This study examines the influence of firm governance structures (board size, independence, CEO duality, director share ownership, and board meeting frequency) in relation to carbon emission disclosures by high-polluting Chinses firms. In addition, the study further examined the moderating role of earnings management on this relationship. In line with stakeholder and agency theories, our study identified that the large and independent boards exercise and demonstrate a higher degree of carbon emission disclosures. However, CEO duality and director share (...) ownership are associated with lower carbon emission disclosures. In addition, the study determined that higher earnings management results in a reduced level of carbon emission disclosures. Lastly, a firm earnings management strategy moderates the relationship between a firm governance structure and its carbon emission disclosures. The findings from the study are consistent with multiple econometric models and variables. The findings from the study contribute to the literature in the areas of firm corporate governance and carbon emission disclosures by documenting the moderating role of earnings management, which is not evident in previous studies; provide an enhanced perspective on the implications for firms, regulators, policymakers, and stakeholders who have an interest in reducing carbon emissions and advancing climate change mitigation goals in line with UN's Sustainable Development Goal (SDG) 7: climate action, and zero emissions goal by 2050. (shrink)

This paper examines the success of corporate communication in voluntary sustainability reporting. Existing studies have focused on the perspective of the communicators but lack an understanding of the perspective of information recipients to clearly evaluate this interactive communication process. This paper looks at the issue of a credibility gap perceived by external stakeholders when they doubt the authenticity of communicated information due to the reporting company’s governance structure. The paper uses family businesses to exemplify the emergence of such a (...) gap when outsiders become concerned about the potential agency problem of the integrated ownership and management controlled by a few members of the same family. Following source credibility theory, these concerns raise a credibility gap associated with a family firm’s trustworthiness and goodwill, even if the family has the expertise to carry out sustainability reporting. The findings of two experimental studies indicate that family businesses suffer a greater credibility gap than non-family businesses. An external and independent assurance service can mitigate such gaps, especially when the service is comprehensive and targets family businesses. The paper provides a complete view evaluating corporate communication by looking at the interaction between the communicating company and the information recipients. (shrink)

This article explores how both corporate governance and corporate social responsibility can be improved by using insights from complexity theory. Complexity theory reveals that decentralized governance architecture is required for firms to absorb competently the increased intricacies, variety of variables, and objectives introduced by CSR. The current predominant form of centralized governance based on command-and-control hierarchies copes with complexities by reducing data inputs. This approach results in firms reducing their objectives, concerns, and insights about CSR. Firms with (...) a decentralized “network” form of governance architecture are used to illustrate how the data inputs of each manager can be reduced through the decomposition of decision-making labor to improve the capability of the firm to intelligently absorb and manage complexity. Network governance also introduces a division of powers with stakeholders to facilitate information flow and strengthen incentives to manage the enterprise to enhance both shareholder value and CSR. (shrink)

Cet article examine la concurrence entre des structures de gouvernance des entreprises. Il y est souligné qu’une panoplie de structures “constitutionnelles” peut être observée dans le cadre marchand et que cette variété a servi des objectifs transactionnels importants sur un plan historique. L’article met en contraste les approches coasienne et autrichienne de l’explication des structures de gouvernance. Nous examinons la tendance récente du déplacement de la propriété des entreprises vers les investisseurs par opposition aux arrangements coopératifs et (...) “mutuels”. L ’ a r gument a t ion sout i ent que l’intervention étatique peut être une explication importante des tendances récentes au Royaume Uni, notamment dans le domaine des institutions financières. Les suggestions selon lesquelles des modèles de gouvernance des entreprises par les “partenaires” devraient être introduits à travers l’intervention de l’Etat ignorent à la fois les coûts de transaction et l’importance d’assurer l’affectation du talent entrepreneurial en direction des ressources économiques.This paper considers competition between governance arrangements for firms. It is argued that a variety of ‘constitutional’ structures can be observed in the market and that historically this variety has served important transactional purposes. The Coasian and Austrian approaches to the explanation of governance arrangements are contrasted. Recent trends towards investor ownership of firms and away from co-operative and ‘mutual’ arrangements are considered. It is argued that government regulatory intervention may be an important explanation for recent trends in the UK, especially in the area of financial institutions. Suggestions that ‘stakeholder’ models of firm governance should be introduced through state intervention ignore considerations both of transactions costs and the importance of ensuring the allocation of entrepreneurial talent to the direction of economic resources. (shrink)

This paper addresses the possibilities to introduce the stakeholder model in the firm, especially the possibility to give property or decision rights to stakeholders. This paper argues that it is not practical to give full property rights to more than one group of stakeholders. Decision rights to employees and creditors are already in place in some countries, but the possibility to introduce them more generally to other stakeholder groups depends very much on the governance and ownership structure of (...) the firm and the legal environment. The future of the stakeholder model in a globalised economy is also analysed. (shrink)

Research on multinational inter-organizational relationships has demonstrated that the capabilities of small and medium sized enterprises can be developed via partnerships, but at present, we lack studies that relate the development of such capabilities to the management of business governance structure. This study provides a new perspective on internationalized SME marketing strategies in the global context. Using a dynamic capability view of firms, the study develops hierarchical regression models linking global dynamic capabilities and governance structure. This study empirically (...) verifies the research framework from 206 internationalized SME Taiwanese firms. The results confirm previous studies that indicate positive correlations between market orientation, learning orientation, and global dynamic capabilities. The results also indicate that the development of global dynamic capabilities impacts the choice of governance structure in firms. Our study suggests that internationalized SMEs strategically manage their autonomy and strategic options by choosing combinations of different relationship types while they decide to develop global marketing capabilities and global design capability, or both. The study also found that market orientation and learning orientation act as enabling mechanisms for building global dynamic capabilities. (shrink)

This study attempts to establish the importance of firm-level interactions with sociopolitical stakeholders in explaining firms prospects for survival. Institutional arguments are proposed to explain the effects of internal structures-both organizational and phenomenological-on firms sociopolitical relational strategies, whereas arguments grounded in the stakeholder view of the firm are advanced to explain effects of sociopolitical stakeholder relations on firm performance. Findings indicate that firms tended to adopt cooptative relationships with sociopolitical stakeholders. Furthermore, firms cooperativeness toward sociopolitical stakeholders (...) had little effect on financial performance but, under some conditions, had positive effects on social performance. Implied is that markets may not be an effective governance mechanism to ensure firms alignment with democratic institutions in a plural society and that public policies may be needed to address these failures. (shrink)

This conceptual article suggests a reexamination of current governance structures, specifically those of unitary boards after the financial crisis of 2008.We suggest that the existing governance structures are based on an outdated paradigm of business, rooted in economics. We propose an alternative paradigm, a more humanistic paradigm, which allows conceiving alternative, network-oriented governance structures. As hierarchical firms grow larger and more complex, the risk of failure increases from biases, errors, and missing data in communication (...) and control systems. These problems are exacerbated by information overload on senior managers, directors, and their respective regulators. In contrast to traditional corporate governance, network governance introduces a division of power via multiple boards, checks and balances, and active stakeholder engagement. We argue that those features could have prevented the stresses and failures of financial firms in 2008, since they were anticipated by both individuals within firms and external commentators. However, those exposed to risks possessed insufficient influence in either governing and/or regulating firms to take corrective action. (shrink)

Many transnational corporations and international organizations have embraced corporate social responsibility to address criticisms of working and environmental conditions at subcontractors' factories. While CSR 'codes of conduct' are easy to draft, supplier compliance has been elusive. Even third-party monitoring has proven an incomplete solution. This article proposes that an alteration in the supply chain's governance, from an arms-length market model to a collaborative partnership, often will be necessary to effectuate CSR. The market model forces contractors to focus on price (...) and delivery as they compete for the lead firm's business, rendering CSR observance secondary, at best. A collaborative partnership where the lead firm gives select suppliers secure product orders and other benefits removes disincentives and adds incentives for CSR compliance. In time, the suppliers' CSR habit should shift their business philosophy toward pursuing CSR as an end in itself, regardless of buyer incentives and monitoring. This article examines these hypotheses in the context of the athletic footwear sector with Nike, Inc. and its suppliers as the specific case study. The data collected and conclusions reached offer strategies for advancing CSR beyond the superficial and often ineffectual 'code of conduct' stage. (shrink)

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

Recent years have featured a spate of regulatory action pertaining to the development and/or disclosure of corporate governance structures in response to financial scandals resulting in part from governance failures. During the same period, corporate governance activists and institutional investors increasingly have called for increased voluntary governance disclosure. Despite this attention, there have been relatively few comprehensive studies of governance disclosure practices and response to the regulation. In this study, we examine a sample of (...) 50 U.S. firms and their public disclosure packages from 2004. We find a high degree of variability in the presentation and reporting format choices for many elements of the governance structure. This variability includes several items for which disclosure is mandated by regulators or legislative action. In particular, smaller firms offer fewer disclosures pertaining to independence, board selection procedures, and oversight of management (including whistleblowing procedures). There are also trends associated with board characteristics: boards that are less independent offer fewer disclosures of independence and management oversight matters. Moreover, large firms provide more disclosures of independence standards, board selection procedures, audit committee matters, management control systems, other committee matters, and whistleblowing procedures but do not appear to have a strictly superior information environment when compared to smaller firms. The findings raise questions about compliance with regulatory requirements and the degree to which conflicts of interest between managers and directors are being controlled. While there have been notable improvements in the information environment of governance disclosures, there remain structural issues that may possess negative ramifications for stakeholders. (shrink)

This study investigates whether and to what extent publicly listed corporations voluntarily comply with and disclose recommended good corporate governance practices, and distinctively examines whether the observed cross-sectional differences in such CG disclosures can be explained by ownership and board mechanisms with specific focus on Saudi Arabia. The study’s results suggest that corporations with larger boards, a Big 4 auditor, higher government ownership, a CG committee, and higher institutional ownership disclose considerably more than those that are not. By contrast, (...) the study finds that an increase in block ownership significantly reduces CG disclosure. The study’s results are generally robust to a number of econometric models that control for different types of disclosure indices, firm-specific characteristics, and firm-level fixed effects. The study’s results have important implications for policy makers, practitioners, and regulatory authorities, especially those in developing countries across the globe. (shrink)

Identifying corporate governance mechanisms to improve firm performance has been at the forefront of policy discussion and research in recent years. Existing research in this area focuses on large-capitalisation firms, and has not provided much insight on smaller firms. This paper tests for the optimality of deployment of governance mechanisms for Canadian small-cap firms by estimating a simultaneous equation system that links four control mechanisms to firm performance, using recent data. The results confirm simultaneity between several (...) governance mechanisms and Canadian small-cap firm performance. CEO ownership and shareholder rights are shown to determine board independence. CEO ownership in turn is shown to depend on the extent of shareholder rights and whether the CEO is also Chairperson of the board. Canadian small-cap firms appear to overutilise debt as a control mechanism. There is somewhat weaker evidence that board independence and CEO ownership are beyond the optimum. The latter, given the relatively high degree of CEO ownership in Canadian small-cap firms, is consistent with management entrenchment. We also do not find any significant discount to performance for Quebec-based firms, or for firms with dual or multiple voting class shares structures. (shrink)

With the expansion of multinational corporations (MNCs), the alarming upsurge in widely publicized and notable corporate scandals involving MNCs in emerging markets has begun to draw both academic and managerial attention to look beyond home market practices to the pressing concern of CSR in emerging markets. Previous studies on CSR have focused primarily on Western markets, reserving limited discussions in addressing the issue of MNC attitudes and CSR practices in their emerging host markets abroad. Despite this incongruity in academic response (...) to CSR in emerging markets, managers of multinational companies continue to face mounting and most often conflicting pressures to weigh among multiple strategic CSR responses in emerging markets. Such a task is often further complicated by the complexity of varying business norms and standards, regulatory environments, and stakeholder demands for CSR across national boundaries. With such a challenge in mind, I attempt to examine the explanatory factors in leading MNCs, otherwise recognized for accountability and integrity in their home markets, to employ inconsistent or negligent practices under CSR pressure in Chinese emerging economy. Preliminary findings reveal that discrepancies exist in how MNCs perform in CSR in home countries versus in host countries. While MNCs do have much to improve, the institutional environment in the emerging market, including the legal framework and the ethical culture, also needs to be improved by the host country governments, the industry associations, and local firms. Meanwhile, media interest and journalists, NGOs, third party monitors, industry stakeholders as well as consumer advocacy groups can raise the visibility of MNC's contradictory practices between their origin nations and countries with emerging economies and offer the pressures and incentives for MNCs to amend their ethical short-comings. This article also suggests implications for both theory and practice. (shrink)

Firms have traditionally responded to environmental violations by increasing information disclosure and/or communication to manage stakeholder perceptions. As such, these approaches may be symbolic in nature, with no genuine intention to improve the environment. We draw from restorative justice grounded in stakeholder theory and explore a relatively new approach in the form of supplemental environmental projects aimed at restoring the environment, and empirically examine the role of corporate governance in firms’ decisions to undertake reparative actions. Using environmental violations and (...) SEPs data from the US Environmental Protection Agency between 2002 and 2015, we find that firms with smaller boards are more likely to undertake SEPs. We also find that firms with higher board independence and CEO duality undertake SEPs more frequently; however, board gender diversity and the existence of a sustainability committee appear to have no impacts. These results are robust to propensity score matching and an alternative data source. We extend the scope of stakeholder theory by emphasizing a new approach—restorative justice—by which corporations can repair damaged relationships and also improve the environment. We also contribute to corporate governance and environmentalism literature by identifying governance structures that promote environmental restorative justice. Thus, our study will inform different stakeholders, including regulators, shareholders, and boards of directors, and will open new avenues for business ethics scholarship. (shrink)

This article empirically examines how the performance of Indian manufacturing corporations is affected by corporate governance practices. The study has used panel data comprising of 76 manufacturing companies listed in BSE, for a consecutive six-year period, from 2015-2016 to 2020-2021. The study has applied panel data regression model to enquire the impact of ownership structure variables; and also board composition variables on firm performance using Tobin's Q and ROA. The findings reveal that ownership structure variables, board size and (...) multiplicity of the board positively affect both ROA and Tobin's Q. While independent board and women director show positive effect on Tobin's Q, the CEO-duality is negatively associated with Tobin's Q. The study suggests policymakers to enhance the multiplicity of directors and gender diversity, to maintain the right proportion of board independency, and to increase the size of board. Policymakers may also restrict the CEO to play dual role.Keywordsboard composition, ownership structure, CEO-duality, Tobin's Q. (shrink)

Using a contingency theory framework, this study examines the relationship between a firm’s business-government relations (BGR) strategy, BGR structure, and BGR performance. Based on previous work, the study hypothesizes that BGR strategy determines, in part, the structure of the public affairs function, as well as the function’s effectiveness. Furthermore, the study contends that an appropriate fit between BGR strategy and BGR structure leads to improved BGR performance. Results indicate that there is a positive association between BGR strategies (buffering and (...) bridging) and BGR performance. There is also a positive association between BGR strategy and BGR formalization (structure). However, the study finds no direct association between BGR structure and performance. Further analysis reveals that it is a fit between a firm’s BGR strategy and BGR structure that leads to improved BGR performance. The associations between strategy, structure, fit, and performance offer empirical support for the relevance of the contingency theory framework to BGR research. (shrink)

Whether firms can be said to be moral agents and to have the capacity for moral responsibility has significant practical consequences. In most legal systems in the world, business firms are recognized as persons with the ability to own property, to maintain and defend lawsuits, and to self-organize governance structures. To recognize that these business persons can also act morally or immorally as organizations, however, would justify the imposition of other legal constraints and normative expectations on organizations. In (...) the criminal law, for example, the idea that an organized firm may itself have criminal culpability is accepted in many countries (such as the United States) but rejected in others (such as Germany). This book collects new contributions by leading business scholars in business ethics, philosophy, and related disciplines to extend our understanding of the moral responsibility of firms. (shrink)

Corporate governance is an issue of growing importance in developing economies, as many firms pass through significant transformations due to the combined forces of sociopolitical changes, technological progress and economic trends toward globalization. These elements, along with the structural characteristics of developing economies such as less developed capital markets and governmental interventionism, draw a picture for corporate governance practices that may, in some aspects, be fundamentally different from the practices found in European or North American contexts. In this (...) paper we review and discuss the state of corporate governance practices in Brazil, focusing on how the governance structure of Brazilian firms has been subjected to important changes in the recent past and how even more changes are expected to happen. (shrink)

In this paper, we present and test a theory of how political connectedness affects corporate governance and productive efficiency of firms. Our model predicts that underdeveloped democratic institutions that do not punish political corruption result in political connectedness of firms that in turn has a negative effect on performance. We test this prediction on an almost complete population of Slovenian joint-stock companies with 100 or more employees. Using the data on supervisory board structure, together with balance sheet and income (...) statement data for 2000–2010, we show that a higher share of politically connected supervisory board members leads to lower productivity. (shrink)

This research examines how firms' environmental, social and governance (ESG) performance impacts their capacity utilisation using data from listed firms in China from 2009 to 2022. We find that firms' ESG performance significantly elevates their capacity utilisation with an inverted U-shaped relationship. All three dimensions of ESG—environmental performance, social responsibility and governance—positively affect capacity utilisation, addressing gaps in enhancing firms' capacity utilisation through ESG practices. We identify an indirect transmission channel through which firms' ESG practices influence capacity utilisation, (...) marking a pioneering discovery in our study. Using structural equation modelling (SEM), we confirm that firms' ESG practices enhance capacity utilisation by improving competitiveness and customer stickiness. Additionally, we discuss potential heterogeneity in the impact of ESG performance on capacity utilisation, considering factors such as ownership structure, industry, financial constraints and equity arrangements. Our findings provide insights for governments and companies aiming to incorporate ESG principles into their decision-making processes to enhance capacity utilisation. (shrink)

This article draws on key models of monitoring and blockholding articulated in the incomplete contracts theory of the firm. Under incomplete contracts theory, different governance systems have incentive structures that entail different tradeoffs—tradeoffs between ownership concentration and liquidity, between monitoring and management initiative, and between private rent-seeking and activity benefiting shareholders as a group. The tradeoffs delimit opportunities for productive cross-reference. More specifically, blockholder systems, such as those in Europe, subsidize monitoring by permitting blockholders to reap private (...) benefits of control through self-dealing and insider trading. Market systems, such as those in the United States and Britain, regulate such private rent-seeking toward the end of maintaining an institutional framework that supports diffuse share ownership and liquid trading markets. It follows that a legal framework conducive to blockholding may be ill-equipped to foster dispersed equity ownership and thick trading markets and that a legal framework conducive to liquid trading markets may have properties that discourage blockholding. This gives rise to questions for law reform agendas on both sides of the Atlantic. In the United States, proponents ask for deregulation of controls on institutional investors, looking to encourage blockholding and more effective monitoring. In Europe, proponents ask for stronger securities regulation, looking to encourage deeper trading markets. This article suggests that each reform program may lead to disappointing results because neither assures conforming adjustments to the pertinent actors’ incentives. Alternatively, strict reforms that materially change prevailing incentive patterns could perversely destabilize workable arrangements without assuring the appearance of more effective alternatives. (shrink)

Among the various institutional structures of an economy like the firm and the marketplace is one that is like no other. Science is unique. This uniqueness raises an important question: why does science exist? From an economic perspective, there are two potentially meaningful approaches to the existence of science. They both encompass institutional pluralism. A substitutes theory of comparative institutions presupposes the primacy of the commercial marketplace over firms—that firms substitute for the market when markets fail. This theory (...) has not been used to explain the existence of science. A complements theory postulates that many simultaneous institutional responses, including science, are necessary for creating an efficient and equitable economy. The economic function of science is to produce fundamental theoretical abstractions about our world. Scientific theories are public goods that would not likely be produced within the governance structures of commercial markets and firms. The aim is to complement but not supplant traditional philosophical answers that science exists to discover truth and knowledge. (shrink)

Recent scandals allegedly linked to CEO compensation have brought executive compensation and perquisites to the forefront of debate about constraining executive compensation and reforming the associated corporate governance structure. We briefly describe the structure of executive compensation, and the agency theory framework that has commonly been used to conceptualize executives acting on behalf of shareholders. We detail some criticisms of executive compensation and associated ethical issues, and then discuss what previous research suggests are likely intended and unintended consequences of (...) some widely proposed executive compensation reforms. We explicitly discuss the following recommendations for reform: require greater independence of compensation committees, require executives to hold equity in the corporation, require greater disclosure of executive compensation, increase institutional investor involvement in corporate governance (including executive compensation), and require firms to expense stock options on their income statements. We provide a brief summary discussion of ethical issues related to executive compensation, and describe possible future research. (shrink)

The paper discusses the structure, applications, and plausibility of the much-used parallel-case argument for workplace democracy. The argument rests on an analogy between firms and states according to which the justification of democracy in the state implies its justification in the workplace. The contribution of the paper is threefold. First, the argument is illustrated by applying it to two usual objections to workplace democracy, namely, that employees lack the expertise required to run a firm and that only capital suppliers (...) should have a say over the governance of the firm. Second, the structure of the argument is unfolded. Third, two salient similarities between firms and states regarding their internal and external effects and the standing of their members are addressed in order to asses the potential and limits of the argument, as well as three relevant differences regarding the voluntariness of their membership, the narrowness of their goals, and the stiffness of the competition they face. After considering these similarities and differences, the paper contends that the the parallel-case argument provides a sound reason in favor of democracy in the workplace—a reason, however, that needs to be importantly qualified and that is only pro tanto. (shrink)

Under conditions of growing interconnectedness of the global economy, more and more stakeholders are exposed to risks and costs resulting from business activities that are neither regulated nor compensated for by means of national governance. The changing distribution of risks poses a threat to the legitimacy of business firms that normally derive their legitimacy from operating in compliance with the legal rules of democratic nation states. However, during the process of globalization, the regulatory power of nation states has been (...) weakened and many production processes have been shifted to states with weak regulatory frameworks where businesses operate outside the reach of the democratic nation state. As a result, business firms have to address the various legitimacy challenges of their operations directly and cannot rely upon the legitimacy of their regulatory environment. These developments challenge the dominant approach to corporate governance that regards shareholders as the only stakeholder group in need of special protection due to risks not covered by contracts and legal regulations. On the basis of these considerations, we argue for a democratization of corporate governance structures in order to compensate for the governance deficits in their regulatory environment and to cope with the changing allocation of risks and costs. By way of democratic involvement of various stakeholders, business firms may be able to mitigate the redistribution of individual risk and address the resulting legitimacy deficits even when operating under conditions of regulatory gaps and governance failure. (shrink)

This paper posits that differences in corporate governance structure partly result from differences in institutional arrangements linked to business systems. We developed a new international triad of business systems: the Anglo-American, the Communitarian and the Emerging system, building on the frameworks of Choi et al. (British Academy of Management (Kynoch Birmingham) 1996, Management International Review 39, 257–279, 1999). A common factor determining the success of a corporate governance structure is the extent to which it is transparent to market (...) forces. Such transparency is more than pure financial transparency; as it can also be based on factors such as governmental, banking and other types of institutional transparency mechanism. There may also be a choice for firms to adopt voluntary corporate disclosure in situations where mandatory disclosure is not established. The Asian financial crisis of 1997–1999 and the more recent corporate governance scandals such as Enron, Andersen and Worldcom in the United States and Ahold and Parmalat in Europe show that corporate governance and business ethics issues exist throughout the world. As an illustration we focus on Asia’s emerging1 markets, as, both in view of the pressure of globalization and taking into account the institutional arrangements peculiar to the emerging business system, these issues are important there. Particularly for those who have to find an accommodation between the corporate governance structures and disclosure standards of the Emerging system and those of the Anglo-American and Communitarian systems. (shrink)

This longitudinal case study identifies corporate governance responses in a Chinese state-owned enterprise facing institutional logic multiplicity and demands to shoulder sociopolitical responsibilities beyond economic responsibility. We find that overseas listing led to the incorporation of market logic into an enterprise in which party-state logic prevailed. The prioritization of sociopolitical responsibilities vis-à-vis economic responsibility has shifted through three phases, reflecting changes in institutional logic centrality amid changing politico-institutional and firm conditions. In response, the enterprise developed hybrid corporate (...) class='Hi'>governance structures based first on decoupling (2001–2011) and then on translation of a “foreign” corporate governance model to fit the domestic context (2012–2016) but has since sought to dehybridize by strengthening the state-controlled governance structure (2017–2019). Our study contributes to the varieties-of-capitalism approach to corporate governance and offers perspectives on institutional change, institutional logic, and hybrid organizing as well as the implicit ethical issue. (shrink)

Global health and environmental wellbeing are mutually reinforcing and interdependent. This mutuality invokes two major analytical orientations: it emphasizes a direct nexus between ecological strategies and global health outcomes. These in turn revitalize the essential quest for comprehensive policies and responsible strategies for enhancing both ecology and health within the discourse of sustainability. With orientation towards political conception of corporate responsibility, I problematize the root questions of the democratic embeddedness of the firm under conditions of weakened institutional structures. (...) I highlight the inherent power relations in global health and ecological governance through literature mapping. I address the question: Why and how might ecological strategies be embedded in corporate day-to-day actions to produce optimal outcomes that have positive effects on global health and human dignity? Besides resource and ethical/political constraints, there are several micro-political, geopolitical, industrial, institutional and structural impediments to ecological and health sustainability. This grim diagnosis is clearly a description of a ‘disturbingly fascinating’ pathology of global capitalism whose industrial effects culminate in the accumulation of more profits for a few at the expense of the ecological sustainability of the majority. That notwithstanding, there are several grounds for optimism with a move from anthropocentrism to humanistic eco-centrism via deliberative democratic procedures. Here, the centrality of human dignity is emphasized. This study provides an interdisciplinary theoretical model that seeks to reorient strategies towards restoration, protection, mitigation, adaptation, harm avoidance and innovative sustainability of the whole economic gamut and biodiversity that supports global health. Thus, I rearticulate ecological sustainability in terms of its most fundamental means and end: sustainable global health and the tutelage of human dignity. (shrink)

Business firms play an increasingly influential role in contemporary societies, which has led many scholars to return to the question of the democratisation of corporate governance. However, the possibility of democratic deliberation within firms has received only marginal attention in the current debate. This article fills this gap in the literature by making a normative case for democratic deliberation at the workplace and empirically assessing the deliberative capacity of self-organised teams within business firms. It is based on sixteen in-depth (...) interviews in six German firms which practice various forms of self-organised teamwork. The article argues that self-organised teamwork can create a space for authentic, inclusive, and consequential deliberation by suspending authoritarian control structures within business firms. Finally, the article proposes the consideration of firms not only as necessary parts of a larger deliberative system but also as deliberative systems in themselves. (shrink)

This paper presents an examination of the relationship between the presence and composition of a corporate social responsibility (CSR) committee on the corporate governance board and CSR decoupling. Using a sample of listed firms drawn from 41 countries, we found that the presence of a CSR committee on the corporate board is negatively associated with CSR decoupling. We also noted that the nature of the industry to which a firm belongs, a firm's level of CSR orientation, and (...) corporate governance quality strengthen such association. Further analysis of the relationship between the structure of the CSR committee and CSR decoupling shows that larger CSR committee size and a greater independence and longer tenure of its members negatively affect CSR decoupling. Our results are robust to various alternative specifications and offer important research and managerial implications. The findings of this study contribute to the growing literature on corporate governance and CSR. (shrink)

Abstract:This article addresses the issue of whether and to what extent moral values can be attributed to collective actors. The paper starts from the premise that business ethics as the ethics of an organization is to be distinguished from the virtues of its members. This point is elaborated in both economic- and organization-theoretic terms within the framework of the New Economics of Organization. The result is the development of a concept of governance ethics. The ethics of governance is (...) about the incorporation of moral conditions and requirements in the management, governance, and control structures of a firm. This is the contextual precondition for the long-lasting and beneficial effects of the virtues of individuals within the organizations. (shrink)

Board composition, insider participation on compensation committees, and director compensation practices can potentially cause conflicts of interest between directors and shareholders. If these corporate governance structures result in situations where actions beneficial to directors do not also benefit shareholders, then shareholders may suffer.Corporate ethics programs usually address conflicts of interest that may arise in the firm''s activities. Some boards of directors take active roles in their firms'' ethics programs by actively overseeing the programs. This paper empirically examines (...) the relationship between ethics programs and potential conflicts of interest and the relationship between board involvement in a firm''s ethics program and potential conflicts of interest. (shrink)

This study aims at analyzing the board structure and its impact on firm performance in the context of an emerging economy, Turkey. Emerging economies are characterised by poorly-developed legal systems, under-developed markets for corporate control and concentrated ownership structures. This context is expected to have an impact not only on the board structure but also on the relationship between board structure and firm performance. Drawing from agency, stewardship and resource dependence theories and emphasising the impact of the (...) societal context in line with macro institutional approaches, hypotheses are developed regarding the board structure/firm performance relationship. Findings tend to show that board structure does not have a significant impact on performance. (shrink)

This article examines the influence of the City law firms, operating through their representative body, the City of London Law Society, in shaping the?professional rules governing conflicts of interest in England and Wales, including a recent failed attempt to allow firms to act for sophisticated clients on either side of the same transaction.? It compares English developments with those in the US and Canada finding that, in all three, it is argued that conflicts rules should be relaxed to meet the (...) needs of sophisticated clients and address the economic realities of legal practice. It argues however that in England the CLLS lobbied for change to promote the economic interests of large law firms whilst paying scant regard to the public interests in publicly owned companies having independent representation, in lawyers maintaining independence from powerful clients, in promoting competition, and in maintaining public confidence in the profession.?It considers what this tells us about corporate lawyers? approach to their professional role. Finally it considers the future of conflicts regulation in large firms in England and Wales given the introduction of alternative business structures and the move to principles based, outcomes focussed, and entity regulation. (shrink)

While previous research considering the emergence of strategic alliances has typically viewed their formation through a single theoretical lens, we suggest that multiple theoretical perspectives are needed to understand their complexity. This research conceptually integrates the resource-based view and institutional theory to assess variations in firm-level motivations to form strategic alliances. Applying these ideas to the context of complex environmental problems, we propose that strategic alliances typically are either competency- or legitimacy-oriented, and that four structural dimensions characterize both types (...) of alliances—organization learning, partner diversity, governance structure, and partner relations. We present research propositions that describe how alliances differ along these dimensions, and offer an important broader perspective on alliance formation that is applicable towards understanding their strategic and social outcomes. (shrink)

Employing a unique dataset of Chinese non-listed firms, this paper investigates the effects of the presence of 19 governance structures on 20 employees’ interest indicators. In general, we find that firms with the governance structures pay workers higher hourly wages, require less monthly working hours, and have a smaller chance of wage arrears. Meanwhile, the shares of total wage and welfare expenditures in total sales revenue are lower in these firms, which results in higher profitability. Moreover, (...) firms with the governance structures invest significantly more into training and provide employees with better fringe benefits. Considering the low labor protection standard and the weak external regulations of China’s labor market, we explain the positive findings thusly: corporate governance structures induce managers to adjust wage payments to the “efficiency wage” level, which is the best balance point for the interests of both shareholders and employees and, therefore, for maintaining the stakeholder relationships. We also find the governance structures that give blockholders superpower are negatively associated with employees interests. These results highlight the importance of giving enough discretion to managers in order to successfully find the common ground for creating mutual values for shareholders and employees. (shrink)

This study aims at analyzing the board structure and its impact on firm performance in the context of an emerging economy, Turkey. Emerging economies are characterised by poorly-developed legal systems, under-developed markets for corporate control and concentrated ownership structures. This context is expected to have an impact not only on the board structure but also on the relationship between board structure and firm performance. Drawing from agency, stewardship and resource dependence theories and emphasising the impact of the (...) societal context in line with macro institutional approaches, hypotheses are developed regarding the board structure/firm performance relationship. Findings tend to show that board structure does not have a significant impact on performance. (shrink)

This article seeks to bring a focus to the significance of trade and finance in corporate governance outcomes. It explores the theoretical and historical link between micro-economic-level firm structure and macro-economic institutions such as trade and finance. The more open the economy, it argues, the more difficult it is in the long run to sustain an insider model. It then argues that changes in interdependent aspects of macro-economic policy in the UK and the US—primarily trade liberalization and the (...) end of capital controls—combined with the presence of developed capital markets and a self-regulatory ethos, allowed institutional investors to refocus the market-level rules on shareholders despite the managerial bias of their legal systems, and enabled the emergence of the outsider shareholder-oriented systems present there today. The article then argues that core insider systems such as those in Germany and France operated with different financing arrangements which meant that they were less susceptible to immediate change. However, in the long run global economic conditions have continued to push shareholder-oriented norms on insider systems. The article concludes that if these conditions persist, then governments will lose, or may indeed already have lost, sovereignty with regard to choice of corporate governance system. (shrink)

This book brings together in one place the work of one of our most respected economic theorists, on a field in which he has played a large part in originating: the New Institutional Economics. Transaction cost economics, which studies the governance of contractual relations, is the branch of the New Institutional Economics with which Oliver Williamson is especially associated.Transaction cost economics takes issue with one of the fundamental building blocks in microeconomics: the theory of the firm. Whereas orthodox (...) economics describes the firm in technological terms, as a production function, transaction cost economics describes the firm in organizational terms, as a governance structure. Alternative feasible forms of organization--firms, markets, hybrids, bureaus--are examined comparatively. The analytical action resides in the details of transactions and the mechanisms of governance.Transaction cost economics has had a pervasive influence on current economic thought about how and why institutions function as they do, and it has become a practical framework for research in organizations by representatives of a variety of disciplines. Through a transaction cost analysis, The Mechanisms of Governance shows how and why simple contracts give way to complex contracts and internal organization as the hazards of contracting build up. That complicates the study of economic organization, but a richer and more relevant theory of organization is the result. Many testable implications and lessons for public policy accrue to this framework. Applications of both kinds are numerous and growing.Written by one of the leading economic theorists of our time, The Mechanisms of Governance is sure to be an important work for years to come. It will be of interest to scholars and students of economics, organization, management, and law. (shrink)

Although personal attributes have gained recognition as an important area of effective corporate governance, scholarship has largely overlooked the value and implications of individual virtue in governance practice. We explore how authenticity—a personal and morally significant virtue—affects the primary monitoring and strategy functions of the board of directors as well as core processes concerning director selection, cultivation, and enactment by the board. While the predominant focus in corporate governance research has been on structural factors that influence (...) class='Hi'>firm financial outcomes, this paper shifts attention to the role of authenticity and its relationship to individual board member qualities and collective board activities. We explore how authenticity has the potential to influence board dynamics and decision making and to enhance transparency and accountability. (shrink)

This study provides comprehensive evidence on the link between boardroom diversity and reduction of carbon emissions. Analyzing data from a sample of 344 UK-listed non-financial and unregulated firms over the period from 2005 to 2021, our findings indicate that task-oriented (i.e., tenure) and structural (i.e., insider/outsider) board diversity are important for reducing corporate carbon emissions while relational diversity does not appear to be useful. Furthermore, the study explores the role of external carbon governance, such as the Paris Agreement, on (...) firms with weaker internal governance structures. The findings reveal that external governance plays a critical role in curbing emissions when internal governance is not effective. Overall, our research offers valuable insights for management and regulatory bodies on the interplay between various governance mechanisms internal and external to a firm. This knowledge could guide them in determining the right mix and degree of diversity in the boardroom to achieve environmental goals. (shrink)

In this article, we examine the factors determining the representation of women on boards of directors by considering three main questions. The first question deals with the relationship between characteristics of ownership and governance on one side, and female directorship on the other. The second major question concerns the demographic attributes of women directors, such as nationality, foreign experience, educational level, business expertise, and connections to external sources. The third important question refers to women in senior positions on French (...) boards (e.g., as independent members or board subcommittee members) in relation to firm characteristics and women’s demographic attributes. Our study focuses on French large- and mid-capitalized companies belonging to the SBF120 stock market index during a 5-year period running from 2000 to 2004. First, our results give evidence that the appointment of women directors is strongly related to family ownership and board or firm size. Second, the appointment of women directors is related to their professional services, valuable skills, and network links. Furthermore, we show that women face a double glass-ceiling problem, and note that French firms rely more on the demographic attributes of their women directors when they are appointed to senior board positions. Our study sheds light on issues concerning the law that comes into force in 2016, which imposes quotas of women members on boards of directors in French companies. (shrink)

The United Nations Global Compact is one of the largest transnational governance schemes. Its success or failure, however, is a matter of debate. Drawing on research in cognitive linguistics, we argue that when evaluators discuss the UNGC, they apply the metaphorical concept of the family: the UNGC corresponds to the “family,” the UNGC headquarter to the “parent” and the business participants of the UNGC to the “children” of the family. As a corollary, evaluators’ implicit understanding of how a family (...) is best organized sets different benchmarks against which the governance structure of the UNGC is assessed. We describe two ideal models of “educating” UNGC business participants. Critics of the UNGC adopt a “strict father” model of transnational governance based on the idea that the proper education of inherently “bad” business firms necessitates obedience, discipline and punishment in case firms are non-compliant. In contrast, the UNGC’s advocates follow a “nurturant parent” model, which prioritizes empathy, learning and nurturance to support the moral development of “good” business firms. We develop the “UNGC-as-family” metaphor, explore its implications for transnational governance and discuss under what conditions these idealized models can serve as appropriate guidelines for TGSs. Specifically, we posit that following the behavioral prescriptions of the “strict father” model may, under certain conditions, jeopardize the organizational embedding and institutionalization of UNGC principles, and explain when and why it may be in the best interest of the UNGC and civil society to embrace the instructions of the “nurturant parent” model of transnational governance. (shrink)

The extant literature has examined the effects of ownership structures on corporate social responsibility, yet it has overlooked the non-linear and interactive effects among major shareholder groups. In this study, we examine the non-linear effects of insider and institutional ownerships on CSR. We also examine whether it is necessary to have both incentive alignment and monitoring mechanisms or it is sufficient to have either mechanism to promote CSR. Using a sample of the U.S. Fortune 1000 firms, our results suggest (...) that insider and institutional ownerships have non-linear effects on CSR. We also find support for the complementary mechanisms view, in that the highest CSR rating is observed when both ownership levels are high. Therefore, firms need to maintain strong governance structures to realize synergistic effects in promoting CSR. Our findings provide a more in-depth understanding of the relationships between ownership structures and corporate social outcomes. (shrink)

This article investigates the distribution of power in Poland’s drug reimbursement policy in the early 2000s. We examine competing theoretical expectations suggested by neopluralism, historical institutionalism, corporate domination, and clique theory of the post-communist state, using data from a purposive sample of 109 semi-structured interviews and documentary sources. We have four concrete findings. First, we uncovered rapid growth in budgetary spending on expensive drugs for narrow groups of patients. Second, to achieve these favorable policy outcomes drug companies employed two prevalent (...) methods of lobbying: informal persuasion of key members of local cliques and endorsements expressed by patient organizations acting as seemingly independent “third parties.” Third, medical experts were co-opted by multinational drug companies because they relied on these firms for scientific and financial resources that were crucial for their professional success. Finally, there was one-way social mobility from the state to the pharmaceutical sector, not the “revolving door” pattern familiar from advanced capitalist countries, with deleterious consequences for state capacity. Overall, the data best supported a combination of corporate domination and clique theory: drug reimbursement in Poland was dominated by Western multinationals in collaboration with domestically based cliques. (shrink)