covering 41 countries, nine sectors and 45,395 firm-year observations. It applies a parabolic relationship, rather than linear regressions, between CSR engagement and social reputation via CSR awarding. This implies that CSR performance should increase until a certain point to gain a social reputation but then should decrease after reaching that threshold point considering limited financial resources. The findings of country-industry-year fixed-effects logistic regressions confirm the threshold effect with an inverted U-shaped relationship between CSR and CSR awarding. More specifically, firms increase their environmental and social engagement until a certain point, and then they reduce it after reaching a social reputation. This finding is confirmed by three dimensions of the environmental pillar (i.e. resource use, emissions and eco-innovation) as well as four dimensions of the social pillar (i.e. workforce, human rights, community and product responsibility). The findings are robust to alternative samples, alternative methodology and endogeneity concerns. The findings of this study have implications for firms about the better allocation of available funds between CSR and operations. The findings could be particularly useful for CSR teams/committees of the firms who formulate CSR policies and how to mobilize firm resources for better social enhancement via environmental and social reputation. This study examines deeper the nature of the association between CSR engagement and social reputation and considers the possibility of an inverted U-shaped relationship between them. The determination of a threshold effect suggests that CSR engagement increases social reputation, but once it reaches a certain point, social reputation will decrease owing to financial resource constraints.Corporate social responsibility performance and social reputation via corporate social responsibility awarding: is there a threshold effect?
Cemil Kuzey, Ali Uyar, Nejla Ould Daoud Ellili, Abdullah S. Karaman
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine the potential threshold effect in the association between corporate social responsibility (CSR) performance and social reputation.

This study includes an international and cross-sector sample covering 41 countries, nine sectors and 45,395 firm-year observations. It applies a parabolic relationship, rather than linear regressions, between CSR engagement and social reputation via CSR awarding. This implies that CSR performance should increase until a certain point to gain a social reputation but then should decrease after reaching that threshold point considering limited financial resources.

The findings of country-industry-year fixed-effects logistic regressions confirm the threshold effect with an inverted U-shaped relationship between CSR and CSR awarding. More specifically, firms increase their environmental and social engagement until a certain point, and then they reduce it after reaching a social reputation. This finding is confirmed by three dimensions of the environmental pillar (i.e. resource use, emissions and eco-innovation) as well as four dimensions of the social pillar (i.e. workforce, human rights, community and product responsibility). The findings are robust to alternative samples, alternative methodology and endogeneity concerns.

The findings of this study have implications for firms about the better allocation of available funds between CSR and operations. The findings could be particularly useful for CSR teams/committees of the firms who formulate CSR policies and how to mobilize firm resources for better social enhancement via environmental and social reputation.

This study examines deeper the nature of the association between CSR engagement and social reputation and considers the possibility of an inverted U-shaped relationship between them. The determination of a threshold effect suggests that CSR engagement increases social reputation, but once it reaches a certain point, social reputation will decrease owing to financial resource constraints.

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Corporate social responsibility performance and social reputation via corporate social responsibility awarding: is there a threshold effect?10.1108/CG-03-2023-0128Corporate Governance2023-12-15© 2023 Emerald Publishing LimitedCemil KuzeyAli UyarNejla Ould Daoud ElliliAbdullah S. KaramanCorporate Governanceahead-of-printahead-of-print2023-12-1510.1108/CG-03-2023-0128https://www.emerald.com/insight/content/doi/10.1108/CG-03-2023-0128/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Female leadership and ESG performance of firms: Nordic evidencehttps://www.emerald.com/insight/content/doi/10.1108/CG-03-2023-0129/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to focus on the relationship between female leadership and the environmental, social and governance (ESG) performance of firms. Specifically, the study examines if firms with women as chief executive officers (CEOs) and/or board chairpersons have higher environmental and social scores. The study uses data on publicly listed Nordic firms in a panel regression approach to establish the relationship between female leadership and the environmental and social performance of firms. The result of this study shows that women have a leadership characteristic that increases the weighted average of environmental (E) and social (S) performance of a firm. In particular, pillar score results indicate a positive relationship between female CEOs and the social scores of a firm but no relationship between a female board chairperson and the environmental or social scores of a firm. This implies that gender-based differences affect the CEO’s success, especially in a firm’s social performance. Further analyses show a more significant impact on the E and S performance when a woman replaces a man as CEO of a firm. While prior research has explored various aspects of gender diversity in corporate leadership and its potential impact, the focus on the Nordic context in this study provides a unique perspective, given the region’s distinct business environment and societal factors. In addition, by examining the collective influence of female leaders and both female CEOs and board chairpersons separately, this study provides a nuanced understanding of how different leadership roles may impact a firm’s ESG performance.Female leadership and ESG performance of firms: Nordic evidence
Habeeb Yahya
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to focus on the relationship between female leadership and the environmental, social and governance (ESG) performance of firms. Specifically, the study examines if firms with women as chief executive officers (CEOs) and/or board chairpersons have higher environmental and social scores.

The study uses data on publicly listed Nordic firms in a panel regression approach to establish the relationship between female leadership and the environmental and social performance of firms.

The result of this study shows that women have a leadership characteristic that increases the weighted average of environmental (E) and social (S) performance of a firm. In particular, pillar score results indicate a positive relationship between female CEOs and the social scores of a firm but no relationship between a female board chairperson and the environmental or social scores of a firm. This implies that gender-based differences affect the CEO’s success, especially in a firm’s social performance. Further analyses show a more significant impact on the E and S performance when a woman replaces a man as CEO of a firm.

While prior research has explored various aspects of gender diversity in corporate leadership and its potential impact, the focus on the Nordic context in this study provides a unique perspective, given the region’s distinct business environment and societal factors. In addition, by examining the collective influence of female leaders and both female CEOs and board chairpersons separately, this study provides a nuanced understanding of how different leadership roles may impact a firm’s ESG performance.

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Female leadership and ESG performance of firms: Nordic evidence10.1108/CG-03-2023-0129Corporate Governance2023-11-14© 2023 Habeeb Yahya.Habeeb YahyaCorporate Governanceahead-of-printahead-of-print2023-11-1410.1108/CG-03-2023-0129https://www.emerald.com/insight/content/doi/10.1108/CG-03-2023-0129/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Habeeb Yahya.
Does the board of directors play a role in mitigating real and accrual-based earnings management in the MENA context?https://www.emerald.com/insight/content/doi/10.1108/CG-04-2022-0192/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestIn light of the key role attributed to the board of directors as a monitoring tool to constrain earnings management practices, this study aims to examine the effect of some board attributes on accrual-based earnings management and real earnings management in the Middle Eastern and North African (MENA) context, whose institutional, economic and legal environment is markedly different from that of most organization for economic cooperation and development countries. The authors selected a sample of 161 nonfinancial companies from nine MENA countries between 2014 and 2021 (corresponding to an unbalanced data panel of 486 observations). The authors used the generalized least squares regression test to examine the relationship between board attributes and earnings management. The authors found that three board attributes (size, independence and gender diversity) have no effect on both types of earnings management practices, while CEO duality has no effect on accrual-based earnings management but has a significant and negative effect on real earnings management. Overall, the results suggest that most board attributes do not play a crucial role in reducing earnings management. The results provide valuable insights into the universal role of corporate governance mechanisms and raise questions about the role of the board of directors in improving reporting quality in the MENA context. Regulators should adapt corporate governance mechanisms to the characteristics of the institutional context in which they are inserted. To the best of the authors’ knowledge, this study is the first to examine the effect of various board characteristics on both types of earnings management practices in the MENA context. It also provides the first empirical evidence of the relationship between board gender diversity and earnings management in the MENA region.Does the board of directors play a role in mitigating real and accrual-based earnings management in the MENA context?
Taha Almarayeh, Beatriz Aibar-Guzman, Óscar Suárez-Fernández
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

In light of the key role attributed to the board of directors as a monitoring tool to constrain earnings management practices, this study aims to examine the effect of some board attributes on accrual-based earnings management and real earnings management in the Middle Eastern and North African (MENA) context, whose institutional, economic and legal environment is markedly different from that of most organization for economic cooperation and development countries.

The authors selected a sample of 161 nonfinancial companies from nine MENA countries between 2014 and 2021 (corresponding to an unbalanced data panel of 486 observations). The authors used the generalized least squares regression test to examine the relationship between board attributes and earnings management.

The authors found that three board attributes (size, independence and gender diversity) have no effect on both types of earnings management practices, while CEO duality has no effect on accrual-based earnings management but has a significant and negative effect on real earnings management. Overall, the results suggest that most board attributes do not play a crucial role in reducing earnings management.

The results provide valuable insights into the universal role of corporate governance mechanisms and raise questions about the role of the board of directors in improving reporting quality in the MENA context.

Regulators should adapt corporate governance mechanisms to the characteristics of the institutional context in which they are inserted.

To the best of the authors’ knowledge, this study is the first to examine the effect of various board characteristics on both types of earnings management practices in the MENA context. It also provides the first empirical evidence of the relationship between board gender diversity and earnings management in the MENA region.

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Does the board of directors play a role in mitigating real and accrual-based earnings management in the MENA context?10.1108/CG-04-2022-0192Corporate Governance2024-02-27© 2024 Emerald Publishing LimitedTaha AlmarayehBeatriz Aibar-GuzmanÓscar Suárez-FernándezCorporate Governanceahead-of-printahead-of-print2024-02-2710.1108/CG-04-2022-0192https://www.emerald.com/insight/content/doi/10.1108/CG-04-2022-0192/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
The determinants of corporate anti-corruption disclosures: evidence from construction companies in the Asia-Pacifichttps://www.emerald.com/insight/content/doi/10.1108/CG-04-2023-0152/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to investigate the determinants of anti-corruption disclosures by construction firms in Asia-Pacific countries. The sample comprises construction companies from seven Asia-Pacific countries from 2015 to 2019. The authors hand-collected data on anti-corruption disclosures by using content analysis. This study provides empirical evidence that government ownership, country-level accounting competence and high-quality auditors increase companies’ anti-corruption disclosures. Meanwhile, this study finds that uncertainty avoidance does not affect companies’ anti-corruption disclosures. This study has a number of implications. First, government and professional accountant organizations need to improve accountants’ knowledge and competence through education, training and continuous professional development. Second, public accounting firms need to ensure the quality of their auditors, particularly in the technical competence in financial and nonfinancial reporting. Finally, universities must improve and update their curriculum regarding nonfinancial reporting issues. This study is among the first to examine anti-corruption disclosure practices in the most corrupted settings, i.e. the construction industry in Asia-Pacific countries. It uses the isomorphism perspective to explain the influence of government ownership, country-level accounting competence and high-quality auditors on anti-corruption disclosure transparency. The number of prior studies investigating this association is very limited. Moreover, disclosures of anti-corruption information are complex and sensitive; thus, coercive, normative and mimetic pressures are required to achieve higher transparency and sustainability.The determinants of corporate anti-corruption disclosures: evidence from construction companies in the Asia-Pacific
Evy Rahman Utami, Zuni Barokah
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to investigate the determinants of anti-corruption disclosures by construction firms in Asia-Pacific countries.

The sample comprises construction companies from seven Asia-Pacific countries from 2015 to 2019. The authors hand-collected data on anti-corruption disclosures by using content analysis.

This study provides empirical evidence that government ownership, country-level accounting competence and high-quality auditors increase companies’ anti-corruption disclosures. Meanwhile, this study finds that uncertainty avoidance does not affect companies’ anti-corruption disclosures.

This study has a number of implications. First, government and professional accountant organizations need to improve accountants’ knowledge and competence through education, training and continuous professional development. Second, public accounting firms need to ensure the quality of their auditors, particularly in the technical competence in financial and nonfinancial reporting. Finally, universities must improve and update their curriculum regarding nonfinancial reporting issues.

This study is among the first to examine anti-corruption disclosure practices in the most corrupted settings, i.e. the construction industry in Asia-Pacific countries. It uses the isomorphism perspective to explain the influence of government ownership, country-level accounting competence and high-quality auditors on anti-corruption disclosure transparency. The number of prior studies investigating this association is very limited. Moreover, disclosures of anti-corruption information are complex and sensitive; thus, coercive, normative and mimetic pressures are required to achieve higher transparency and sustainability.

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The determinants of corporate anti-corruption disclosures: evidence from construction companies in the Asia-Pacific10.1108/CG-04-2023-0152Corporate Governance2024-03-18© 2024 Emerald Publishing LimitedEvy Rahman UtamiZuni BarokahCorporate Governanceahead-of-printahead-of-print2024-03-1810.1108/CG-04-2023-0152https://www.emerald.com/insight/content/doi/10.1108/CG-04-2023-0152/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
An analysis of annual reports from the sustainable development goals perspectivehttps://www.emerald.com/insight/content/doi/10.1108/CG-04-2023-0155/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe sustainable development goals (SDGs) are introduced to guide achieving the sustainable goals and tackle the global problems. United Nations members may perform activities to achieve the predetermined goals and report on their SDG activities. The comprehension and commitment of several stakeholders are essential for the effective implementation of the SDGs. Countries encourage their stakeholders to perform and report their activities to meet the SDGs. The purpose of this study is to investigate the extent to which corporations’ annual reports address the SDGs to assess and comprehend their level of commitment to, priority of and integration of SDGs within their reporting structure. This research makes it easier to evaluate corporations’ sustainability performance and contributions to global sustainability goals by looking at the extent to which they address the SDGs. In the study, it is revealed to what extent the reports meet the SDGs with the multilabel text classification approach. The SDG classification is carried out by examining the report with the help of a text analysis tool based on an enhanced version of gradient boosting. The implementation of a machine learning-based model allowed it to determine which SDGs are associated with the company’s operations without the requirement for the report’s authors to perform so. Therefore, instead of reading the texts to seek for “SDG” evidence as typically occurs in the literature, SDG proof was searched in relevant texts. To show the feasibility of the study, the annual reports of the leading companies in Turkey are examined, and the results are interpreted. The study produced results including insights into the sustainable practices of businesses, priority SDG selection, benchmarking and business comparison, gaps and improvement opportunities identification and representation of the SDGs’ importance. The findings of the analysis of annual reports indicate which SDGs they are concerned about. A gap in the literature can be noticed in the analysis of annual reports of companies that fall under a particular framework. In addition, it has sparked the idea of conducting research on a global scale and in a time series. With the aid of this research, decision-making procedures can be guided, and advancements toward the SDGs can be achieved.An analysis of annual reports from the sustainable development goals perspective
Erk Hacıhasanoğlu, Ömer Faruk Ünlüsoy, Fatma Selen Madenoğlu
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

The sustainable development goals (SDGs) are introduced to guide achieving the sustainable goals and tackle the global problems. United Nations members may perform activities to achieve the predetermined goals and report on their SDG activities. The comprehension and commitment of several stakeholders are essential for the effective implementation of the SDGs. Countries encourage their stakeholders to perform and report their activities to meet the SDGs. The purpose of this study is to investigate the extent to which corporations’ annual reports address the SDGs to assess and comprehend their level of commitment to, priority of and integration of SDGs within their reporting structure. This research makes it easier to evaluate corporations’ sustainability performance and contributions to global sustainability goals by looking at the extent to which they address the SDGs.

In the study, it is revealed to what extent the reports meet the SDGs with the multilabel text classification approach. The SDG classification is carried out by examining the report with the help of a text analysis tool based on an enhanced version of gradient boosting. The implementation of a machine learning-based model allowed it to determine which SDGs are associated with the company’s operations without the requirement for the report’s authors to perform so. Therefore, instead of reading the texts to seek for “SDG” evidence as typically occurs in the literature, SDG proof was searched in relevant texts.

To show the feasibility of the study, the annual reports of the leading companies in Turkey are examined, and the results are interpreted. The study produced results including insights into the sustainable practices of businesses, priority SDG selection, benchmarking and business comparison, gaps and improvement opportunities identification and representation of the SDGs’ importance.

The findings of the analysis of annual reports indicate which SDGs they are concerned about. A gap in the literature can be noticed in the analysis of annual reports of companies that fall under a particular framework. In addition, it has sparked the idea of conducting research on a global scale and in a time series. With the aid of this research, decision-making procedures can be guided, and advancements toward the SDGs can be achieved.

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An analysis of annual reports from the sustainable development goals perspective10.1108/CG-04-2023-0155Corporate Governance2023-10-12© 2023 Emerald Publishing LimitedErk HacıhasanoğluÖmer Faruk ÜnlüsoyFatma Selen MadenoğluCorporate Governanceahead-of-printahead-of-print2023-10-1210.1108/CG-04-2023-0155https://www.emerald.com/insight/content/doi/10.1108/CG-04-2023-0155/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Accounting, ESG dynamics and the pandemic: when the quality of disclosure becomes crucial to sustainable successhttps://www.emerald.com/insight/content/doi/10.1108/CG-04-2023-0161/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to investigate the quality of disclosure of a cutting-edge reporting tool – integrated reporting (<IR>) – in terms of its effectiveness to report on COVID-19 pandemic information, its ability to provide forward-looking information and risk impact implications, and its quality determinants in challenging times. Thanks to a content analysis of 247 <IR> for FY20, an integrated reporting disclosure score was developed to assess the disclosure quality provided by the sampled companies. Three research questions were tested through logistic regressions. Non-financial disclosure activities struggle to provide adequate information in terms of potential future scenarios, risk assessment and forward-looking analyses. However, companies incorporated in “Anglo-Saxon” territories drafted integrated reports of higher quality. More recently, incorporated companies have made a greater effort to measure and report COVID-19 pandemic impacts on environmental, social and governance and business activities, also increasing their risk assessment and mitigation efforts. Concerning the determinants of disclosure quality, leverage, corporate governance structures, country of incorporation and belonging to “high impact” industries all lead to a higher quality of <IR> disclosure. Examining in detail corporate social responsibility activities and corporate governance integrity is pivotal to orienting strategy towards sustainable trajectories: to do so, corporate reporting and disclosure practices are essential tools. In this context, corporate governance systems that emphasize board diversity are proven, even in disruptive circumstances, to play a crucial role in providing corporate reports of higher quality. High disclosure quality that goes beyond mere financial results is considered to be necessary to remain competitive strategically, socially and environmentally.Accounting, ESG dynamics and the pandemic: when the quality of disclosure becomes crucial to sustainable success
Michael Murgolo, Patrizia Tettamanzi, Valentina Minutiello
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to investigate the quality of disclosure of a cutting-edge reporting tool – integrated reporting (<IR>) – in terms of its effectiveness to report on COVID-19 pandemic information, its ability to provide forward-looking information and risk impact implications, and its quality determinants in challenging times.

Thanks to a content analysis of 247 <IR> for FY20, an integrated reporting disclosure score was developed to assess the disclosure quality provided by the sampled companies. Three research questions were tested through logistic regressions.

Non-financial disclosure activities struggle to provide adequate information in terms of potential future scenarios, risk assessment and forward-looking analyses. However, companies incorporated in “Anglo-Saxon” territories drafted integrated reports of higher quality. More recently, incorporated companies have made a greater effort to measure and report COVID-19 pandemic impacts on environmental, social and governance and business activities, also increasing their risk assessment and mitigation efforts. Concerning the determinants of disclosure quality, leverage, corporate governance structures, country of incorporation and belonging to “high impact” industries all lead to a higher quality of <IR> disclosure.

Examining in detail corporate social responsibility activities and corporate governance integrity is pivotal to orienting strategy towards sustainable trajectories: to do so, corporate reporting and disclosure practices are essential tools. In this context, corporate governance systems that emphasize board diversity are proven, even in disruptive circumstances, to play a crucial role in providing corporate reports of higher quality. High disclosure quality that goes beyond mere financial results is considered to be necessary to remain competitive strategically, socially and environmentally.

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Accounting, ESG dynamics and the pandemic: when the quality of disclosure becomes crucial to sustainable success10.1108/CG-04-2023-0161Corporate Governance2023-12-26© 2023 Emerald Publishing LimitedMichael MurgoloPatrizia TettamanziValentina MinutielloCorporate Governanceahead-of-printahead-of-print2023-12-2610.1108/CG-04-2023-0161https://www.emerald.com/insight/content/doi/10.1108/CG-04-2023-0161/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The influence of the sustainable development goals on large companies’ adoption and implementation of a broader corporate purposehttps://www.emerald.com/insight/content/doi/10.1108/CG-04-2023-0167/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to understand whether, and if so how, the United Nations’ Sustainable Development Goals (SDGs) influence large companies’ adoption and implementation of a broader corporate purpose, beyond profit maximization. Adopting a multiple-case study method, data were collected from semi-structured interviews with 28 managers from 16 large companies in Australia and Japan, and from secondary sources. Grounded theory methods were used to analyze the data and draw out key findings. The study revealed the influence of the SDGs on corporate purpose depends on the SDG integration level: where and how the SDGs are integrated into management practices. The influence was more significant when the companies implemented the SDGs at a normative level compared to those implementing the SDGs at a strategic and/or operational level. Due to the exploratory nature of the study, the sample size is limited and covers only companies in two countries. Future studies could examine the validity of the findings and the explanatory model by testing with a larger sample and expanding the scope into different countries. The study provides practical implications on how large companies’ could scale up their contributions to achieving the SDGs. While the extant literature suggests a simple relationship between sustainability (the SDGs) and corporate purpose, this paper identified a more complex relationship. It presents in a multi-pathway model that explains the relationship, based on empirical evidence from 16 large companies in two different institutional contexts.The influence of the sustainable development goals on large companies’ adoption and implementation of a broader corporate purpose
Kyoko Sasaki, Wendy Stubbs, Megan Farrelly
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to understand whether, and if so how, the United Nations’ Sustainable Development Goals (SDGs) influence large companies’ adoption and implementation of a broader corporate purpose, beyond profit maximization.

Adopting a multiple-case study method, data were collected from semi-structured interviews with 28 managers from 16 large companies in Australia and Japan, and from secondary sources. Grounded theory methods were used to analyze the data and draw out key findings.

The study revealed the influence of the SDGs on corporate purpose depends on the SDG integration level: where and how the SDGs are integrated into management practices. The influence was more significant when the companies implemented the SDGs at a normative level compared to those implementing the SDGs at a strategic and/or operational level.

Due to the exploratory nature of the study, the sample size is limited and covers only companies in two countries. Future studies could examine the validity of the findings and the explanatory model by testing with a larger sample and expanding the scope into different countries. The study provides practical implications on how large companies’ could scale up their contributions to achieving the SDGs.

While the extant literature suggests a simple relationship between sustainability (the SDGs) and corporate purpose, this paper identified a more complex relationship. It presents in a multi-pathway model that explains the relationship, based on empirical evidence from 16 large companies in two different institutional contexts.

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The influence of the sustainable development goals on large companies’ adoption and implementation of a broader corporate purpose10.1108/CG-04-2023-0167Corporate Governance2023-11-03© 2023 Emerald Publishing LimitedKyoko SasakiWendy StubbsMegan FarrellyCorporate Governanceahead-of-printahead-of-print2023-11-0310.1108/CG-04-2023-0167https://www.emerald.com/insight/content/doi/10.1108/CG-04-2023-0167/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The sustainable development goals and the role of environmental legislation in Brazilian poultry companieshttps://www.emerald.com/insight/content/doi/10.1108/CG-04-2023-0170/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to evaluate how corporate governance focused on meeting the legal requirements applied in poultry slaughterhouses contributes to the advancement of the Sustainable Development Goals (SDGs) within the environmental pillar and identify vulnerabilities in this governance framework. This research was qualitative and was structured with the following steps: literature review, selection of companies and documentary research on licenses applied to these companies. The assessment demonstrates that the governance strategy based on legal aspects contributes to progress in indicators related to SDGs such as clean water, climate action, life below water and life on land. However, it falls short when addressing SDG 7 on affordable and clean energy. Another vulnerability of this governance model is that legislation establishes metrics and indicators individually for each link in the poultry industry chain. Assessment of the corporate governance of poultry slaughterhouses, focusing on legality and analyzing vulnerabilities in the legal aspects of the poultry industry concerning the SDGs that encompass the environmental pillar. The results provide valuable information for policymakers, regulators and industry stakeholders in the segment, suggesting the need to align legislation with SDGs or adopt incentive policies to encourage the spontaneous advancement of SDGs in the poultry industry. Considering the need for progress toward a more sustainable world and the trend of organizations focusing their efforts on complying with local legislation, this study aims to contribute to understanding how the legal requirements applied in practice are prepared to support the advancement of the SDGs.The sustainable development goals and the role of environmental legislation in Brazilian poultry companies
Gustavo Schiavo, Annibal Scavarda
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to evaluate how corporate governance focused on meeting the legal requirements applied in poultry slaughterhouses contributes to the advancement of the Sustainable Development Goals (SDGs) within the environmental pillar and identify vulnerabilities in this governance framework.

This research was qualitative and was structured with the following steps: literature review, selection of companies and documentary research on licenses applied to these companies.

The assessment demonstrates that the governance strategy based on legal aspects contributes to progress in indicators related to SDGs such as clean water, climate action, life below water and life on land. However, it falls short when addressing SDG 7 on affordable and clean energy. Another vulnerability of this governance model is that legislation establishes metrics and indicators individually for each link in the poultry industry chain.

Assessment of the corporate governance of poultry slaughterhouses, focusing on legality and analyzing vulnerabilities in the legal aspects of the poultry industry concerning the SDGs that encompass the environmental pillar.

The results provide valuable information for policymakers, regulators and industry stakeholders in the segment, suggesting the need to align legislation with SDGs or adopt incentive policies to encourage the spontaneous advancement of SDGs in the poultry industry.

Considering the need for progress toward a more sustainable world and the trend of organizations focusing their efforts on complying with local legislation, this study aims to contribute to understanding how the legal requirements applied in practice are prepared to support the advancement of the SDGs.

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The sustainable development goals and the role of environmental legislation in Brazilian poultry companies10.1108/CG-04-2023-0170Corporate Governance2024-03-18© 2024 Emerald Publishing LimitedGustavo SchiavoAnnibal ScavardaCorporate Governanceahead-of-printahead-of-print2024-03-1810.1108/CG-04-2023-0170https://www.emerald.com/insight/content/doi/10.1108/CG-04-2023-0170/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
How firms adjust their SDG adoption in response to COVID-19 outbreak: a regional perspectivehttps://www.emerald.com/insight/content/doi/10.1108/CG-04-2023-0171/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to examine the COVID-19 pandemic’s impacts on the regional progression toward the Sustainable Development Goals (SDGs) through the lens of the adoption of 2030 Agenda by firms from different Italian regions. Mixed methods were adopted. First, a content analysis was performed on 330 nonfinancial declarations released in the 2019–2021 period by a sample of 110 Italian listed companies from different regional macroareas. Second, regression analyses were run to test the impact of regional localization of businesses on SDGs adoption over pre-/during/post-COVID era. The regional localization of businesses does not affect the SDGs adoption in the pre-COVID-19 era because Italian firms mainly address social goals. Instead, SDGs adoption is affected by regional localization of businesses both during and post-COVID-19 age, when Northern firms prioritize economic and social goals, whereas Southern firms shift from social to environmental goals. This study fills the need of considering the subnational specificities in literature on sustainable development by capturing connections between firms, belonging territory, SDGs and COVID-19 crisis.How firms adjust their SDG adoption in response to COVID-19 outbreak: a regional perspective
Raffaella Montera, Giulia Nevi, Nicola Cucari, Salvatore Esposito De Falco
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to examine the COVID-19 pandemic’s impacts on the regional progression toward the Sustainable Development Goals (SDGs) through the lens of the adoption of 2030 Agenda by firms from different Italian regions.

Mixed methods were adopted. First, a content analysis was performed on 330 nonfinancial declarations released in the 2019–2021 period by a sample of 110 Italian listed companies from different regional macroareas. Second, regression analyses were run to test the impact of regional localization of businesses on SDGs adoption over pre-/during/post-COVID era.

The regional localization of businesses does not affect the SDGs adoption in the pre-COVID-19 era because Italian firms mainly address social goals. Instead, SDGs adoption is affected by regional localization of businesses both during and post-COVID-19 age, when Northern firms prioritize economic and social goals, whereas Southern firms shift from social to environmental goals.

This study fills the need of considering the subnational specificities in literature on sustainable development by capturing connections between firms, belonging territory, SDGs and COVID-19 crisis.

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How firms adjust their SDG adoption in response to COVID-19 outbreak: a regional perspective10.1108/CG-04-2023-0171Corporate Governance2023-11-01© 2023 Emerald Publishing LimitedRaffaella MonteraGiulia NeviNicola CucariSalvatore Esposito De FalcoCorporate Governanceahead-of-printahead-of-print2023-11-0110.1108/CG-04-2023-0171https://www.emerald.com/insight/content/doi/10.1108/CG-04-2023-0171/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Digital transformation and governance heterogeneity as determinants of CSR disclosure: insights from Chinese A-share companieshttps://www.emerald.com/insight/content/doi/10.1108/CG-04-2023-0173/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestIn this fast-changing world, digitization has become crucial to organizations, allowing decision-makers to alter corporate processes. Companies with a higher corporate social responsibility (CSR) level not only help encourage employees to focus on their goals, but they also show that they take their social responsibility seriously, which is increasingly important in today’s digital economy. So, this study aims to examine the relationship between digital transformation and CSR disclosure of Chinese A-share companies. Furthermore, this research investigates the moderating impact of governance heterogeneity, including CEO power and corporate internal control (INT) mechanisms. This study used fixed effect estimation with robust standard errors to examine the relationship between digital transformation and CSR disclosure and the moderating effect of governance heterogeneity among Chinese A-share companies from 2010 to 2020. The whole sample consists of 17,266 firms, including 5,038 state-owned enterprise (SOE) company records and 12,228 non-SOE records. The whole sample data is collected from the China Stock Market and Accounting Research, the Chinese Research Data Services and the WIND databases. The regression results lead us to three conclusions after classifying the sample into non-SOE and SOE groups. First, Chinese A-share businesses with greater levels of digitalization have lower CSR disclosures. Both SOE and non-SOE are consistent with these findings. Second, increasing CEO authority creates a more centralized company decision-making structure (Breuer et al., 2022; Freire, 2019), which improves the negative association between digitalization and CSR disclosure. These conclusions, however, also apply to non-SOE. Finally, INT reinforces the association between corporate digitization and CSR disclosure, which is especially obvious in SOEs. These findings are robust to alternative HEXUN CSR disclosure index. Heterogeneity analysis shows that the negative relationship between corporate digitalization and CSR disclosures is more pronounced in bigger, highly levered and highly financialized firms. Digitalization and CSR disclosure are well studied, but few have examined their interactions from a governance heterogeneity perspective in China. Practitioners and policymakers may use these insights to help business owners implement suitable digital policies for firm development from diverse business perspectives.Digital transformation and governance heterogeneity as determinants of CSR disclosure: insights from Chinese A-share companies
Xiaoyan Jin, Sultan Sikandar Mirza, Chengming Huang, Chengwei Zhang
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

In this fast-changing world, digitization has become crucial to organizations, allowing decision-makers to alter corporate processes. Companies with a higher corporate social responsibility (CSR) level not only help encourage employees to focus on their goals, but they also show that they take their social responsibility seriously, which is increasingly important in today’s digital economy. So, this study aims to examine the relationship between digital transformation and CSR disclosure of Chinese A-share companies. Furthermore, this research investigates the moderating impact of governance heterogeneity, including CEO power and corporate internal control (INT) mechanisms.

This study used fixed effect estimation with robust standard errors to examine the relationship between digital transformation and CSR disclosure and the moderating effect of governance heterogeneity among Chinese A-share companies from 2010 to 2020. The whole sample consists of 17,266 firms, including 5,038 state-owned enterprise (SOE) company records and 12,228 non-SOE records. The whole sample data is collected from the China Stock Market and Accounting Research, the Chinese Research Data Services and the WIND databases.

The regression results lead us to three conclusions after classifying the sample into non-SOE and SOE groups. First, Chinese A-share businesses with greater levels of digitalization have lower CSR disclosures. Both SOE and non-SOE are consistent with these findings. Second, increasing CEO authority creates a more centralized company decision-making structure (Breuer et al., 2022; Freire, 2019), which improves the negative association between digitalization and CSR disclosure. These conclusions, however, also apply to non-SOE. Finally, INT reinforces the association between corporate digitization and CSR disclosure, which is especially obvious in SOEs. These findings are robust to alternative HEXUN CSR disclosure index. Heterogeneity analysis shows that the negative relationship between corporate digitalization and CSR disclosures is more pronounced in bigger, highly levered and highly financialized firms.

Digitalization and CSR disclosure are well studied, but few have examined their interactions from a governance heterogeneity perspective in China. Practitioners and policymakers may use these insights to help business owners implement suitable digital policies for firm development from diverse business perspectives.

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Digital transformation and governance heterogeneity as determinants of CSR disclosure: insights from Chinese A-share companies10.1108/CG-04-2023-0173Corporate Governance2024-03-29© 2024 Emerald Publishing LimitedXiaoyan JinSultan Sikandar MirzaChengming HuangChengwei ZhangCorporate Governanceahead-of-printahead-of-print2024-03-2910.1108/CG-04-2023-0173https://www.emerald.com/insight/content/doi/10.1108/CG-04-2023-0173/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
The role of foreign board and ownership on the quality of sustainability disclosure: the moderating effect of social reputationhttps://www.emerald.com/insight/content/doi/10.1108/CG-05-2022-0236/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine the effect of social reputation on the relationship between boards and foreign ownership on the quality of sustainability disclosure. The sample of this study consists of publicly-traded primary and secondary sector companies in Indonesia for 12 years, from 2009 to 2020. This study uses panel model regression to generate its results. The disclosure data are hand-collected data sourced from annual financial and company sustainability reports. Higher foreign board component companies report lower quality of sustainability disclosure, whereas companies that possess foreign ownership components report a higher quality of sustainability disclosure. This result is strengthened by obtaining consistent results tested with economic, social and environmental disclosure components. In addition, if the company has a good social reputation, it will strengthen the relationship of foreign ownership to the quality of sustainability disclosure. These findings are relevant for policymakers, professional organizations and practitioners in Indonesia and other developing countries. The moderating effect of social reputation on the relation of the foreign board and foreign ownership-quality of sustainability disclosure as this study does remain rare in developing countries. This study complements various research conducted in developing countries, such as Indonesia, by offering a new dimension. The results indicate that social reputation has a moderating role in determining the impact of foreign ownership on the quality of sustainability disclosure.The role of foreign board and ownership on the quality of sustainability disclosure: the moderating effect of social reputation
Arumega Zarefar, Dian Agustia, Noorlailie Soewarno
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine the effect of social reputation on the relationship between boards and foreign ownership on the quality of sustainability disclosure.

The sample of this study consists of publicly-traded primary and secondary sector companies in Indonesia for 12 years, from 2009 to 2020. This study uses panel model regression to generate its results. The disclosure data are hand-collected data sourced from annual financial and company sustainability reports.

Higher foreign board component companies report lower quality of sustainability disclosure, whereas companies that possess foreign ownership components report a higher quality of sustainability disclosure. This result is strengthened by obtaining consistent results tested with economic, social and environmental disclosure components. In addition, if the company has a good social reputation, it will strengthen the relationship of foreign ownership to the quality of sustainability disclosure.

These findings are relevant for policymakers, professional organizations and practitioners in Indonesia and other developing countries.

The moderating effect of social reputation on the relation of the foreign board and foreign ownership-quality of sustainability disclosure as this study does remain rare in developing countries. This study complements various research conducted in developing countries, such as Indonesia, by offering a new dimension. The results indicate that social reputation has a moderating role in determining the impact of foreign ownership on the quality of sustainability disclosure.

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The role of foreign board and ownership on the quality of sustainability disclosure: the moderating effect of social reputation10.1108/CG-05-2022-0236Corporate Governance2023-12-19© 2023 Emerald Publishing LimitedArumega ZarefarDian AgustiaNoorlailie SoewarnoCorporate Governanceahead-of-printahead-of-print2023-12-1910.1108/CG-05-2022-0236https://www.emerald.com/insight/content/doi/10.1108/CG-05-2022-0236/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Audit committee quality and cosmetic accounting: an examination in an emerging markethttps://www.emerald.com/insight/content/doi/10.1108/CG-05-2023-0181/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe literature on the influence of audit committees (AC) and cosmetic accounting (CA) is scarce. AC plays a unique and vital role in boosting earnings reliability in countries with weaker application of accounting standards or weaker legal protection for investors. AC, therefore, are considered to be one of the essential tools available to directors in supervising management decisions regarding financial reporting. This paper aims to examine the influence of AC characteristics (ACC) on CA and how this relationship is moderated by the audit fee. This study used probit regression to analyze 1,218 firm-year observations of listed companies in Tehran Stock Exchange from 2014 to 2020. The results show that AC financial accounting expertise, AC independence, female AC membership and AC tenure were negatively related to CA. The negative relationship is highly pronounced when a firm incurs higher audit fees, and audit fees moderate the relationship between ACC and CA. Results for the robustness checks show that only AC independence was significant, and the results of other characteristics were not significant. This research was conducted in an Iranian setting where the formation of ACs is on the verge of regulation; therefore, the data used for the study only contains the seven-year period of ACs’ statutory activity. In addition, a lack of consensus on the precise measures of an AC’s effectiveness could be considered as a restrictive factor. The findings provide an initial insight into the effect AC on CA and moderating effect of audit fee on the relationship between ACC and CA.Audit committee quality and cosmetic accounting: an examination in an emerging market
Abbas Ali Daryaei, Afshin Balani, Yasin Fattahi
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

The literature on the influence of audit committees (AC) and cosmetic accounting (CA) is scarce. AC plays a unique and vital role in boosting earnings reliability in countries with weaker application of accounting standards or weaker legal protection for investors. AC, therefore, are considered to be one of the essential tools available to directors in supervising management decisions regarding financial reporting. This paper aims to examine the influence of AC characteristics (ACC) on CA and how this relationship is moderated by the audit fee.

This study used probit regression to analyze 1,218 firm-year observations of listed companies in Tehran Stock Exchange from 2014 to 2020.

The results show that AC financial accounting expertise, AC independence, female AC membership and AC tenure were negatively related to CA. The negative relationship is highly pronounced when a firm incurs higher audit fees, and audit fees moderate the relationship between ACC and CA. Results for the robustness checks show that only AC independence was significant, and the results of other characteristics were not significant.

This research was conducted in an Iranian setting where the formation of ACs is on the verge of regulation; therefore, the data used for the study only contains the seven-year period of ACs’ statutory activity. In addition, a lack of consensus on the precise measures of an AC’s effectiveness could be considered as a restrictive factor.

The findings provide an initial insight into the effect AC on CA and moderating effect of audit fee on the relationship between ACC and CA.

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Audit committee quality and cosmetic accounting: an examination in an emerging market10.1108/CG-05-2023-0181Corporate Governance2024-01-30© 2024 Emerald Publishing LimitedAbbas Ali DaryaeiAfshin BalaniYasin FattahiCorporate Governanceahead-of-printahead-of-print2024-01-3010.1108/CG-05-2023-0181https://www.emerald.com/insight/content/doi/10.1108/CG-05-2023-0181/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
The power of purpose: how material sustainability and stakeholder orientation drive financial successhttps://www.emerald.com/insight/content/doi/10.1108/CG-05-2023-0189/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestConsidering the standards developed by the Sustainability Accounting Standards Board (SASB), this study aims to examine whether the link between material sustainability and financial performance depends on the extent to which the company is oriented toward stakeholders. To test the predictions, 13,942 firm-year observations from 43 different countries are used, covering the period from 2010 to 2019. Using a hand-mapping approach to match the indicators suggested by the SASB with those of the ASSET4, the authors realize that there are 170 material sustainability indicators among 466 indicators of the ASSET4. The authors use three different methods to verify if the materiality matters, including the alphas obtained from the Fama and French factor models, comparing the average abnormal returns of the portfolios and the bootstrapped Cramer technique. The findings show that companies investing in material sustainability activities perform better than those investing in immaterial activities. Also, consistent with the theoretical foundations, the authors find that the effect of investing in material sustainability activities is more pronounced in stakeholder-oriented countries than that in shareholder-oriented countries. The results are robust to a battery of sensitivity tests. Owing to COVID-19 in late 2019, data from 2020 to 2022 have not been used to obtain reliable results. The results obtained in the current research provide valuable guidance for investors to make investments considering the degree of materiality of sustainability activities in different industries. It also helps managers to increase the company’s financial performance, make efficient decisions related to investment in sustainability activities and find investment strategies on the material sustainability issues in their industries. This study provides a clearer understanding of investment in sustainability activities in different industries by separating material and immaterial sustainability activities in stakeholder and shareholder-oriented countries, and the results obtained can change the perspective of investors and company managers regarding investing in such activities in different countries. Investing in more materiality sustainability activities than the immateriality dimension can be new opportunities for companies to achieve predetermined goals, help retain and attract business partners or be a source of innovation for new product lines or services. Internal morale and employee engagement may increase while increasing productivity and firm performance. This discussion opens the way for future research. This study provides insight into the effect of investing in material and immaterial sustainability activities in different industries on the company’s performance in shareholder and stakeholder-oriented countries.The power of purpose: how material sustainability and stakeholder orientation drive financial success
Samira Joudi, Gholamreza Mansourfar, Saeid Homayoun, Zabihollah Rezaee
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

Considering the standards developed by the Sustainability Accounting Standards Board (SASB), this study aims to examine whether the link between material sustainability and financial performance depends on the extent to which the company is oriented toward stakeholders.

To test the predictions, 13,942 firm-year observations from 43 different countries are used, covering the period from 2010 to 2019. Using a hand-mapping approach to match the indicators suggested by the SASB with those of the ASSET4, the authors realize that there are 170 material sustainability indicators among 466 indicators of the ASSET4. The authors use three different methods to verify if the materiality matters, including the alphas obtained from the Fama and French factor models, comparing the average abnormal returns of the portfolios and the bootstrapped Cramer technique.

The findings show that companies investing in material sustainability activities perform better than those investing in immaterial activities. Also, consistent with the theoretical foundations, the authors find that the effect of investing in material sustainability activities is more pronounced in stakeholder-oriented countries than that in shareholder-oriented countries. The results are robust to a battery of sensitivity tests.

Owing to COVID-19 in late 2019, data from 2020 to 2022 have not been used to obtain reliable results.

The results obtained in the current research provide valuable guidance for investors to make investments considering the degree of materiality of sustainability activities in different industries. It also helps managers to increase the company’s financial performance, make efficient decisions related to investment in sustainability activities and find investment strategies on the material sustainability issues in their industries.

This study provides a clearer understanding of investment in sustainability activities in different industries by separating material and immaterial sustainability activities in stakeholder and shareholder-oriented countries, and the results obtained can change the perspective of investors and company managers regarding investing in such activities in different countries. Investing in more materiality sustainability activities than the immateriality dimension can be new opportunities for companies to achieve predetermined goals, help retain and attract business partners or be a source of innovation for new product lines or services. Internal morale and employee engagement may increase while increasing productivity and firm performance. This discussion opens the way for future research.

This study provides insight into the effect of investing in material and immaterial sustainability activities in different industries on the company’s performance in shareholder and stakeholder-oriented countries.

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The power of purpose: how material sustainability and stakeholder orientation drive financial success10.1108/CG-05-2023-0189Corporate Governance2024-03-26© 2024 Emerald Publishing LimitedSamira JoudiGholamreza MansourfarSaeid HomayounZabihollah RezaeeCorporate Governanceahead-of-printahead-of-print2024-03-2610.1108/CG-05-2023-0189https://www.emerald.com/insight/content/doi/10.1108/CG-05-2023-0189/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
The role of female executives in capital structure decisions: evidence from a Southeast Asian countryhttps://www.emerald.com/insight/content/doi/10.1108/CG-05-2023-0203/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to investigate how the presence of female executives on the board affects a company’s capital structure decisions. The critical mass of female executives on the board was also considered to observe their impact on capital structure. Samples were taken from nonfinancial sector companies listed on the Indonesia Stock Exchange between 2012 and 2021 (3,707 firm-year observations). Capital structure was measured using four approaches, namely, debt-to-total asset ratio (DAR), debt-to-equity ratio (DER), short-term debt-to-total assets (STD) and long-term debt-to-total assets (LTD). The data were analyzed using panel data regression analysis, including a fixed effects model with clustered standard errors. The presence of female executives on the board is significantly negatively related to capital structure as measured by DER and STD. The critical mass of women provided no evidence of a relationship with a firm’s capital structure. Robustness checks were performed, and the results were consistent with those in the main analysis. Female executives can be appointed to management boards when determining a strategy to achieve the capital structure desired by a company. This study increases the diversity of research in corporate governance by synthesizing various indicators from female executives into a single study to determine their relationships with companies’ capital structures. In addition, this study stands out by incorporating four distinct indicators for assessing capital structure and diverging from the norm observed in many other studies, many of which rely on just two indicators: DAR and DER. Moreover, it strongly emphasizes the unique economic, legal, social and cultural landscapes of developing countries like Indonesia in comparison to their developed counterparts, particularly Western nations.The role of female executives in capital structure decisions: evidence from a Southeast Asian country
Muhammad Edo Suryawan Siregar, Suherman Suherman, Titis Fatarina Mahfirah, Berto Usman, Gentiga Muhammad Zairin, Herni Kurniawati
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to investigate how the presence of female executives on the board affects a company’s capital structure decisions. The critical mass of female executives on the board was also considered to observe their impact on capital structure.

Samples were taken from nonfinancial sector companies listed on the Indonesia Stock Exchange between 2012 and 2021 (3,707 firm-year observations). Capital structure was measured using four approaches, namely, debt-to-total asset ratio (DAR), debt-to-equity ratio (DER), short-term debt-to-total assets (STD) and long-term debt-to-total assets (LTD). The data were analyzed using panel data regression analysis, including a fixed effects model with clustered standard errors.

The presence of female executives on the board is significantly negatively related to capital structure as measured by DER and STD. The critical mass of women provided no evidence of a relationship with a firm’s capital structure. Robustness checks were performed, and the results were consistent with those in the main analysis.

Female executives can be appointed to management boards when determining a strategy to achieve the capital structure desired by a company.

This study increases the diversity of research in corporate governance by synthesizing various indicators from female executives into a single study to determine their relationships with companies’ capital structures. In addition, this study stands out by incorporating four distinct indicators for assessing capital structure and diverging from the norm observed in many other studies, many of which rely on just two indicators: DAR and DER. Moreover, it strongly emphasizes the unique economic, legal, social and cultural landscapes of developing countries like Indonesia in comparison to their developed counterparts, particularly Western nations.

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The role of female executives in capital structure decisions: evidence from a Southeast Asian country10.1108/CG-05-2023-0203Corporate Governance2023-11-27© 2023 Emerald Publishing LimitedMuhammad Edo Suryawan SiregarSuherman SuhermanTitis Fatarina MahfirahBerto UsmanGentiga Muhammad ZairinHerni KurniawatiCorporate Governanceahead-of-printahead-of-print2023-11-2710.1108/CG-05-2023-0203https://www.emerald.com/insight/content/doi/10.1108/CG-05-2023-0203/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Exploring the impact of institutional forces on the social sustainability of logistics service providers: insights from a high terrorism-affected regionhttps://www.emerald.com/insight/content/doi/10.1108/CG-05-2023-0214/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestAchieving social sustainability has become a critical challenge in global supply chain networks, particularly during complex crises such as terrorism. The purpose of this study is to explore how institutional forces influence the social sustainability approaches of logistics service providers (LSPs) in high terrorism-affected regions (HTAR). This then leads to investigating how the key factors interact with Institutional Theory. An exploratory multiple-case study research method was used to investigate six cases of different-sized logistics LSPs, each in an HTAR. The data was collected using semistructured interviews and triangulated using on-site observations and document analysis. Thematic analysis was used in iterative cycles for cross-case comparisons and pattern matching. The findings interact with Institutional Theory and the three final-order themes. First, management processes are driven by coopetition and innovation. Second, organizational resources, structure and culture lead to an ineffective organizational design. Finally, a lack of institutionalization creates institutional uncertainty. These factors are rooted in many other first-order factors such as information sharing, communication, relationship management, capacity development, new process developments, workforce characteristics, technology, microlevel culture and control aspects. This study answers the call for social sustainability research and enriches the literature on social sustainability, Institutional Theory and LSPs in HTARs by providing illustrations showing that institutional forces act as driving forces for social sustainability initiatives by shaping the current management processes. Conversely, the same forces impede social sustainability initiatives by shaping the current organizational designs and increasing institutional uncertainty.Exploring the impact of institutional forces on the social sustainability of logistics service providers: insights from a high terrorism-affected region
Muhammad Naveed Khan, Piyya Muhammad Rafi-ul-Shan, Pervaiz Akhtar, Zaheer Khan, Saqib Shamim
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

Achieving social sustainability has become a critical challenge in global supply chain networks, particularly during complex crises such as terrorism. The purpose of this study is to explore how institutional forces influence the social sustainability approaches of logistics service providers (LSPs) in high terrorism-affected regions (HTAR). This then leads to investigating how the key factors interact with Institutional Theory.

An exploratory multiple-case study research method was used to investigate six cases of different-sized logistics LSPs, each in an HTAR. The data was collected using semistructured interviews and triangulated using on-site observations and document analysis. Thematic analysis was used in iterative cycles for cross-case comparisons and pattern matching.

The findings interact with Institutional Theory and the three final-order themes. First, management processes are driven by coopetition and innovation. Second, organizational resources, structure and culture lead to an ineffective organizational design. Finally, a lack of institutionalization creates institutional uncertainty. These factors are rooted in many other first-order factors such as information sharing, communication, relationship management, capacity development, new process developments, workforce characteristics, technology, microlevel culture and control aspects.

This study answers the call for social sustainability research and enriches the literature on social sustainability, Institutional Theory and LSPs in HTARs by providing illustrations showing that institutional forces act as driving forces for social sustainability initiatives by shaping the current management processes. Conversely, the same forces impede social sustainability initiatives by shaping the current organizational designs and increasing institutional uncertainty.

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Exploring the impact of institutional forces on the social sustainability of logistics service providers: insights from a high terrorism-affected region10.1108/CG-05-2023-0214Corporate Governance2023-12-19© 2023 Emerald Publishing LimitedMuhammad Naveed KhanPiyya Muhammad Rafi-ul-ShanPervaiz AkhtarZaheer KhanSaqib ShamimCorporate Governanceahead-of-printahead-of-print2023-12-1910.1108/CG-05-2023-0214https://www.emerald.com/insight/content/doi/10.1108/CG-05-2023-0214/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
An exploratory study of barriers to sustainable development: evidence from the New Zealand flexible packaging industryhttps://www.emerald.com/insight/content/doi/10.1108/CG-05-2023-0221/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestManufacturing companies continue to encounter a diverse set of obstacles while embracing sustainable development goals. Accordingly, the purpose of this study is to explore critical sustainable development-related barriers to flexible packaging manufacturing companies in the New Zealand context. Drawing on a qualitative multiple case studies approach, the authors collected data from the New Zealand flexible packaging industry. Semistructured interviews were conducted with the senior corporate managers in two large flexible packaging companies. Following the thematic analysis approach, the authors analyzed the information collected from the participants and synthesized our findings under the key dimensions of internal and external barriers to sustainable development. The findings revealed that internal barriers to sustainable flexible packaging are linked to economic, operational and technical issues. Conversely, external barriers include global crises and disruption, customer behavior and preferences and institutional and infrastructural-related aspects. Based on the analysis of empirical findings, the authors further identified the underlying reasons for sustainable flexible packaging barriers and recommended guidelines that could assist corporate managers and policymakers in addressing obstacles inhibiting the flexible packaging industry from adopting sustainable business practices. The authors argue that this study is one of the early studies to consider inhibiting factors to incorporate sustainable development into the New Zealand flexible packaging industry context. Building on a range of theoretical perspectives, the authors extend the current body of knowledge seeking to advance the sustainable development agenda in the New Zealand flexible packaging industry and offer recommended pathways fostering sustainable development in a distinctive manufacturing context.An exploratory study of barriers to sustainable development: evidence from the New Zealand flexible packaging industry
Amna Farrukh, Aymen Sajjad
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

Manufacturing companies continue to encounter a diverse set of obstacles while embracing sustainable development goals. Accordingly, the purpose of this study is to explore critical sustainable development-related barriers to flexible packaging manufacturing companies in the New Zealand context.

Drawing on a qualitative multiple case studies approach, the authors collected data from the New Zealand flexible packaging industry. Semistructured interviews were conducted with the senior corporate managers in two large flexible packaging companies. Following the thematic analysis approach, the authors analyzed the information collected from the participants and synthesized our findings under the key dimensions of internal and external barriers to sustainable development.

The findings revealed that internal barriers to sustainable flexible packaging are linked to economic, operational and technical issues. Conversely, external barriers include global crises and disruption, customer behavior and preferences and institutional and infrastructural-related aspects. Based on the analysis of empirical findings, the authors further identified the underlying reasons for sustainable flexible packaging barriers and recommended guidelines that could assist corporate managers and policymakers in addressing obstacles inhibiting the flexible packaging industry from adopting sustainable business practices.

The authors argue that this study is one of the early studies to consider inhibiting factors to incorporate sustainable development into the New Zealand flexible packaging industry context. Building on a range of theoretical perspectives, the authors extend the current body of knowledge seeking to advance the sustainable development agenda in the New Zealand flexible packaging industry and offer recommended pathways fostering sustainable development in a distinctive manufacturing context.

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An exploratory study of barriers to sustainable development: evidence from the New Zealand flexible packaging industry10.1108/CG-05-2023-0221Corporate Governance2024-01-25© 2024 Emerald Publishing LimitedAmna FarrukhAymen SajjadCorporate Governanceahead-of-printahead-of-print2024-01-2510.1108/CG-05-2023-0221https://www.emerald.com/insight/content/doi/10.1108/CG-05-2023-0221/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
Identifying the dimensions of philanthropic CSR in the FMCG sector: agenda for the sustainability of businesshttps://www.emerald.com/insight/content/doi/10.1108/CG-05-2023-0224/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to use a multi-stage scale development process to identify the dimensions of philanthropic corporate social responsibility (PCSR) in India’s fast-moving consumer goods (FMCG) sector. The authors conducted a study to develop a comprehensive, reliable and valid scale for measuring PCSR based on the customer perception of FMCG product manufacturers. This research adopted a comprehensive and detailed scale development process using multi-stage sampling for scale development. This final study was conducted on a sample of 402 respondents from the city of Jaipur, India. The results have underlined the multi-dimensional aspect of PCSR; these dimensions are: altruism towards society, volunteering for local community development, generosity towards ecology, benevolent spirit and problem-solving charity. This study gives valuable insights into philanthropic scale development in the FMCG sector that can immensely help domestic and international marketers to formulate CSR as a strategy. This research provides insights into a wide range of scales which can be base for future research studies that aim to explore different organizational settings. PCSR and CSR are important for developing strategies for sustainable businesses across the globe. Dimensions of PCSR will be useful for practitioners and researchers in developing second-order constructs for future studies.Identifying the dimensions of philanthropic CSR in the FMCG sector: agenda for the sustainability of business
Vibha Soni, Priti Saxena, Sana Moid, Abhineet Saxena, Mita Mehta
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to use a multi-stage scale development process to identify the dimensions of philanthropic corporate social responsibility (PCSR) in India’s fast-moving consumer goods (FMCG) sector.

The authors conducted a study to develop a comprehensive, reliable and valid scale for measuring PCSR based on the customer perception of FMCG product manufacturers. This research adopted a comprehensive and detailed scale development process using multi-stage sampling for scale development. This final study was conducted on a sample of 402 respondents from the city of Jaipur, India.

The results have underlined the multi-dimensional aspect of PCSR; these dimensions are: altruism towards society, volunteering for local community development, generosity towards ecology, benevolent spirit and problem-solving charity.

This study gives valuable insights into philanthropic scale development in the FMCG sector that can immensely help domestic and international marketers to formulate CSR as a strategy. This research provides insights into a wide range of scales which can be base for future research studies that aim to explore different organizational settings.

PCSR and CSR are important for developing strategies for sustainable businesses across the globe. Dimensions of PCSR will be useful for practitioners and researchers in developing second-order constructs for future studies.

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Identifying the dimensions of philanthropic CSR in the FMCG sector: agenda for the sustainability of business10.1108/CG-05-2023-0224Corporate Governance2023-12-13© Emerald Publishing LimitedVibha SoniPriti SaxenaSana MoidAbhineet SaxenaMita MehtaCorporate Governanceahead-of-printahead-of-print2023-12-1310.1108/CG-05-2023-0224https://www.emerald.com/insight/content/doi/10.1108/CG-05-2023-0224/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© Emerald Publishing Limited
The moderating role of duality split on the relationship between CEO narcissism and earnings managementhttps://www.emerald.com/insight/content/doi/10.1108/CG-06-2023-0229/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe purpose of this study is to examine the moderating effect of an exogenous corporate governance shock that curbs Chief Executive Officers’ (CEOs) power on the relationship between CEO narcissism and earnings management practices. The authors performed a quasi-experiment using a differences-in-differences approach to examine Brazil’s duality split regulatory change on 101 Brazilian public firms during the period 2010–2022. The main findings indicate that the introduction of duality split curtails the positive influence of CEO narcissism on earnings management, suggesting that this corporate governance regulation may act as a complementary corporate governance mechanism in mitigating the negative consequences of powerful narcissistic CEOs. Further robustness checks indicate that the results remain consistent after using entropy balancing and alternative measures of CEO narcissism. In emerging markets, where governance systems are frequently perceived as less than optimal, policymakers and regulatory authorities can draw insights from this enforcement to shape governance systems, reducing CEO power and, consequently, improving the quality of financial reporting. To the best of the authors’ knowledge, this is the first study to examine whether a duality split mitigates the influence of CEO narcissism on earnings management. Thus, this study contributes to the corporate governance literature that calls for research on the effectiveness of external corporate governance mechanisms in emerging markets as well as the CEO narcissism literature that calls for research on moderating factors that could curtail negative consequences of narcissistic CEO behavior.The moderating role of duality split on the relationship between CEO narcissism and earnings management
Yuri Gomes Paiva Azevedo, Mariana Câmara Gomes e Silva, Silvio Hiroshi Nakao
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

The purpose of this study is to examine the moderating effect of an exogenous corporate governance shock that curbs Chief Executive Officers’ (CEOs) power on the relationship between CEO narcissism and earnings management practices.

The authors performed a quasi-experiment using a differences-in-differences approach to examine Brazil’s duality split regulatory change on 101 Brazilian public firms during the period 2010–2022.

The main findings indicate that the introduction of duality split curtails the positive influence of CEO narcissism on earnings management, suggesting that this corporate governance regulation may act as a complementary corporate governance mechanism in mitigating the negative consequences of powerful narcissistic CEOs. Further robustness checks indicate that the results remain consistent after using entropy balancing and alternative measures of CEO narcissism.

In emerging markets, where governance systems are frequently perceived as less than optimal, policymakers and regulatory authorities can draw insights from this enforcement to shape governance systems, reducing CEO power and, consequently, improving the quality of financial reporting.

To the best of the authors’ knowledge, this is the first study to examine whether a duality split mitigates the influence of CEO narcissism on earnings management. Thus, this study contributes to the corporate governance literature that calls for research on the effectiveness of external corporate governance mechanisms in emerging markets as well as the CEO narcissism literature that calls for research on moderating factors that could curtail negative consequences of narcissistic CEO behavior.

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The moderating role of duality split on the relationship between CEO narcissism and earnings management10.1108/CG-06-2023-0229Corporate Governance2024-02-07© 2024 Emerald Publishing LimitedYuri Gomes Paiva AzevedoMariana Câmara Gomes e SilvaSilvio Hiroshi NakaoCorporate Governanceahead-of-printahead-of-print2024-02-0710.1108/CG-06-2023-0229https://www.emerald.com/insight/content/doi/10.1108/CG-06-2023-0229/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
The antecedent cognitions of brand love and its impact on brand loyalty: the moderating role of sustainability marketinghttps://www.emerald.com/insight/content/doi/10.1108/CG-06-2023-0230/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine the moderating effect of sustainability marketing on brand loyalty of brands that advertise their sustainable development agenda goals. The study highlights the mediating effect of brand love having cognitive antecedents of brand authenticity, popularity and congruence with private and social self of the consumer. A mall intercept survey was used to collect data from consumers who use brands that embrace sustainable marketing strategies. Only those brands were selected which are popular as well as advertise sustainable practices in their brand communication (mainstream and social media). The data was self-administered by trained research assistants, who gathered data from a sample of 350 respondents. The findings revealed that the popularity and authenticity of a brand play an essential role in developing brand love and later influences brand loyalty behavior. A larger effect is seen on brand love when there is congruence of private and social self with the brand. The brand has even a stronger relationship with brand loyalty when moderated by sustainability marketing. Brand love has the potential for long-term influences, only if sustainability marketing is used as a backbone. Brand managers should target an authenticity-seeking segment of consumers, who once convinced can lead to repeat business and brand loyalty and reduce dissonance. As sustainability marketing provides multiple benefits, genuine branding strategies should be devised that amalgamate into a single message spun around sustainability concerns and connecting the ethos of authenticity, popularity and self-expression. Future research may take into consideration more categories than this study on clothing, and consumer goods, adopting a mixed-methods approach. Moreover, a range of potential antecedents of brand love can be determined along with potential outcomes when aligned with external efforts such as sustainability, corporate social responsibility and international investment. To the best of the authors’ knowledge, this is the first study investigating the moderating role of sustainability marketing on the relationship between brand love and brand loyalty and the mediating role of brand love between brand authenticity, popularity, social/private-self-expression and brand loyalty. It is also the first study documenting how sustainability marketing reinforces the brand loyalty for popular brands in developing countries like Pakistan. This study fills a research gap as it expands the existing literature on sustainability marketing and brand love that is generally focused on brand dimensions and not the brand communications and thus has not reached similar results.The antecedent cognitions of brand love and its impact on brand loyalty: the moderating role of sustainability marketing
Afia Khalid, Raheel Amir Awan, Rizwan Ali, Imran Sarmad
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine the moderating effect of sustainability marketing on brand loyalty of brands that advertise their sustainable development agenda goals. The study highlights the mediating effect of brand love having cognitive antecedents of brand authenticity, popularity and congruence with private and social self of the consumer.

A mall intercept survey was used to collect data from consumers who use brands that embrace sustainable marketing strategies. Only those brands were selected which are popular as well as advertise sustainable practices in their brand communication (mainstream and social media). The data was self-administered by trained research assistants, who gathered data from a sample of 350 respondents.

The findings revealed that the popularity and authenticity of a brand play an essential role in developing brand love and later influences brand loyalty behavior. A larger effect is seen on brand love when there is congruence of private and social self with the brand. The brand has even a stronger relationship with brand loyalty when moderated by sustainability marketing.

Brand love has the potential for long-term influences, only if sustainability marketing is used as a backbone. Brand managers should target an authenticity-seeking segment of consumers, who once convinced can lead to repeat business and brand loyalty and reduce dissonance. As sustainability marketing provides multiple benefits, genuine branding strategies should be devised that amalgamate into a single message spun around sustainability concerns and connecting the ethos of authenticity, popularity and self-expression. Future research may take into consideration more categories than this study on clothing, and consumer goods, adopting a mixed-methods approach. Moreover, a range of potential antecedents of brand love can be determined along with potential outcomes when aligned with external efforts such as sustainability, corporate social responsibility and international investment.

To the best of the authors’ knowledge, this is the first study investigating the moderating role of sustainability marketing on the relationship between brand love and brand loyalty and the mediating role of brand love between brand authenticity, popularity, social/private-self-expression and brand loyalty. It is also the first study documenting how sustainability marketing reinforces the brand loyalty for popular brands in developing countries like Pakistan. This study fills a research gap as it expands the existing literature on sustainability marketing and brand love that is generally focused on brand dimensions and not the brand communications and thus has not reached similar results.

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The antecedent cognitions of brand love and its impact on brand loyalty: the moderating role of sustainability marketing10.1108/CG-06-2023-0230Corporate Governance2023-09-04© 2023 Emerald Publishing LimitedAfia KhalidRaheel Amir AwanRizwan AliImran SarmadCorporate Governanceahead-of-printahead-of-print2023-09-0410.1108/CG-06-2023-0230https://www.emerald.com/insight/content/doi/10.1108/CG-06-2023-0230/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The moderating effect of corporate governance factors on capital structure and performance: evidence from Indian companieshttps://www.emerald.com/insight/content/doi/10.1108/CG-06-2023-0239/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to empirically investigate the moderating role of corporate governance (CG) in the capital structure-performance relationship. The analysis is based on top Business Today-500 companies and covers a time span of 10 years. The fixed effect panel regression model is used to examine the impact of CG mechanisms on the relationship between capital structure and firm performance. The core findings of the study indicate significant positive moderating role of board independence, board size and family ownership on the relationship between leverage and performance. The results enable the managers of Indian firms to comprehend the significance of CG framework while taking financing decisions. The findings encourage managers to raise debt funds in those firms that adhere to good governance norms. Unlike extant studies that emphasize on the moderating impact of single CG variable in leverage-performance relationship, the current work comprehensively examines the role of many CG factors that moderate the relationship between capital structure and firm performance. To the best of the authors’ knowledge, the present study is the first of its kind with respect to India.The moderating effect of corporate governance factors on capital structure and performance: evidence from Indian companies
Aparna Bhatia, Pooja Kumari
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to empirically investigate the moderating role of corporate governance (CG) in the capital structure-performance relationship.

The analysis is based on top Business Today-500 companies and covers a time span of 10 years. The fixed effect panel regression model is used to examine the impact of CG mechanisms on the relationship between capital structure and firm performance.

The core findings of the study indicate significant positive moderating role of board independence, board size and family ownership on the relationship between leverage and performance.

The results enable the managers of Indian firms to comprehend the significance of CG framework while taking financing decisions. The findings encourage managers to raise debt funds in those firms that adhere to good governance norms.

Unlike extant studies that emphasize on the moderating impact of single CG variable in leverage-performance relationship, the current work comprehensively examines the role of many CG factors that moderate the relationship between capital structure and firm performance. To the best of the authors’ knowledge, the present study is the first of its kind with respect to India.

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The moderating effect of corporate governance factors on capital structure and performance: evidence from Indian companies10.1108/CG-06-2023-0239Corporate Governance2024-01-01© 2023 Emerald Publishing LimitedAparna BhatiaPooja KumariCorporate Governanceahead-of-printahead-of-print2024-01-0110.1108/CG-06-2023-0239https://www.emerald.com/insight/content/doi/10.1108/CG-06-2023-0239/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Corporate governance mechanisms and renewable energy transitionhttps://www.emerald.com/insight/content/doi/10.1108/CG-06-2023-0245/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe intensity of carbon emissions has led to the serious problem of global warming, and the consequences in terms of climatic disasters are gaining increasing attention worldwide. As the energy sector is responsible for most global emissions, developing clean energy is crucial to combat climate change. This study aims to examine the relationship between corporate governance and renewable energy (RE) consumption and explore the interaction between RE production and RE use. The study adopts an econometric framework of a panel model, followed by the robustness check using alternative methods, including logit regressions. The bivariate probit model is used to analyze the interaction between the decision to use and the decision to produce RE. The analysis is based on a sample of 3,896 firms covering 45 countries worldwide. The results reveal that appropriate governance mechanisms positively impact RE consumption. These include the existence of a sustainability committee; environmental, social and governance-based compensation policy; financial performance-based compensation; sustainability external audit; transparency; board gender diversity; and board independence. Firms with appropriate governance mechanisms are more likely to produce and use RE than others. Finally, while RE use positively impacts firm value and environmental performance, the authors find no significant effect on current profitability. This study goes beyond previous research by exploring the impact of multiple governance mechanisms. To the best of the authors’ knowledge, this is also the first study examining the relationship between RE use and firm value. Overall, the findings suggest that RE transition requires, first of all, establishing appropriate governance mechanisms within companies.Corporate governance mechanisms and renewable energy transition
Marcellin Makpotche, Kais Bouslah, Bouchra B. M’Zali
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

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

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

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

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

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Corporate governance mechanisms and renewable energy transition10.1108/CG-06-2023-0245Corporate Governance2023-11-27© 2023 Emerald Publishing LimitedMarcellin MakpotcheKais BouslahBouchra B. M’ZaliCorporate Governanceahead-of-printahead-of-print2023-11-2710.1108/CG-06-2023-0245https://www.emerald.com/insight/content/doi/10.1108/CG-06-2023-0245/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Firm financial performance in the wake of political turmoil; whether political connection is propitious?https://www.emerald.com/insight/content/doi/10.1108/CG-06-2023-0247/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to investigate the effect of political turmoil on the firm financial performance, particularly in presence of politically affiliated board of directors. The study applied panel regression analyses on a data set of Pakistan’s listed companies ranged over 14 years, spanning from 2007 to 2021. Political turmoil was first gauged through three determinants, i.e. political protest, government election and constitutional reform, and thereafter, economic uncertainty index was used as a proxy for political turmoil. For the purpose of political connection, the study used political affiliation of the board of directors. The study finds that political turmoil has deleterious effect on the return on assets and Tobin’s Q. The study further unveils that politically affiliated firms are relatively insulated from the volatility posed by the political uncertainty and exhibit significantly better financial outcomes. Findings of the study suggest that appropriate composition of the board is imperative in offsetting the risk posed by the political turmoil. Hence, the results are useful for investors, policymakers and regulators to ensure financial soundness of firms in the wake of political turmoil. To the best of the authors’ knowledge, this is the first study that investigates the moderating impact of political connection on the performance of companies in presence of political turmoil.Firm financial performance in the wake of political turmoil; whether political connection is propitious?
Adnan Ullah Khan, Athar Iqbal
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to investigate the effect of political turmoil on the firm financial performance, particularly in presence of politically affiliated board of directors.

The study applied panel regression analyses on a data set of Pakistan’s listed companies ranged over 14 years, spanning from 2007 to 2021. Political turmoil was first gauged through three determinants, i.e. political protest, government election and constitutional reform, and thereafter, economic uncertainty index was used as a proxy for political turmoil. For the purpose of political connection, the study used political affiliation of the board of directors.

The study finds that political turmoil has deleterious effect on the return on assets and Tobin’s Q. The study further unveils that politically affiliated firms are relatively insulated from the volatility posed by the political uncertainty and exhibit significantly better financial outcomes.

Findings of the study suggest that appropriate composition of the board is imperative in offsetting the risk posed by the political turmoil. Hence, the results are useful for investors, policymakers and regulators to ensure financial soundness of firms in the wake of political turmoil.

To the best of the authors’ knowledge, this is the first study that investigates the moderating impact of political connection on the performance of companies in presence of political turmoil.

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Firm financial performance in the wake of political turmoil; whether political connection is propitious?10.1108/CG-06-2023-0247Corporate Governance2024-01-25© 2024 Emerald Publishing LimitedAdnan Ullah KhanAthar IqbalCorporate Governanceahead-of-printahead-of-print2024-01-2510.1108/CG-06-2023-0247https://www.emerald.com/insight/content/doi/10.1108/CG-06-2023-0247/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
The evolutionary journey of the American corporation and its governance over two centurieshttps://www.emerald.com/insight/content/doi/10.1108/CG-06-2023-0249/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to explore the evolutionary trajectory of American corporations and their governance over the past few centuries, using a multidisciplinary investigative approach. The research focuses on the American business landscape because it has played a pivotal role in shaping the field of corporate governance theory and practice. The author thoroughly investigates archival records, legal documents, academic publications, reputable databases and pertinent literature to unearth valuable insights into the key events that have influenced the evolutionary path of American corporations and their governance throughout history. Delving into the evolutionary journey of American corporations and their governance reveals a multifaceted narrative, enhancing our comprehension of the impact of the external socio-economic environment, and the effectiveness and limitations of established corporate governance paradigms in addressing such transformations. This introspection establishes the groundwork for ongoing discussions concerning how corporate governance should adapt to meet the evolving needs and expectations of stakeholders and society as a whole, with a specific focus on the pivotal role that boardrooms could play in this regard. The insights gained from this analysis offer practitioners a foundational resource to understand corporate governance in a complex business landscape. Armed with this understanding, practitioners can better align governance strategies with both historical context and contemporary requirements. The research has significant social implications in the sense that history highlights the importance of the society in influencing corporate governance practices. It specifically emphasizes the need for the board of directors to consider both shareholder value and social responsibility, while also fostering public trust and confidence. Many corporate governance concepts are often used with limited understanding of their initial intent, resulting in their unquestioned adoption. In this paper, the author offers a contextual exploration of historical events that have contributed to the development of these diverse corporate perspectives. To the best of the author’s knowledge, there are exceedingly few, if any, papers that present comparably insightful and multidisciplinary insights into the evolutionary path of corporations and their governance, especially within a dynamic and influential market like that of the USA.The evolutionary journey of the American corporation and its governance over two centuries
Karim S. Rebeiz
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to explore the evolutionary trajectory of American corporations and their governance over the past few centuries, using a multidisciplinary investigative approach. The research focuses on the American business landscape because it has played a pivotal role in shaping the field of corporate governance theory and practice.

The author thoroughly investigates archival records, legal documents, academic publications, reputable databases and pertinent literature to unearth valuable insights into the key events that have influenced the evolutionary path of American corporations and their governance throughout history.

Delving into the evolutionary journey of American corporations and their governance reveals a multifaceted narrative, enhancing our comprehension of the impact of the external socio-economic environment, and the effectiveness and limitations of established corporate governance paradigms in addressing such transformations. This introspection establishes the groundwork for ongoing discussions concerning how corporate governance should adapt to meet the evolving needs and expectations of stakeholders and society as a whole, with a specific focus on the pivotal role that boardrooms could play in this regard.

The insights gained from this analysis offer practitioners a foundational resource to understand corporate governance in a complex business landscape. Armed with this understanding, practitioners can better align governance strategies with both historical context and contemporary requirements.

The research has significant social implications in the sense that history highlights the importance of the society in influencing corporate governance practices. It specifically emphasizes the need for the board of directors to consider both shareholder value and social responsibility, while also fostering public trust and confidence.

Many corporate governance concepts are often used with limited understanding of their initial intent, resulting in their unquestioned adoption. In this paper, the author offers a contextual exploration of historical events that have contributed to the development of these diverse corporate perspectives. To the best of the author’s knowledge, there are exceedingly few, if any, papers that present comparably insightful and multidisciplinary insights into the evolutionary path of corporations and their governance, especially within a dynamic and influential market like that of the USA.

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The evolutionary journey of the American corporation and its governance over two centuries10.1108/CG-06-2023-0249Corporate Governance2023-11-09© 2023 Emerald Publishing LimitedKarim S. RebeizCorporate Governanceahead-of-printahead-of-print2023-11-0910.1108/CG-06-2023-0249https://www.emerald.com/insight/content/doi/10.1108/CG-06-2023-0249/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Regulatory influence, board characteristics and climate change disclosures: evidence from environmentally sensitive firms in developing economy contexthttps://www.emerald.com/insight/content/doi/10.1108/CG-06-2023-0262/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine the impact of board characteristics on climate change disclosures (CCDs) in the context of an emerging economy, with a unique focus on regulatory influences. This study analyzes longitudinal data (2014–2021) from environmentally sensitive firms listed on the Dhaka Stock Exchange, using a disclosure index developed within the Global Reporting Initiative framework. The authors use a neo-institutional theoretical lens to explore regulatory influences on CCD through board characteristics. This study uses hand-collected data from annual reports owing to the absence of an established database. The results indicate that a larger board size, the presence of foreign directors and the existence of an audit committee correlate with higher levels of CCD disclosure. Conversely, a higher frequency of board meetings is associated with lower CCD disclosure levels. This study also observed an increase in CCD following the implementation of corporate governance guidelines by the Bangladesh Securities and Exchange Commission, albeit with a relatively low number of firms making these disclosures. This study contributes to the climate change reporting literature by providing empirical evidence of regulatory influences on CCD through board characteristics in an emerging economy. However, the findings may not be universally applicable, considering the study’s focus on Bangladeshi listed firms. This study suggests growing pressures for diverse stakeholders, including researchers and regulatory bodies, to integrate climate change disclosure into routine activities. This study offers a valuable framework and insights for various stakeholders. By emphasizing the influence of good governance and sustainability practices, this study contributes to stakeholders’ understanding, aiming to contribute to a better world. This study stands out by uniquely positioning itself in the climate change reporting literature, shedding light on regulatory influences on CCD through board characteristics in the context of an emerging economy.Regulatory influence, board characteristics and climate change disclosures: evidence from environmentally sensitive firms in developing economy context
Anup Kumar Saha, Imran Khan
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine the impact of board characteristics on climate change disclosures (CCDs) in the context of an emerging economy, with a unique focus on regulatory influences.

This study analyzes longitudinal data (2014–2021) from environmentally sensitive firms listed on the Dhaka Stock Exchange, using a disclosure index developed within the Global Reporting Initiative framework. The authors use a neo-institutional theoretical lens to explore regulatory influences on CCD through board characteristics. This study uses hand-collected data from annual reports owing to the absence of an established database.

The results indicate that a larger board size, the presence of foreign directors and the existence of an audit committee correlate with higher levels of CCD disclosure. Conversely, a higher frequency of board meetings is associated with lower CCD disclosure levels. This study also observed an increase in CCD following the implementation of corporate governance guidelines by the Bangladesh Securities and Exchange Commission, albeit with a relatively low number of firms making these disclosures.

This study contributes to the climate change reporting literature by providing empirical evidence of regulatory influences on CCD through board characteristics in an emerging economy. However, the findings may not be universally applicable, considering the study’s focus on Bangladeshi listed firms.

This study suggests growing pressures for diverse stakeholders, including researchers and regulatory bodies, to integrate climate change disclosure into routine activities. This study offers a valuable framework and insights for various stakeholders.

By emphasizing the influence of good governance and sustainability practices, this study contributes to stakeholders’ understanding, aiming to contribute to a better world.

This study stands out by uniquely positioning itself in the climate change reporting literature, shedding light on regulatory influences on CCD through board characteristics in the context of an emerging economy.

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Regulatory influence, board characteristics and climate change disclosures: evidence from environmentally sensitive firms in developing economy context10.1108/CG-06-2023-0262Corporate Governance2024-03-11© 2024 Emerald Publishing LimitedAnup Kumar SahaImran KhanCorporate Governanceahead-of-printahead-of-print2024-03-1110.1108/CG-06-2023-0262https://www.emerald.com/insight/content/doi/10.1108/CG-06-2023-0262/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
Female directors and firms’ financial performance: an empirical application of Kanter’s theory in the Indian contexthttps://www.emerald.com/insight/content/doi/10.1108/CG-07-2022-0308/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestGiven the relevance of female directors in the governance of any firm, this paper aims to examine their effect on firms’ financial performance by investigating their general impact and segregating the same into different subgroups based on Kanter’s theory. To achieve the purpose, this study selects a sample of the top 100 listed Indian firms for the period of 2014–2018 and gathers the data pertaining to the variables under consideration from the respective firms’ annual report and corporate database Capitaline Plus. For undertaking the investigation, the authors have segregated the sample into three groups, i.e. firms with boards having less than 10% of female directors are called skewed boards; firms with boards having female directors that range from 10% to 20% are called as tilted board; and firms with boards having sizable representation of female directors of above 20%. To examine the performance impact of overall female directors and their different subgroups, the authors have used a generalized estimating equation model. For the robustness test, the authors have used the fixed-effect model. The authors find a significant positive impact of the overall percentage of female directors on the financial performance of firms. Additionally, the results indicate that boards with a titled group of female directors and boards with a sizable representation of female directors significantly positively impact firms’ performance. However, the authors fail to extricate any significant performance impact of boards with a skewed group of female directors. First, the study reveals that despite prevailing nepotism in India, female directors, owing to their core characteristics, can create a favorable perception of firms in the market. Second, it also works as an eye-opener for regulators by revealing the minimum threshold for female directors that a board should have to exploit the benefits of a gender quota rather than mere compliance with the requirements of the Companies Act, 2013. Third, it implies that more gender-diverse boards can improve a firm’s financial performance only if female directors range between the thresholds of 10% to 20%. Finally, the finding is significant for changing the business culture in India, where institutions are traditionally less supportive of women than in other emerging countries. Departing from existing studies, which provide evidence on the performance impact of the overall percentage of female directors, the study unveils the differential impact of female directors on firms’ financial performance depending on their level of representation on the board. To the best of the authors’ knowledge, this is the first study in the context of an emerging market to test Kanter’s theory.Female directors and firms’ financial performance: an empirical application of Kanter’s theory in the Indian context
Santi Gopal Maji, Rupjyoti Saha
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

Given the relevance of female directors in the governance of any firm, this paper aims to examine their effect on firms’ financial performance by investigating their general impact and segregating the same into different subgroups based on Kanter’s theory.

To achieve the purpose, this study selects a sample of the top 100 listed Indian firms for the period of 2014–2018 and gathers the data pertaining to the variables under consideration from the respective firms’ annual report and corporate database Capitaline Plus. For undertaking the investigation, the authors have segregated the sample into three groups, i.e. firms with boards having less than 10% of female directors are called skewed boards; firms with boards having female directors that range from 10% to 20% are called as tilted board; and firms with boards having sizable representation of female directors of above 20%. To examine the performance impact of overall female directors and their different subgroups, the authors have used a generalized estimating equation model. For the robustness test, the authors have used the fixed-effect model.

The authors find a significant positive impact of the overall percentage of female directors on the financial performance of firms. Additionally, the results indicate that boards with a titled group of female directors and boards with a sizable representation of female directors significantly positively impact firms’ performance. However, the authors fail to extricate any significant performance impact of boards with a skewed group of female directors.

First, the study reveals that despite prevailing nepotism in India, female directors, owing to their core characteristics, can create a favorable perception of firms in the market. Second, it also works as an eye-opener for regulators by revealing the minimum threshold for female directors that a board should have to exploit the benefits of a gender quota rather than mere compliance with the requirements of the Companies Act, 2013. Third, it implies that more gender-diverse boards can improve a firm’s financial performance only if female directors range between the thresholds of 10% to 20%. Finally, the finding is significant for changing the business culture in India, where institutions are traditionally less supportive of women than in other emerging countries.

Departing from existing studies, which provide evidence on the performance impact of the overall percentage of female directors, the study unveils the differential impact of female directors on firms’ financial performance depending on their level of representation on the board. To the best of the authors’ knowledge, this is the first study in the context of an emerging market to test Kanter’s theory.

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Female directors and firms’ financial performance: an empirical application of Kanter’s theory in the Indian context10.1108/CG-07-2022-0308Corporate Governance2023-12-11© 2023 Emerald Publishing LimitedSanti Gopal MajiRupjyoti SahaCorporate Governanceahead-of-printahead-of-print2023-12-1110.1108/CG-07-2022-0308https://www.emerald.com/insight/content/doi/10.1108/CG-07-2022-0308/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Sustainability-driven market impacts of climate change and firms’ renewable energy innovation: a conceptual analysishttps://www.emerald.com/insight/content/doi/10.1108/CG-07-2023-0298/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to unravel the relationship between market-driven impacts of climate change and firms’ deployment of renewable energy (RE) innovation. The purpose is to understand how market-related forces, influenced by uncertainty, shape firms’ behaviour in response to climate change challenges. Drawing on the behavioural theory of the firm (BTOF), the paper develops a conceptual model to decode the relationship between each category of market-driven impacts and the resulting RE innovation within firms. The model takes into account the role of uncertainty and differentiates between multinational enterprises (MNEs) and domestic firms. The analysis reveals five key sources of market-driven impacts: investor sentiment, media coverage, competitors’ adoption of ISO 14001, customer satisfaction and shareholder activism. These forces influence the adoption of RE innovation differently across firms, depending on the level of uncertainty and the discrepancy between environmental performance and aspiration level. This paper contributes to the literature in four ways. Firstly, it emphasises the importance of uncertainty associated with market-driven impacts, which stimulates different responses from firms. Secondly, it fills a research gap by focusing on the proactivity of firms in adopting RE innovation, rather than just operational strategies to curb emissions. Thirdly, the paper extends the BTOF by incorporating the concept of uncertainty in explaining firm behaviour. Finally, it provides insights into the green strategies of MNEs in the face of climate change, offering a comprehensive model that differentiates MNEs from domestic firms.Sustainability-driven market impacts of climate change and firms’ renewable energy innovation: a conceptual analysis
Hiva Rastegar, Gabriel Eweje, Aymen Sajjad
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to unravel the relationship between market-driven impacts of climate change and firms’ deployment of renewable energy (RE) innovation. The purpose is to understand how market-related forces, influenced by uncertainty, shape firms’ behaviour in response to climate change challenges.

Drawing on the behavioural theory of the firm (BTOF), the paper develops a conceptual model to decode the relationship between each category of market-driven impacts and the resulting RE innovation within firms. The model takes into account the role of uncertainty and differentiates between multinational enterprises (MNEs) and domestic firms.

The analysis reveals five key sources of market-driven impacts: investor sentiment, media coverage, competitors’ adoption of ISO 14001, customer satisfaction and shareholder activism. These forces influence the adoption of RE innovation differently across firms, depending on the level of uncertainty and the discrepancy between environmental performance and aspiration level.

This paper contributes to the literature in four ways. Firstly, it emphasises the importance of uncertainty associated with market-driven impacts, which stimulates different responses from firms. Secondly, it fills a research gap by focusing on the proactivity of firms in adopting RE innovation, rather than just operational strategies to curb emissions. Thirdly, the paper extends the BTOF by incorporating the concept of uncertainty in explaining firm behaviour. Finally, it provides insights into the green strategies of MNEs in the face of climate change, offering a comprehensive model that differentiates MNEs from domestic firms.

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Sustainability-driven market impacts of climate change and firms’ renewable energy innovation: a conceptual analysis10.1108/CG-07-2023-0298Corporate Governance2024-02-27© 2024 Emerald Publishing LimitedHiva RastegarGabriel EwejeAymen SajjadCorporate Governanceahead-of-printahead-of-print2024-02-2710.1108/CG-07-2023-0298https://www.emerald.com/insight/content/doi/10.1108/CG-07-2023-0298/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
Corporate governance and Islamic bank risk – do the directors’ and the Shariah board’s diversity attributes matter?https://www.emerald.com/insight/content/doi/10.1108/CG-08-2022-0348/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to investigate the effect of the diversity of the board of directors (BOD) and the shariah supervisory board (SSB) on credit risk, insolvency, operations, reputation, rate of deposit return risk (RDRR) and equity-based financing risk (EBFR) of Islamic banks (IB). The study uses 68 IBs from 19 countries covering 2009 to 2019. BOD and SSB diversity attributes data were hand-collected from the annual reports. Financial data were collected from the bankscope database. The robustness test and two-step system generalized method of moment estimation technique were used to address potential endogeneity issues. This study provides evidence that diversity in the experience and cross-membership of board members decreases the risk. Gender diversity increases the risk, but the BOD’s education level diversity has no relationship with risk. More interestingly, influences in the experience and cross-membership of the SSB’s members positively influence risk. However, members’ education levels and gender diversity have not been proven to affect risk. The paper recommends that Islamic banking authorities play a stronger role and make a greater effort in driving corporate governance reform. Also, determining individual characteristics of the board is a requirement to become a member of a BOD or an SSB. This paper expands the commitment literature through the diversity of the BOD’s and the SSB’s members in terms of their education levels, experience, cross-membership and gender. This study expands the list of potential risks for IBs, by including the RDRR and EBFR.Corporate governance and Islamic bank risk – do the directors’ and the Shariah board’s diversity attributes matter?
Hasan Mukhibad, Doddy Setiawan, Y. Anni Aryani, Falikhatun Falikhatun
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to investigate the effect of the diversity of the board of directors (BOD) and the shariah supervisory board (SSB) on credit risk, insolvency, operations, reputation, rate of deposit return risk (RDRR) and equity-based financing risk (EBFR) of Islamic banks (IB).

The study uses 68 IBs from 19 countries covering 2009 to 2019. BOD and SSB diversity attributes data were hand-collected from the annual reports. Financial data were collected from the bankscope database. The robustness test and two-step system generalized method of moment estimation technique were used to address potential endogeneity issues.

This study provides evidence that diversity in the experience and cross-membership of board members decreases the risk. Gender diversity increases the risk, but the BOD’s education level diversity has no relationship with risk. More interestingly, influences in the experience and cross-membership of the SSB’s members positively influence risk. However, members’ education levels and gender diversity have not been proven to affect risk.

The paper recommends that Islamic banking authorities play a stronger role and make a greater effort in driving corporate governance reform. Also, determining individual characteristics of the board is a requirement to become a member of a BOD or an SSB.

This paper expands the commitment literature through the diversity of the BOD’s and the SSB’s members in terms of their education levels, experience, cross-membership and gender. This study expands the list of potential risks for IBs, by including the RDRR and EBFR.

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Corporate governance and Islamic bank risk – do the directors’ and the Shariah board’s diversity attributes matter?10.1108/CG-08-2022-0348Corporate Governance2024-02-05© 2024 Emerald Publishing LimitedHasan MukhibadDoddy SetiawanY. Anni AryaniFalikhatun FalikhatunCorporate Governanceahead-of-printahead-of-print2024-02-0510.1108/CG-08-2022-0348https://www.emerald.com/insight/content/doi/10.1108/CG-08-2022-0348/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
A path to success: educational board diversity and its influence on MENA banks’ efficiency and stabilityhttps://www.emerald.com/insight/content/doi/10.1108/CG-08-2023-0339/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to examine how the diversity of educational levels within bank boards influences the efficiency and stability of banks operating in the Middle East and North Africa (MENA) region. Unlike previous studies, this analysis also investigates the role of board gender diversity in moderating the relationship between board educational level diversity and bank efficiency and financial stability in MENA. In this study, a sample of 77 banks in the MENA region spanning the years 2011 to 2018 is used. The relationship between the presence of highly educated directors on the board, bank efficiency and stability is assessed using the ordinary least squares method. Additionally, the authors use the Generalized Method of Moments technique to correct endogeneity problem. This study establishes a positive association between the presence of directors with advanced educational backgrounds on bank boards and bank efficiency and stability. Furthermore, the inclusion of women on the board strengthens this relationship. These findings have important implications for policymakers and regulators in the MENA region, suggesting that promoting diversity policies that encourage the participation of highly educated directors on bank boards can contribute to enhanced efficiency and financial stability. Policymakers may also consider implementing quotas or guidelines to improve gender diversity in board appointments, thereby fostering bank performance in the region. This study stands out for its innovation and distinctiveness, as it delves into the connection between board educational level diversity and bank efficiency in the MENA region. Notably, it surpasses previous research by investigating the moderating role of board gender diversity, thus offering valuable insights into the complex interplay between these two facets of board diversity. This contribution enriches the existing literature by providing novel perspectives on board composition dynamics and its influence on bank efficiency and stability.A path to success: educational board diversity and its influence on MENA banks’ efficiency and stability
Ayman Issa, Ahmad Sahyouni, Miroslav Mateev
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to examine how the diversity of educational levels within bank boards influences the efficiency and stability of banks operating in the Middle East and North Africa (MENA) region. Unlike previous studies, this analysis also investigates the role of board gender diversity in moderating the relationship between board educational level diversity and bank efficiency and financial stability in MENA.

In this study, a sample of 77 banks in the MENA region spanning the years 2011 to 2018 is used. The relationship between the presence of highly educated directors on the board, bank efficiency and stability is assessed using the ordinary least squares method. Additionally, the authors use the Generalized Method of Moments technique to correct endogeneity problem.

This study establishes a positive association between the presence of directors with advanced educational backgrounds on bank boards and bank efficiency and stability. Furthermore, the inclusion of women on the board strengthens this relationship.

These findings have important implications for policymakers and regulators in the MENA region, suggesting that promoting diversity policies that encourage the participation of highly educated directors on bank boards can contribute to enhanced efficiency and financial stability. Policymakers may also consider implementing quotas or guidelines to improve gender diversity in board appointments, thereby fostering bank performance in the region.

This study stands out for its innovation and distinctiveness, as it delves into the connection between board educational level diversity and bank efficiency in the MENA region. Notably, it surpasses previous research by investigating the moderating role of board gender diversity, thus offering valuable insights into the complex interplay between these two facets of board diversity. This contribution enriches the existing literature by providing novel perspectives on board composition dynamics and its influence on bank efficiency and stability.

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A path to success: educational board diversity and its influence on MENA banks’ efficiency and stability10.1108/CG-08-2023-0339Corporate Governance2024-02-26© 2024 Emerald Publishing LimitedAyman IssaAhmad SahyouniMiroslav MateevCorporate Governanceahead-of-printahead-of-print2024-02-2610.1108/CG-08-2023-0339https://www.emerald.com/insight/content/doi/10.1108/CG-08-2023-0339/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
The influence of board policy setting on firm performance in Malaysia: the interacting effect of capital structurehttps://www.emerald.com/insight/content/doi/10.1108/CG-08-2023-0361/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe literature has dealt with the relationship between board characteristics (BC) and firm performance (FP) on a large scale. However, it yielded inconsistent results. Thus, this paper aims to examine the indirect relationship between BC and FP through the mediating role of the capital structure (CS). This study used a sample of 528 non-financial companies listed on Bursa Malaysia from 2015 to 2019. Also, a two-step system generalised method of moments estimation technique was applied. The results show that board diversity and the frequency of board meetings positively affect financial performance, and it is negatively influenced by board turnover, size and independence. Also, the results indicate a positive relationship between the independence of the board and all CS variables. Importantly, the findings support the policy-setting role of the board of directors where CS (measured by total debt and short-term debt) suppresses some governance mechanisms’ detrimental effect on FP. Hence, the board of directors, apart from the monitoring function, introduce various policies (financial and non-financial) that enhance the overall performance of companies. These results are consistent with the agency’s perspective that management practices in selecting the optimal capital reduce agency costs and improve performance. The findings contribute to developing a broader theoretical framework that accounts for the policy-setting role of the board of directors. The current study model of corporate governance offers insight for policymakers into the role of corporate governance other than monitoring functions in organisations and how CS should be taken into consideration with corporate governance and FP association.The influence of board policy setting on firm performance in Malaysia: the interacting effect of capital structure
Saleh F.A. Khatib, Dewi Fariha Abdullah, Hamzeh Al Amosh
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

The literature has dealt with the relationship between board characteristics (BC) and firm performance (FP) on a large scale. However, it yielded inconsistent results. Thus, this paper aims to examine the indirect relationship between BC and FP through the mediating role of the capital structure (CS).

This study used a sample of 528 non-financial companies listed on Bursa Malaysia from 2015 to 2019. Also, a two-step system generalised method of moments estimation technique was applied.

The results show that board diversity and the frequency of board meetings positively affect financial performance, and it is negatively influenced by board turnover, size and independence. Also, the results indicate a positive relationship between the independence of the board and all CS variables. Importantly, the findings support the policy-setting role of the board of directors where CS (measured by total debt and short-term debt) suppresses some governance mechanisms’ detrimental effect on FP. Hence, the board of directors, apart from the monitoring function, introduce various policies (financial and non-financial) that enhance the overall performance of companies.

These results are consistent with the agency’s perspective that management practices in selecting the optimal capital reduce agency costs and improve performance. The findings contribute to developing a broader theoretical framework that accounts for the policy-setting role of the board of directors. The current study model of corporate governance offers insight for policymakers into the role of corporate governance other than monitoring functions in organisations and how CS should be taken into consideration with corporate governance and FP association.

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The influence of board policy setting on firm performance in Malaysia: the interacting effect of capital structure10.1108/CG-08-2023-0361Corporate Governance2024-03-25© 2024 Emerald Publishing LimitedSaleh F.A. KhatibDewi Fariha AbdullahHamzeh Al AmoshCorporate Governanceahead-of-printahead-of-print2024-03-2510.1108/CG-08-2023-0361https://www.emerald.com/insight/content/doi/10.1108/CG-08-2023-0361/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
The effect of enabling performance measurement systems on team learning behaviour and team effectivenesshttps://www.emerald.com/insight/content/doi/10.1108/CG-09-2023-0390/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe purpose of this study is to investigate the impact of the enabling performance measurement systems (PMS) on non-managerial employees’ team learning behaviours (TLB) and team effectiveness (TE) when the PMS is used as an enabler. A questionnaire survey was conducted with non-managerial employees in Japan and a total sample of 474 responses were collected. Partial least squares structural equation modelling using Smart-PLS was used for the analysis. The results demonstrated that the design feature of global transparency in enabling PMS contributes to the enhancement of TE, with partial mediation through TLB. Furthermore, it was also evident that fostering TLB involves increasing the flexibility in PMS, specifically offering multiple options for collecting and aggregating performance information in various formats. By examining the effects of the four features of enabling controls on TE and TLB, this study shows which features in an enabling PMS are important in motivating non-managerial employees at the operational level. The study not only fills a gap on the impact of enabling controls on non-managerial employees that has been under-researched but also makes an academic contribution in that it has deepened our understanding of four features that have not yet been fully elucidated.The effect of enabling performance measurement systems on team learning behaviour and team effectiveness
Hitomi Toyosaki
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

The purpose of this study is to investigate the impact of the enabling performance measurement systems (PMS) on non-managerial employees’ team learning behaviours (TLB) and team effectiveness (TE) when the PMS is used as an enabler.

A questionnaire survey was conducted with non-managerial employees in Japan and a total sample of 474 responses were collected. Partial least squares structural equation modelling using Smart-PLS was used for the analysis.

The results demonstrated that the design feature of global transparency in enabling PMS contributes to the enhancement of TE, with partial mediation through TLB. Furthermore, it was also evident that fostering TLB involves increasing the flexibility in PMS, specifically offering multiple options for collecting and aggregating performance information in various formats.

By examining the effects of the four features of enabling controls on TE and TLB, this study shows which features in an enabling PMS are important in motivating non-managerial employees at the operational level. The study not only fills a gap on the impact of enabling controls on non-managerial employees that has been under-researched but also makes an academic contribution in that it has deepened our understanding of four features that have not yet been fully elucidated.

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The effect of enabling performance measurement systems on team learning behaviour and team effectiveness10.1108/CG-09-2023-0390Corporate Governance2023-11-21© 2023 Emerald Publishing LimitedHitomi ToyosakiCorporate Governanceahead-of-printahead-of-print2023-11-2110.1108/CG-09-2023-0390https://www.emerald.com/insight/content/doi/10.1108/CG-09-2023-0390/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The impact of legal systems on CEO compensation and bank stability: a cross-country studyhttps://www.emerald.com/insight/content/doi/10.1108/CG-12-2022-0510/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestRemuneration policies may differ from country to country, and their effect on bank stability could be due to the legal framework. Therefore, this study aims to investigate how the legal system impacts the relationship between CEO compensation and bank stability across countries. To test the study hypotheses, the authors use panel data of 74 banks operating in ten OECD countries during the period 2009–2016 and apply the generalized moments method regression model to better remediate the endogeneity problem. The findings confirm that a country’s banking regulations significantly affect its bank stability. Common law countries have less bank stability than civil law countries. This result can be interpreted by the fact that, in common-law countries, banks’ CEO are strongly protected by the law, so they allocate a large part of bank assets to risky loans to improve their variable remuneration. The research can help policymakers understand bank stability in one country. Any legal reform would require prior knowledge of how risk-taking may arise in executive compensation. The contribution is to explain the controversial effect of executive compensation on bank stability in the framework of legal theory. The authors argue that regulators should monitor compensation structures and that the country’s legal origin of law shapes the CEO compensation structure and is a determinant of bank stability. To the best of the authors’ knowledge, there are no studies exploring this field. So, this study tries to shed more light on the dark side of CEOs’ behavior when undertaking risky projects to maximize their remuneration.The impact of legal systems on CEO compensation and bank stability: a cross-country study
Maha Khemakhem Jardak, Marwa Sallemi, Salah Ben Hamad
Corporate Governance, Vol. ahead-of-print, No. ahead-of-print, pp.-

Remuneration policies may differ from country to country, and their effect on bank stability could be due to the legal framework. Therefore, this study aims to investigate how the legal system impacts the relationship between CEO compensation and bank stability across countries.

To test the study hypotheses, the authors use panel data of 74 banks operating in ten OECD countries during the period 2009–2016 and apply the generalized moments method regression model to better remediate the endogeneity problem.

The findings confirm that a country’s banking regulations significantly affect its bank stability. Common law countries have less bank stability than civil law countries. This result can be interpreted by the fact that, in common-law countries, banks’ CEO are strongly protected by the law, so they allocate a large part of bank assets to risky loans to improve their variable remuneration.

The research can help policymakers understand bank stability in one country. Any legal reform would require prior knowledge of how risk-taking may arise in executive compensation.

The contribution is to explain the controversial effect of executive compensation on bank stability in the framework of legal theory. The authors argue that regulators should monitor compensation structures and that the country’s legal origin of law shapes the CEO compensation structure and is a determinant of bank stability. To the best of the authors’ knowledge, there are no studies exploring this field. So, this study tries to shed more light on the dark side of CEOs’ behavior when undertaking risky projects to maximize their remuneration.

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The impact of legal systems on CEO compensation and bank stability: a cross-country study10.1108/CG-12-2022-0510Corporate Governance2024-01-18© 2023 Emerald Publishing LimitedMaha Khemakhem JardakMarwa SallemiSalah Ben HamadCorporate Governanceahead-of-printahead-of-print2024-01-1810.1108/CG-12-2022-0510https://www.emerald.com/insight/content/doi/10.1108/CG-12-2022-0510/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited