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Full-Text Articles in Business Law, Public Responsibility, and Ethics

Reading Between The Lines: Not All Csr Is Good Csr, David K. Ding, Christo Ferreira, Udomsak Wongchoti Aug 2018

Reading Between The Lines: Not All Csr Is Good Csr, David K. Ding, Christo Ferreira, Udomsak Wongchoti

Research Collection Lee Kong Chian School Of Business

Purpose: This paper aims to investigate whether corporate social responsibility (CSR), as evidenced in annual financial reports, is associated with a firm’s financial performance in New Zealand. Design/methodology/approach: A word count approach of several key CSR indicators found in the audited financial reports of NZX50 constituent firms is used. Several variables are constructed that measure the presence of CSR within the annual report such as sustainability, responsibility, social, environment, diversity, employee and community, and eight other variables within the annual report that measure the penetration of stakeholder engagement. Control variables and alternative measures of CSR are also ...


Corporate Short-Termism And Intertemporal Choice, Robert J. Rhee Jan 2018

Corporate Short-Termism And Intertemporal Choice, Robert J. Rhee

Washington University Law Review

This paper presents an intertemporal model of short-termism. Critics have portrayed short-termism in broad brushstrokes as the bane of corporate governance. But short-termism does not have a self-evident, efficiency-based normative value. A simple application of a well-accepted asset valuation theory shows that short-termism is not per se inefficient. If profitable enough, a short-term strategy would be better than a long-term strategy. This intuition is a mathematical and financial fact. The model presented here is tested in a case study of Air Products and Chemicals, Inc. v. Airgas, Inc., a prominent and legally significant Delaware hostile takeover battle. Short-termism was a ...


Who Bleeds When The Wolves Bite? A Flesh-And-Blood Perspective On Hedge Fund Activism And Our Strange Corporate Governance System, Leo E. Strine Jr. Apr 2017

Who Bleeds When The Wolves Bite? A Flesh-And-Blood Perspective On Hedge Fund Activism And Our Strange Corporate Governance System, Leo E. Strine Jr.

Faculty Scholarship at Penn Law

This paper examines the effects of hedge fund activism and so-called wolf pack activity on the ordinary human beings—the human investors—who fund our capital markets but who, as indirect of owners of corporate equity, have only limited direct power to ensure that the capital they contribute is deployed to serve their welfare and in turn the broader social good.

Most human investors in fact depend much more on their labor than on their equity for their wealth and therefore care deeply about whether our corporate governance system creates incentives for corporations to create and sustain jobs for them ...


Socially Responsible Firms, Allen Ferrell, Hao Liang, Luc Renneboog Dec 2016

Socially Responsible Firms, Allen Ferrell, Hao Liang, Luc Renneboog

Research Collection Lee Kong Chian School Of Business

In the corporate finance tradition, starting with Berle and Means (1932), corporations should generally be run to maximize shareholder value. The agency view of corporate social responsibility (CSR) considers CSR an agency problem and a waste of corporate resources. Given our identification strategy by means of an instrumental variable approach, we find that well-governed firms that suffer less from agency concerns (less cash abundance, positive pay-for-performance, small control wedge, strong minority protection) engage more in CSR. We also find that a positive relation exists between CSR and value and that CSR attenuates the negative relation between managerial entrenchment and value.


Socially Responsible Firms, Allen Ferrell, Hao Liang, Luc Renneboog Aug 2016

Socially Responsible Firms, Allen Ferrell, Hao Liang, Luc Renneboog

Research Collection Lee Kong Chian School Of Business

In the corporate finance tradition starting with Berle & Means (1923), corporations should generally be run so as to maximize shareholder value. The agency view of corporate social responsibility (CSR) considers CSR as an agency problem and a waste of corporate resources. Given our identification strategy by means of an IV approach, we find that well-governed firms who suffer less from agency concerns (less cash abundance, positive pay-for-performance, small control wedge, strong minority protection) engage more in CSR. We also find a positive relation between CSR and value and that CSR attenuates the negative relation between managerial entrenchment and value.


Stewardship In The Interests Of Systemic Stakeholders: Re-Conceptualizing The Means And Ends Of Anglo-American Corporate Governance In The Wake Of The Global Financial Crisis, Zhong Xing Tan Jan 2014

Stewardship In The Interests Of Systemic Stakeholders: Re-Conceptualizing The Means And Ends Of Anglo-American Corporate Governance In The Wake Of The Global Financial Crisis, Zhong Xing Tan

Journal of Business & Technology Law

No abstract provided.


Political Connection And Firm Value, James S. Ang, David K. Ding, Tiong Yang Thong Aug 2013

Political Connection And Firm Value, James S. Ang, David K. Ding, Tiong Yang Thong

Research Collection Lee Kong Chian School Of Business

We study the effect of political connection (PC) on company value in an environment where low PC is due to better institutions and not confounded by favorable social/cultural factors. We find that in Singapore, the only country that fits this description, PC in general adds little to the value of a company. However, in industries that are subject to more stringent government regulations, PC appears to be somewhat important. Robustness checks show that alternative PC variables give rise to similar results, and the addition of control variables do not drastically change the findings. Politically connected firms have higher managerial ...


Last Of The Tai-Pans: Improving The Sustainability Of Long-Term Financial Flows By Improving Hong Kong’S Corporate Governance, Bryane Michael Jan 2013

Last Of The Tai-Pans: Improving The Sustainability Of Long-Term Financial Flows By Improving Hong Kong’S Corporate Governance, Bryane Michael

Bryane Michael (bryane.michael@stcatz.ox.ac.uk)

Hong Kong leads the rank tables as an international financial centre. However, the data indicate that some parts of her corporate governance arrangements probably detract from – rather than contribute to – that leading position. In this brief, we show how excessive shareholding concentration, probably self-dealing, insufficient minority shareholder recourse to mechanisms aimed at protecting their investments, and Hong Kong’s close links with several “tax havens” probably weaken Hong Kong’s role as an international financial centre. We present 18 recommendations aimed at increasing the volume of international financial capital coming to the city by improving Hong Kong’s corporate governance.


Adapting To The New Shareholder-Centric Reality, Edward B. Rock Jan 2013

Adapting To The New Shareholder-Centric Reality, Edward B. Rock

Faculty Scholarship at Penn Law

After more than eighty years of sustained attention, the master problem of U.S. corporate law—the separation of ownership and control—has mostly been brought under control. This resolution has occurred more through changes in market and corporate practices than through changes in the law. This Article explores how corporate law and practice are adapting to the new shareholder-centric reality that has emerged.

Because solving the shareholder–manager agency cost problem aggravates shareholder–creditor agency costs, I focus on implications for creditors. After considering how debt contracts, compensation arrangements, and governance structures can work together to limit shareholder–creditor ...


Banks' Survival During The Financial Crisis: The Role Of Regulatory Reporting Quality, Jeffrey Ng, Tjomme O. Rusticus Dec 2012

Banks' Survival During The Financial Crisis: The Role Of Regulatory Reporting Quality, Jeffrey Ng, Tjomme O. Rusticus

Research Collection School Of Accountancy

In this paper, we investigate the effect of bank transparency before the crisis on bank stability during the financial crisis that erupted in 2008. Using a large sample of private and public commercial banks in the United States, we find that transparency enhances stability. We use two measures of transparency. We develop a new measure of financial reporting transparency based on loan loss provision estimation errors. We corroborate our findings using a second measure based on the incidence of accounting restatements. We show that lower transparency before the crisis is associated with higher non-performing loans and lower profitability at the ...


Agency And The Ontology Of The Corporation, Christopher M. Bruner Jan 2012

Agency And The Ontology Of The Corporation, Christopher M. Bruner

Scholarly Works

No abstract provided.


Inside-Out Corporate Governance, David A. Skeel Jr., Vijit Chahar, Alexander Clark, Mia Howard, Bijun Huang, Federico Lasconi, A.G. Leventhal, Matthew Makover, Randi Milgrim, David Payne, Romy Rahme, Nikki Sachdeva, Zachary Scott Jan 2011

Inside-Out Corporate Governance, David A. Skeel Jr., Vijit Chahar, Alexander Clark, Mia Howard, Bijun Huang, Federico Lasconi, A.G. Leventhal, Matthew Makover, Randi Milgrim, David Payne, Romy Rahme, Nikki Sachdeva, Zachary Scott

Faculty Scholarship at Penn Law

Until late in the twentieth century, internal corporate governance—that is, decision making by the principal constituencies of the firm—was clearly distinct from outside oversight by regulators, auditors and credit rating agencies, and markets. With the 1980s takeover wave and hedge funds’ and equity funds’ more recent involvement in corporate governance, the distinction between inside and outside governance has eroded. The tools of inside governance are now routinely employed by governance outsiders, intertwining the two traditional modes of governance. We argue in this Article that the shift has created a new governance paradigm, which we call inside-out corporate governance ...


Application Of Stakeholder Theory To Corporate Environmental Disclosures, Pamela Kent, Christopher Chan Jul 2010

Application Of Stakeholder Theory To Corporate Environmental Disclosures, Pamela Kent, Christopher Chan

Pamela Kent

Ullmann's (1985) three-dimensional model of social responsibility disclosure is tested to determine whether it can be operationalized to help explain the quantity and quality of environmental disclosures in Australian annual reports. The stakeholder power dimension of Ullmann's framework is significant in explaining environmental disclosures while content of the mission statement and existence or otherwise of environmental or social responsibility committees also find strong statistically significant support in the results. Ullmann's stakeholder theory has previously been applied to explain social disclosures in general (Roberts, 1992) and is an important theory because it introduces a measure of strategy. The ...


La Riforma Del Controllo Contabile Delle Societa’ In Italia: “Schede Di Lettura” Del Decreto Legislativo 39/2010 In Tema Di Svolgimento Della Revisione Legale Dei Conti, Claudio Sottoriva Jun 2010

La Riforma Del Controllo Contabile Delle Societa’ In Italia: “Schede Di Lettura” Del Decreto Legislativo 39/2010 In Tema Di Svolgimento Della Revisione Legale Dei Conti, Claudio Sottoriva

Claudio Sottoriva

Il contributo offre una prima lettura delle novità apportate dal Decreto Legislativo n. 39/2010 attuativo della Direttiva 2006/43/CE, relativa alle revisioni legali dei conti annuali e dei conti consolidati. La disciplina dello svolgimento della attività di revisione legale dei conti trova quindi ora riferimenti normativi nelle norme del Codice Civile e in alcune norme speciali (principalmente nel T.U.F.) nonché per quanto non diversamente disciplinato nel Decreto 39/2010. La disciplina è destinata a trovare completamento con l'emanazione di specifici regolamenti attuativi del Decreto da parte del Ministero dell'Economia e delle finanze nonché da ...


Corporate Governance, Investor Protection, And Auditor Choice In Emerging Markets, Mahmud Hossain, Chee Yeow Lim, Patricia Mui Siang Tan Mar 2010

Corporate Governance, Investor Protection, And Auditor Choice In Emerging Markets, Mahmud Hossain, Chee Yeow Lim, Patricia Mui Siang Tan

Research Collection School Of Accountancy

In this study, we examine the effect of firm-level governance on the firm's choice of an external auditor. Further, we test how the relation between corporate governance and auditor choice may be affected by the strength of legal environment. The results show that firm-level governance scores are positively related to the firm's auditor choice. This association is strengthened by country-level legal protection. Specifically, the positive association between auditor choice and the firm-level governance scores is weaker (stronger) in a low (high) legal environment. These findings are robust after controlling for determinants that were found to be significant in ...


Why "Democracy" And "Drifter" Firms Can Have Abnormal Returns: The Joint Importance Of Corporate Governance And Abnormal Accruals In Separating Winners From Losers, Koon Boon Kee Jan 2010

Why "Democracy" And "Drifter" Firms Can Have Abnormal Returns: The Joint Importance Of Corporate Governance And Abnormal Accruals In Separating Winners From Losers, Koon Boon Kee

Dissertations and Theses Collection (Open Access)

Do managers exercise accounting discretion in an opportunistic or efficient manner? Good governance structures, which mitigate agency costs, are necessary to ensure that the accounting information supplied by management is not opportunistically manipulated. The output of quality accounting information, in turn, serves as an input to better governance structures. Thus, governance and earnings quality (EQ) are inexorably linked through a complementarity relationship. This suggests two previously unexamined relationships. Firstly, the governance effects on performance in the influential paper by Gompers, Ishii and Metrick (2003) is overrated without good EQ, measured by the magnitude of abnormal accruals (AA), as an input ...


Why Does Corporate Governance Matter? Evidence From Seasoned Bond Offerings, Fang Wang Jan 2010

Why Does Corporate Governance Matter? Evidence From Seasoned Bond Offerings, Fang Wang

Dissertations and Theses Collection (Open Access)

To examine the importance of corporate governance, I look at how management and investors behave in the event of seasoned bond offerings, controlling for the corporate governance structure of issuing firms. I find that companies with the weakest governance structure aggressively manipulate their earnings upwards during the two years prior to the debt issuances. And when the bond offerings are announced to the market, these same firms experienced positive abnormal returns over a three day event period, indicating that investors of poorly governed firms value a debt financing for the alleged decrease in agency cost.


Does Corporate Governance Matter, Evidence From Earnings Management Practices In Singapore, Lingxu Hu Jan 2010

Does Corporate Governance Matter, Evidence From Earnings Management Practices In Singapore, Lingxu Hu

Dissertations and Theses Collection (Open Access)

This paper addresses two questions. First, do good corporate governance practices add values to company or does it lead to higher stock returns in Singapore? Second, does poorly governed listed company in SGX tend to manage their earnings by using discretionary accruals? Following the approach of Gompers et al. (2003), we formed two portfolios consisting of well-governed and poorly governed companies. Well governed companies are able to maintain a higher return relative to poorly governed companies. I also look at the firm valuation from the adoption of corporate governance practices. Our result shows a positive relationship between firm valuation and ...


Corporate Governance And Earnings Management Before Share Repurchase Announcements In Singapore, Jian Ming Chua Jan 2010

Corporate Governance And Earnings Management Before Share Repurchase Announcements In Singapore, Jian Ming Chua

Dissertations and Theses Collection (Open Access)

Share repurchase in Singapore was legalized in 1998. It is well known that investors view share repurchase as good news. This study is based on share repurchase announcements from 2006 to 2009. The mean Cumulative Market-Adjusted Returns (CAR) for the period [0, +1] and [-1, +1] are significant at 1.25% and 1.33% respectively. In Singapore, there are positive abnormal returns following share repurchase announcements in support of the ―free cash flow‖ hypothesis. By using the Singapore Corporate Governance Index as a proxy, the weakly governed companies exhibit the strongest, positive and significant CAR of 2.62% for the ...


The Association Between Institutional Ownership And Audit Properties, Soongsoo Han, Tony Kang, Lynn Reesc Mar 2009

The Association Between Institutional Ownership And Audit Properties, Soongsoo Han, Tony Kang, Lynn Reesc

Research Collection School Of Accountancy

In this study, we examine how institutional ownership affects the quality and riskiness of the financial statement audit. We hypothesize that institutional investors can influence corporate policy to employ governance mechanisms that reduce their monitoring costs. Our evidence shows that firms are more likely to hire a Big 4 auditor (our proxy for audit quality) when long-term institutional ownership is high, suggesting that long-term institutional investors view high quality audits as a viable means of improving corporate governance while reducing their direct monitoring costs. We find no association between auditor choice and short-term institutional ownership. Next, we find that auditors ...


The Enduring Ambivalence Of Corporate Law, Christopher M. Bruner Oct 2008

The Enduring Ambivalence Of Corporate Law, Christopher M. Bruner

Scholarly Works

Prevailing theories of corporate law tend to rely heavily on strong claims regarding the corporate governance primacy and legitimacy of either the board or the shareholders, as the case may be. In this article I challenge the descriptive power of these theories as applied to widely held public corporations and advance an alternative, arguing that corporate law is, and will remain, deeply ambivalent - both doctrinally and morally - with respect to three fundamental and related issues: the locus of ultimate corporate governance authority, the intended beneficiaries of corporate production, and the relationship between corporate law and theachievement of the social good ...


Japanese Corporate Governance: Structural Change And Financial Performance, Asli M. Colpan, Toru Yoshikawa, Takashi Hikino, Hiroaki Miyoshi Dec 2007

Japanese Corporate Governance: Structural Change And Financial Performance, Asli M. Colpan, Toru Yoshikawa, Takashi Hikino, Hiroaki Miyoshi

Research Collection Lee Kong Chian School Of Business

This paper analyzes institutional and legal changes related to corporate governance and their impact on financial performance in Japan since the second half of the 1990s. We attempt to address two issues systematically: (1) how much the governance reforms of Japanese firms transformed the conventional system of alliance capitalism and managerial control; and (2) what economic outcomes those governance changes have yielded. As the Commercial Code and other legal and institutional frameworks were revised, Japanese firms experienced shifts in terms of stock ownership, corporate control and managerial organizations. Our empirical results show that the influence of new ownership composition and ...


Ownership Structure, Investment Behaviour And Firm Performance In Japanese Manufacturing Industries, Eric Gedajlovic, Toru Yoshikawa, Motomi Hashimoto Jan 2005

Ownership Structure, Investment Behaviour And Firm Performance In Japanese Manufacturing Industries, Eric Gedajlovic, Toru Yoshikawa, Motomi Hashimoto

Research Collection Lee Kong Chian School Of Business

Using data spanning the 1996-98 fiscal years of 247 of Japan's largest manufacturers, we empirically evaluate the extent to which a firm's investment behaviour and financial performance are influenced by its ownership structure. To do so, we examine six distinct categories of Japanese shareholders: foreign investors, investment funds, pension funds, banks and insurance companies, affiliated companies and insiders. Our findings strongly indicate that the relationship between the equity stakes of a particular category of investor and a firm' s financial performance and investment behaviour is considerably more complex than is depicted in simple principal-agent representations. Such a result ...


The Performance Implications Of Ownership Driven Governance Reform, Toru Yoshikawa, Phillip H. Phan Dec 2003

The Performance Implications Of Ownership Driven Governance Reform, Toru Yoshikawa, Phillip H. Phan

Research Collection Lee Kong Chian School Of Business

This paper explores the performance impact of recent changes in foreign shareholdings and boardroom reforms in Japan. Empirical research on the impact of reform on the Japanese corporate governance system could provide useful lessons for their European counterparts who are themselves facing similar pressures to reform. We found that although participation of outside directors in strategic decision-making was associated with positive stock returns, the increase in the ratio of outside directors, the separation of the board members and executive officers, and the reduction of board size were not related to firm performance.