bluuebunny/crossref_metadata_2025 huggingface dataset:
The complex relation between director independence and board effectiveness
Authors: Van den Berghe L.A.A. , Baelden Tom
Published: January 2010

Purpose

Throughout the world, reform initiatives have been set up to fix perceived and actual corporate governance shortcomings. One of the proposed remedies has been to improve the independence of the board of directors. The main purpose of this paper is to examine the issue of independence as one element to improve board effectiveness. In doing this, the focus is mainly on the monitoring role, and to a lesser extent on the strategic role of the board of directors.

Design/methodology/approach

A comparison of the definitions of independence provided by the corporate governance codes and recommendations reveals that they approach the concept of independence mainly from a formal point of view, where independence equals being in a position free of any possible conflicts of interest. It is stated that this approach does not capture all the aspects of independence and that independence cannot be an end in itself. Instead of emphasising independence, the paper hypothesises that, to ensure board effectiveness, a board of directors is needed which, among other things, vigilantly monitors the company and pursues an objective decision‐making process.

Findings

Without neglecting the importance of other elements in achieving this two‐fold goal, the paper highlights the need for directors to have the “right attitude”. To achieve this, three conditions have to be jointly fulfilled: each director should have the ability as well as the willingness to be a critical thinker, with an independent mind, however, the environment should also be such as to facilitate directors to display this attitude.

Originality/value

These three factors – ability, willingness and environment – are discussed in depth and integrated into a tentative framework for evaluating the chance that a given director will display this attitude. As such, this paper is of value both for practitioners as academics and will mostly affect their understanding of the concept of independence.
Antecedents and consequences of failed governance: the Enron example
Authors: Downes Meredith , Russ Gail S.
Published: January 2010

Purpose

The purpose of this paper is to examine the demise of Enron, one of the most curious aspects of which was that on the surface it appeared to be thriving, giving no one any cause to question the company's governance structures.

Design/methodology/approach

The paper provides a detailed analysis of the composition of Enron's board of directors, demonstrating how directly observable traits are not the sole determinants of effective corporate governance.

Findings

The paper finds that collectively, the board's qualifications are less overt, and even more elusive are the ethics and morals that drive the governance process.

Originality/value

This case illustrates how ethics and morals are necessary, but that none is sufficient, to deter poor governance, and also underscores the far‐reaching impact of Enron's moral deficiencies.
Retrieving corporate policy: managing minority dissent
Authors: Davis Paul
Published: January 2010

Purpose

The purpose of the research was to discover to what extent franchisees supported the direction the company was taking as determined by the board of directors. Specifically, franchisees were invited to comment on corporate policies, initiatives and values that they were expected to implement and embody in their daily business practices.

Design/methodology/approach

This article presents the findings from an international study conducted on the world's largest retail bakery franchisor which operates some 670 bakeries (January 2004) throughout Australia and New Zealand.

Findings

In many key areas of company policy and values, a considerable proportion of franchisees appeared to be strongly opposed to, or ignorant of, what the corporate body was promoting as business strategy. With respect to environmental initiatives, many franchisees are not supporting corporate policy to a very significant degree and some major initiatives seem destined to fail unless effective intervention is enacted. A proportion of franchisees are not implementing many core policies designed to promote good employee relations and develop staff potential. There were also some concerns regarding franchisee attitudes towards community involvement.

Originality/value

Outlined here are the distinct characteristics of franchise organizations that can combine to frustrate corporate governance. The survey findings as they relate to the company's policy initiatives and organizational values are discussed, along with recommendations for developing more effective franchisor‐franchisee relationships.
Corporate governance in the USA and Europe: they are closer than you might think
Authors: Payne Andros
Published: January 2010

Purpose

Aims to provide an insightful viewpoint on the growing similarity of corporate governance for companies in the USA and Europe and to provide corporate leaders with a framework for anticipating corporate governance changes in order to avoid risks and maximize enterprise value.

Design/methodology/approach

Likely patterns of corporate governance changes are derived through the examination of the underlying factors impacting corporate governance in the USA and Europe and matching these with multiple corporate governance events or changes in the marketplace.

Findings

Corporate governance in the USA and Europe is becoming more similar even though the underlying drivers for convergence are different in Europe and the USA.

Research limitations/implications

Conclusions are based on a limited number of anecdotal observations and are not empirically substantiated.

Practical implications

Provides a useful framework for understanding the likely development of corporate governance in the USA and Europe, thereby helping corporate leaders to better anticipate opportunities and risks.

Originality/value

This paper identifies an important pattern in changes to corporate governance which has hereto received little attention in the business and academic press.
Global sports organisations and their governance
Authors: Forster John
Published: January 2010

Purpose

To identify the organisations that provide global governance within the sports industry, to discuss their role, and to suggest that they have self‐governance problems due to both their evolution and the massive commercialisation of sport of recent decades.

Design/methodology/approach

An empirical‐based argument is conducted. Standing at the apex of a hierarchy of national governing bodies and playing organisations, global sports organisations (GSOs) are defined and classified in terms of their governance functions, their commonalities and differences and their interconnections described and analysed. The GSOs for soccer, the Olympics and athletics are used as illustrative cases. Deficiencies in the small sports governance literature are identified. It is argued how the GSOs have maintained their authority as governance organisations despite being private organisations. Hirschman's “Voice, exit and loyalty” model is offered as a partial theoretical interpretation of their situation.

Findings

Although one of the GSOs' original major functions of formalising international sport is now complete, they have retained not only their sport governance monopolies and authority but also the original structures designed for amateur sport. This creates problems when the governance monopoly can be used as a revenue device.

Originality/value

Sport is an important part of global culture and an industry worth hundreds of billions of dollars where accusations of corruption are common but global governance is little examined. The GSOs, present‐day commercial roles and enormous revenues create unresolved governance problems and these are described.
Executive incentive pay strategies in entrepreneurial UK initial public offering companies: an empirical study
Authors: Allcock Deborah , Pass Christopher
Published: January 2010

Purpose

The purpose of this paper is to use a sample of UK entrepreneurial initial public offering (IPO) companies to investigate whether they change their compensation strategies as they undertake the crucial transformation of the business from private to public status.

Design/methodology/approach

The paper uses the agency perspective to underpin an examination of the changes within the compensation packages of companies at the stage of the initial public offering, particularly with regard to the use of executive director incentive schemes, and compares this to “best practice” guidelines issued within the UK.

Findings

The paper discovers that even though incentive schemes are adopted, the majority are unconditional and requiring only an improvement in share price and the executive to remain employed in order for gains to be made. The general finding is that before IPO most companies did not have an incentive pay scheme in place, and those that did, operated unconditional option schemes. However, after IPO most companies introduced an incentive pay scheme, but the majority were unconditional rather than conditional (i.e. schemes requiring executives to meet pre‐determined performance criteria – as recommended by “best practice” guidelines).

Originality/value

The paper exposes that, contrary to “best practice” guidelines and regulations, many of these schemes reward executives unconditionally with the only factor being them remaining in employment over the vesting period. Despite “best practice” and regulations, firms still appear to be defensive and protect the executives from rigorous scrutiny by shareholders.
Directors' remuneration, firm's performance and corporate governance in Malaysia among distressed companies
Authors: Nahar Abdullah Shamsul
Published: January 2010

Purpose

The purpose of this study is to investigate the extent to which firm's performance, the structure of the board of directors and ownership determine directors' remuneration in Malaysia among distressed firms.

Design/methodology/approach

The study uses publicly available data from a sample of 86 distressed firms and matched 86 non‐distressed firms for 2001 financial year.

Findings

The findings for the full sample show that directors' remuneration is not associated with firm's profitability, as measured by ROA. A negative and significant association is observed between directors' remuneration and lagged ROA. With regard to corporate governance, board independence and the extent of non‐executive directors' interests are found to have negative influence on directors' remuneration. In addition, findings also reveal directors' remuneration is positively associated with firm's growth and size. In sub‐sample analyses, a strong negative relation is observed between ROA and directors' remuneration for healthy sub‐sample.

Research limitations/implications

Future research on this area could examine period after the adoption of the Malaysian Code by the Bursa Malaysia in 2001. Further, interviews with directors and managers about the need to link remuneration and performance could be carried out.

Practical implications

There is a need for companies to link remuneration with performance, which this paper found to be lacking in practice.

Originality/value

The contribution of this paper is its examination of directors' remuneration among distressed firms. Findings of this paper would be useful to both regulatory bodies and practitioners.
Corporate social responsibility: what role for law? Some aspects of law and CSR
Authors: Buhmann Karin
Published: January 2010

Purpose

The purpose of this article is to discuss the role that law plays for corporate social responsibility (CSR) in substance, action and reporting, including whether CSR functions as informal law.

Design/methodology/approach

The theoretical point of departure is based in legal science. Through a discussion of various contexts of CSR in which law and legal standards feature, the article questions the conception that CSR is to do “more than the law requires”. CSR is discussed with the triple bottom line as a point of departure, focussing on social (esp. labour and human rights) and environmental dimensions.

Findings

It is argued that CSR functions as informal law, and that important principles of law function as part of a general set of values that guide much action on CSR. Furthermore, it is argued that aspects of law in the abstract as well as in the statutory sense and as self‐regulation influence the substance, implementation and communication of CSR, and that the current normative regime of CSR in terms of demands on multinational corporations may constitute pre‐formal law.

Originality/value

Through its discussion, observations and examples of the role played in CSR by law in the abstract as well as the statutory sense, by international, supranational and national soft and hard law and documents, and by public regulation as well as corporate self‐regulation, the paper is of value to corporate managers, public regulators, NGOs and individuals with an interest in CSR, including as an aspect of corporate governance.
Illusions of compliance and governance
Authors: Laufer William S.
Published: January 2010

Purpose

This article aims to place recent corporate governance reforms in the historical context of the good corporate citizenship movement that began in the US in the mid‐1990s and came to an abrupt end in 2002 when the most recent spate of corporate scandals emerged. It explores what the apparent failure of this movement portends for the recently‐enacted governance reforms.

Design/methodology/approach

The paper engages in a policy analysis of regulatory reform.

Findings

After offering the tale of corporate governance, a critical take on current reforms, the paper finds the skeptic's and pessimist's account of corporate good citizenship movement to be most helpful in explaining the illusory nature of corporate reforms and the resilience of the regulatory status quo.

Originality/value

The paper is a critical analysis of corporate governance reforms.
Beyond public relations: bringing the rule of law to corporate codes of conduct in the global economy
Authors: Collingsworth Terry
Published: January 2010

Purpose

This paper aims to examine the impact of a US law, called Alien Tort Statute (ATS), on the overseas operations of multinational corporations with regard to human rights abuses. The law has the potential of creating substantial financial liabilities and operational risks for the multinational corporations (MNCs) by allowing foreign citizens to bring cases in the US courts for acts committed in a foreign country.

Design/methodology/approach

The paper reviews the relevant case law and the decisions of the US highest court in outlining the expanding scope of corporate culpability and financial liability.

Findings

The paper undertakes a careful critique of the arguments made by the MNCs as to the scope and reach of the law. It concludes that these arguments are not tenable in terms of MNCs' own professed commitment to protecting human rights. It also finds that the law's intent as interpreted in various decisions of the US federal courts has led to further clarity and specificity as to obligations of the MNCs.

Originality/value

MNCs must take concrete steps to ensure that their overseas operations are not implicated in human rights abuses. Specific approaches are suggested to comply with the law.
Enlarged EU: enlarged corporate governance? Why directives might be more appropriate for transition economies
Authors: Braendle Udo C. , Noll Juergen
Published: January 2010

Purpose

This paper seeks to illustrate the development of corporate governance issues in the transition economies of Central and Eastern Europe (CEE) and to analyze if codes based on directives or standards are better for these economies.

Design/methodology/approach

A chapter about corporate governance codes and the respective (dis)advantages of directives and standards starts the paper. Then common European and specific transition economies' corporate governance problems followed by a discussion of directives versus standards for CEE countries are described.

Findings

The paper finds that historical development of the transition economies in CEE leads to specific corporate governance problems such as high court delays, corruption and immature institutional investors. The introduction of corporate governance codes for these economies seems useful but should not rely on broad standards but on legally enforced binding rules accounting for the discussion of directives versus standards.

Research limitations/implications

Research on the weaknesses of legal systems in transition economies is mainly verbally argued and needs more empirical backing. The discussion of directives versus standards is limited as we live in a world of flux – standards are becoming directives over time.

Practical implications

The paper argues against the blindfold implementation of corporate governance codes of other countries and argues for country specific solutions keeping in minds the different effects of directives and standards.

Originality/value

The paper opposes the mainstream thinking that corporate governance codes are the ultimate ratio for transition economies in countries of CEE.
Responsible competitiveness: reshaping global markets through responsible business practices
Authors: Zadek Simon
Published: January 2010

Purpose

The purpose of the paper is to explore the theoretical underpinnings and practical implications of responsible competitiveness, where responsible business practices become a driver of national and regional competitiveness.

Design/methodology/approach

The paper is based on extensive international consultations in association with the United Nations, detailed case studies, and econometric analysis of country level competitiveness and corporate responsibility related data.

Findings

The paper concluded that responsible business practices can contribute to national and regional competitiveness, and that without such links corporate responsibility impacts are likely to remain limited.

Research limitations/implications

Further sector and issue‐based and country‐level research is needed exploring the potential and practice of responsible competitiveness.

Practical implications

Proposes that national and regional strategies for enhancing competitiveness and so also social/environmental outcomes can be grounded in responsible competitiveness. Furthermore, offers insights into how global markets can internalise key costs and benefits.

Originality/value

The paper authors the notion of responsible competitiveness, and provides original definitions, methodology and data previously unpublished in any academic journal.
The Lisbon Strategy after the mid‐term review: implications for innovation and life‐long learning
Authors: João Rodrigues Maria
Published: January 2010

Purpose

This paper aims to investigate the interaction between the sustainability of the European social model and the European Union's revised Lisbon Strategy and its focus on jobs and growth. The success of this strategy – following its five‐year mid‐term review in 2005 – depends on attempts to renew European competitiveness through, for example, innovation and life‐long learning and well‐designed reforms of the European social model.

Design/methodology/approach

The paper reviews the evolution of the Lisbon Strategy and sets out the broader context for European policy on competitiveness. It provides the backdrop for discussions linking competitiveness to corporate responsibility.

Findings

The sustainability of the European social model depends on the success of the overall strategy for growth and jobs, in which innovation and life‐long learning are key. The concrete solutions to achieve a successful combination of those factors in each member state need to be found by countries themselves. That is why the preparation and implementation of Europe‐wide National Reform Programmes for growth and jobs opens an opportunity to drive competitiveness which should not be missed.

Practical implications

The paper addresses issues relevant for sustainable development, Europe's innovation potential and competitiveness and could open new areas for research. There is a need for a more forward‐looking approach to European citizens' aspirations that focuses on: sustaining their living conditions in a global economy; making Europe a stronger player in improving global governance; and creating a more democratic and effective political system.

Originality/value

The paper provides a new approach to renewing European competitiveness by fully exploiting the potential of Europe's own single and external market, as well sound macro‐economic management of its growth potential.
Learning together: new partnerships for new times
Authors: Senge Peter M. , Dow Michelle , Neath Gavin
Published: January 2010

Purpose

The purpose of this research is to provide an overview of the learning that has emerged from two initiatives in which a multinational company, Unilever, and an international non‐governmental organization, Oxfam have worked together: the Sustainable Food Laboratory Initiative, a project focusing on the global food production system, and “Exploring the Links”, a joint research project exploring the links between wealth creation and poverty reduction in one country, Indonesia.

Design/methodology/approach

The paper presents an overview of learning as expressed by participants in the Sustainable Food Laboratory and a summary of the final report published by the joint research project, giving an overview of the process and highlighting the key lessons learned by both organizations.

Findings

The paper finds that the common success of both projects is a contribution to a better understanding of current global systems and local impacts, as well as an indication of the opportunities for systemic change that emerge when different organizations are willing to learn with and from each other. Oxfam and Unilever participants came to realize that, despite their very different missions and goals, they share a commitment to poverty reduction, healthy resource systems, and truly sustainable development. Although common ground may be found, such projects do not attempt to cover over differences. On the contrary, understanding differences can lead to more balanced and integrative pictures of complex problems, reveal limitations of what individual organizations can do, and identify areas where partnerships can have the greatest benefits for real and lasting change.

Research limitations/implications

The paper draws on personal learning from a limited number of participants in the three year pilot of the Sustainable Food Laboratory and solely on the research and findings published in the Indonesia project's final report.

Practical implications

This paper highlights the valuable learning that can emerge when different kinds of organization work together to explore and address common challenges. Understanding their differences in outlook and experience can lead to more balanced and integrative pictures of complex problems, reveal limitations of what individual organizations can do, and identify areas where partnerships can have the greatest benefits for real and lasting change.

Originality/value

This paper gives real examples of the kind of learning that can emerge from cross‐sector initiatives, and highlights lessons about how such learning can be achieved and why it is valuable.
The impact of higher education on students' and young managers' perception of companies and CSR: an exploratory analysis
Authors: Sobczak André , Debucquet Gervaise , Havard Christelle
Published: January 2010

Purpose

The purpose of this article is to analyse the impact of higher education on students' and young managers' perception of companies and corporate social responsibility (CSR).

Design/methodology/approach

The research is based on an electronic questionnaire for students and alumni of different institutions of higher education in Nantes (France). The textual analysis software ALCESTE enabled interpretion of the answers to the open‐ended questions. Concerning the closed questions, analyses by simple sort and the cross sort subject to chi2‐tests were used.

Findings

The main result of this exploratory study is the impact of the different types of academic institutions on the respondents' perception of companies and their attitude towards CSR concepts and tools.

Research limitations/implications

The questionnaire should be submitted to a group of older managers and engineers in order to check whether and to what extent the impact of the academic institution is confirmed after several years of experience as managers. Furthermore, this exploratory research should be complemented by a qualitative approach to explain the link between the corporate vision and educational background.

Practical implications

Higher educational institutions have to integrate CSR in their culture, as this culture seems to have an impact on the perception of companies and CSR that is as important as the content of the education.

Originality/value

This research has been designed by a French business school and the white collar trade union CFDT‐Cadres.
The social‐competitive innovation pyramid
Authors: Molteni Mario
Published: January 2010

Purpose

The purpose of this article is to define a logical process through which social needs can be investigated and integrated into corporate strategy, thus allowing management to meet the expectations of its stakeholder.

Design/methodology/approach

The process has been defined on the basis of a review of international literature that helped to identify the main problems related to the recognition of social expectations by the company and the implications of these expectations on the overall competitive strategy.

Findings

The research has lead to the construction of a framework to address social needs: the social‐competitive innovation pyramid. It is shaped in order to help companies to understand their degrees of efficiency in responding to their partners' expectations. The pyramid identifies five efficiency levels. The highest one, named “social competitive synthesis”, shows the best response to stakeholders' needs; the lowest level, “temporary sacrifice of social expectations”, is the one where social expectations are sacrificed in the view of the companies strategy.

Originality/value

The paper presents corporate responsibility as an integral part of corporate strategy, so much so that it helps corporate management to find innovative solutions to fulfil stakeholder expectations. Therefore, corporate responsibility becomes a creative factor in developing competitiveness.
Board process attributes and company performance of family‐owned businesses in Turkey
Authors: Kula Veysel , Tatoglu Ekrem
Published: January 2010

Purpose

This paper aims to investigate the relationship between board process attributes and company performance of family‐owned companies within an emerging country context.

Design/methodology/approach

A survey questionnaire was developed and conducted on a sample of privately‐held Turkish companies where a total of 386 usable questionnaires were returned. From the original data set a sub‐sample of 266 firms with majority family ownership was created. Based on the extant literature, a set of 18 directors' collective attributes and 15 directors' individual attributes were identified as potentially relevant for company performance. Relying on the perceptions of the respondents, multiple subjective measures of company performance were adopted.

Findings

Company performance is found to be positively related to the directors' collective and individual attributes which are associated with access to information, effectiveness of board, observance of fiduciary responsibility and performance evaluation.

Practical implications

The essential implication of the study for establishing a desirable board climate is the necessity of having a keen focus on information. Sticking to fiduciary responsibility and application of performance evaluations are also indispensable attributes of high performance companies. These attitudes all combined seem to culminate in effective board process.

Originality/value

While the subject of corporate governance is gaining an increasing attention from both academic and business circles, there is a dearth of research on board process attributes and their impact on company performance. This paper, therefore, aims to fill this lacuna by examining the relationship between board process attributes and company performance within a big emerging country context.
Corporate internal investigations: balancing firm social reputation with board fiduciary responsibility
Authors: Hemphill Thomas A.
Published: January 2010

Purpose

The subject of corporate internal investigations engenders a special challenge for the final arbiters of a company's strategy, the boards of directors. The taint to corporate reputation associated with allegations of improper business practices has widespread, and possibly long‐term, financial and legal implications for various key stakeholders of the corporation. The purpose of this paper is to develop a methodological approach to balancing firm social reputation with the fiduciary responsibilities inherent to directors in publicly‐traded companies.

Design/methodology/approach

For boards to effectively address the issues raised by threats to corporate reputation and cooperation with US government agencies in their criminal and civil investigations, a two‐stage approach of interactive/reactive engagement (based on a typology developed in 1975) provides the theoretical foundation to formulate a firm nonmarket strategy for addressing corporate internal investigations.

Findings

Recognizing the new socio‐economic reality faced by the modern firm (i.e. corporate citizenship and stakeholder engagement) requires that executives and directors balance the strategic importance of maintaining the firm's social reputation for the long term with the short‐term economic consequences of criminal and civil litigation over improper business practices.

Originality/value

The value of this interactive/reactive engagement approach is that it requires explicit managerial/board recognition of the benefits ”accruing to the corporation and its stakeholders (i.e. leniency in sentencing and fines, enhanced corporate social reputation,), while factoring in carefully measured costs” (e.g. the negotiated waiver of attorney‐client privilege and work‐product protection) that must be absorbed by the firm and its shareholders.
Financial distress and corporate governance in Zimbabwean banks
Authors: Muranda Zororo
Published: January 2010

Purpose

The purpose of this paper is to investigate the relationship between corporate governance failures and financial distress in Zimbabwe's banking sector.

Design/methodology/approach

The study uses the case study method. It discusses cases of banks currently in financial distress. Data collection was through desk research. The analysis is qualitative. Judgemental sampling was used in selecting the eight abridged cases.

Findings

In all cases of pronounced financial distress, either the chairman of the board or the chief executive wields disproportionate power in the board. The disproportionate power emanates from major shareholding. The overbearing executive overshadows other directors, executive and non‐executive, thus creating power imbalance in the board. The study shows that financial institutions in Zimbabwe (as cited in abridged cases) underestimated the competitive forces that resulted from first, economic deregulation and later economic decline coupled with political meltdown. In order to survive, banking institutions significantly shifted from their core business. In all cases the institutions ended up engaging in financial and accounting imprudence. The study also shows that an active role by regulatory authorities directly contributes to observance of good corporate governance practices.

Originality/value

The value of the paper is in its contribution of knowledge in an area that is least researched in Zimbabwe. The paper should be quite useful to academics in terms of understanding developing country corporate governance issues. The paper is also valuable to business executives especially those operating in economies under stress.
The contribution of the practice of confession and the Protestant Reformation to the modern practice of accountability
Authors: Velayutham Sivakumar
Published: January 2010

Purpose

This paper seeks to highlight the contribution of the Catholic practice of confession and the Protestant Reformation to the development of the modern concept of accountability.

Design/methodology/approach

A historical analysis of the literature is carried out to identify the contribution of key features of the practice of confession and the reformation of the Church to the development of accountability in Protestant societies.

Findings

The study highlights that the practice of confession is similar to accountability and the Catholic Church developed the emotion of guilt necessary for accountability. The Protestant Reformation provided for the further development of accountability to its modern form, through the restructuring of the practice of confession and the extension of the principles of accountability to itself. The conditions necessary for the practice of accountability such as popular power of the people, the concept of contracts and the emotion of guilt developed within the above environment.

Originality/value

This paper highlights the historical development of accountability to provide some insights into understanding of the environment and conditions necessary for the spread of accountability, which is becoming increasingly important in the current economic environment characterized by global integration of markets.
Governance, compliance and legal enforcement: evaluating a recent Irish initiative
Authors: Heneghan John , O'Donnell David
Published: January 2010

Purpose

The objective of this paper is to present an initial evaluation of recent Irish legislation in the area of corporate governance.

Design/methodology/approach

The background to the introduction of the 2001 Company Law Enforcement Act, establishing the Office of the Director of Corporate Enforcement (ODCE), and the Companies (Auditing & Accounting) Act of 2003, establishing the Irish Auditing and Accounting Supervisory Authority (IAASA), is first outlined. Some empirical evidence is then presented on how such initiatives are perceived by Irish accountants, auditors and directors.

Findings

The tentative conclusion reached is that these regulatory and legislative changes, particularly the active stance of the ODCE, are contributing positively towards creating a compliance culture among Irish directors and their professional accounting advisers. The most striking aspect of the IAASA is its mere existence at a regulatory level over the main professional bodies for the first time in the history of the Irish state.

Research limitations/implications

Law mediates the relationship between the steering media of economics and politics – and the lifeworlds of accountants, auditors and company directors. This relationship is contextually complex and further research on this institutionalisation process may lead to further insights emerging.

Practical implications

Legislation, if supported with the requisite resources and institutions, can positively impact on business culture through influencing the behaviour of key actors.

Originality/value

This paper is one of the first evaluations of recent Irish responses to enhancing the integrity of its business culture.
Does ownership affect a firm's performance and default risk in Jordan?
Authors: Zeitun Rami , Gang Tian Gary
Published: January 2010

Purpose

This paper seeks to examine the impact of ownership structure on firm performance and the default risk of a sample of publicly listed firms.

Design/methodology/approach

This paper examines the impact of ownership structure on firm performance and the default risk of a sample of 59 publicly listed firms in Jordan from 1989 to 2002.

Findings

The main findings were: ownership structure has significant effects on the accounting measure of performance return on assets (ROE); government shares are significantly negatively related to the firm's performance ROE; defaulted firms have a high concentration ownership compared with non‐defaulted firms and also high foreign ownership firms have a low incidence of default; government ownership is significantly negatively related to the firm's probability of default; both mix and concentration ownership structure data can be used to predict the probability of default as the largest five shareholders (C5) and government ownership fraction (FGO) are significantly negatively correlated with the probability of the default. These results further suggest that reducing government ownership can increase a firm's performance but will also cause some firms to go bankrupt, at least in the short term.

Originality/value

This paper provides useful information on the impact of ownership structure on firm performance and the default risk of a sample of publicly‐listed firms.
Corporate governance and financing decisions of Ghanaian listed firms
Authors: Abor Joshua
Published: January 2010

Purpose

This paper seeks to examine the relationship between corporate governance and the capital structure decisions of listed firms in Ghana.

Design/methodology/approach

Multiple regression analysis is used in the study in estimating the relationship between the corporate governance characteristics and capital structure.

Findings

The empirical results show statistically significant and positive associations between capital structure and board size, board composition, and CEO duality. The results generally indicate that Ghanaian listed firms pursue high debt policy with larger board size, higher percentage of non‐executive directors, and CEO duality. The results also show a negative (though statistically insignificant) relationship between the tenure of the CEO and capital structure, suggesting that, entrenched CEOs employ lower debt in order to reduce the performance pressures associated with high debt capital.

Originality/value

The main value of this paper is the analysis of the effect of corporate governance on financing decisions from the Ghanaian perspective.
Corporate governance and the small and medium enterprises sector: theory and implications
Authors: Abor Joshua , Adjasi Charles K.D.
Published: January 2010

Purpose

The purpose of this paper is to identify the extent to which the corporate governance framework can be applied to small and medium enterprises (SMEs), and discuss these issues further within the Ghanaian context.

Design/methodology/approach

After considering some of the key issues, the paper shows how relevant these issues are to the SME sector.

Findings

It is clear that corporate governance brings new strategic outlook through external independent directors and enhances firms' corporate entrepreneurship and competitiveness. Again the problems of credit constraint and managerial incompetence in the Ghanaian SME sector could also be overcome with a good corporate governance structure in place.

Research limitations/implications

The discussion mainly focuses on corporate governance within the context of Ghanaian SMEs.

Originality/value

This paper provides conceptual insights on the application of corporate governance among SMEs.
Are the corporate social responsibility matters based on good intentions or false pretences? An empirical study of the motivations behind the issuing of CSR reports by UK companies
Authors: Idowu Samuel O. , Papasolomou Ioanna
Published: January 2010

Purpose

This paper documents the motivations of modern corporations in issuing corporate social responsibility (CSR) reports to their stakeholders. It further demonstrates why these entities have suddenly become more moral or ethical.

Design/methodology/approach

An empirical methodology was used to gather and analyse the required information from companies drawn from two sectors of the capital market.

Findings

The study results suggest that UK companies have different reasons for issuing CSR reports, for instance; in response to an increasing number of stakeholders requesting information on CSR, companies believe that doing so is good for business, to derive positive public relations benefits, to comply with the government's request for them to issue information on CSR, etc.

Originality/value

Information on corporate entities' CSR activities is considered to be valuable by both academic researchers and business managers as it provides a working framework on which future studies can be based. In addition, it improves understanding of the social obligations which corporate entities owe to their stakeholders and society in general.
The economic foundations of corporate sustainability
Authors: Steger Ulrich , Ionescu‐Somers Aileen , Salzmann Oliver
Published: January 2010

Purpose

The purpose of this paper is to fill the void of empirical cross‐industry research in the area of corporate sustainability management and its business case.

Design/methodology/approach

Nine industries (oil and gas, utility, aviation, automotive, chemical, pharmaceutical, technology, financial services and food and beverage) are compared in terms of their environmental and social issues, the pressure they face from their stakeholders, and the resulting business case for corporate sustainability. For this approach, a mixed methods design was employed featuring semi‐structured interviews with managers (sustainability experts, business managers from various functions) and external stakeholders); and self‐completion questionnaires (also targeting sustainability experts and business managers) to collect complementary quantitative data. It was possible to draw upon more than 400 interviews and 1,100 questionnaires.

Findings

It was ascertained that the business case is clearly sector‐specific and difficult for companies to build for several reasons: limited relevance of social and environmental risks and opportunities to companies' core business; numerous and highly‐fragmented stakeholder demands; and lack of basic organizational capacities to collect and process relevant data.

Originality/value

This paper is primarily relevant to practitioners. It looks beyond the usual “sustainability rhetoric”, as it provides a much differentiated (since cross‐industry) view on the drivers and barriers to corporate sustainability.
Corporate social responsibility (CSR) perspectives of leading firms in Ghana
Authors: Ofori Dan F. , Hinson Robert E.
Published: January 2010

Purpose

Corporate social responsibility (CSR) research has blossomed in this new millennium. This has been due to: the increasing concern expressed by policy makers about corporate social responsibility; the pressure exerted on firms to demonstrate high ethical standards; and for developing countries, the increasing demands on their firms exporting to Europe and other western countries to document adherence to high ethical standards in order to be competitive. This study sought to ascertain and document the extent of recognition, nature and content of socially responsible actions by firms located in Ghana.

Design/methodology/approach

The study used a sample of companies listed in the Ghana Club 100 database, an annual ranking of the most prestigious firms in Ghana. The study adopted an in‐depth, exploratory and comparative approach in examining the CSR issues from the perspectives of local versus internationally‐connected firms in Ghana.

Findings

The key findings of the study were that, although local companies are familiar with the concept and do, indeed, practise some amount of CSR, they subscribe less to the contemporary notion of CSR; they are less strategic, less moral and ethical in their approach to CSR. Thus, internationally‐connected Ghanaian firms seem to have a better grasp of the various dimensions of CSR and how these could be used to business and strategic advantage.

Research limitations/implications

Future research indications might be the fashioning of a CSR typology for Ghanaian firms and an investigation of the relationship between CSR and financial performance.

Originality/value

Reports findings in the first nation‐wide study carried out in the area of CSR and will interest academics and practitioners working in and on the area.
Board of director performance: a group dynamics perspective
Authors: Murphy Steven A. , McIntyre Michael L.
Published: January 2010

Purpose

This paper proposes mainly that boards of directors (BOD) are teams that share characteristics with many other kinds of teams. As a consequence, some of the factors that lead to board effectiveness are the same factors that lead to team effectiveness in general. By integrating the organizational behaviour literature on teams with the governance literature, a comprehensive model of BOD performance is proposed.

Design/methodology/approach

This conceptual paper proposes a model to assess the performance of a board and situates board performance as one input into firm performance.

Findings

This paper outlines the dynamic interplay between board characteristics, functionality and performance and proposes a comprehensive model, based largely on the group dynamics literature.

Research limitations/implications

Suggests that future research attempt to empirically address some (or all) of the items in the conceptual model. Acknowledges that operationalizing certain variables will prove challenging, but suggests that ethnographic accounts of how these variables (and potentially others) interact may be a valuable first step in more fully understanding board composition, functioning and performance.

Practical implications

It is argued that by extending traditional passive agency roles, BOD may be able to provide a wider range of contributions to enhance shareholder value.

Originality/value

This interdisciplinary paper integrates the group dynamics literature with the governance literature to propose a comprehensive model of BOD performance.
The Chihuahua sustainability practice: lots of shivering but no real action. Practical sustainability acceptance is low in German and New Zealand firms
Authors: Mueller Jens , Klandt Heinz , McDonald Gael , Finke‐Schuermann Tanja
Published: January 2010

Purpose

This paper aims to describe the extent to which corporate organizations in Germany and in New Zealand have included sustainability practices as part of their strategic planning process.

Design/methodology/approach

Current literature is reviewed to make a case for sustainability to be a driver behind corporate decision making and long‐term performance. The results of surveys of several hundred firms in both Germany and New Zealand, countries with a publicly stated commitment to sustainability, are reviewed to compare the adoption rates of sustainability practices.

Findings

There is a significant difference between what firms do and what their managers think is important. Managers largely consider sustainability practices an important factor for their future careers, while firms to a large extent do not include sustainability as part of their strategic or operational planning process.

Research limitations/implications

The International Sustainability Acceptance Measurement (ISAM) collects data in several countries through local‐language versions of the same online survey tool (www.worldreply.com). The findings in this report are specific only to New Zealand and Germany.

Practical implications

The paper points academics, corporate executives and sustainability fanatics to an alarming inconsistency between what is publicly reported as commitment to sustainability and what is practically achieved.

Originality/value

This paper adds value to the discussion of how sustainability practices have migrated into the operation of firms.