Government quality,auditor choice and adoption of IFRS: A cross country analysis

We examine the association between country-level government quality and firms' choice of external auditors. Using a cross-sectional sample of 142,193 firm-year observations from 46 countries over 1998–2007, we show that the government quality of a country has a significant positive effect on the likelihood of choosing Big 4 auditors by firms in that country. We also show that firms in countries with strong governments that have adopted IFRS are more likely to choose Big 4 than non-Big 4 auditors. To our knowledge, this is the first study of its kind to provide direct evidence on the role of government quality in firms' choice of external auditors. Choice of a Big 4 auditor may be regarded as a proxy for the demand for high quality financial reporting, and thus the results provide insights for policy makers on the importance of government quality toward improving financial reporting quality in a country.     

Female directors on the board and cost of debt: evidence from Australia

We examine whether the presence of female board members has any impact on the cost of debt among Australian listed companies. We find that female presence on the board is negatively associated with the cost of debt. Most importantly, our findings support the argument of critical mass theory that a certain threshold of gender balance is required for enhancing board effectiveness. Our results are valid irrespective of alternate model specifications and endogeneity issues. Overall, the results provide support to the ASX Corporate Governance Principles and Recommendation for the appointment of female directors on corporate boards.     

The impact of sustainability (environmental,social, and governance) disclosure and board diversity on firm value: The moderating role of industry sensitivity

Using a large panel data set comprising 812 listed European firms, this study investigates whether sustainability disclosure (environmental, social, and governance) and female representation on boards affect firm value. We observe a positive impact of sustainability disclosure and board gender diversity on firm value, suggesting that the best management practices, enhanced stakeholder trust, and female representation on boards improve firm value. We observe that the firms in sensitive industries achieve superior social and governance performance. We also observe that the firms with higher female representation on their boards present significantly superior environmental, social, and governance performance. Our results are robust to different firm and country specific control variables and to year‐ and country‐fixed effects.     

Are environmental social governance equity indices a better choice for investors? An Asian perspective

This article examines the risk and return profiles of stock indices composed of companies meeting environmental, social and governance (ESG) screening criteria [such as the Dow Jones Sustainability Indices (DJSI)] and conventional composite indices of eight Asian countries from 2002 to 2014. The results indicate that there are no significant differences in the returns or risk‐adjusted returns between the ESG indices and the composite indices within countries. The results do reveal that the market volatility of the ESG indices is higher than the market volatility of the conventional indices. Market betas of DJSI and ESG equity indices are significantly lower than betas of the composite equity indices. The overall results indicate that the performance of ESG equity indices of many Asian countries is similar to the performance of conventional indices, suggesting that investors can pursue socially responsible investing objectives without a material difference in portfolio performance from conventional investing.     

Working Off the Clock and Its Impact

Textile is one of the largest export and source of foreign exchange in Pakistan. For the last two decades, Textile sector is serving as the backbone for Pakistan economy. Several foreign retailers including Target, Jessie Penny, Wal-Mart, and Kohl’s are outsourcing textile and garments from Pakistan. Along with the quality, these retailers are highly concerned with the ethical and social issues of their suppliers, including child labor, forced labor, compensation, working hours and environment health, and safety. My current study is an applied research, based on the problem, regarding the working hours and its proper management in textile factories, mismanagement of which lead to serious issues during social and ethical standard audits. Repetition of which may consequent in termination of business with suppliers and factories. The research hypothesis is that working off the clock will lead to overtime premium not paid and double book record keeping. As far as ethical and social compliance (SC) is concerned both overtime premiums not paid and double book records are critical issues during SC audit. A sample of 40 suppliers (factories SC audit reports) of Pakistan was randomly selected working with foreign buyers. Secondary data were used to verify the findings based on Audits finding conducted by different third party during a period of 2 years, i.e. Feb., 2010 to Jan., 2012. The results and research findings reflect that during the last 2 years (Nov., 2010 to Oct., 2012) out of 40 factories audit reports 25 factories (62.5 %) were found having working off the clock that also lead to overtime premium not paid. However, double book records were not witnessed in all 40 factories SC audit reports as parallel (falsified) records were not maintained by any factories. The above findings will help the suppliers, factories, and buyers to develop a proactive approach (on buyers end) and proper production planning (on suppliers and factories end) to avoid critical issues and smooth business activities.     

Child malnutrition in developing economies: a case study of Bangladesh

The study investigate the impact of socioeconomic factors on malnutrition in children (under 5 years) using Bangladesh Demographic and Health Survey. The urban and rural areas are separately probed for stunting, wasting and under-weight children. The analysis revealed that birth-interval, mother’s education and wealth index reduce the malnutrition in children for urban and rural household, while duration of breastfeeding and lower BMI of the mother increase the malnutrition in both urban and rural areas. Wealth index is more effective in rural areas as compared to urban ones. The male children are more likely to be malnourished in urban areas but female children are more likely to be malnourished in rural areas. The primary level of education of the women has no significant impact on nutritional status of children in urban as well as in rural areas. It has important policy implications that at least secondary level of education should be part of the education policy of Bangladesh. The incidence of diarrhea enhances the probability of stunting and wasting in both urban and rural areas of Bangladesh. From the policy perspective mother’s education and birth-interval are required for achieving the nutrition status of children. For the long-run the socioeconomic status of the household expressed by wealth index is needed. The duration of breastfeeding needs to be reduced by initiation of the supplement food.     

Developing integrated management systems using an AHP‐Fuzzy VIKOR approach

Integrated management systems (IMSs) involve a strategy to manage multiple systems while meeting the needs and expectations of stakeholders. There are various management standards used for the development of IMS. This study aims to undertake research focused on how to develop an IMS. In this context, management standards, including the International Organization for Standardization (ISO) and Global Reporting Initiatives (GRI), consider alternatives and integration potential at multiple levels (i.e., strategic, tactical, and operational). We assess criteria including continuous improvement, systematic management, integration, organizational learning, standardization, and ability to cut through bureaucracy before a deeper dive into 28 subcriteria. We then use an analytical hierarchy process (AHP) approach to prioritize the main criteria and subcriteria. Next, we include the use of fuzzy VlseKriterijuska Optimizacija I Komoromisno Resenje (F‐VIKOR) methods to prioritize alternatives. The contributions of this study reveal that systematic management and standardization are the most influencing criteria among six guiding principles. The ISO standard and GRI are the most suitable standards for the development of dynamic IMS. This study is the first of its kind to prioritize guiding principles of IMS. The outcomes of this study will assist business managers, organizations, and policymakers in their decision making regarding management standards for IMS development as well as improve sustainable business practices. Researchers will find new IMS insights and constructs for further empirical investigation.     

Regulating for corporate human rights abuses: The emergence of corporate reporting on the ILO's human rights standards within the global garment manufacturing and retail industry

Despite the ubiquitous nature of the discourse on human rights there is currently little research on the emergence of disclosure by multinational corporations on their human rights obligations or the regulatory dynamic that may lie behind this trend. In an attempt to begin to explore the extent to which, if any, the language of human rights has entered the discourse of corporate accountability, this paper investigates the adoption of the International Labour Organisation's (ILO) human rights standards by major multinational garment retail companies that source products from developing countries, as disclosed through their reporting media. The paper has three objectives. Firstly, to empirically explore the extent to which a group of multinational garment retailers invoke the language of human rights when disclosing their corporate responsibilities. The paper reviews corporate reporting media including social responsibility codes of conduct, annual reports and stand-alone social responsibility reports released by 18 major global clothing and retail companies during a period from 1990 to 2007. We find that the number of companies adopting and disclosing on the ILO's workplace human rights standards has significantly increased since 1998 – the year in which the ILO's standards were endorsed and accepted by the global community (ILO, 1998). Secondly, drawing on a combination of Responsive Regulation theory and neo-institutional theory, we tentatively seek to understand the regulatory space that may have influenced these large corporations to adopt the language of human rights obligations. In particular, we study the role that International Governmental Organisation's (IGO) such as ILO may have played in these disclosures. Finally, we provide some critical reflections on the power and potential within the corporate adoption of the language of human rights.