Search Results (13)

In contemporary times, energy sustainability and security have become essential economic concerns globally. Nonetheless, in addition to these concerns, inadequate governance inside a corporation within the energy industry may result in corruption and energy instability within the sector. The primary purpose of this study was to examine the influence of a new array of corporate governance controversies on the energy security of 102 listed energy businesses in Europe. To achieve the purpose of this study, entropy weight and TOPSIS multicriteria approaches were used. The data were obtained from the Refinitiv Eikon database for fiscal year 2024. The findings reveal that the most significant influence, among the identified governance concerns that affect the energy security of European energy corporations, is the detrimental effect of the directors’ people. Moreover, the criteria that constitute bribery, corruption, and fraud scandals seem to be the second most significant element affecting the energy security of the enterprises in this industry. The risk of corruption in governance is exacerbated in the realm of renewable energy due to several converging factors: the urgent demands to implement new projects in response to the climate crisis, apprehensions regarding energy security, potential access to lucrative contracts, and the existence of ‘rent-seeking’ gatekeepers within the processes central to the development and operation of renewable energy assets. Full article

The fraud triangle has long served as a fundamental model for understanding corporate fraud, emphasizing opportunity, pressure, and rationalization. Over time, this framework evolved with the fraud diamond, which introduced capability; the fraud pentagon, which added arrogance; and the fraud hexagon, which incorporated collusion and reshaped arrogance. Building on these developments, this study proposes a seventh dimension: the pleasure and thrill of risk-taking. This psychological factor highlights the gratification that some individuals derive from engaging in fraud as a high-stakes game. Through a qualitative analysis of five major corporate fraud cases—Société Générale, Enron, Wirecard, Parmalat, and Theranos—this study highlights the presence of this additional motivational factor. By introducing the fraud polygon, this research provides a more comprehensive framework for understanding corporate fraud’s multifaceted nature. This model has significant implications for both academic research and practical fraud prevention, offering insights into the interplay between systemic vulnerabilities and intrinsic motivations. Full article

Our investigation examined the impact of ESG (Environmental, Social, and Governance) activities on corporate financial distress. This research utilised data from companies listed in the FTSE All-Share index from 2014 to 2022 from the Refinitiv EIKON database. We incorporated year- and industry-fixed effects into our analysis to address changing economic conditions and industry-specific effects. ESG scores were used as a proxy for ESG activities, while Z-scores were utilised to gauge financial distress. The results unveiled a compelling trend: ESG activities showcased a negative correlation with financial distress, implying that companies actively involved in ESG actions are less likely to face default, even after incorporating several robustness and endogeneity tests. Moreover, when examining the role of bribery, corruption, and fraud issues (negative issues) as a moderating factor, our findings revealed that lower negative issues strengthen the negative relationship between ESG (governance pillar) and financial distress. This suggests that governance mechanisms effectively reduce financial distress in less corrupt environments, where institutional quality supports properly implementing governance practices. These findings offer valuable insights for companies seeking to mitigate financial distress by adopting ESG strategies. Full article

Family businesses have distinct characteristics that differentiate them from other firms. Researchers must meticulously analyze issues, with a specific focus on the interplay of family business dynamics, considering this factor. The main objective of this research was to provide insight into the adverse effects of family companies, particularly how the power dynamics inside these organizations might enable corruption or fraud and how corporate governance can help in mitigating these phenomena. Specifically, family businesses can be investigated by considering unique characteristics such as ownership and control, generational dynamics, and corporate governance. To address the study topic, a bibliometric analysis was conducted using the R statistical programming language and the bibliometric tools Biblioshiny and VOSviewer. Data were obtained from the Scopus database and examined in documents. The lack of unbiased external evaluation, the ineffectiveness of internal audits, disputes between different generations, the dominance of family members, and the narrow extent of governance all contribute to the exacerbation of tensions that promote corruption inside family firms. Moreover, the findings indicate that CEO duality correlates with the occurrence of corruption and fraudulent activities, such as manipulating profits. Furthermore, the findings suggest a correlation between the qualities of the board and instances of corruption and bribery inside family firms. These factors also increase the probability of financial statement fraud. Full article

There is an increasing trend in bribery practices among employees (corporate bribery), especially from emerging economies, where developed countries, including the USA, have enormous interests in various aspects of local and international trade. Therefore, this study aims to examine the influence of organisations’ culture and outcome orientation, as well as the stability culture dimensions of Organisation Culture Profile (OCP), in order to combat corporate bribery practices, as an aspect of corporate sustainability practices, and their subsequent impact on both organisational financial and non-financial performance. The study surveyed mid-to-top level managers of a total of 201 organisations from Bangladesh. The survey data were used to develop a structural equation model (SEM) by utilising the AMOS (26th version) software, and thus tested the developed hypotheses on the study variables. The findings provide evidence of the positive influence of the two dimensions (outcome orientation and stability) of organisations’ culture in combating bribery practices within organisations. The findings highlight the positive impact of combating bribery practices on both organisations’ financial and non-financial performance. Our empirical findings contribute to the existing limited bribery-related corporate sustainability literature, with the goal of achieving suitable organisation culture in order to minimise unethical business practices, specifically bribery practices. The findings provide practical implications for practitioners and policymakers due to the discovery of the importance of having congenial corporate culture, in order to promote and enhance corporate sustainability practices by reducing the likelihood of poor practices by employees, i.e., taking or offering bribes to business partners. Full article

This paper considers the anti-corruption disclosure reporting of the large UK-quoted extractive companies from 2003 to 2019. This period includes the introduction of the 2010 UK Bribery Act, which might be expected to influence corporate disclosure. It takes content analysis metrics from the environmental reporting literature, which is a more developed area of research, and considers an area with a higher volume of corporate disclosures. It applies these metrics to investigate the trends in corruption reporting over time and the impact of the introduction of the Act on reporting breadth and depth. We find that some of the metrics would appear to add more insight than others in this new context. We conclude that the volume of reporting has grown over time, but this would seem to be in breadth, more questions addressed rather than more depth to the answers given. There has been a step-change in reporting since the introduction of the Act, though concluding whether this has increased quality may depend on your perspective and interest as a user of the information. Full article

The financial sector is characterized by complexity due to the management of a large volume of transactions, which can lead to the difficulty of considering, identifying, and monitoring them. The lack of mechanisms in monitoring and control transactions can contribute to the development of illegal practices within a company, such as fraud, corruption, bribery, and money laundering. These phenomena can affect financial institutions negatively. Therefore, the development of an appropriate corporate governance system can ensure to members of the board and executives in a company that any illegal practice can be detected. This study aims to highlight the factors that contribute to the development of illegal practices within European financial institutions. This can help executives to plan and mitigate the illicit practices that may emerge. For this purpose, a binary logit regression analysis on panel data from 2018 to 2020 was applied to 336 European financial companies. The findings of this research emphasize the crucial role of corporate governance in the prevention of the development of illicit issues within European financial institutions, while human resources can be characterized as a pathway to corruption. Both factors, corporate governance and human resources, are main pillars of environmental, social, and corporate governance (ESG), which indicates the need of the financial sector in Europe for the elaboration of anti-corruption strategies. Thus, companies within the sector can improve their ESG score. Full article

To engage in an effective corporate social responsibility (CSR) action, it is necessary to first recognise its impact on targeted buyers. This study surveyed respondents from Poland and Ukraine to analyse their perception of initiatives related to environmental protection and the effect of such initiatives on purchasing behaviour. The study demonstrated how consumers’ age, education level, or professional position influence their purchasing decisions and feedback on different kinds of CSR actions related to environmental protection. Of the five areas identified in the questionnaire (environmental protection, cooperation with the local community, corruption and bribery, labour and employment, and human rights), environmental protection was found to be the most important to consumers. These results may help in decision making regarding specific environmental CSR initiatives targeted at selected social groups living in this region of Europe. Full article

The Regulation of Transnational Bribery by Kevin E. Davis, strips out the universal character of illegitimate payments used to bribe public officials of foreign countries in the milieu of international business which has been known for years. The manuscript deals with various definitions of bribery as a transaction in which an official misuse his or her office “as a result of considerations of personal gain, which need not be monetary”. The book highlights the current debate about prohibiting transnational bribery. Such a debate is not about the practicality or desirability of the United States’ FCPA, which at one time was the only law in the world that efficiently banned transnational bribery. Full article

Sustainability is a central challenge of the fashion industry. In an era where Internet and social networks allow information to spread quickly, more consumers are familiar with the call for “ethical fashion” as disasters such as Rana Plaza resound worldwide. However, consumers interested in buying “ethical” clothing could have a hard time orienting themselves amongst the abundance of brands claiming to be ethical on the market. Consumers might make purchasing decisions based on their knowledge of a brand. In this context, it is imaginable that corporate social responsibility (CSR) communications, including codes of ethics, could constitute one way a consumer can learn more about a company’s values. These codes may serve a variety of purposes—they are undoubtedly one of the ways a brand communicates its commitment to ethical principles. Indeed, by analyzing the codes of ethics of some of the industry’s well-known brands, it is evident that they primarily focus on employment and workers’ rights (including equality and discrimination issues), labor safety standards, bribery and anti-corruption, counterfeiting and unfair business practices, as well as respect for (and sometimes improvement of) the environment. A company’s code of ethics is also a powerful tool for improving brand image by adopting a code that responds to the issues that consumers care about. It is therefore necessary to distinguish between companies that are truly ethical and those that merely appear so. In order to protect consumer confidence in such documents, a fil rouge across legal systems may be found (although the specific characteristics may vary greatly) in the laws that protect consumers from misleading advertising. Full article

This study examines the correlation between corporate governance and corruption (firm bribery) using 8885 firms in four emerging economies: Brazil, Russia, India, and China (BRICs). The sample firms are collected from the World Bank Enterprise Survey database. To estimate the corruption of a firm, a logistics regression is used. The dependent variable of the logistics regression is a dummy variable on firm bribery while the test variables are a corporate governance metric composed of an ownership structure proxied by the percentage of the largest ownership and that of foreign ownership, Chief Executive Officer (CEO) characteristics proxied by CEO gender and CEO experience in the same sector, and an external audit on a firm’s financial statements. We find that firm bribery is negatively associated with the percentage of the largest ownership and external audit on financial statements, but is positively related to CEO experience. These results suggest that increases in the largest ownership, external audits on financial statements, and a shorter tenure of a CEO in the same sector are negatively associated with firm bribery in BRICs. Full article

This article analyses how the monies generated for, and from, corporate financial crimes are controlled, concealed, and converted through the use of organisational structures in the form of otherwise legitimate corporate entities and arrangements that serve as vehicles for the management of illicit finances. Unlike the illicit markets and associated ‘organised crime groups’ and ‘criminal enterprises’ that are the normal focus of money laundering studies, corporate financial crimes involve ostensibly legitimate businesses operating within licit, transnational markets. Within these scenarios, we see corporations as primary offenders, as agents, and as facilitators of the administration of illicit finances. In all cases, organisational structures provide opportunities for managing illicit finances that individuals alone cannot access, but which require some element of third-party collaboration. In this article, we draw on data generated from our Partnership for Conflict, Crime, and Security Research (PaCCS)-funded project on the misuse of corporate structures and entities to manage illicit finances to make a methodological and substantive addition to the literature in this area. We analyse two cases from our research—corporate bribery in international business and corporate tax fraud—before discussing three main findings: (1) the ostensible legitimacy created through abuse of otherwise lawful business arrangements; (2) the effective anonymity and insulation afforded through such misuse; and (3) the necessity for facilitation by third-party professionals operating within a stratified market. The analysis improves our understanding of how and why business offenders misuse what are otherwise legitimate business structures, arrangements, and practices in their criminal enterprise. Full article

On 15 December 2016, new non-financial reporting requirements were implemented in the Polish Accounting Act (PAA) which would be enforced from 1 January 2017. This act resulted from the transposition of Directive 2014/95/EU. New requirements oblige certain groups of entities to disclose non-financial information on environmental, social and employee-related matters, respect for human rights, anti-corruption and bribery matters. The purpose of this paper is two-fold. Firstly, this study analyses the new non-financial reporting requirements implemented in PAA, which were created from the transposition of the Directive. Secondly, this study investigates the current extent and quality of corporate social responsibility (CSR) reporting in companies listed on the Warsaw Stock Exchange (WSE) and their compliance with the new requirements. The sample comprises 150 selected listed companies on the WSE. The data were collected from annual reports, separate CSR reports, and companies’ websites. Content analysis and a rating scale were used to measure the level of CSR disclosures. The results show that companies prefer annual reports to communicate voluntary CSR disclosures. In the majority of cases, CSR disclosure of companies were not compliant with the new requirements. Companies placed little emphasis on reporting about human rights and anti-corruption. This suggests that the new reporting obligation should increase the extent and quality of non-financial disclosure among Polish listed companies. Full article