Search results for: corporate%20performance

Authors: Syed Ahmed Salman

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Ethicality is essential in our daily activities, including personal and commercial activities. This is evidenced by referring to the historical development of the corporate governance and ethical guidelines. The first corporate governance guideline, i.e. Cadbury Report from U.K. focuses the responsibility of board members towards the shareholders only. Gradually, realising the need to take care of the society and community, stakeholders are now concerns of business entities. Consequently, later codes of corporate governance started extending the responsibility to the other stakeholders in addition to the shareholders. One prevailing corporate governance theory, i.e. stakeholder theory, has been widely used in the research to explore the effects of business entities on society. In addition, the Global Reporting Initiative (GRI) is the leading organisation which promotes social care from businesses for sustainable development. Conventionally, history shows that ethics is key to the long term success of businesses. Many organisations, societies, and regulators give full attention and consideration to ethics. Several countries have introduced ethical codes of conduct to direct trade activities. Similarly, Islam and other religions prohibit the practice of interest, uncertainty, and gambling because of its unethical nature. These prohibited practices are not at all good for the society, business, and any organisation especially as it is detrimental to the well-being of society. In order to avoid unethicality in the finance industry, Shari’ah scholars come out with the idea of Islamic finance which is free from the prohibited elements from the Islamic perspective. It can also be termed ethical finance. This paper highlights how Takaful as one of the Islamic finance products offers fair and just products to the contracting parties and the society. Takaful is framed based on ethical guidelines which are extracted from Shari’ah principles and divine sources such as the Quran and Sunnah. Takaful products have been widely offered all over the world, including in both Muslim and non-Muslim countries. It seems that it is gaining acceptance regardless of religion. This is evidence that Takaful is being accepted as an ethical financial product.

Keywords: ethics, insurance, Islamic finance, religion and takaful

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Authors: Wanlapha Phraibueng, Patrick Sentis, Geraldine Riviere-Giordano

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Corporate Social Responsibility (CSR) initiatives have been widely discussed especially in investor-oriented firms. In contrast, cooperatives pay less attention to CSR because their activities have integrated the responsibility and the solidity of social, economic and environment. On the other hand, by adopting ownership theory and agency theory – cooperatives ignore CSR investment due to unclarified decision control in the governance and the limitation to acquire the capital financed. The unique governance and financial structures in cooperatives lead to the conflict among the stakeholders and long-term investment which have an impact on firm financial performance. As an illustration of cooperatives dilemmas, we address the question of Whether or not cooperatives in term of governance and financial structures are the constraints on implementing CSR policies. We find that the governance and financial structures in large cooperatives are the influence factors which predispose cooperatives to invest on CSR. In contrast, in the startup or small cooperatives, its governance and financial structures are the constraints on implementing CSR policies. We propose the alternative financial structure based on the trade-off between debt and equity which aims to relax the restrictions in cooperatives’ governance and allow cooperatives to acquire the capital financed either from its members or non-members. We suggest that engaging equity as a financial structure induces cooperatives to invest on CSR policies. Alternative financial structure eliminates not only cooperative ownership control problem but also the constraints in capital acquisition. By implementing CSR activities consistent with the alternative financial choice, cooperatives can increase firm’s value and reduce the conflict among their stakeholders.

Keywords: cooperatives, corporate social responsibility, financial, governance

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Authors: Lajmi Azhaar, Yab Mdallelah

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This study examines the Tunisian market in which recent events, notably financial scandals, provide an appropriate framework for studying the impact of corporate governance on the audit report lag. Moreover, very little research has been done to examine this relationship in this context. The objective of this work is, therefore, to understand the factors influencing audit report lag, drawing primarily on agency theory (Jensen and Meckling, 1976), which shows that the characteristics of the board of directors have an impact on the report lag (independence, diligence, and size). In addition, the characteristics of the committee also have an impact on the audit report lag (size, independence, diligence, and expertise). Therefore, our research provides empirical evidence on the impact of governance mechanisms attributes on audit report lag. Using a sample of forty-seven (47) Tunisian companies listed on the Tunis Stock Exchange (BVMT) during the period from 2014 to 2019, and basing on the GMM method of the dynamic panel, multivariate analysis shows that most corporate governance attributes have a significant effect on audit report lag. Specifically, the audit committee diligence and the audit committee expertise have a significant and positive effect on audit report lag. But the diligence of the board has a significant and negative effect on audit report lag. However, this study finds no evidence that the audit committee independence, the size, independence, and diligence of the director’s board are associated with the audit report lag. In addition, the results of this study also show that there is a significant effect of some control variables. Finally, we are contributing to this study by using the GMM method of the dynamic panel. We are also using an emerging context that is very poorly developed and exploited by previous studies.

Keywords: governance mechanisms, audit committee, board of directors, audit report lag

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Authors: Morena Paulisic, Marli Gonan Bozac

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Business organization and management in theory are typically presented as gender- neutral. Although in practice female contribution to corporation is not questionable, gender diversity in top management of corporation is and that especially in emerging countries like Croatia. This paper brings insights into obstacles and problems which should be overcome. Furthermore, gives an introspective view on the most important promotion and motivation factors of powerful female CEOs in Croatia. The goal was to clarify perception and performance of female CEOs that contributed to their success and to determine mutual characteristics of women in corporate entrepreneurship regarding the motivation. For our study we used survey instrument that was developed for this research. The research methods used were: table research, field research, generalization method, comparative method, and statistical method (descriptive statistics and Pearson’s Chi-square test). Some result showed us that today even more women in corporations are not likely to accept more engagement at work if it harms their families (2003 – 31.9% in 2013 – 33.8%) although their main motivating factor is still interested job (2003 – 95.8%; in 2013-100%). It is also significant that 78.8 % of Croatian top managers (2013) think that women managers in Croatia are insufficiently spoken and written about, and that the reasons for this are that: (1) the society underestimates their ability (37.9%); (2) women underestimate themselves (22.4%); (3) the society still mainly focuses on male managers (20.7%) and (4) women managers avoid interviews and appearing on front pages (19%). The environment still “blocks” the natural course of advancement of women managers in organisations (entrepreneurship in general) and the main obstacle is that women must always or almost always be more capable than men in order to succeed (96.6%). Based on survey results on longitudinal research conducted in 2003 (return rate 30,8%) and 2013 (return rate 29,2%) in Croatia we expand understanding of determination indicators of corporate female entrepreneurship. Theoretically in practice gender structure at the management level (executive management, management board and supervisory board) throw years (2011- 2014) have positive score but still women remain significantly underrepresented at those positions. Findings from different sources have shown that diversity at the top of corporations’ correlates with better performance. In this paper, we have contributed to research on gender in corporate entrepreneurship by offering experiences from successful female CEOs and explanation why in social responsible society women with their characteristics can support needed changes and construct different way forward for corporations. Based on research result we can conclude that in future underrepresentation of female in corporate entrepreneurship should be overcome.

Keywords: Croatia, female entrepreneurship, glass ceiling, motivation

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Authors: Avadh Bihari

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Corporate social responsibility (CSR) has become a global parameter to define corporates' ethical and responsible behaviour. It was a voluntary practice in India till 2013, driven by various guidelines, which has become a mandate since 2014 under the Companies Act, 2013. This has compelled the corporates to redesign their CSR strategies by bringing in structures, planning, accountability, and transparency in their processes with a mandate to 'comply or explain'. Based on the author's M.Phil. dissertation, this paper presents the changes in organisational practices and institutional mechanisms of third-sector organisations (TSOs) with the theoretical frameworks of institutionalism and co-optation. It became an interesting case as India is the only country to have a law on CSR, which is not only mandating the reporting but the spending too. The space of CSR in India is changing rapidly and affecting multiple institutions, in the context of the changing roles of the state, market, and TSOs. Several factors such as stringent regulation on foreign funding, mandatory CSR pushing corporates to look out for NGOs, and dependency of Indian NGOs on CSR funds have come to the fore almost simultaneously, which made it an important area of study. Further, the paper aims at addressing the gap in the literature on the effects of mandated CSR on the functioning of TSOs through the empirical and theoretical findings of this study. The author had adopted an interpretivist position in this study to explore changes in organisational practices from the participants' experiences. Data were collected through in-depth interviews with five corporate officials, eleven officials from six TSOs, and two academicians, located at Mumbai and Delhi, India. The findings of this study show the legislation has institutionalised CSR, and TSOs get co-opted in the process of implementing mandated CSR. Seventy percent of the corporates implement their CSR projects through TSOs in India; this has affected the organisational practices of TSOs to a large extent. They are compelled to recruit expert workforce, create new departments for monitoring & evaluation, communications, and adopt management practices of project implementation from corporates. These are attempts to institutionalise the TSOs so that they can produce calculated results as demanded by corporates. In this process, TSOs get co-opted in a struggle to secure funds and lose their autonomy. The normative, coercive, and mimetic isomorphisms of institutionalism come into play as corporates are mandated to take up CSR, thereby influencing the organisational practices of TSOs. These results suggest that corporates and TSOs require an understanding of each other's work culture to develop mutual respect and work towards the goal of sustainable development of the communities. Further, TSOs need to retain their autonomy and understanding of ground realities without which they become an extension of the corporate-funder. For a successful CSR project, engagement beyond funding is required from corporate, through their involvement and not interference. CSR-led community development can be structured by management practices to an extent, but cannot overshadow the knowledge and experience of TSOs.

Keywords: corporate social responsibility, institutionalism, organisational practices, third-sector organisations

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Authors: Agata Ferreira

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Rapidly increasing debates and initiatives in the area of Corporate Social Responsibility (“CSR”) have reached the world of international investment law. CSR standards that focus on the operations of multinational companies are increasingly relevant in the context of international investment policy making. In the past, the connection between CSR standards and legal framework for foreign direct investment has been largely non-existent. Recently, however, there is a growing trend of a more balance approach to rights and obligations as between investors and states under investment treaties. CSR principles join other social and environmental measures slowly being included in the investment treaties to enhance their sustainable development dimension. Issues of CSR are present on negotiation tables of new mega regional investment treaties like TTIP for example. To date, only a very few bilateral investment treaties and a handful of other international treaties with investment provisions include CSR clauses. In addition, the existing provisions tend to be of a soft type, where parties merely acknowledge importance of good corporate governance and CSR for sustainable development or generally affirm their aim to encourage enterprises to observe internationally recognised guidelines and principles of CSR. The relevant provisions often leave it up to the states to encourage enterprises operating within their territories to voluntarily incorporate CSR principles. The interaction between general non-binding CSR standards, domestic laws and policies and provisions of international investment treaties have not been tested by investment tribunals yet. The role of investment treaties in raising awareness and promoting CSR is still in its infancy. The use of CSR standards in the international investment protection regime for promotion of CSR standards, and as a tool for disciplining investors into complying with such standards, pose a number of questions and is met with resistance from investors` lobbies. Integration of these two areas, CSR and international investment law, both consisting of multilayered, diverse and often overlapping instruments is by no means an easy task. Whether international investment world is ready to embrace CSR standards or shrug them off is a matter of uncertain future. The subject however has been raised, first introductions have been made and the time will show whether the relationship between legal framework of international investment and CSR will flourish or remain dormant.

Keywords: corporate social responsibility, foreign direct investment, investment treaties, sustainable development

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Authors: Augustar Omoze Ehighalua, Itotenaan Henry Ogiri

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As a mono-product economy, Nigeria relies largely on oil revenues for its foreign exchange earnings and the exploration activities of firms operating in the Niger Delta region have left in its wake tales of environmental degradation, poverty and misery. This, no doubt, have created corporate social responsibility issues in the region. The focus of this research is the critical evaluation of the ethical response to Corporate Social Responsibility (CSR) practice by firms operating in Nigeria Delta Swamplands. While CSR is becoming more popular in developed society with effective practice guidelines and reporting benchmark, there is a relatively low level of awareness and selective applicability of existing international guidelines to effectively support CSR practice in Nigeria. This study, haven identified the lack of CSR institutional framework attempts to develop an ethically-driven CSR transparency benchmark laced within a regulatory framework based on international best practices. The research adopts a qualitative methodology and makes use of primary data collected through semi-structured interviews conducted across the six core states of the Niger Delta Region. More importantly, the study adopts an inductive, interpretivist philosophical paradigm that reveal deep phenomenological insights into what local communities, civil society and government officials consider as good ethical benchmark for responsible CSR practice by organizations. The institutional theory provides for the main theoretical foundation, complemented by the stakeholder and legitimacy theories. The Nvivo software was used to analyze the data collected. This study shows that ethical responsibility is lacking in CSR practice by firms in the Niger Delta Region of Nigeria. Furthermore, findings of the study indicate key issues of environmental, health and safety, human rights, and labour as fundamental in developing an effective CSR practice guideline for Nigeria. The study has implications for public policy formulation as well as managerial perspective.

Keywords: corporate social responsibility, CSR, ethics, firms, Niger-Delta Swampland, Nigeria

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Authors: Mohammed Benlemlih

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Using a sample of 22,839 US firm-year observations over the 1991-2012 period, we find that high CSR firms pay more dividends than low CSR firms. The analysis of individual components of CSR provides strong support for this main finding: five of the six individual dimensions are also associated with high dividend payout. When analyzing the stability of dividend payout, our results show that socially irresponsible firms adjust dividends more rapidly than socially responsible firms do: dividend payout is more stable in high CSR firms. Additional results suggest that firms involved in two controversial activities -the military and alcohol - are associated with low dividend payouts. These findings are robust to alternative assumptions and model specifications, alternative measures of dividend, additional control, and several approaches to address endogeneity. Overall, our results are consistent with the expectation that high CSR firms may use dividend policy to manage the agency problems related to overinvestment in CSR.

Keywords: corporate social responsibility, dividend policy, Lintner model, agency theory, signaling theory, dividend stability

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Authors: Sedef Sert, Paola Garrone, Marco Melacini, Alessandro Perego

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This paper is aimed at enhancing our current understanding of motivations behind corporate in-kind donations and to find out whether economic efficiency may be a major driver. Our empirical setting is consisted of surplus food recovery and donation by companies from food supply chain. This choice of empirical setting is motivated by growing attention on the paradox of food insecurity and food waste i.e. a total of 842 million people worldwide were estimated to be suffering from regularly not getting enough food, while approximately 1.3 billion tons per year food is wasted globally. Recently, many authors have started considering surplus food donation to nonprofit organizations as a way to cope with social issue of food insecurity and environmental issue of food waste. In corporate philanthropy literature the motivations behind the corporate donations for social purposes, such as altruistic motivations, enhancements to employee morale, the organization’s image, supplier/customer relationships, local community support, have been examined. However, the relationship with economic efficiency is not studied and in many cases the pure economic efficiency as a decision making factor is neglected. Although in literature there are some studies give us the clue on economic value creation of surplus food donation such as saving landfill fees or getting tax deductions, so far there is no study focusing deeply on this phenomenon. In this paper, we develop a conceptual framework which explores the economic barriers and drivers towards alternative surplus food management options i.e. discounts, secondary markets, feeding animals, composting, energy recovery, disposal. The case study methodology is used to conduct the research. Protocols for semi structured interviews are prepared based on an extensive literature review and adapted after expert opinions. The interviews are conducted mostly with the supply chain and logistics managers of 20 companies in food sector operating in Italy, in particular in Lombardy region. The results shows that in current situation, the food manufacturing companies can experience cost saving by recovering and donating the surplus food with respect to other methods especially considering the disposal option. On the other hand, retail and food service sectors are not economically incentivized to recover and donate surplus food to disfavored population. The paper shows that not only strategic and moral motivations, but also economic motivations play an important role in managerial decision making process in surplus food management. We also believe that our research while rooted in the surplus food management topic delivers some interesting implications to more general research on corporate in-kind donations. It also shows that there is a huge room for policy making favoring the recovery and donation of surplus products.

Keywords: corporate philanthropy, donation, recovery, surplus food

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Authors: Agustin Baidez, Yolanda Ramirez

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There is currently a growing interest in the improvement of university governance and the disclosure of information on governance processes as an essential part of the transparency and accountability of universities. This paper aims to examine the extent and quality of voluntary corporate governance disclosure by public Spanish universities on their websites in relation to information need of stakeholders. The results of this study show that Spanish university stakeholders attach great importance to the disclosure of specific information on aspects of corporate governance. However, the quality of disclosed information on university governance in public Spanish universities websites is in the middle level. In order to satisfy the information needs of university stakeholders, Spanish universities can be recommended to focus on reporting higher quality information on university autonomy in financing, autonomy in management, autonomy regarding student selection and assessment, degree of consanguinity of executive directors, report on assigned public funding based on results, and management reports.

Keywords: university, governance, transparency, stakeholders

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Authors: Jaballah Jamil

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KLD (Peter Kinder, Steve Lydenberg and Amy Domini) research & analytics is an independent intermediary of social performance information that adopts an investor-pay model. KLD rating agency does not have an explicit monitoring on the rated firm which suggests that KLD ratings may not include private informations. Moreover, the incapacity of KLD to predict accurately the extra-financial rating of Enron casts doubt on the reliability of KLD ratings. Therefore, we first investigate whether KLD ratings affect investors' perception by studying the effect of KLD rating changes on firms' financial performances. Second, we study the impact of the Enron scandal on investors' perception of KLD rating changes by comparing the effect of KLD rating changes on firms' financial performances before and after the failure of Enron. We propose an empirical study that relates a number of equally-weighted portfolios returns, excess stock returns and book-to-market ratio to different dimensions of KLD social responsibility ratings. We first find that over the last two decades KLD rating changes influence significantly and negatively stock returns and book-to-market ratio of rated firms. This finding suggests that a raise in corporate social responsibility rating lowers the firm's risk. Second, to assess the Enron scandal's effect on the perception of KLD ratings, we compare the effect of KLD rating changes before and after the Enron scandal. We find that after the Enron scandal this significant effect disappears. This finding supports the view that the Enron scandal annihilates the KLD's effect on Socially Responsible Investors. Therefore, our findings may question results of recent studies that use KLD ratings as a proxy for Corporate Social Responsibility behavior.

Keywords: KLD social rating agency, investors' perception, investment decision, financial performance

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Authors: O. Colot, M. Croquet, L. Cultrera, Y. Fandja Collince

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The objective of our research is to evaluate the impact of the allowance for corporate equity (ACE) on the financial structure of Belgian SME in order to highlight the potential existence of a fiscal leverage. To limit the biases linked to the rationing of the capital further to the financial crisis, we compare first the dynamic evolution of the financial structure of the Belgian firms over the period 2006-2015 by focusing on three sub-periods: 2006-2008, 2009-2012 and 2013-2015. We give then an international size to this comparison by including SMEs from countries adjoining Belgium (France, Germany, Netherlands and the United Kingdom) and within which there is no ACE. This comparison allows better understanding the fiscal advantage linked to the ACE of firms evolving in a relatively unstable economic environment further to the financial crisis of 2008. This research is relevant given the economic and political context in which Belgium operates and the very uncertain future of the Belgian ACE. The originality of this research is twofold: the long study period and the consideration of the effects of the financial and economic crisis on the financing structure of Belgian SMEs. The results of this research, even though they confirm the existence of a positive fiscal leverage for the tax deduction for venture capital on the financing structure of Belgian SMEs, do not allow the extent of this leverage to be clearly quantified. The comparative evolution of financing structures over the period 2006-2015 of Belgian, French, German, Dutch and English SMEs shows a strong similarity in the overall evolution of their financing.

Keywords: allowance for corporate equity, Belgium, financial structure, small and medium sized firms

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Authors: Ahmad Haidar

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This research paper investigates the concept of modern management, concentrating on the development of managerial practices and the adoption of innovative strategies in response to the fast-changing business landscape caused by Artificial Intelligence (AI). The study begins by examining the historical context of management theories, tracing the progression from classical to contemporary models, and identifying key drivers of change. Through a comprehensive review of existing literature and case studies, this paper provides valuable insights into the principles and practices of modern management, offering a roadmap for organizations aiming to navigate the complexities of the contemporary business world. The paper examines the growing role of digital technology in modern management, focusing on incorporating AI, machine learning, and data analytics to streamline operations and facilitate informed decision-making. Moreover, the research highlights the emergence of new principles, such as adaptability, flexibility, public participation, trust, transparency, and digital mindset, as crucial components of modern management. Also, the role of business leaders is investigated by studying contemporary leadership styles, such as transformational, situational, and servant leadership, emphasizing the significance of emotional intelligence, empathy, and collaboration in fostering a healthy organizational culture. Furthermore, the research delves into the crucial role of environmental sustainability, corporate social responsibility (CSR), and corporate digital responsibility (CDR). Organizations strive to balance economic growth with ethical considerations and long-term viability. The primary research question for this study is: "What are the key principles, practices, and innovations that define modern management, and how can organizations effectively implement these strategies to thrive in the rapidly changing business landscape?." The research contributes to a comprehensive understanding of modern management by examining its historical context, the impact of digital technologies, the importance of contemporary leadership styles, and the role of CSR and CDR in today's business landscape.

Keywords: modern management, digital technology, leadership styles, adaptability, innovation, corporate social responsibility, organizational success, corporate digital responsibility

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Authors: Kristine Demilou Santiago

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In a context of a developing nation, how important is the role of Corporate Social Responsibility health programs? Is there a possibility that this will render a large impact in a society where health benefits are insufficient? The Philippine government has been in an unceasing battle to provide its citizens competitive health benefits through launching various health programs. As the efforts are being claimed by the government, the numbers just show that all the health benefits being offered such as PhilHealth health cards, medical missions and other subsidized government health benefits are not effective and sufficient at the minimum level. This is a major characteristic of a developing nation which the Philippine government is focusing on addressing as it becomes a national concern under the effects of poverty. Industrial companies, through Corporate Social Responsibility, are playing an important role in the aspiration to resolve this problem on health programs as supposed to be basic services to citizens of the Philippine government. The rise of commitment by these industrial companies to render health programs to communities as part of their corporate citizenship has covered a large portion of the basic health services that the Filipino citizens are supposed to be receiving. This is the most salient subject that a developing nation should focus on determining the important contribution of industrial companies present in their country as part of the citizens’ access to basic health services. The use of survey forms containing quantitative and qualitative questions which aim to give numerical figures and support answers as to the role of CSR Health programs in helping the communities receive the basic health services they need was the methodological procedure followed in this research. A sample population in a community where the largest industrial company in a province of the Philippines was taken through simple random sampling. The assumption is that this sample population which represents the whole of the community has the highest opportunities to access both the government health services and the CSR health program services of the industrial company located in their community. Results of the research have shown a significant level of participation by industrial companies through their CSR health programs in the attainment of basic health services that should be rendered by the Philippine government to its citizens as part of the state’s health benefits. In a context of a developing nation such as the Philippines, the role of Corporate Social Responsibility is beyond the expectation of initiating to resolve environmental and social issues. It is moving deeper in the concept of the corporate industries being a pillar of the government in catering the support needed by the individuals in the community for its development. As such, the concept of the presence of an industrial company in a community is said to be a parallel progress: by which when an industrial company expands because it is becoming more profitable, so is the community gaining the same step of progress in terms of socioeconomic development.

Keywords: basic health services, CSR health program, health services in a developing nation, Philippines health benefits

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Authors: Mohammad A. R. S. Almutairi

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This study will provide the introduction that constitutes the problem cornerstone of legal disputes of disclosure and transparency under Kuwaiti Capital market authority Law No. 7 of 2010. It also will discuss the reasons for the emergence of corporate governance and its purposes in the Capital Market Authority Law in Kuwait. In addition, it will show the legal disputes resulting from the unclear concept of disclosure and interest and will discuss the main reasons in support of the possible solution. In addition, this study will argue why the Capital Market Authority Law in Kuwait needs a clear concept and a straight structure of disclosure under section 100. This study will demonstrate why a clear disclosure is led to a better application of the law. This study will demonstrate the fairness in applying the law regarding the punishment against individual, companies and securities market. Furthermore, it will discuss added confidence between investors and the stock market with a clear concept under section 100. Finally, it will summarize arises problem and possible solution.

Keywords: corporate governors, disclosure, transparency, fairness

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Authors: Prateep Wajeetongratana

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The objective of this research is to examine the effects of internal audit innovation on firm performance effectiveness influences of financial report reliability, organizational process improvement, and risk management effectiveness. This paper drew upon the survey data collected from 400 employees survey conducted at Nonthaburi province, Thailand. The statistics utilized in this paper included percentage, mean, standard deviation, and regression analysis. The findings revealed that the majority of samples were between 31-40 years old, married, held an undergraduate degree, and had an average income between 10,000-15,000 baht. And also the results show that auditing integration has only influence on financial report reliability. Moreover, corporate risk evaluation has effect on firm performance by risk management effectiveness and control self-assessment has effect influence on firm performance by organizational process improvement and risk management effectiveness as well.

Keywords: corporate risk evaluation, firm performance effectiveness, internal audit innovation, marketing management

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Authors: Eko Budi Santoso

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There is a growing interest in Corporate Social Responsibility (CSR) issues in developing countries such as Indonesia. Firms disclose their CSR activities, and some provide assurance to gain recognition as socially responsible firms. However, several of those socially responsible firms involve in tax scandals and raise a question of whether CSR disclosure is used to disguise firm misconduct or as a reflection of socially responsible firms. Specifically, whether firms engage in CSR disclosure and its assurance also responsible for their tax matters. This study examines the association between CSR disclosure and tax aggressiveness and the role of sustainability reporting assurance to the association. This research develops a modified index according to global reporting initiatives to measure CSR disclosure and various measurement for tax aggressiveness. Using a sample of Indonesian go public companies issued CSR disclosure, the empirical result shows that there is an association between CSR disclosure and tax aggressiveness. In addition, results also indicate sustainability reporting assurance moderate those association. The findings suggest that stakeholder in developing countries should examine carefully firms with active CSR disclosure before label it as socially responsible firms. JEL Classification: M14

Keywords: CSR disclosure, tax aggressiveness, assurance, business ethics

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Authors: David Abad, M. Encarnación Lucas-Pérez, Antonio Minguez-Vera, José Yagüe

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We examine explicitly the relation between the gender diversity on corporate boards and the levels of information asymmetry in the stock market. Based on prior evidence that suggests that the presence of women on director boards increases the quantity and quality of public disclosure by firms, we expect firms with higher gender diversity on their boards to show lower levels of information asymmetry in the market. Using a Spanish sample for the period 2004-2009, proxies for information asymmetry estimated from high-frequency data, and a system GMM methodology, we find that the gender diversity on boards is negative associated with the level of information asymmetry in the stock market. Our findings support legislative changes implemented to increase the presence of women on boards in several European countries by providing evidence that gender diverse boards have beneficial effects on stock markets.

Keywords: corporate board, female directors, gender diversity, information asymmetry, market microstructure

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Authors: Synthia Atas Sari

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The purpose of this paper is to examine the impact of reward system which determine by government over the work of Board of Commissioners to implement good corporate governance in Indonesian state-owned enterprises. To do so, this study analyzes the adequacy of the remuneration, the job attractiveness, and the board commitment and dedication with the remuneration system. Qualitative method used to examine the significant features and challenges to the government policy over the remuneration determination for the board of commissioners to their roles. Data gathered through semi-structure in-depth interview to the twenty-one participants over nine Indonesian stated-owned enterprises and written documents. Findings of this study indicate that government policies over the remuneration system is not effective to increase the performance of board of commissioners in implementing good corporate governance in Indonesian stated-owned enterprises due to unattractiveness of the remuneration amount, demotivate active members, and conflict interest over members of the remuneration committee.

Keywords: reward system, board of commissioners, stated-owned enterprises, government policy

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Authors: Libor Zachoval, Daire O Broin, Oisin Cawley

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E-learning platforms, such as Blackboard have two major shortcomings: limited data capture as a result of the limitations of SCORM (Shareable Content Object Reference Model), and lack of incorporation of Artificial Intelligence (AI) and machine learning algorithms which could lead to better course adaptations. With the recent development of Experience Application Programming Interface (xAPI), a large amount of additional types of data can be captured and that opens a window of possibilities from which online education can benefit. In a corporate setting, where companies invest billions on the learning and development of their employees, some learner behaviours can be troublesome for they can hinder the knowledge development of a learner. Behaviours that hinder the knowledge development also raise ambiguity about learner’s knowledge mastery, specifically those related to gaming the system. Furthermore, a company receives little benefit from their investment if employees are passing courses without possessing the required knowledge and potential compliance risks may arise. Using xAPI and rules derived from a state-of-the-art review, we identified three learner behaviours, primarily related to guessing, in a corporate compliance course. The identified behaviours are: trying each option for a question, specifically for multiple-choice questions; selecting a single option for all the questions on the test; and continuously repeating tests upon failing as opposed to going over the learning material. These behaviours were detected on learners who repeated the test at least 4 times before passing the course. These findings suggest that gauging the mastery of a learner from multiple-choice questions test scores alone is a naive approach. Thus, next steps will consider the incorporation of additional data points, knowledge estimation models to model knowledge mastery of a learner more accurately, and analysis of the data for correlations between knowledge development and identified learner behaviours. Additional work could explore how learner behaviours could be utilised to make changes to a course. For example, course content may require modifications (certain sections of learning material may be shown to not be helpful to many learners to master the learning outcomes aimed at) or course design (such as the type and duration of feedback).

Keywords: artificial intelligence, corporate e-learning environment, knowledge maintenance, xAPI

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Authors: Sélima Baccar, Ephraim Clark

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This paper can be considered as a new perspective to analyse credit spreads. A comprehensive empirical analysis of conditional variance of credit spreads indices is performed using various GARCH models. Based on a comparison between traditional and asymmetric GARCH models with alternative functional forms of the conditional density, we intend to identify what macroeconomic and financial factors have driven daily changes in the US Dollar credit spreads in the period from January 2011 through January 2013. The results provide a strong interdependence between credit spreads and the explanatory factors related to the conditions of interest rates, the state of the stock market, the bond market liquidity and the exchange risk. The empirical findings support the use of asymmetric GARCH models. The AGARCH and GJR models outperform the traditional GARCH in credit spreads modelling. We show, also, that the leptokurtic Student-t assumption is better than the Gaussian distribution and improves the quality of the estimates, whatever the rating or maturity.

Keywords: corporate bonds, default risk, credit spreads, asymmetric garch models, student-t distribution

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Authors: S. Sundarasen, I. Ibrahim

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This study examines whether the legal origin of a country alters the association between corruption and corporate performance in the East Asia and South East Asia Region. A total of 18,286 companies from 14 countries in the East Asia and South East Asia Region are tested using Generalized Least Square (GLS) panel and pool data analysis with the cross-section being the income level. The data is further analyzed in terms of high income, upper middle income and low-income countries within the East and South Asia region. The empirical results indicate that legal origin positively moderates the relationship between a country’s corruption level and firm performance. As for the sub-analysis, legal origin positively moderates only in the high and upper middle-income countries. As for the low-income countries, no significance is documented in both the common and civil law.

Keywords: corruption, performance, legal origin, East Asia and South East Asia Region

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Authors: N. Amruth Raj, Suja S. Nair

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The last six decades have borne witness to a radical change in the private sectors relationship with both the state and civil society. Firms have been increasingly called upon to adopt strategies beyond the financial aspects of their operations and consider the social and environmental impact of their business activities. In this context, many companies have modified their policies and activities and engaged into Corporate Social Responsibility (CSR) especially on Rural development in India. At the firm level, CSR is implemented through various practices, which aim to enhance the company’s social and environmental performance and may cover various topics. Examples of CSR practices are abundant in Andhra Pradesh relevant literature. For instance, in India especially at Andhra Pradesh companies like Amara Raaja requires from its suppliers to prohibit child labour, Nagarjuna Cements applies a series of programs for reducing its CO2 emissions, LANCO group of Industries addresses health and safety issues in the workplace whereas GVK works limited has adopted a series of policies for addressing human rights and environmental abuse related to its operations.

Keywords: CSR, limitations, need, objectives, rural development

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Authors: Ade Oyedijo

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This paper reports the findings of a study on the strategic and organizational antecedents and effects of two opposing pay patterns used by some manufacturing companies in Lagos Nigeria with particular reference to the behavioural correlates of the pay strategies considered. The assumed relationship between pay strategies and some organizational correlates such as business and corporate strategies and firm size was considered problematic in view of their likely implications for employee motivation and citizenship behaviour and firm performance. The survey research method was used for the study. Structured, close ended questions were used to collect primary data from the respondents. A multipart Likert scale was used to measure the pay orientations of the respondent firms and the job and organizational involvement of the respondent employees. Utilizing hierarchical linear regression method and "t-test" to analyze the data obtained from 48 manufacturing companies of various sizes and strategies, it was found that the dominant pattern of employee compensation in the sampled manufacturing companies. The study also revealed that the choice of a pay strategy was strongly influenced by organizational size as well as the type of business and corporate level strategies adopted by afirm. Firms pursuing a strategy of related and unrelated diversification are more likely to adopt the algorithmic compensation system than single product firms because of their relatively larger size and scope. However; firms that pursue a competitive advantage through a business level strategy of cost efficiency are more likely to use the experiential, variable pay strategy. The study found that an algorithmic compensation strategy is as effective as experiential compensation strategy in the promotion of organizational citizenship behaviour and motivation of employees.

Keywords: compensation, corporate strategy, business strategy, motivation, citizenship behaviour, algorithmic, experiential, organizational commitment, work environment

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Authors: Nada Azhar

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The aim of the paper is to investigate the effect of corporate social responsibility (CSR) CSR on the National Commercial Bank (NCB) in Saudi Arabia. In order to achieve this, a case study was made of the CSR activities of this bank from the perspective of its branch managers. The NCB was chosen as it was one of the first Saudi banks to engage in CSR and currently has a wide range of CSR initiatives. A qualitative research method was used. Open-ended questionnaires were administered to eighty branch managers of the NCB, with fifty-five usable questionnaires returned and twenty managers were interviewed as part of the primary research. Data from both questionnaires and interviews were analysed using qualitative content analysis. Six themes emerged from the questionnaire findings were used to develop the interview questions. These themes are the following: Awareness of employees about CSR in the NCB; CSR activities as a type of investment; Government and media support; Increased employee loyalty in the NCB; Prestige and profit to the NCB; and View of CSR in Islam. This paper makes a theoretical contribution in that it investigates and increases understanding of the effect of CSR on the NCB in Saudi Arabia. In addition, it makes a practical contribution by making recommendations which can support the development of CSR in the NCB. A limitation of the paper is that it is a case study of only one bank. It is therefore recommended that future research could be conducted with other banks in Saudi Arabia, or indeed, with a range of other types of firm within the financial services area in Saudi Arabia. In this way, the same issues could be explored but with a greater potential generalisability of findings of CSR within the Saudi Arabian financial services industry. In addition, this paper takes a qualitative approach and it is suggested that future research be carried out using mixed methods, which could provide a greater depth of analysis.

Keywords: branch managers, corporate social responsibility, national commercial bank, Saudi Arabia

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Authors: Y. Tahat, T. Dunne, S. Fifield, D. Power

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Information about a firm’s usage of Financial Instruments (FIs) plays a very important role in determining its financial position and performance. Yet accounting standard-setters have encountered problems when deciding on the FI-related disclosures which firms must make. The primary objective of this paper is to review the extant literature on FI disclosure. This objective is achieved by surveying the literature on: the corporate usage of FIs; the different accounting standards adopted concerning FIs; and empirical studies on FI disclosure. This review concludes that the current research on FI disclosure has generated a number of useful insights. In particular, the paper reports that: FIs are a very important risk management mechanism in ensuring that companies have the cash available to make value-enhancing investments, however, without a clear set of risk management objectives, using such instruments can be dangerous; accounting standards concerning FIs have resulted in enhanced transparency about the usage of these instruments; and FI-related information is a key input into investors’ decision-making processes. Finally, the paper provides a number of suggestions for future research in the area.

Keywords: financial instruments, financial reporting, accounting standards, value relevance, corporate disclosure

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Authors: Radhika Ralhan

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With the formalization of 2030, Global Agenda for Sustainable Development nations have instantaneously geared up their efforts towards the implementation of a comprehensive list of global goals. The criticality of Sustainable Development Goals (SDGs) is imperative, as it will define the course and pace of development for the next 15 years. This development will entail transformational shifts towards a green and inclusive growth. Leadership, investments and technology will constitute as key ingredients of this transformational shift and governance will emerge as a one of the most significant driver of the global 2030 agenda. Corporate Governance is viewed as one of the key force to accelerate the momentum of SDGs and initiate these transformational shifts. Many senior level leaders have reinstated their conviction that adopting a triple bottom line approach will play an imperative role in transforming the entire industrial sector. In the Indian context, the above occurrence bears an intriguing facet, as the framing of SDGs in the global scenario coincided with the emergence of mandatory Corporate Social Responsibility (CSR) Rules in India at national level. As one of the leading democracies in the world, India is among few countries to formally mandate companies to spend 2% from their CSR funds under Section 135 of The New Companies Act 2013. The overarching framework of SDGs correlates to the areas of CSR interventions as mentioned in the Schedule VII of Section 135. As one of the legitimate stakeholders, business leaders have expressed their commitments to their respective governments, to reorient the entire fabric of their companies to scale up global priorities. This is explicitly seen in the case of India where leading business entities have converged national government priorities of Clean India, Make in India and Skill India by actively participating in the campaigns and incorporating these programmes within the ambit of their CSR policies. However, the CSR Act has received mixed responses with associated concerns such as the onus of doing what the government has to do, mandatory reporting mechanisms, policy disclosures, personnel handling CSR portfolios etc. The overall objective of the paper, therefore, rests in analyzing the discourse of CSR and the perspectives of Indian Inc. in imbibing the principles of SDGs within their business polices and operations. Through primary and secondary research analysis, the paper attempts to outline the diverse challenges that are being faced by Indian businesses while establishing the business case of sustainable responsibility. Some of the principal questions that paper addresses are: What are the SDG priorities for India Inc. as per their respective industry sectors? How can corporate policies imbibe the SDGs principles? How can the global concerns in form of SDGs align with the national CSR mandate and development issues? What initiatives have been undertaken by the companies to integrate their long term business strategy and sustainability? The paper will also reinstate an approach or a way forward that will enable businesses to proceed beyond compliance and accentuate the principles of responsibility and transparency within their operational framework.

Keywords: corporate social responsibility, CSR, India Inc., section 135, new companies act 2013, sustainable development goals, SDGs, sustainability, corporate governance

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Authors: Peter Crow

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Boards and directors have been subjects of much scholarly research and public interest over several decades, more so since the succession of high profile company failures of the early 2000s. An array of research outputs including information, correlations, descriptions, models, hypotheses and theories have been reported. While some of this research has shed light on aspects of the board–performance relationship and on board tasks and behaviours, the nature and characteristics of the supposed board–performance relationship remain undetermined. That satisfactory explanations of how boards influence company performance have yet to emerge is a significant blind spot. Yet the board is ultimately responsible for company performance, in accordance with the wishes of shareholders. The aim of this paper is to explore corporate governance and board practice through the lens of strategic management, and to take tentative steps towards a new conception of corporate governance. The findings of a recent longitudinal multiple-case study designed to explore the board’s involvement in strategic management are reported. Qualitative and quantitative data was collected from two quasi-public large companies in New Zealand including from first-hand observations of boards in session, semi-structured interviews with chief executives and chairmen and the inspection of company and board documentation. A synthetic timeline framework was used to collate the financial, board structure, board activity and decision-making data, in order to provide a holistic perspective. Decision sequences were identified, and realist techniques of abduction and retroduction were iteratively applied to analyse the multi-year data set. Using several models previously proposed in the literature as a guide, conjectures were formed, tested and refined—the culmination of which was a provisional model of how boards can influence performance via strategic management. The model builds on both existing theoretical perspectives and theoretical models proposed in the corporate governance and strategic management literature. This paper seeks to add to the understanding of how boards can make meaningful contributions to value creation via strategic management, and to comment on the qualities of directors, social interactions in boardrooms and other circumstances within which influence might be possible given the highly contingent relationship between board activity and business performance outcomes.

Keywords: board practice, case study, corporate governance, strategic management

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Authors: Lucia Varra, Marzia Timolo

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The interest of scholars towards corporate sustainability has strengthened in recent years in parallel with the growing need to undertake paths of cultural and organizational change, as a way for greater competitiveness and stakeholders’ satisfaction. In fact, studies on the business sustainability, while on the one hand have integrated the three dimensions of sustainability that existed for some time in the economic approaches (economic, environmental and social dimensions), on the other hand did not give rise to an organic construct that puts together the aspects of strategic management with corporate social responsibility and even less with the organizational issues. Therefore some important questions remain open: Which organizational structure and which operational mechanisms are coherent or propitious to a sustainability strategy? Existing studies appear to be fragmented, although some aspects have shared importance: knowledge management, human resource, management, leadership, innovation, etc. The construction of a model of sustainable organization that supports the sustainability strategy no longer seems to be postponed, as is its connection with the main practices of measuring corporate social responsibility performance. The paper aims to identify the organizational characteristics of a sustainable corporate. To this end, from a theoretical point of view the work examines the main existing literary contributions and, from a practical point of view, it presents a business case referring to a service organization that for years has undertaken the sustainability strategy. This paper is divided into two parts: the first part concerns a review of the main articles on the strategic management topic and the main organizational issues raised by the literature, such as knowledge management, leadership, innovation, etc.; later, a modeling of the main variables examined by scholars and an integration of these with the international measurement standards of CSR is proposed. In the second part, using the methodology of the case study company, the hypotheses and the structure of the proposed model that aims to integrate the strategic issues with the organizational aspects and measurement of sustainability performance, are applied to an Italian company, which has some organizational and human resource management interventions are in place to align strategic decisions with the structure and operating mechanisms of the structure. The case presented supports the hypotheses of the model.

Keywords: CSR, strategic management, sustainable leadership, sustainable human resource management, sustainable organization

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Authors: Seyedmohammad Mousavian, Hanlu Fan, Quingliang Tang

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Climate change is emerging as a severe threat to our society, so businesses are expected to take actions to mitigate carbon emissions. However, the actions to be taken depend on managers’ perceptions of climate change risks. Yet, there is scant research on this issue, and understanding of the determinants of corporate perceptions of climate change is extremely limited. The purpose of this study is to close this gap by examining the relationship between perceptions of climate risk and firm-level and country-level factors. In this study, climate change risk captures physical, regulatory, and other risks, and we use data from European companies that participated in CDP from 2010 to 2017. This study reveals those perceptions of climate change risk are significantly positively associated with the environmental, social, and governance score, firm size, and membership in a carbon-intensive sector. In addition, we find that managers in firms operating in a geographic area that is sensitive to the consequences of global warming are more likely to perceive and formally recognize carbon-related risks in their CDP reports.

Keywords: carbon actions, CDP, climate change risk, risk perception

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