Business Commons^™

Examining The Extent Of And Determinants For Sustainability Assurance Quality: The Role Of Audit Committees, Rashid Zaman, Muhammad Bilal Farooq, Fahad Khalid, Zeeshan Mahmood

Research outputs 2014 to 2021

This study examines the extent of and determinants for sustainability assurance quality. Data comprise sustainability assurance statements published by the top 100 listed companies in Australia and New Zealand from 2017 to 2019. The findings indicate that Australian companies lead their New Zealand counterparts in sustainability assurance. Although sustainability reporting has risen, assurance rates remain significantly low. Accountants dominate the market, and companies prefer to use their own auditors for sustainability assurance work. Sustainability assurance quality is poor and does not vary significantly among Australian and New Zealand companies. Low-quality sustainability assurance plays a limited role in mitigating potential stakeholder–agency …

Optimizing The World’S Leading Corporate Law: A 20-Year Retrospective And Look Ahead, Lawrence Hamermesh, Jack B. Jacobs, Leo E. Strine Jr.

All Faculty Scholarship

In a 2001 article (Function Over Form: A Reassessment of Standards of Review in Delaware Corporation Law) two of us, with important input from the other, argued that in addressing issues like hostile takeovers, assertive institutional investors, leveraged buyouts, and contested ballot questions, the Delaware courts had done exemplary work but on occasion crafted standards of review that unduly encouraged litigation and did not appropriately credit intra-corporate procedures designed to ensure fairness. Function Over Form suggested ways to make those standards more predictable, encourage procedures that better protected stockholders, and discourage meritless litigation, by restoring business judgment rule …

Mutual Fund Stewardship And The Empty Voting Problem, Jill E. Fisch

All Faculty Scholarship

When Roberta Karmel wrote the articles that are the subject of this symposium, she was skeptical of both the potential value of shareholder voting and the emerging involvement of institutional investors in corporate governance. In the ensuing years, both the increased role and engagement of institutional investors and the heightened importance of shareholder voting offer new reasons to take Professor Karmel’s concerns seriously. Institutional investors have taken on a broader range of issues ranging from diversity and political spending to climate change and human capital management, and their ability to influence corporate policy on these issues has become more significant. …

What Are The Four Traits Of Digitally Mature Organizations?, Clarence Goh, Gary Pan, Poh Sun Seow, Yuanto Kusnadi, Gek Choo Shirlena Tan

Research Collection School Of Accountancy

A study conducted by Deloitte Southeast Asia and the Singapore Management University said there are four traits that could identify digitally mature organisations based on how they manage the governance, risk, and compliance aspects of digital transformation.

Corporate Board Leadership And Earnings Informativeness, Chiyachantana N. Chiraphol, Siripen Pattanawihok, Pattarawan Prasarnphanich

Research Collection Lee Kong Chian School Of Business

This study examines the relationship between six board compositions and the informativeness of earnings. The results show that smaller board sizes are more informativeness of earnings. Longer board service time is viewed as the experience and expertise to manage the firms and increases informativeness of earnings. The average board tenure is positively significant with the informativeness of earnings. The accounting earnings generated from the firms with more independent directors and female directors are highly valued by the investors. Consequently, the accounting earnings generated from these firms are highly valuable to the investors.

Board Composition, Board Diversity And Stock Performance, Chiyachantana N. Chiraphol, Siripen Pattanawihok, Pattarawan Prrasarnphanich

Research Collection Lee Kong Chian School Of Business

The study investigates the relationship between six board compositions and stock returns. The results indicate a significant association between various board compositions and stock returns. Specifically, board size and executive directors have a negative impact, whereas independent directors enhance stock returns. Busy directors positively impact the abnormal stock returns for the companies in the non-financial industry, which implies that busy directors who serve on more boards tend to be well connected. More importantly, the results indicate a significant positive relationship between board tenure and stock returns. Board service time is perceived as the board quality of knowledge and experience from …

Robust And Ethical Data Governance Critical To Growth In Digital Age, Themin Suwardy, Melvin Yong

Research Collection School Of Accountancy

With increasing digitalisation, and companies collecting an ever-increasing amount of their customer and business data, organisations have to become more accountable to stakeholders such as regulators, customers and investors on the issue of data. Observers say expectations are also increasing, with incidents of data breaches capturing much media attention. Just as corporate governance encompasses more than just compliance, experts say data governance is more than just data protection and security but also about creating value.

Common Ownership Positively Impacts Corporate Governance, Takuma Iwasaki

International Programs

Common ownership is the situation where the same entities hold shares in multiple companies competing in the same market. Common ownership is often viewed as a cause of decreasing market competition, but its positive aspect regarding enhancing corporate governance is overlooked.

Hawkish Or Dovish: The Effect Of Female Ceo Leadership On Strategic Conformity, Organizational Innovation And Strategic Change, Hazel Husne Dadanlar

Theses and Dissertations

The U.S. female labor market participation rate has significantly improved in the last 50 years (Bureau of Labor Statistics, 2007). Along with the broader female labor participation rate, the level of female representation at the executive and director-level positions has shown some improvement in the last 24 years, albeit at a much slower pace than it has been in recent years (Pew Research Center Report, 2018). For example, while the number of female Chief Executive Officers (CEOs) leading Fortune 500 companies was zero in 1995, it rose by 7.4% by 2020. Despite some improvement, a mere 7.4% increase …

Malaysian Smes Experience Toward Effective Corporate Governance Adaptability And Challenges, Lahcenc Makgloufi, Bader Al-Qaied

Jerash for Research and Studies Journal مجلة جرش للبحوث والدراسات

Currently, SMEs are recognized as a crucial impact on economic growth in both developed and the developing economies. SMEs are the backbone contributor to the GDP and employment in everywhere the world. Today, the corporate governance practices it is critical for the company and it is essential to be implemented in order to monitor and control firms. The ownership focusing in Malaysian SMEs has resulted in less protection of the minority shareholders. This is because; most of the companies are family based, where the family members hold the top management positions. Thus, the majority shareholders are involved in the act …

Ceo Power And R&D Investment, Christine Naaman, Li Sun

Faculty & Staff Research and Creative Activity

Purpose

This study aims to examine whether and how the power of a chief executive officer (CEO) relates to firm-level research and development (R&D) investment.

Design/methodology/approach

The authors use clustered standard errors ordinary least squares regression using a large sample of US firms from 1994 to 2017.

Findings

The authors find a significant negative relation between CEO power and R&D investment, suggesting that firms with more powerful CEOs are less likely to invest in R&D activities. Besides, the study finds that this significant negative relation is largely driven by firms with weaker corporate governance.

Originality/value

This study contributes to the …

Corporate Governance And Financial Performance: An Empirical Study On Cement Companies Listed In Saudi Stock Market, Mohammed Bajaher

Jerash for Research and Studies Journal مجلة جرش للبحوث والدراسات

This paper investigates the impact of corporate governance on financial performance by cement firms listed in Saudi stock market during the period of 2012-2016. Many studies have examined the association between corporate governance mechanisms, ownership structure and firm performance, the most of them conducted in the developed countries, produced diverse findings, influenced by the nature of the dominant governance system for each country. Using the Least Ordinary Square (OLS), the results of the current study revealed that managerial ownership and firm size have a positive and significant impact on firm performance. However, board independence, board size, board meeting and audit …

The Mediating Effect Of Strategic Posture On Corporate Governance And Environmental Reporting, Abdalla Shwairef, Azlan Amran, Mohammad Iranmanesh, Noor Hazlina Ahmad

Research outputs 2014 to 2021

The aim of this study is to explain how corporate governance affects environmental reporting through the mediating effect of strategic position. The data were collected from chief executive managers and chief financial managers of 197 large companies in Malaysia. The partial least squares technique was used to test the proposed relationships. The results show that managers’ strategic posture mediates the impact of four aspects of corporate governance, namely, board size, board independency, CSR committee presence, and institutional ownership on environmental reporting. These findings extend the literature on the relationship between corporate governance and environmental reporting by providing insight into the …

What Is The Role Of Large Shareholders In Monitoring Corporate Performance?, Singapore Management University

Perspectives@SMU

Research in China suggests that increased stock liquidity provides large shareholders incentives to enhance monitoring activities and improve corporate governance

Independent Directors' Dissensions And Firm Value, Wonseok Choi, Monika K. Rabarison, Bin Wang

Finance Faculty Research and Publications

Using a novel dataset of independent directors’ voting activities on items proposed by managers of Korean firms, we investigate whether independent directors’ dissension in board meetings plays an effective role in enhancing firm value through improved corporate governance. Our results indicate that dissension improves firm value. This finding is robust to different measures of firm value and alternative model specifications including subsample, propensity score matching, and instrumental variable analyses. Overall, we contribute to the understanding of the relation between corporate governance and firm value. Specifically, we provide new evidence that the monitoring by independent directors enhances firm value.

The Financial Impact Of Gender Diversity On Corporate Boards, Elizabeth Hamilton

Undergraduate Theses

The purpose of this study is to investigate the relationship between gender diversity and firm financial performance, using a data set of 50 S&P 500 companies during 2015-2019. Gender diversity was measured through the percentage of women on the board and whether the board has a “critical mass” (of at least three women). In the results of the regression analyses, some significant relationships between variables were found. The regression between ROA and the percentage of women indicated a positive, significant relationship for ROA to the percentage of women. For the regression between ROA and the critical mass variable, no significant …

Lessons Learned: Chester B. Feldberg, Maryann Haggerty

Journal of Financial Crises

Chester B. Feldberg worked for the Federal Reserve Bank of New York (FRBNY) for 36 years in a variety of roles. In the aftermath of the Global Financial Crisis, he served as a trustee for the AIG Credit Trust Facility (2009-2011). The trust was established in early 2009 to hold the equity stock of American International Group Inc. (AIG) that the U.S. government had received as a result of the 2008 AIG bailout. The three trustees were responsible for voting the stock, ensuring satisfactory corporate governance at AIG, and eventually disposing of the stock.

When he was named as a …

Corporate Governance, Market Orientation And Performance Of Iran’S Upscale Hotels, Soheil Kazemian, Hadrian G. Djajadikerta, Jamaliah Said, Saiyidi Mat Roni, Terri Trireksani, Md Mahmudul Alam

Research outputs 2014 to 2021

Market orientation has been known as an efficient managerial tool to assist in sustaining the performance of organisations. Market orientation has three dimensions, namely customer orientation, competitor orientation and inter-function coordination. This paper evaluates how corporate governance influences the three dimensions of market orientation within Iran's upscale hotels. The impacts of the three dimensions of market orientation on the hotels' social and financial performance are also examined to determine if market orientation mediates the relationships between corporate governance and performance. Partial least squares structural equation modelling (PLS-SEM) is used to analyse the survey data collected from the executives of four- …

The “Value” Of A Public Benefit Corporation, Jill E. Fisch, Steven Davidoff Solomon

All Faculty Scholarship

We examine the “value” a PBC form provides for publicly-traded corporations. We analyze the structure of the PBC form and find that other than requiring a designated social purpose it does not differ significantly in siting control and direction with shareholders. We also examine the purpose statements in the charters of the most economically significant PBCs. We find that, independent of structural limitations on accountability, these purpose statements are, in most cases, too vague and aspirational to be legally significant, or even to serve as a reliable checks on PBC behavior. We theorize, and provide evidence, that without a legal …

Just Say Yes? The Fiduciary Duty Implications Of Directorial Acquiescence, Lisa Fairfax

All Faculty Scholarship

The rise in shareholder activism is one of the most significant recent phenomena in corporate governance. Shareholders have successfully managed to enhance their power within the corporation, and much of that success has resulted from corporate managers and directors voluntarily acceding to shareholder demands. Directors’ voluntary acquiescence to shareholder demands is quite simply remarkable. Remarkable because most of the changes reflect policies and practices that directors have vehemently opposed for decades, and because when opposing such changes directors stridently insisted that the changes were not in the corporation’s best interest. In light of that insistence, and numerous statements from directors …

Lifting Labor’S Voice: A Principled Path Toward Greater Worker Voice And Power Within American Corporate Governance, Leo E. Strine Jr., Aneil Kovvali, Oluwatomi O. Williams

All Faculty Scholarship

In view of the decline in gain sharing by corporations with American workers over the last forty years, advocates for American workers have expressed growing interest in allowing workers to elect representatives to corporate boards. Board level representation rights have gained appeal because they are a highly visible part of codetermination regimes that operate in several successful European economies, including Germany’s, in which workers have fared better.

But board-level representation is just one part of the comprehensive codetermination regulatory strategy as it is practiced abroad. Without a coherent supporting framework that includes representation from the ground up, as is provided …

The Founder Chief Executive Officer: A Review Of Current Insights And Directions For Future Research, Michael A. Abebe, Pingshu Li, Keshab Acharya, Joshua J. Daspit

Management Faculty Publications and Presentations

Research Question/Issue

From its inception in the late 1980s and early 1990s, founder-chief executive officer (CEO) research has garnered significant scholarly attention in the strategy and entrepreneurship disciplines, although other fields—such as economics, finance, and family business—have also generated substantial research insight on this topic. Despite this progress, a limited consensus exists on the influence of the founder CEO owing to the fragmented nature of extant research. In this review, we address this fragmentation by reviewing current literature, synthesizing the discipline-specific findings into an integrated framework, and highlighting promising directions for future founder-CEO research.

Research Findings/Insights

Using a cross-disciplinary review …

Reconsidering The Evolutionary Erosion Account Of Corporate Fiduciary Law, William W. Bratton

All Faculty Scholarship

This Article reconsiders the dominant account of corporate law’s duty of loyalty, which asserts that the courts have steadily relaxed standards of fiduciary scrutiny applied to self-dealing by corporate managers across more than a century of history—to the great detriment of the shareholder interest. The account originated in Harold Marsh, Jr.’s foundational article, Are Directors Trustees? Conflicts of Interest and Corporate Morality, published in The Business Lawyer in 1966. Marsh’s showing of historical lassitude has been successfully challenged in a recent book by Professor David Kershaw. This Article takes Professor Kershaw’s critique a step further, asking whether the evolutionary …

Editorial: Covid-19, Corporate Governance, Sustainability, And The Post-Neoliberal World, Marie Dela Rama, Julie Crews

Research outputs 2014 to 2021

Welcome to this special issue of Corporate Governance and Sustainability Review focusing on the impact of thecoronavirus (COVID-19) on societies and economies worldwide. The five papers in this special issue reflect the initial impact of the COVID-19 pandemic,in its first year,on corporate governance and sustainability. What is common throughout these papers is how the pandemic has created disequilibria for many organisations. The question continues to be posed as to the new forms of organising and managing as the world reorientates or pivots in a pandemic and post-pandemic world.

Impact Of Corporate Governance On Financial Reporting And Profitability Of Banking, Susan Ortega

Walden Dissertations and Doctoral Studies

AbstractA lack of corporate governance and financial reporting may lead to a decrease in profitability and bank closures due to poor management, lack of capital, and liquidity. Based on agency theory, the purpose of this correlational study was to investigate the relationship between corporate governance, financial reporting, and three measures of profitability; return on assets, return on equity, and net interest margin, in 80 banks within the Midwest from 2015–2018. The data were collected from the banks' websites and the Federal Deposit Insurance Corporation (FDIC). The results of the three regression analyses were not significant; however, financial reporting was a …

Fiduciary Duty Or Loyalty? Evidence From Co-Opted Boards And Corporate Misconduct, Rashid Zaman, Nader Atawnah, Ghasan A. Baghdadi, Jia Liu

Research outputs 2014 to 2021

We examine the effect of co-opted boards on corporate misconduct and document a significant positive relationship. Utilising a large sample of public U.S. companies from the period 2001 to 2015, we find that a one standard deviation increase in the proportion of co-opted directors on a board leads to a 4.3% rise in corporate misconduct. This outcome is robust to a series of sensitivity tests and continues to hold after accounting for potential endogeneity concerns. Further analyses indicate that co-opted directors propose fewer board agenda items, exhibit lower attendance at board meetings, and receive compensation packages in excess of industry …

Uncovering Real Earnings Management: Pay Attention To Risk-Taking Behavior, Samar Alharbi, Md Al Mamun, Nader Atawnah

Research outputs 2014 to 2021

We examine the impact of corporate risk-taking on firm-level real earnings management. We find that firms with higher risk-taking engage in higher real earnings management. Our results are robust to a series of robustness tests, including simultaneous least squares approach, firm fixed effect, change analysis, and pseudo difference-in-difference analysis. Additional analyses reveal that the impact of risk-taking on real earnings management is more pronounced among firms that experience prior-year loss and are run by top-echelons who are risk lovers. Sarbanes-Oxley Act (SOX) regulation does not attenuate the positive effect of risk-taking on real earnings management. However, external monitoring by institutional …

Exploring The Key Challenges Facing Company Secretaries In A Two-Tier Board Context, Stefan Peij, Pieter-Jan Bezemer

Research outputs 2014 to 2021

Purpose:

This study aims to examine the core challenges facing company secretaries in a two-tier board context. This study focuses on the key factors contributing to these challenges and how company secretaries can effectively address them.

Design/methodology/approach:

An analysis of the narratives provided by 291 Dutch company secretaries in response to a series of open-ended questionnaire questions led to insights into the key challenges company secretaries face in their day-to-day work.

Findings:

Company secretaries perceive a myriad of factors contributing to pressures on their time, the need to work for multiple organizational bodies and the processing of information. They believe …

Corporate Governance And Corporate Social Responsibility Synergies: Evidence From New Zealand, Rashid Zaman, Muhammad Nadeem, Mariela Carvajal

Research outputs 2014 to 2021

© 2020, Emerald Publishing Limited. Purpose: This paper aims to provide exploratory evidence on corporate governance (CG) and corporate social responsibility (CSR) interfaces. Although there remains a voluminous literature on CG and CSR, very little effort has been put forward to explore the nature of this relationship. Design/methodology/approach: Using interviews with Senior Executives of New Zealand Stock Exchange listed firms, this research assesses CG and CSR practices, identifies barriers for CG and CSR adoption and investigates the nature of the relationship between CG and CSR. Findings: The results indicate a moderate level of CG and CSR practices, with a lack …

Accountability’S Aa1000ap Standard: A Framework For Integrating Sustainability Into Organisations, Muhammad Bilal Farooq, Rashid Zaman, Muhammad Nadeem

Research outputs 2014 to 2021

Purpose: This study aims to evaluate corporate sustainability integration by evaluating corporate practices against the sustainability principles of inclusivity, materiality, responsiveness and impact outlined in AccountAbility’s AA1000 Accountability Principles (AA1000AP) standard. Design/methodology/approach: Data comprise 12 semi-structured interviews with senior managers of listed New Zealand companies. Findings are evaluated against AccountAbility’s principles of inclusivity, materiality, responsiveness and impact, which are based on a normative view of stakeholder theory. Findings: In terms of inclusivity, stakeholder engagement is primarily monologic and is directed more towards traditional stakeholder groups. However, social media, which is gaining popularity, has the potential to facilitate greater dialogic stakeholder …