Search Results (18)

At different lifecycle stages, enterprises possess differentiated resource endowments and innovation needs, leading to variations in the effect of carbon emission trading policies on their green innovation. This study analyzes the impact of China’s carbon emission trading policy on green innovation, using A-share listed firms in Shanghai and Shenzhen between 2010 and 2022 as samples, from the perspective of the enterprise lifecycle. The results validate the Porter hypothesis, showing that the policy stimulates green innovation, especially in the growth and maturity stages of enterprises. However, the extent of this impact varies across enterprise scale heterogeneity, heterogeneity in the proportion of independent directors, heterogeneity in the level of green innovation and regional heterogeneity. The carbon emission trading policies can mitigate financing constraints and improve capital investment to foster green innovation, especially for mature enterprises. The findings not only enhance the theoretical investigation of flexible market-oriented environmental regulatory mechanisms but also provide valuable insights for advancing the growth of China’s low-carbon economy. Full article

The growing presence of women at the top of companies has sparked interest in examining their role in the remuneration gap between senior managers and employees. This article analyses the traditional Chief Executive Officer (CEO)-to-employee pay ratio but includes a new relation, the senior-management-to-employee pay ratio, and extends the research by including six positions for women in company management: on the board of directors, executive directors, CEOs, proprietary directors, independent directors, and senior managers. The study is based on a sample of 77 listed companies in Spain from 2015 to 2022 and the panel data models have been estimated using the Generalised Method of Moments (GMM). The main findings indicate that the proportion of women in different categories of board and senior management positions has a positive effect on the CEO-to-employee pay ratio, especially in companies with higher market capitalisation. In contrast, the proportion of women in senior management positions has a negative effect on the CEO-to-employee pay ratio in all the samples analysed. Government agencies should prioritise the participation of women in non-board senior management positions in order to at least reduce the pay gap between senior managers and employees. Full article

In this in-depth study, we explored the nuanced dynamics of boardroom gender diversity and its consequential impact on sustainability reporting within the U.S. Healthcare sector. Leveraging a comprehensive dataset from Refinitiv Eikon, our analysis spanned a spectrum of 646 observations across 57 healthcare entities listed in the S&P 500, covering the period from 2010 to 2021. Our methodology combined various empirical techniques to dissect correlations, unravel heterogeneity, and account for potentially omitted variables. Central to our findings is the discovery that various metrics of board gender diversity, such as the proportion of female directors and the Blau and Shannon diversity indices, exhibit a robust and positive correlation with the intensity and quality of sustainability reporting. This correlation persists even when controlling for a multitude of factors, including elements of corporate governance (such as board size, independence, and meeting attendance), as well as intrinsic firm characteristics (such as size, profitability, growth potential, and leverage). The presence of female directors appears to not only bolster the breadth and depth of sustainability reporting but also align with a broader perspective that their inclusion in boardrooms significantly influences corporate reporting practices. These insights extend beyond academic discourse by offering tangible and actionable intelligence for policymakers and corporate decision-makers. By elucidating the intrinsic value of gender diversity in governance, our study contributes a compelling argument for bolstering female representation in leadership roles as a catalyst for enhanced corporate responsibility and stakeholder engagement. Full article

The COVID-19 pandemic has had a dreadful influence on both economic activities and human life, in view of which management has to play a strategic role to focus on effective board leadership in order to optimize firm performance. The present study analyses the role of corporate governance practices in determining firm performance during the pandemic. A total of 151 non-financial companies from 11 diversified industries representing the NIFTY200 index for two years, 2019–2020 (pre-COVID-19) and 2020–2021 (duringCOVID-19), were selected. Paired sample t-tests, panel data regression, and one-way ANOVA were used for the analysis. The findings confirm that there is a significant difference between some corporate governance practices (board size, board independence, board’s female proportion, board attendance, and audit committee size) as well as financial performance (Tobin’s Q) before and during the COVID-19 period. The regression results of the full sample show that only board busyness has a positive and significant impact on ROA and Tobin’s Q. However, after splitting the sample year-wise, board size and audit committee meetings positively affected ROA during COVID-19. On the other hand, board independence had a negative influence. Female directors and audit committee meetings positively affected ROA in the pre-COVID-19 period, while board busyness had a negative influence. The results of one-way ANOVA show a substantial difference in the financial performance among industries. Full article

In accordance with the segregation of oversight from management decision making, the board-level information technology governance is accountable for supervising managerial IT activities. This research empirically analyzes the impact of board-level IT governance on the performance and earnings management practices of Saudi Arabian stock exchange (Tadawul)-listed companies between 2008 and 2020. The study sample includes cross-sectional time-series data from 154 firms with 18,018 firm-year observations. This study used regression analysis and other econometric models to examine probable endogeneities. The findings show that only the return on assets’ operational performance is positively and significantly related to board-level IT governance among the three performance metrics (return on assets, return on equity, and Tobin’s Q). This indicates that a higher proportion of members with IT experience and the presence of a board-level IT professional as chief information officer/chief technology officer and an IT committee positively impact operational performance. Finally, board-level IT governance competence and other governance attributes do not deter earnings management practices. Therefore, countries like Saudi Arabia should enhance their corporate governance environment considering the increasing significance of IT governance (control, service, and monitoring). There is also a need to review provisions of the Saudi Arabia Corporate Governance Regulations, especially for board composition, the appointment of independent and IT-literate directors, and penalties for non-compliance with regulations. Full article

This paper selects firm downside risk and firm upside risk as proxy variables of enterprise risk, and the proportion of independent directors as a proxy variable of board governance. Using the panel data of Chinese listed companies from 2010 to 2019, a multiple linear regression model is established to empirically study the impact of supervisory function and advisory function of board governance on the downside risk and the upside risk, to test whether the two functions of the board of directors play a role in the enterprise risk management (ERM). The internal mechanism and boundary conditions of board governance that affect firm risk are also explored in this paper. It is found that the sample enterprises pay more attention to the board‘s supervisory function. At the same time, they reduce the firm’s overall risk by reducing the downside risk and the upside risk while performing this function. We also identify that boards are more likely to use meetings to communicate and strategize to prevent upside risks than to identify and control downside risks. Finally, boards are negatively affected by CEO duality in performing their oversight functions. Full article

This paper analyzes the impact of the instability brought about by the change of directors on the risk of corporate debt default from the perspective of the fusion of old and new directors. Combining Ab-sorptive Capacity Theory and Embeddedness Theory, on the one hand, analyzes the threshold effect of the hard integration of directors on corporate debt default risk from the proportion of new directors; on the other hand, through the proportion of the number of well-integrated people, and from the perspective of ability-based role matching and cultural-based group matching between new and old directors, it is judging the individual and interactive effects of director soft fusion quality on firm debt default risk. Through the above two perspectives, we comprehensively judge the independent and interactive effects of directors’ smooth integration quality on corporate debt default risk and consolidate. The study found that the proportion of new directors positively correlates with the increase in the risk of corporate debt default. The weakening of the threshold effect shows that the hard integration of the number of new directors alone will reduce instability due to the increase in the number of new directors, thereby reducing the risk of corporate debt default. Regarding the smooth integration of directors, the role matching between old and new directors has a rejuvenating contribution to corporate debt default risk and has a significant threshold effect. At the same time, group matching positively correlates with corporate debt default risk but has no threshold effect. After the interaction between the two, group matching contributes to debt default risk. Full article

This study empirically analyzes the relationship between Vietnamese firms’ earnings management, board characteristics, and ownership structures. I use board size and the proportion of outside directors to reflect board characteristics, and the ownership percentages of the board of directors, outside directors, and the chief executive officer (CEO) to reflect the ownership structures. I use discretionary accruals, measured by the modified Jones model, to proxy for earnings management. From analyzing firms listed on the Ho Chi Minh and Hanoi Stock Exchanges from 2012 to 2017, I find that board size and the ownership percentages of outside directors and CEOs are negatively related to earnings management, whereas the board of directors’ ownership percentage is positively related. The proportion of outside directors is not significantly associated with earnings management. This study provides policy insights for improving Vietnamese firms’ financial transparency. Specifically, corporate laws regulating board composition should be enacted to ensure that all firms meet a minimum number of board members. Moreover, a policy mandating boards to include independent outside directors is necessary, as establishing an independent outside director system within Vietnam’s corporate law can strengthen the sustainability of the board of directors. Full article

The purpose of the paper is to develop a risk measure in the form of a risk index and a governance index as an indicator of the quality of governance structure. Using the Delphi technique, two indices are developed (risk index and corporate governance index (CGI)); subsequently, using the 10-year (2005–2015) data of top Indian Public Sector Undertakings (PSUs) and diff-GMM regression (to deal with endogeneity), indices have been validated. Though the data set may appear old, it has only been used to test the risk index and analyze the results. Empirical evidence on indices indicates that Indian PSUs have ‘moderate’ risk levels and ample scope for improvement in their governance structure. Further, a positive relation between governance index and returns and negative relation between risk index and returns lend credence to the indices developed in the study. Notably, the governance index appears to be a moderating variable in the relationship between risk and return. It is perhaps the first study to put forth a comprehensive measure of risk to measure risk levels of PSUs and prescribe a measure of the quality of governance structure. While constructing the CGI, certain non-compliances were observed, even in terms of mandatory requirements, such as the proportion of PSUs may take independent directors. The new datasets may further check for compliance and its effect on the results. Such infringements call for stringent penal provisions and better monitoring of PSUs. Further, if the normative frameworks are adhered to as per the study by the Securities and Exchange Board of India (SEBI) and Ministry of Corporate Affairs (MCA), more effective and efficient decisions with lower risks, and hassle-free management resulting in better return on assets and return on equity. Full article

The main goal of this study is to analyze whether the existence of remuneration committees tend to disclose more corporate social responsibility (CSR) information. In addition, we test the moderating role played by the proportion of independent directors on boards of directors with the relationship between the constitution of remuneration committees and CSR disclosure. Previous research does not appear to have addressed these questions. The research questions proposed are tested using an international sample of 28,610 listed companies, and we took into consideration information on industrial companies from the Middle East, developed Asian and Pacific countries, both emerging and developed European countries, Africa, Latin America and North America. These findings provide evidence that the existence of remuneration committees is more likely to disclose CSR information, and the existence of independent board members positively moderates the association between the existence of remuneration committees and CSR disclosure. We expand on earlier empirical literature concerning corporate governance and CSR issues. Full article

Earnings management is a means by which managers manipulate earnings to conceal the true performance of a company. The characteristics of the board of directors can also influence firm performance. This study applies data envelopment analysis (DEA) and the Tobin regression model to investigate the influence of earnings management and board characteristics on company efficiency. The data sample includes 396 Taiwanese electronics and biotechnology companies from 2009 to 2017. The results indicate that earnings management has an insignificant influence on company efficiency with mixed results on the interactions between earnings management and board characteristics. When companies practiced earnings management, director experiences, a higher proportion of female directors, and a higher number of board meetings increased company efficiency. In contrast, a higher number of independent directors and a higher attendance rate of the directors at the board meeting decreased company efficiency. The results of this study suggest that board diversity, more female directors, and meetings could still improve firm performance despite companies’ engagement in earnings management. Full article

The study aimed to investigate the role of non-financial measures in predicting corporate financial distress in the Indian industrial sector. The proportion of independent directors on the board and the proportion of the promoters’ share in the ownership structure of the business were the non-financial measures that were analysed, along with ten financial measures. For this, sample data consisted of 82 companies that had filed for bankruptcy under the Insolvency and Bankruptcy Code (IBC). An equal number of matching financially sound companies also constituted the sample. Therefore, the total sample size was 164 companies. Data for five years immediately preceding the bankruptcy filing was collected for the sample companies. The data of 120 companies evenly drawn from the two groups of companies were used for developing the model and the remaining data were used for validating the developed model. Two binary logistic regression models were developed, M1 and M2, where M1 was formulated with both financial and non-financial variables, and M2 only had financial variables as predictors. The diagnostic ability of the model was tested with the aid of the receiver operating curve (ROC), area under the curve (AUC), sensitivity, specificity and annual accuracy. The results of the study show that inclusion of the two non-financial variables improved the efficacy of the financial distress prediction model. This study made a unique attempt to provide empirical evidence on the role played by non-financial variables in improving the efficiency of corporate distress prediction models. Full article

This study aimed to analyze the board of directors’ commitment to the Sustainable Development Goals (SDGs) by looking at the influence of the characteristics and activities of the board of directors and the existence of Corporate Social Responsibility (CSR) committees on disclosures regarding the SDGs. The directors’ characteristics that were analyzed in this research included the board size, the proportion of independent directors, the presence of female directors, and the presence of foreign directors. The activities analyzed included the number of board meetings held in one year and the percentage of directors in meetings. The context of this study was companies in five Southeast Asian countries—Indonesia, Malaysia, Singapore, Thailand, and the Philippines—during the 2016 and 2017 reporting years. This study was an initial research work aiming to empirically examine the effect of the board of directors on SDG disclosures in public companies from five countries in Southeast Asia. The study shows that the percentage of attendance of board directors’ meetings and the existence of CSR committees positively affected SDG disclosures. It also indicates that the presence of the board at the meeting can encourage more intensive SDG disclosures. Companies with a high commitment to sustainability, as shown by their forming of CSR committees, also tended to have a higher level of SDG disclosures. Full article

Corporate social responsibility (CSR) is one of the pillars of sustainable development. It is the key to operationalizing the strategic role of business in contributing towards the sustainability process. The fact that firms communicate their activities about economic sustainability, environmental sustainability, and social equity shows their commitment to society and their stakeholders. This paper analyzes the influence exerted by the composition of boards of directors on corporate social responsibility disclosure with reference to those companies that undertook an initial public offerings (IPO) in the Spanish capital market during the period 1998–2013. The empirical evidence provided by this study shows that ownership structure and board characteristics are relevant in the context of a firm’s CSR disclosure. The independent directors, non-executive directors, and large shareholder representatives affect the way in which their companies voluntarily disclose information regarding CSR. Our results lend support for a non-linear relationship between the proportion of shares in the IPO belonging to the members of the board of directors and the level of CSR reporting. We also find that the underwriter’s reputation has a positive and statistically significant influence on CSR disclosure for Spanish IPOs. Full article

This paper investigated the impact of employee quality on corporate social responsibility (CSR). Based on data from China A-share-listed companies for the years 2012–2016 and using ordinary least squares, our empirical results show that the educational level of the workforce, as a proxy for employee quality, is positively associated with CSR, which suggests that higher education can promote CSR implementation. Additional analyses found that this positive relationship is more pronounced in non-state-owned enterprises, enterprises in regions with lower marketisation processes, and firms with lower proportions of independent directors. This study extends the literature on human capital at the level of firms’ entire workforce and CSR by elaborating the positive effect of employee quality on CSR in the context of an emerging economy (China). The results suggest that it is necessary to consider the educational level of employees when analysing CSR, which is of strategic significance for corporate sustainable development. Full article