Search results for: corporate earnings management

Authors: Cindy Woods

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After years of implacable neoliberal globalization, multinational corporations have moved from the periphery to the center of the international legal agenda. Human rights advocates have long called for greater corporate accountability in the international arena. The creation of the Global Compact in 2000, while aimed at fostering greater corporate respect for human rights, did not silence these calls. After multiple unsuccessful attempts to adopt a set of norms relating to the human rights responsibilities of transnational corporations, the United Nations succeeded in 2008 with the Guiding Principles on Business and Human Rights (Guiding Principles). The Guiding Principles, praised by some within the international human rights community for their recognition of an individual corporate responsibility to respect human rights, have not escaped their share of criticism. Many view the Guiding Principles to be toothless, failing to directly impose obligations upon corporations, and call for binding international obligations on corporate entities. After decades of attempting to promulgate human rights obligations for multinational corporations, the existing legal frameworks in place fall short of protecting individuals from the human rights abuses of multinational corporations. The Global Compact and Guiding Principles are proof of the United Nations’ unwillingness to impose international legal obligations on corporate actors. In June 2014, the Human Rights Council adopted a resolution to draft international legally binding human rights norms for business entities; however, key players in the international arena have already announced they will not cooperate with such efforts. This Note, through an overview of the existing corporate accountability frameworks and a study of Newmont Mining’s Minas Conga project in Peru, argues that binding international human rights obligations on corporations are necessary to fully protect human rights. Where states refuse to or simply cannot uphold their duty to protect individuals from transnational businesses’ human rights transgressions, there must exist mechanisms to pursue justice directly against the multinational corporation.

Keywords: business and human rights, Latin America, international treaty on business and human rights, mining, human rights

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Authors: Bruno Henrique Rocha Fernandes, Amir Rezaee, Jucelia Appio

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The relation between Human Resource Management (HRM) practices and organizational performance remains the subject of substantial literature. Though many studies demonstrated positive relationship, still major influencing variables are not yet clear. This study considers the Person-Environment Fit (PE Fit) and its components, Person-Supervisor (PS), Person-Group (PG), Person-Organization (PO) and Person-Job (PJ) Fit, as possible explanatory variables. We analyzed PE Fit as a moderator between HRM practices and financial performance in the “best companies to work” in Brazil. Data from HRM practices were classified through the High Performance Working Systems (HPWS) construct and data on PE-Fit were obtained through surveys among employees. Financial data, consisting of return on invested capital (ROIC) and price earnings ratio (PER) were collected for publicly traded best companies to work. Findings show that PO Fit and PJ Fit play a significant moderator role for PER but not for ROIC.

Keywords: financial performance, human resource management, high performance working systems, person-environment fit

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Authors: Navdeep Kaur

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Corporate Social Responsibility is the process through which the organizations execute their philanthropic visions for social welfare. This paper considers the data of one Public Sector Bank–State Bank of India (SBI) and one Private Sector Bank-Industrial Credit and Investment Corporation of India (ICICI) from the year 2008 to 2016. The study is based on descriptive research design, and secondary data collected from the annual report of respective bank from website and different literature are reviewed. Least Square Method is used for estimating CSR spending for the financial year 2017-18. The analysis shows that these banks are making efforts for the implementation of CSR, but are not spending their 2% share of profits on CSR. There is a need for better CSR activities by the banks, which is possible by concentrating more on the prevailing social issues. The finding reveals that the percentage of profit after tax spends for CSR by SBI is more compare to ICICI. The estimated Spending for CSR for 2017-18 is also more in SBI as compared to ICICI.

Keywords: banking sector, corporate social responsibility in India, financial institution, public sector banks, SBI, ICICI

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Authors: Abdullah AlGhazali, Richard Fairchild, Yilmaz Guney

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We examine the effect of managerial overconfidence on UK firms’ payout policy for the period 2000 to 2012. The analysis incorporates, in addition to common firm-specific factors, a wide range of corporate governance factors and managerial characteristics that have been documented to affect the relationship between overconfidence and payout policy. Our results are robust to several estimation considerations. The findings show that the influence of overconfident CEOs on the amount of, and the propensity to pay, dividends is significant within the UK context. Specifically, we detect that there is a reduction in dividend payments in firms managed by overconfident managers compared to their non-overconfident counterparts. Moreover, we affirm that cash flows, firm size and profitability are positively correlated, while leverage, firm growth and investment are negatively correlated with the amount of and propensity to pay dividends. Interestingly, we demonstrate that firms with the potential for undervaluation reduce dividend payments. Some of the corporate governance factors are shown to motivate firms to pay more dividends while these factors seem to have no influence on the propensity to pay dividends. The results also show that in general higher overconfidence leads to more share repurchases but the lower total payout. Overall, managerial overconfidence should be considered as an important factor influencing payout policy in addition to other known factors.

Keywords: dividends, repurchases, UK firms, overconfidence, corporate governance, undervaluation

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Authors: Helene Eller

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The aim of non-profit organizations (NPO) is to provide services and goods for its clientele, with profit being a minor objective. By having this definition as the basic purpose of doing business, it is obvious that the goal of an organisation is to serve several bottom lines and not only the financial one. This approach is underpinned by the non-distribution constraint which means that NPO are allowed to make profits to a certain extent, but not to distribute them. The advantage is that there are no single shareholders who might have an interest in the prosperity of the organisation: there is no pie to divide. The gained profits remain within the organisation and will be reinvested in purposeful projects. Good governance is mandatory to support the aim of NPOs. Looking for a measure of good governance the principals of corporate governance (CG) will come in mind. The purpose of CG is direction and control, and in the field of NPO, CG is enlarged to consider the relationship to all important stakeholders who have an impact on the organisation. The recognition of more relevant parties than the shareholder is the link to corporate social responsibility (CSR). It supports a broader view of the bottom line: It is no longer enough to know how profits are used but rather how they are made. Besides, CSR addresses the responsibility of organisations for their impact on society. When transferring the concept of CSR to the non-profit area it will become obvious that CSR with its distinctive features will match the aims of NPOs. As a consequence, NPOs who apply CG apply also CSR to a certain extent. The research is designed as a comprehensive theoretical and empirical analysis. First, the investigation focuses on the theoretical basis of both concepts. Second, the similarities and differences are outlined and as a result the interconnection of both concepts will show up. The contribution of this research is manifold: The interconnection of both concepts when applied to NPOs has not got any attention in science yet. CSR and governance as integrated concept provides a lot of advantages for NPOs compared to for-profit organisations which are in a steady justification to show the impact they might have on the society. NPOs, however, integrate economic and social aspects as starting point. For NPOs CG is not a mere concept of compliance but rather an enhanced concept integrating a lot of aspects of CSR. There is no “either-nor” between the concepts for NPOs.

Keywords: business ethics, corporate governance, corporate social responsibility, non-profit organisations

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Authors: Jesus Argueta

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This study aims to explore the Business Demography Phenomena along the Central American context, through the examination of its theoretical background, and the revision of Central American corporations success stories, that will eventually guide this research towards the business Demography Key Performance Indicators, across the Central American Business Ambiance. Considering that this analysis will support the development of a Small and Medium Business Observatory over the Honduran commercial landscapes, as platform for the reinforcement of this global topic.

Keywords: business demography, economic dynamism, small, medium and large enterprises, corporate demography

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Authors: Nor Anisa

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This paper aims to describe the use of conservation and rehabilitation of Mangrove forests as an alternative area in protecting the natural environment and ecosystems and ecology, community education and innovation of sustainable industrial development such as oil companies, gas and coal. The existence of globalization encourages energy needs such as gas, diesel and coal as an unaffected resource which is a basic need for human life while environmental degradation and natural phenomena continue to occur in Indonesia, especially global warming, sea water pollution, extinction of animal steps. The phenomenon or damage to nature in Indonesia is caused by a population explosion in Indonesia that causes unemployment, the land where the residence will disappear so that this will encourage the exploitation of nature and the environment. Therefore, Pertamina as a state-owned oil and gas company carries out its social responsibility efforts, namely to carry out conservation and rehabilitation and management of Mangrove fruit seeds which will provide an educational effect on the benefits of Mangrove seed maintenance. The method used in this study is a qualitative method and secondary data retrieval techniques where data is taken based on Pertamina activity journals and websites that can be accounted for. So the conclusion of this paper is: the benefits and function of conservation of mangrove forests in Indonesia physically, chemically, biologically and socially and economically and can provide innovation to the CSR (Corporate Social Responsibility) of the company in continuing social responsibility in the scope of environmental conservation and social education.

Keywords: mangrove, environmental damage, conservation and rehabilitation, innovation of corporate social responsibility

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Authors: Patrick Velte

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Sustainability reporting has become a central element of modern corporate governance practice. This paper is the first to recognize supervisory board independence, sustainable expertise and gender diversity in two European two tier countries and their impact on sustainability reporting quality. For a sample of 188 German and Austrian companies which are listed at the Prime Standard of the Frankfurt and Vienna Stock Exchange for the business years 2012-2013, descriptive findings show that CSR reporting quality is still low in both countries. Furthermore, multiple regressions state that independent and female members in the supervisory board do have a positive impact on CSR reporting quality in Germany and Austria. However, the existence of sustainable experts in the supervisory board both in Germany and Austria shows a positive but insignificant impact. Our findings suggest that the current European corporate governance regulations can be a useful instrument to increase the quality of modern CSR reporting for the stakeholders.

Keywords: sustainability reporting, corporate governance, gender diversity, board independence

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Authors: Lubica Hikkerova, Jean-Michel Sahut

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Environmental protection remains a global challenge but, since 2012, there has been a progressive decline in corporate engagement in environmental protection issues. This study seeks to investigate the role of financial capacity and governance in improving the level of environmental engagement of companies. The regression technique is applied to data on 351 large European companies from the ASSET4-ESG database for the 2007-2015 period. Firstly, the results show that the companies in the sample are fairly engaged in environmental protection, with a strong dispersion representing nearly four times the average. This means that the companies in the sample do not share the same level of engagement in matters of environmental protection, some being more committed than others. Secondly, the results reveal that the financial capacity of the company, as assessed through its indicators, has a significant effect on its level of environmental protection engagement in the present sample. This effect is more positive the higher the profits the company makes, and more negative the more heavily indebted or, the higher the rates of dividends it pays per share. Lastly, the results also show that a better quality of governance plays an important role in the decision to undertake actions leading to environmental protection. More specifically, the degree of management implication in the running of the business, the respect of the rights of the shareholders, the effectiveness of the control exerted by the board of directors, and, to a lesser extent, the independence of the audit committee, are variables which have a positive and significant influence on the level of environmental engagement of companies.

Keywords: financial capacity, corporate governance, environmental engagement, stakeholder theory, theory of organizational legitimacy, theory of resources and capabilities

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Authors: Chen Shuwen, Nunthapin Chantachaimongkol

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Since the world has moved into a transitional period, known as globalization; the business environment is now more complicated than ever before. Corporate information has become a matter of great importance for stakeholders, in order to understand the current situation. As a result of this, the concept of corporate governance has been broadly introduced to manage and control the affairs of corporations while businesses are required to disclose both financial and non-financial information to public via various communication channels such as the annual report, the financial report, the company’s website, etc. However, currently there are several other issues related to asymmetric information such as moral hazard or adverse selection that still occur intensively in workplaces. To prevent such problems in the business, it is required to have an understanding of what factors strengthen their transparency, accountability, fairness, and responsibility. Under aforementioned arguments, this paper aims to propose a conceptual framework that enables an investigation on how corporate governance mechanism influences disclosure efficiency of listed companies in the Association of Southeast Asia Nations (ASEAN) and the factors that should be considered for further development of good behaviors, particularly in regards to voluntary disclosure practices. To achieve its purpose, extensive reviews of literature are applied as a research methodology. It is divided into three main steps. Firstly, the theories involved with both corporate governance and disclosure practices such as agency theory, contract theory, signaling theory, moral hazard theory, and information asymmetry theory are examined to provide theoretical backgrounds. Secondly, the relevant literatures based on multi- perspectives of corporate governance, its attributions and their roles on business processes, the influences of corporate governance mechanisms on business performance, and the factors determining corporate governance characteristics as well as capability are reviewed to outline the parameters that should be included in the proposed model. Thirdly, the well-known regulatory document OECD principles and previous empirical studies on the corporate disclosure procedures are evaluated to identify the similarities and differentiations with the disclosure patterns in the ASEAN. Following the processes and consequences of the literature review, abundant factors and variables are found. Further to the methodology, additional critical factors that also have an impact on the disclosure behaviors are addressed in two groups. In the first group, the factors which are linked to the national characteristics - the quality of national code, legal origin, culture, the level of economic development, and so forth. Whereas in the second group, the discoveries which refer to the firm’s characteristics - ownership concentration, ownership’s rights, controlling group, and so on. However, because of research limitations, only some literature are chosen and summarized to form part of the conceptual framework that explores the relationship between corporate governance and the disclosure practices of listed companies in ASEAN.

Keywords: corporate governance, disclosure practice, ASEAN, listed company

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Authors: Baikunthanath Sahoo, Santosh Kumar Sahu, Krishna Malakar

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With the essence of global environmental sustainability and green business management, the wind of business research moved towards Corporate Social Responsibility. In addition to international and national treaties, businesses have also started realising environmental protection and energy efficiency through CSR as part of business strategy in response to climate change. Considering the ambitious emission reduction target and rapid economic development of India, this study is an attempt to explore the effect of CSR on the energy efficiency management of manufacturing firms in India. By using firm-level data, the panel fixed effect model shows that the CSR dummy variable is negatively influencing the energy intensity or technically, they are energy efficient. The result demonstrates that in the presence of CSR, all the production economic variables are significant. The result also shows that doing environmental expenditure does not improve energy efficiency might be because very few firms are motivated to do such expenditure and also not common to all sectors. The interactive effect model result conforms that without considering CSR dummy as an intervening variable only Manufacturers of Chemical and Chemical products, Manufacturers of Pharmaceutical, medical chemical, and botanical products firms energy intensity low but after considering CSR in their business practices all six sub-sector firms become energy efficient. The empirical result also validate that firms are continuously engaged in CSR activities they are highly energy efficient. It is an important motivational factor for firms to become economically and environmentally sustainable in the corporate world. This analysis would help business practitioners to know how to manage today’s profitability and tomorrow’s sustainability to achieve a comparative advantage in the emerging market economy. The paper concludes that reducing energy consumption as part of their social responsibility to care for the environment, will need collaborative efforts of business society and policy bodies.

Keywords: CSR, Energy Efficiency, Indian manufacturing Sector, Business strategy

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Authors: M. Bartal

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A large empirical evidence points to sizable lifetime earnings losses associated with the displacement of tenured workers. The causes of these losses are still not well-understood. Existing explanations are heavily based on human capital depreciation during non-employment spells. In this paper, a new avenue is explored. Evidence on the role of household liquidity constraints in accounting for the persistence of post-displacement earning losses is provided based on SIPP data. Then, a directed search and matching model with endogenous human capital and wealth accumulation is introduced. The model is computationally tractable thanks to its block-recursive structure and highlights a non-trivial, yet intuitive, interaction between wealth and human capital. Constrained workers tend to accept jobs with low firm-sponsored training because the latter are (endogenously) easier to find. This new channel provides a plausible explanation for why young (highly constrained) workers suffer persistent scars after displacement. Finally, the model is calibrated on US data to show that the interplay between wealth and human capital is crucial to replicate the observed lifecycle pattern of earning losses. JEL— E21, E24, J24, J63.

Keywords: directed search, human capital accumulation, job displacement, wealth accumulation

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Authors: Vani Tanggamani, Azlan Amran

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The issues of Corporate Social Responsibility (CSR) have been extended from developmental economics to corporate and business in recent years. Research in issues related to CSR is deemed to make higher impacts as CSR encourages long-term economy and business success without neglecting social, environmental risks, obligations and opportunities. Therefore, CSR is a key matter for any organisation aiming for long term sustainability since business incorporates principles of social responsibility into each of its business decisions. Thus, this paper presents a theoretical proposition based on stakeholder theory from the organisational perspective as a foundation for better CSR practices. The primary subject of this paper is to explore how looping concept can be effectively embedded into corporate CSR strategy to foster sustainable long term growth. In general, the concept of a loop is a structure or process, the end of which is connected to the beginning, whereas the narrow view of a loop in business field means plan, do, check, and improve. In this sense, looping concept is a blend of balance and agility with the awareness to know when to which. Organisations can introduce similar pull mechanisms by formulating CSR strategies in order to perform the best plan of actions in real time, then a chance to change those actions, pushing them toward well-organized planning and successful performance. Through the analysis of an exploratory study, this paper demonstrates that approaching looping concept in the context of corporate CSR strategy is an important source of new idea to propel CSR practices by deepening basic understanding through the looping concept which is increasingly necessary to attract and retain business stakeholders include people such as employees, customers, suppliers and other communities for long-term business survival. This paper contributes to the literature by providing a fundamental explanation of how the organisations will experience less financial and reputation risk if looping concept logic is integrated into core business CSR strategy.The value of the paper rests in the treatment of looping concept as a corporate CSR strategy which demonstrates "looping concept implementation framework for CSR" that could further foster business sustainability, and help organisations move along the path from laggards to leaders.

Keywords: corporate social responsibility, looping concept, stakeholder theory, sustainable growth

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Authors: Jakub Stelina, Janina Ciechanowicz-McLean

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Fifty years of existence and development of international environmental law brought a deep disappointment with efficiency and effectiveness of traditional command and control mechanisms of environmental regulation. Agenda 21 agreed during the first Earth Summit in Rio de Janeiro 1992 was one of the first international documents, which explicitly underlined the importance of public participation in environmental protection. This participation includes also the initiatives undertaken by business corporations in the form of private environmental standards setting. Twenty years later during the Rio 20+ Earth Summit the private sector obligations undertaken during the negotiations have proven to be at least as important as the ones undertaken by the governments. The private sector has taken the leading role in environmental standard setting. Among the research methods used in the article two are crucial in the analysis. The comparative analysis of law is the instrument used in the article to analyse the practice of states and private business companies in the field of sustainable development. The article uses economic analysis of law to estimate the costs and benefits of Corporate Social Responsibility Projects in the field of environmental protection. The study is based on the four premises. First is the role of social dialogue, which is crucial for both Corporate Social Responsibility and modern environmental protection regulation. The Aarhus Convention creates a procedural environmental human right to participate in administrative procedures of law setting and environmental decisions making. The public participation in environmental impact assessment is nowadays a universal standard. Second argument is about the role of precaution as a principle of modern environmental regulation. This principle can be observed both in governmental regulatory undertakings and also private initiatives within the Corporate Social Responsibility environmental projects. Even in the jurisdictions which are relatively reluctant to use the principle of preventive action in environmental regulation, the companies often use this standard in their own private business standard setting initiatives. This is often due to the fact that soft law standards are used as the basis for private Corporate Social Responsibility regulatory initiatives. Third premise is about the role of ecological education in environmental protection. Many soft law instruments underline the importance of environmental education. Governments use environmental education only to the limited extent due to the costs of such projects and problems with effects assessment. Corporate Social Responsibility uses various means of ecological education as the basis of their actions in the field of environmental protection. Last but not least Sustainable development is a goal of both legal protection of the environment, and economic instruments of companies development. Modern environmental protection law uses to the increasing extent the Corporate Social Responsibility. This may be the consequence of the limits of hard law regulation. Corporate Social Responsibility is nowadays not only adapting to soft law regulation of environmental protection but also creates such standards by itself, showing new direction for development of international environmental law. Corporate Social Responsibility in environmental protection can be good investment in future development of the company.

Keywords: corporate social responsibility, environmental CSR, environmental justice, stakeholders dialogue

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Authors: Amylyn F. Labasano, M. S. Econ

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The study predicts the impact of collective bargaining agreement and its related factors on employees’ perceived productivity in terms of union-management relation’s climate, income, fringe benefits, and job satisfaction of the employees. It also determines whether there are significant differences in the employees’ perceived productivity based on the demographic characteristics of the respondents. The results revealed that the relationship climate which exists between the union and the management is found to have significant adverse effect on the average unpaid hours spent by employees working within the college. On the other hand, the total monthly wage earnings of employees have negative effect on the average hours an employee spent in bringing his work home while job satisfaction positively influences the overall productivity level of employees. The result further shows significant differences in the productivity level of employees across civil status and current designation.

Keywords: perceived productivity, collective bargaining agreement, union, union-management relations climate, income, fringe benefits, job satisfaction

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Authors: Bi-Huei Tsai

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Previous studies on financial distress prediction choose the conventional failing and non-failing dichotomy; however, the distressed extent differs substantially among different financial distress events. To solve the problem, “non-distressed”, “slightly-distressed” and “reorganization and bankruptcy” are used in our article to approximate the continuum of corporate financial health. This paper explains different financial distress events using the two-stage method. First, this investigation adopts firm-specific financial ratios, corporate governance and market factors to measure the probability of various financial distress events based on multinomial logit models. Specifically, the bootstrapping simulation is performed to examine the difference of estimated misclassifying cost (EMC). Second, this work further applies macroeconomic factors to establish the credit cycle index and determines the distressed cut-off indicator of the two-stage models using such index. Two different models, one-stage and two-stage prediction models, are developed to forecast financial distress, and the results acquired from different models are compared with each other, and with the collected data. The findings show that the two-stage model incorporating financial ratios, corporate governance and market factors has the lowest misclassification error rate. The two-stage model is more accurate than the one-stage model as its distressed cut-off indicators are adjusted according to the macroeconomic-based credit cycle index.

Keywords: Multinomial logit model, corporate governance, company failure, reorganization, bankruptcy

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Authors: Manjinder Singh, Anish Sachdeva

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Research on total quality management (TQM), total productive maintenance (TPM), international organization for standardization (ISO) and six sigma generally investigate the implementation and impact of these programs in isolation. However, none of these quality improvement programs is self-sufficient and they may not be powerful enough to deliver the improvements and innovations that are required nowadays to ensure the survival and growth of a firm. They are not mutually exclusive and inconsistent. On the contrary, they need complementary support and may reinforce mutually to make use of their complementarity, inducement of side-effects in favor of other quality improvement program, mutual simulation and exploitation of shared values. In this paper, first of all, the various management activities were identified which are normally under focus when any quality improvement program is implemented in any organization. Then TOPSIS methodology was applied to establish the ranking of various quality improvement programs (total quality management, total productive maintenance, ISO and six sigma which were brought to the corporate boardroom to improve the quality) with respect to different management activities (operations related activities, quality related activities, maintenance related activities, organizational related activities, human related activities and finance related activities).

Keywords: total productive maintenance (TPM), total quality management (TQM), TOPSIS, international organization for standardization (ISO)

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Authors: Vrajesh Chokshi

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In last three decades, the global economy is substantially changed. Today, we are living in highly inter-connected world. The global markets are more open and consumers are well informed about products and services. The information technology revolution has broken all barriers in global business. The E-commerce has given opportunities of global trades to corporate. The IT is extensively used in almost all industries. After liberalization in 1992, the Indian economy is also significantly changed. The IT (information technology) and ITES (IT enable services) are extensively used in supply chain management. In India, previously car rental service business was dominated by local organization and operated through local contact. This industry is very lucrative and to catch this opportunity, many new corporate have ventured into e-commerce car rental service business in India. As the market is very competitive, branding is also very important part of marketing strategy. Now, the E-commerce portals those are in car rental business in India have realized the importance of the same and have started usage of all types of communication channel to promote their brand in different Indian markets. At consumer side, the awareness is also being considerably increased due to marketing communication campaign run by these companies. This paper aims to understand effectiveness of branding strategies in car rental business in India and also tries to identify unique promotional strategies to consolidate brand image of this business in different Indian markets.

Keywords: branding strategies, car rental business, CRM (customer relationship management), ITES (information technology enabled services)

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Authors: Jagbir Singh Kadyan

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This research paper critically analyse the performance of those Indian Automobile Companies which are listed and traded on the National Stock Exchange (NSE) of India and which are also included in the NSE nifty auto Index. In India, CSR–Corporate Social Responsibility is mandatory for certain qualifying companies under the Indian Companies Act 2013, which replaces the erstwhile Companies Act 1956. There has been a significant shift in the focus and approaches of the Indian Corporates towards their CSR obligations with the insertion of section 135, revision of section 198 and introduction of schedule VII of the Indian Companies Act 2013. Every such qualifying companies are required to mandatorily spend at least 2% of their annual average net profit of the immediately preceding three financial years on such CSR activities as specified under schedule VII of the Companies act 2013. This research paper analyzes the CSR performance of such Indian companies. This research work is originally based on the secondary data. The annual reports of the selected Indian automobile companies have been extensively used and considered for this research work.

Keywords: board of directors, corporate social responsibility, CSR committees, Indian automobile companies, Indian companies act 2013, national stock exchange

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Authors: Tina Vuko, Marija Maretić, Marko Čular

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The aim of this study is to analyze the role and effectiveness of internal mechanism (audit committee) of corporate governance on credit institutions performance in Croatia. Based on research objective, sample of 78 credit institutions listed on Zagreb Stock Exchange, from 2007 to 2012, has been collected and efficiency index of audit committee (EIAC) has been created. Based on the sample and created EIAC, conclusions are as follows: audit committees of credit institutions have medium efficiency, based on EIAC measurement; there is a significant difference in audit committee effectiveness, in observed period; there is no positive relationship between audit committee effectiveness and credit institution performance; there is a significant difference between level of audit committee effectiveness and audit firm type. Future research should contain increased number of elements in EIAC creation and increased sample, for all obligators who need to establish audit committee.

Keywords: corporate governance, audit committee, financial institutions, efficiency index of audit committee

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Authors: Khaled Alotaibi, Salah Alhamadi, Ibraheem Almubarak

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The study attempts to explore both corporate governance (GC) and business ethics (BE) practices in Kuwaiti banks and the relationship between CG and BE, using an accountability framework. By examining the perceptions of key stakeholder groups, this study investigates the practices of BE and CG in Islamic banks (IBs) compared to conventional banks (CBs). We contribute to the scarce studies concerned with relations between CG and BE. We have employed a questionnaire survey method for a random sample of crucial relevant stakeholder groups. The empirical analysis of the participants’ perceptions highlights the importance of applying CG regulations and BE for Kuwaiti banks and the clear link between the two concepts. We find that the main concern is not the absence of CG and BE codes, but the lack of consistent enforcement of the regulations. Such a system needs to be strictly and effectively implemented in Kuwaiti banks to protect all stakeholders’ wealth, not only that of stockholders. There are significant patterns in the CG and BE expectations among different stakeholder groups. Most interestingly, banks’ client groups illustrate high expectations concerning CG and BE practices.

Keywords: corporate governance, GC, business ethics, BE, Islamic banks, IBs, conventional banks, CBs, accountability

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Authors: Roxana D. Maiorescu-Murphy

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In the US, corporations have recently embraced political stances in an attempt to respond to the external pressure exerted by activist groups. To date, research in this area remains in its infancy, and few studies have been conducted on the way stakeholder groups respond to corporate political advocacy in general and in the immediacy of such a corporate announcement in particular. The current study aims to fill in this research void. In addition, the study contributes to an emerging trajectory in the field of crisis management by focusing on the delineation between crises (unexpected events related to products and services) and scandals (crises that spur moral outrage). The present study looked at online reactions in the aftermath of Elon Musk’s endorsement of the Republican party on Twitter. Two data sets were collected from Twitter following two political endorsements made by Elon Musk on May 18, 2022, and June 15, 2022, respectively. The total sample of analysis stemming from the data two sets consisted of N=1,374 user comments written as a response to Musk’s initial tweets. Given the paucity of studies in the preceding research areas, the analysis employed a case study methodology, used in circumstances in which the phenomena to be studied had not been researched before. According to the case study methodology, which answers the questions of how and why a phenomenon occurs, this study responded to the research questions of how online users perceived Tesla and why they did so. The data were analyzed in NVivo by the use of the grounded theory methodology, which implied multiple exposures to the text and the undertaking of an inductive-deductive approach. Through multiple exposures to the data, the researcher ascertained the common themes and subthemes in the online discussion. Each theme and subtheme were later defined and labeled. Additional exposures to the text ensured that these were exhaustive. The results revealed that the CEO’s political endorsements triggered moral outrage, leading to Tesla’s facing a scandal as opposed to a crisis. The moral outrage revolved around the stakeholders’ predominant rejection of a perceived intrusion of an influential figure on a domain reserved for voters. As expected, Musk’s political endorsements led to polarizing opinions, and those who opposed his views engaged in online activism aimed to boycott the Tesla brand. These findings reveal that the moral outrage that characterizes a scandal requires communication practices that differ from those that practitioners currently borrow from the field of crisis management. Specifically, because scandals flourish in online settings, practitioners should regularly monitor stakeholder perceptions and address them in real-time. While promptness is essential when managing crises, it becomes crucial to respond immediately as a scandal is flourishing online. Finally, attempts should be made to distance a brand, its products, and its CEO from the latter’s political views.

Keywords: crisis management, communication management, Tesla, corporate political activism, Elon Musk

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Authors: María-José Palacin-Sanchez, Filippo Di Pietro, Reyes Samaniego-Medina

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This article examines, in an institutional context such as Spanish one, the corporate board structure characteristics and determinants in entrepreneurial firms to go public. Specifically, it explores these issues through all the initial public offerings in the Spanish Alternative Equity Market (MAB), which is a market segment for smaller growing companies. The results show that: a) firm size, age of the company, and the reputation of the auditor and the nominated advisor and Corporate Governance Code favour a larger and more independent board structure that enhances its monitoring functions; and b) leverage, opportunities of growth, sector risk and ownership by executive directors all lead towards a smaller broad of directors where the role of entrepreneurship provided by executive directors remains crucial. This reflects the delicate balance of power between small-business entrepreneurs and financial equity market forces, which demand more transparency and monitoring in the companies.

Keywords: board composition, board size, corporate governance, IPO, SMEs

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Authors: Tatiana Ponomarenko, Oksana Marinina, Marina Nevskaya

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Modern corporate social responsibility (CSR) is a sphere of multilevel responsibility of a company toward society represented by various stakeholders. The relevance of CSR management grows due to the active development of socially responsible investing (principles for responsible investment) taking into account factors of environmental, social and corporate governance (ESG), growing attention of the investment community in general to the long-term stability of companies and the quality of control of nonfinancial risks. The modern approach to CSR strategic management is aimed at the creation of trustful relationships with stakeholders, on the basis of which a contribution to the sustainable development of companies, regions, and national economics is insured. However, the practical concepts of social responsibility in mining companies are different, which leads to various degrees of application of CSR. A number of companies implement CSR using a traditional (limited) understanding of responsibility toward employees and counteragents, the others understand CSR much wider and try to use leverages of efficient cooperation. As in large mining companies the scope of CSR measures is diverse and characterized by different indices, the study was aimed at evaluating CSR efficiency on the basis of a proprietary methodology and determining the level of development of CSR management in terms of anti-crisis, reactive and proactive development. The methodology of the research includes analysis of integrated global reporting initiative (GRI) reports of large mining companies; choice of most representative sectoral agents by a criterion of the regularity of issuance and publication of reports; calculation of indices of evaluation of CSR level of the selected companies in dynamics. The methodology of evaluation of CSR level is based on a rating score of changes in standard indices of GRI reports by economic, environmental, and social directions. Result. By the results of the analysis, companies of fuel and energy and metallurgic complexes, in overwhelming majority, reflecting three indices out of a wide range of possible indicators of SDGs (Sustainable Development Goals), were selected for the study. The evaluation of the scopes of CSR of the companies Gazprom, LUKOIL, Metalloinvest, Nornikel, Rosneft, Severstal, SIBUR, SUEK corresponds to the reactive type of development according to a scale of CSR strategic management, which is the average value out of the possible values. The chief drawback is that companies, in the process of analyzing global goals, often choose the goals which relate to their own activities, paying insufficient attention to the interests of the stakeholders inside the country. This fact evidences the necessity of searching for more effective mechanisms of CSR control. Acknowledgment: This article is prepared within grant support of the RFBR, project 19-510-44013 'Development of the concept of mineral resources value formation in the context of sustainable development in resource-oriented economies'.

Keywords: sustainable development, corporate social responsibility, development strategies, efficiency assessment

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Authors: Barbara Ballan

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Environmental Justice (EJ) and Environmental Social Governance (ESG) are trending terms used to address the impacts of corporate actions and environmental and social regulations on the people and the planet. ESG is a private governance invention (though increasingly required by public law) that aims to disclose environmental and social criteria while fostering value for businesses. On the other hand, EJ was borne as a social movement that evolved into a regulatory tool employed by EJ advocates and governmental agencies to assess inequalities in environmental impacts and regulations. However, EJ usage is expanding, and private environmental governance in the form of ESG disclosure frameworks is incorporating EJ criteria, indexes, and tools as part of its metric-driven approach. There is an existing tension between (1) the notion of social justice at the heart of the environmental justice movement and (2) the nature of for-profit corporations which generate value by externalizing costs, translated to environmental injustices. This study aims to explore the paradoxical relation of ESG, including EJ criteria, despite their opposing notions, in response to the need for innovative mechanisms to address today’s pressing social and environmental challenges. To that end, this study will evaluate and critically assess the inclusion of EJ in ESG reporting. Furthermore, it identifies gaps in ESG frameworks and proposes the integration of EJ tools to address these deficiencies. This work is intended to help both businesses looking to expand their ESG frameworks and include EJ criteria to inform corporate decisions and assure long-term corporate viability, as well as EJ supporters in understanding the complex dynamic of ESG disclosure for the pursuit of EJ objectives.

Keywords: environmental justice, ESG, sustainability reporting, corporate law, environmental law, social justice

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Authors: A. R. Nor Azlina, H. Salwana, I. Zuraeda, A. R. Rashidah, O. Normah

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Transitioning towards globalization in the business environment has necessitated more essential growing changes such as competition, business strategy, innovation in technology and effectiveness of societal trends on adopting corporate governance are seen to be drivers of the future. This transformations on business environment has a significant impact to organizations’ performances. Many organizations are demanding for more proactive entrepreneurs with dynamic team, who can run and steer their business to success. Changing on strategy, roles, tasks, entrepreneurial skills and implementing corporate governance in relationship development is important to enhance the organization’s performance towards being more cost-efficient and subsequently increase its efficiency. Small Medium Enterprises (SMEs) in most developing countries are contributors to the economic growth of a nation. However, the potential of Microfinance Institutions (MFIs) is always overlooked in contributing towards SMEs development. The adoption of corporate governance and accountability in MFIs as driving forces for these SMEs is not incorporated in measurements of organization performance. This paper attempts to address some of the governance issues associated with dimensions of accountability in improving performances of microfinance institutions. Qualitative approach was adopted in this study to analyze the data collected. The qualitative approach emerges as contributing factor in understanding and critiquing accountability processes, as well as addressing the concerns of practitioners and policymakers. A close researcher engagement with the field which concerns process, embracing of situational complexity, as well as critical and reflective understandings of organizational phenomena remain as hallmarks of the tradition. It is concluded that in describing and scrutinizing an understanding of managerial behavior, organizational factors and macro-economic relationship in SMEs firm need to be improved. This is also the case in MFIs. A framework is developed to explore the linkage of corporate governance and accountability issues related to entrepreneurship as factors affecting MFIs performances in facing ongoing transformation of organization performance within Malaysian SMEs industries.

Keywords: accountability, corporate governance, microfinance, organization performance

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Authors: Mansur Lubabah Kwanbo

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Existing literatures have demonstrated the importance of executive duality (ED) and audit committee (AC) in the financial growth of companies. To some extent this points to corporate governance mechanism aiming at addressing makers and implementers of company policies to be centered on promoting only company objectives. However, furthering organizational objectives needs an adequate structure of control to realize that. Recent development in the various industries in Nigeria have indicated the internal control system (ICS)has not been able to adequately address most of the activities that results in ills of sustaining growth for these industries. It is from this premise the study has as one of its objective to determine the extent to which ICS significantly relates to ED and AC in listed Nigerian corporation. Data were sourced from 308 financial statements and accounts of the corporations that made the sample of the study. Logistic regression aided the test of the hypothesis formulated for the study. Findings revealed a significant relationship between the study variables. The study concludes that the internal control system (ICS) is effective despite the bifurcation of executive duality (ED) and the presence of the Audit Committee (AC) to the extent of preventing ills that encourage lack of sustainability of company’s growth. Sustaining legitimate policies that translate into huge earnings, and create value to stake holders should be pursued.

Keywords: audit committee (AC), executive duality (ED), internal control system (ICS), Nigeria

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Authors: Şeyda Kaya

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The aim of this study is to examine the relationship between corporate social responsibility perception and organizational commitment among Turkish cabin crew. At the same time, the social responsibility perception and organizational commitment scores of the participants were compared according to their gender, age, education level, title, and work experience. In the globalizing world, businesses have developed some innovative marketing methods in order to survive and strengthen their place in the market. Nowadays, consumers who are connected to the brand with an emotional bond rather than being just consumers. Corporate Social Responsibility Projects, on the one hand, provide social benefit, on the other hand, increase the brand awareness of businesses by providing credibility in the eyes of consumers. The rapid increase of competition, requires businesses to use their human resources, which is the most important resource to sustain their existence, in the most effective and efficient way. For this reason, the concept of ‘Organizational Commitment’ has become an important research topic for business and academics. Although there are studies in the literature to determine the effect of the perception of corporate social Responsibility on Organizational Commitment in Banking and Finance and Tourism sectors, there are no studies conducted specifically for the Turkish aviation sector to our best knowledge. Personal information form, CSR scale, Importance of CSR scale, Organizational commitment scale were used as data collection tools in the research. CSR Scale created by Türker (2006). was used to find out how employees felt about CSR. Importance of CSR Scale through a subscale of the Perceived Role of Ethics and Social Responsibility (PRESOR) that Etheredge (1999) converted into a two-factor framework, the significance of social responsibility for employees was assessed. Organizational Commitment Scale, Mowday, Steers, and Porter (1979) created the OCQ, which uses 15 measures to evaluate global commitment to the organization. As a result of the study, there is a significant positive relationship between the participants' CSR scale sub-dimensions, CSR to Employees, CSR to Customers, CSR to Society, CSR to Government, CSR to Natural Environment, CSR to Next Generation, CSR to Governmental Organizations, Importance of CSR, and Organizational Commitment scores. As a result; as the participants' Corporate Social Responsibility scores increase, their organizational commitment increases. To summarize the findings of our study, the scores obtained from the CSR scale and the scores obtained from the Organizational Commitment scale were found to have a positive and significant relationship. In other words, if the participants value the corporate social responsibility projects of the institution they work for and think that they spare time and effort, the importance they attach to the corporate social responsibility projects and their organizational commitment to the institution they work for, increase. Similarly, the scores obtained from the Importance of CSR and the scores obtained from the Organizational Commitment scale also have a positive and significant relationship. As the importance given to corporate social responsibility projects by the participants increases, their organizational commitment to the institution they work for also increases.

Keywords: corporate social responsibility, organizational commitment, Turkish cabin crew, aviation

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Authors: Novawiguna Kemalasari, Ahmad Badawi Saluy

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Recent economic developments are more dependent on the value created by intangible assets than tangible company's assets. Intangible assets in question is intellectual capital that is recognized as the basis of individual, organizational, and general competition in the 21st century. The rapid global economy and technological innovations that have led to tough competition in the business world, make IC creation, management, measurement, and evaluation an important indicator in improving company performance that will affect the value of the company in the future. This study aims to determine the strong influence of intellectual capital on corporate performance, and how the influence of human capital on structural capital and relation capital. By distributing questionnaires to 100 employees of banking companies in Jakarta with middle and upper positions. Approach method used is Partial Least Square (PLS) Based on research that has been done, it can be concluded that human capital has influence on relation capital and structural capital. Similarly, the influence on the performance of the company turned out to human capital and relation capital has a significant influence, but structural capital has a non-significant effect on company performance.

Keywords: human capital, structural capital, relation capital, corporate performance

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Authors: Danuta Szwajca

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Reputation The exponential growth of the Internet and social media (SM) in the recent years has contributed to changing the communication environment, in which stakeholders: customers, investors, business partners, employees, like their users, may post and distribute their opinions about the company and its products. This generates a number of potential threats to the image and reputation of both people and organizations. Social media create new opportunities not only for rapid and interactive communication but also for organizing themselves into strong pressure groups which may effectively affect the decisions of various organized bodies. Companies cannot ignore this fact and should use SM not only as an additional communication marketing channel but in a broader context - as a tool to build and protect their reputation. This article aims to identify the extent, scope, and directions of the use of SM in the activities of companies operating in the Polish market, as well as to identify threats and opportunities generated by the media in the area of reputation management. The results of research presented in the article showed that Polish companies recognize the potential of SM and try to apply them in their marketing efforts. However, his activity is limited only to maintain communication with customers through two portals: Facebook and Twitter. In the approach to the SM as a communication channel, the traditional way of thinking dominates, in which they are treated as just another promotional tool used by two departments: marketing and PR. This approach is called "silo" and is not integrated. This way of using SM does not allow effective building and protecting reputation in the Internet environment. To achieve this goal, the following research methods were used: the critical analysis of literature, analysis of secondary sources in a form of the report from the research conducted by Harvard Business Review Poland together with Capgemini Poland and case study.

Keywords: corporate reputation, reputation management, social media, risk reputation

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