Corporate Governance and Corporate Social Responsibility Disclosures: Evidence from an Emerging Economy

We examine the relationship between corporate governance and the extent of corporate social responsibility (CSR) disclosures in the annual reports of Bangladeshi companies. A legitimacy theory framework is adopted to understand the extent to which corporate governance characteristics, such as managerial ownership, public ownership, foreign ownership, board independence, CEO duality and presence of audit committee influence organisational response to various stakeholder groups. Our results suggest that although CSR disclosures generally have a negative association with managerial ownership, such relationship becomes significant and positive for export-oriented industries. We also find public ownership, foreign ownership, board independence and presence of audit committee to have positive significant impacts on CSR disclosures. However, we fail to find any significant impact of CEO duality. Thus, our results suggest that pressures exerted by external stakeholder groups and corporate governance mechanisms involving independent outsiders may allay some concerns relating to family influence on CSR disclosure practices. Overall, our study implies that corporate governance attributes play a vital role in ensuring organisational legitimacy through CSR disclosures. The findings of our study should be of interest to regulators and policy makers in countries which share similar corporate ownership and regulatory structures.     

The Supply of Corporate Social Responsibility Disclosures Among U.S. Firms

Corporate social responsibility (CSR) is a dramatically expanding area of activity for managers and academics. Consumer demand for responsibly produced and fair trade goods is swelling, resulting in increased demands for CSR activity and information. Assets under professional management and invested with a social responsibility focus have also grown dramatically over the last 10 years. Investors choosing social responsibility investment strategies require access to information not provided through traditional financial statements and analyses. At the same time, a group of mainstream institutional investors has encouraged a movement to incorporate environmental, social, and governance information into equity analysis, and multi-stakeholder groups have supported enhanced business reporting on these issues. The majority of research in this area has been performed on European and Australian firms. We expand on this literature by exploring the CSR disclosure practices of a size- and industry-stratified sample of 50 publicly traded U.S. firms, performing a content analysis on the complete identifiable public information portfolio provided by these firms during 2004. CSR activity was disclosed by most firms in the sample, and was included in nearly half of public disclosures made during that year by the sample firms. Areas of particular emphasis are community matters, health and safety, diversity and human resources (HR) matters, and environmental programs. The primary venues of disclosure are mass media releases such as corporate websites and press releases, followed closely by disclosures contained in mandatory filings. Consistent with prior research, we identify industry effects in terms of content, emphasis, and reporting format choices. Unlike prior research, we can offer only mixed evidence on the existence of a size effect. The disclosure frequency and emphasis is significantly different for the largest one-fifth of the firms, but no identifiable trends are present within the rest of the sample. There are, however, identifiable size effects with respect to reporting format choice. Use of websites is positively related to firm size, while the use of mandatory filings is negatively related to firm size. Finally, and also consistent with prior literature, we document a generally self-laudatory tone in the content of CSR disclosures for the sample firms.     

Exploring the Impact of Internal Corporate Governance on the Relation Between Disclosure Quality and Earnings Management in the UK Listed Companies

This study investigates the impact of internal corporate governance on the relation between disclosure quality and earnings management in the UK listed companies, in particular whether governance mechanisms have deterrent effect on earnings management similar to firms’ disclosure quality. Unlike prior literature, we measure a number of board and audit committee-related governance instruments, three disclosure quality proxies (i.e. Investor Relation Magazine Award, Forward-Looking Disclosure and Analyst Forecast Accuracy) and the Modified Jones Model to test the hypotheses of the study on a matched-pair sample data of Investor Relation Magazine Award winning and non-winning firms. Our findings in the OLS and sensitivity analyses using Heckman Procedure and 2SLS regressions consistently report a significant negative association between earnings management and disclosure quality for all proxies in restraining earnings management. In contrast, corporate governance variables are mostly insignificantly related to earnings management. This provides an emerging trend of the outperformance of disclosure quality over internal governance mechanisms in lessening earnings management. These findings warrant due attention of the policy makers, investors, corporate firms and other stakeholders in shaping a high-quality disclosure and governance regime in corporate settings to mitigate managerial manipulations of earnings across the countries in the world.     

The Effects of Information Disclosure and Board Independence on IPO Discount*

This paper examines the effect of strategic information disclosure and corporate governance on the stock market performance of initial public offering (IPO) firms in France. It argues that information disclosure and board independence mitigate agency problems between the IPO firm and investors, thus reducing the IPO discount defined as the difference between the offer price and the intrinsic value of the firm. However, extensive disclosure may damage the firm's competitive advantage and lead to a curvilinear (an inverted U‐shape) relationship between information disclosure and the IPO discount. Further analysis suggests that it is not necessarily the quantity of information, but rather the type of information, that causes the IPO discount to increase with the amount of disclosure.     

The role of CSR committee characteristics on R&D investments

We investigate the impact of corporate social responsibility (CSR) committees on research and development (R&D) investments. Using a unique sample of European listed companies, we offer three key results to the current academic and policy debate. First, we document that firms with a CSR committee exhibit lower levels of R&D investments. Second, we find that the CSR committee membership of either the CEO or chairman is associated with an increase in R&D investments. Finally, we provide evidence that firms whose CSR committees are chaired by a female director exhibit higher R&D investments. These results are of importance for academics, investors, and policy makers, since they shed light on the effect of CSR board committees on corporate outcomes, beyond their impact on social performance and/or sustainability disclosure.     

Women’s Roles on U.S. Fortune 500 Boards: Director Expertise and Committee Memberships

This study examines the presence and roles of female directors of U.S. Fortune 500 firms, focusing on committee assignments and director background. Prior work from almost two decades ago concludes that there is a systematic bias against females in assignment to top board committees. Examining a recent data set with a logistic regression model that controls for director and firm characteristics, director resource-dependence roles and interaction between director gender and director characteristics, we find that female directors are less likely than male directors to sit on executive committees and more likely than male directors to sit on public affairs committees. There is little if any evidence of systematic gender bias in director assignment to other board committees. We find some evidence that boards evaluate resource dependence differently for women than men. Craig A. Peterson Western Michigan University, Grand Rapios, MI 49503, USA Craig A. Peterson is associate professor of finance at Western Michigan University, Grand Rapids Regional Center. In addition to corporate governance, his research interests include investment management and corporate finance. James Philpot is assistant professor of finance and general business at Missouri State University. His research interests include corporate governance, financial planning and financial education.     

公司治理质量与外部独立审计效率

本文主要考察了公司治理质量对外部独立审计效率的影响。运用主成分分析技术构建公司治理指数,并以此作为公司治理质量的衡量指标,考察了公司治理质量对审计师的选择、审计收费和审计意见的影响。我们发现,公司治理质量越高的公司,越倾向于选择高质量的审计师;同时,也愿意支付更高的审计费用;但在其他条件一定的情况下,相对于公司治理质量高的公司,公司治理质量差的公司更容易获得标准无保留的审计意见,从而影响审计独立性和审计质量的提高。     

Corporate Governance Quality and CSR Disclosures

Given the increasing importance attached to both corporate social responsibility (CSR) and corporate governance, this study investigates the association between these two complimentary mechanisms used by companies to enhance relations with stakeholders. Consistent with both legitimacy and stakeholder theory and controlling for industry profile, firm size, stockholder power/dispersion, creditor power/leverage, and economic performance, our analysis of the annual reports for a sample of 222 listed companies suggests that firms providing more CSR information: have better corporate governance ratings; are larger; belong to higher profile industries; and are more highly leveraged. Our findings support the limited prior research suggesting a link between corporate governance quality and CSR disclosure in company annual reports and suggest that, rather than mandating specific disclosures, regulators might be better served focussing on corporate governance quality as a way of increasing CSR disclosures.     

Perceptions of Intentional Wrongdoing and Peer Reporting Behavior Among Registered Nurses

Researchers and practitioners have devoted considerable attention to firms' policies regarding discretionary disclosures. Prior studies argue that firms increase demand for their debt and equity issues and, thus, lower their cost of capital, by providing more informative disclosures. However, empirical research has generally not been able to document significant benefits from increased disclosure.This paper proposes an alternative explanation – firms disclose because it is the socially responsible thing to do. We argue that companies have incentives to engage in stakeholder management by undertaking socially responsible activities and that providing extensive and informative disclosures is one such practice.We examine the relationship between firms' disclosures and measures of social responsibility. We use ratings provided by the Council on Economic Priorities as proxies for the degree of social responsibility adopted by the sample firms. Disclosure rankings provided by the annual Association for Investment Management and Research Corporate Information Committee Reports (AIMR Reports) are used to measure disclosure level.Our results indicate that there is a positive relationship between disclosure level and corporate social responsibility. That is, firms that engage in socially responsive activities provide more informative and/or extensive disclosures than do companies that are less focused on advancing social goals. In addition, we find that socially responsible firms are more likely to provide this increased disclosure through better investor relations practices. These results support our contention that increased disclosure is a form of socially responsible behavior.     

Market Risk Disclosures and Board Gender Diversity in Gulf Cooperation Council (GCC) Firms

We investigate the impact of board gender diversity on corporate risk reporting for Gulf Cooperation Council (GCC) financial firms. Recent developments and improvements of corporate governance in the GCC markets suggest that firms in the GCC have become more transparent with less information asymmetry. However, we find that the presence of female directors in the boards of financial institutions suppresses the positive association between corporate governance and market risk disclosures for the period between 2007 and 2011. These findings suggest that culture and conservatism nature of GCC societies persist in the GCC business environment. Our results are robust to alternative specifications and endogeneity tests.     

An evaluation of corporate governance evaluation, governance index (CGI NK ) and performance: Evidence from Chinese listed companies in 2003

In the present paper, based on samples of 2003, empirical analyses of Corporate Governance Index (CGI ^NK ) and its six dimensions of listed companies in China, the index of controlling shareholders’ behaviors, board governance index, top management governance index, information disclosure index, stakeholders’ governance index, and supervisors committee governance index, are carried out and the results show that CGI ^NK is positively associated with the return on assets (ROA), net assets per share (NAPS), earnings per share (EPS), operating cash flow per share (OCFPS), total assets turnover (TAV), rate of total assets growth (ITA) and Z-score. These indicate that good corporate governance mechanisms improve profitability, stock expansion ability, operating efficiency, growth and development potential, as well as financial flexibility and safety of listed companies. Corporate governance mechanisms of controlling shareholders, board of directors, top management, information disclosure, stakeholders and supervisors committee are largely responsible for decision-making and decision-execution mechanisms, and furthermore, they have direct and profound effects on the performance and value of listed companies. Translated from Zhongguo Gongye Jingji 中国工业经济 (China Industrial Economy), 2006, (4): 98–107     

Understanding the Determinants of RiskMetrics/ISS Ratings of the Quality of UK Companies' Corporate Governance Practice

We examine the determinants of RiskMetrics/ISS Ratings of the quality of UK companies' corporate governance practice and investigate whether corporate governance mechanisms and firm specific characteristics affect these ratings. We also investigate the association between firms' financial distress and these ratings. Using data for nonfinancial Financial Times Stock Exchange (FTSE) 250 firms over the 2003 to 2009 period, we find that board independence, managerial ownership, institutional ownership, firm size, and profitability are associated with firms' corporate governance ratings. In addition, we find that more independent directors on the board, more institutional ownership, and larger size lead to a high level of board‐related ratings. Finally, we find no association between corporate governance ratings and financial distress. Copyright © 2012 ASAC. Published by John Wiley & Sons, Ltd.     

独立董事与会计信息披露质量研究

独立董事制度是完善公司治理结构的一项重要举措,独立董事制度在公司治理结构的各个部分能够充分发挥作用的情况下,能为会计信息质量提供可靠的保证。到目前为止,我国大多数上市公司都建立了独立董事制度,人们重视的方面也已经从发展的规模转移到运作和治理有效性的角度上。在大多数上市公司都建立了独立董事制度的情况下,应该充分发挥董事会尤其是非执行董事的监督参与决策的职能,从而更好地提高会计信息披露质量。只有完善充分发挥作用的公司治理结构,才能为企业经营决策及外部投资者提供高质量的会计信息。     

绿色金融政策、公司治理与企业环境信息披露——以502家重污染行业上市公司为例

以502家重污染行业上市公司为研究对象,选取2006-2008年度上市公司披露的环境信息,构建环境信息披露指数,系统考察绿色金融政策下公司治理因素对企业环境信息披露水平的影响。研究结果发现,国有股权、第一大股东持股比例、审计委员会以及设立环保部等公司治理因素对环境信息披露水平的提高影响非常显著,而绿色金融政策则强化了这些因素的环保作用。     

Corporate Governance Reform and CEO Compensation: Intended and Unintended Consequences

Recent scandals allegedly linked to CEO compensation have brought executive compensation and perquisites to the forefront of debate about constraining executive compensation and reforming the associated corporate governance structure. We briefly describe the structure of executive compensation, and the agency theory framework that has commonly been used to conceptualize executives acting on behalf of shareholders. We detail some criticisms of executive compensation and associated ethical issues, and then discuss what previous research suggests are likely intended and unintended consequences of some widely proposed executive compensation reforms. We explicitly discuss the following recommendations for reform: require greater independence of compensation committees, require executives to hold equity in the corporation, require greater disclosure of executive compensation, increase institutional investor involvement in corporate governance (including executive compensation), and require firms to expense stock options on their income statements. We provide a brief summary discussion of ethical issues related to executive compensation, and describe possible future research.     

论中小民营企业良好内控环境的构建

内部控制环境包括公司治理架构、诚信和道德价值观、胜任能力与人力资源政策、责任分配与授权、董事会与审计委员会。分析了中小民营企业内控环境这六要素,指出内控环境是民营企业建立完善内部控制的软肋,并提出完善内控环境的若干建议。     

独立董事选用与盈余管理监控有效性分析

作为我国公司治理机制的重要组成部分,独立董事制度的有效性对制约公司盈余管理行为至关重要,如果独立董事是自愿性选用的,董事会的独立性就会降低盈余管理;如果独立董事是强制性选用的,董事会的独立性程度较高与较低的盈余管理是不相关的。因此,董事会的独立性可以有效地监控盈余管理,但监控扭曲了独立董事的市场环境,这会导致治理机制失效。所以,我国监管机构通过不断完善公司治理机制,以应对国际金融市场不断反复的波动和冲击。     

The effect of corporate governance on firm value and profitability: Time-series evidence from Turkey

We study the corporate governance practices of Turkish public firms from 2006 to 2012, relying on hand-collected data covering the vast majority of listed firms. We build a Turkey Corporate Governance Index, TCGI, composed of subindices for board structure, board procedure, disclosure, ownership, and shareholder rights. TCGI predicts higher market value (with firm fixed effects) and higher firm-level profitability with firm random effects. The principal subindex which predicts higher market value and profitability, and drives the results for TCGI as a whole, is disclosure subindex. We also study the determinants of firms' governance and find that most firm-specific factors have little effect on firms' governance choices.     

Board of director attributes and CSR engagement in emerging economy firms: Evidence from across Asia

This study investigates the relationship between the board of director attributes and corporate social responsibility (CSR) engagement across a sample of Asian emerging economy firms. We find a statistically positive relationship between CSR engagement and several directors' attributes including their political influence, international experience, business expertise, other directorships held and independence from management. These empirical results indicate that while corporate governance recommendations designed for developed economy firms are relevant for emerging economy firms, additional director attributes are also important in encouraging CSR engagement in emerging economy firms given the divergent institutional and resource dependency issues they face.     

Board Gender Diversity and Corporate Response to Sustainability Initiatives: Evidence from the Carbon Disclosure Project

This paper investigates the effect of female representation on the board of directors on corporate response to stakeholders’ demands for increased public reporting about climate change-related risks. We rely on the Carbon Disclosure Project as a sustainability initiative supported by institutional investors. Greenhouse gas emissions measurement and its disclosure to investors can be thought of as a first step toward addressing climate change issues and reducing the firm’s carbon footprint. Based on a sample of publicly listed Canadian firms over the period 2008–2014, we find that the likelihood of voluntary climate change disclosure increases with women percentage on boards. We also find evidence that supports critical mass theory with regard to board gender diversity. These findings reinforce initiatives being undertaken around the world to promote gender diversity in corporate governance while demonstrating board effectiveness in stakeholder management.