Session 465

The Importance of Corporate Governance

Track O

Date: Tuesday, September 23, 2014

 

Time: 11:00 – 12:15

Common Ground

Room: Estocolmo


Facilitator:

  • Ruth Aguilera, Northeastern University

Title: Corporate Environmental Performance: Institutional and Governance Perspectives

Authors

  • Patricia Kanashiro, Loyola University Maryland

Abstract: This proposal investigates how the greening of corporate governance mechanisms enhances the likelihood that managers will comply with pressures to improve the environmental performance of the firm. While neo-institutional theory suggests that management’s decision is determined by institutional pressures, agency theory suggests that management’s behavior will be constrained by the extent that corporate governance structures are effectively applied within the organizational context. We found that the presence of environmental compensation and environmental officer enhance the likelihood that managers will comply with institutional pressures to improve environmental performance. However, environmental board committees seem to play no role in improving firms’ environmental performance. We used a sample of the most polluting firms in the U.S., years 2006 to 2011, and employed a panel data with random effects.

Title: Examining the Interrelatedness of Institutionalized Governance Mechanisms

Authors

  • Guilhem Bascle, Catholic University of Louvain

Abstract: This study presents the main governance mechanisms associated with the shareholder-value-maximization logic and draws on institutional theory to explore whether conformity to focal governance mechanism can be influenced by previous conformity to other governance mechanisms. The developed theoretical framework is tested on a sample of Fortune 500 firms. Consistent with the arguments, findings suggest that governance mechanisms can be interrelated in subtle ways. We discuss the implications of the results in terms of their impact on the literature and for practitioners.

Title: Institutionalizing Codes of Good Governance: The Government as Institutional Entrepreneur

Authors

  • Mario Krenn, Southeastern Louisiana University
  • Jean McGuire, Louisiana State University

Abstract: Soft law regulation, in the form of government issued corporate governance codes, has become an increasingly important aspect of the business environment. However, the practices anchored in those codes often stand at odds with prevalent institutional pillars of corporate behavior. We combine institutional and socio-political perspectives and examine the government in its role as an institutional entrepreneur who pursues different intervention strategies to initiate a process of legitimation to ensure that the code practices it champions are widely adopted by firms in its jurisdiction. We hypothesize that these strategies focus on a combination three activities: the mobilization of financial resources; the dissemination of legitimating accounts; and interventions in firms’ in social structure. Our preliminary results provide insight into legitimation processes of soft law regulation.

Title: Media Governance and Firm Valuation: An Examination of Media Shaming on Corporate Financial Fraud

Authors

  • Daphne Yiu, Chinese University of Hong Kong
  • William Wan, City University of Hong Kong
  • Xiaocong Tian, Chinese University of Hong Kong

Abstract: Media plays an increasingly important role in corporate governance. We study the effect of media governance on firm valuation by focusing on media reporting of corporate financial frauds in China during the period of 2000 to 2012. We find that media shaming has differential impacts on firm valuation, with reintegrative shaming having positive effect on firm value while disintegrative shaming resulting in negative valuation on the fraud firm, and such effects are amplified by media salience. In addition, we find that prior stakeholders’ sentiment positively moderates the positive effects of reintegrative shaming and the negative effects of disintegrative shaming on the fraud firm value. These findings deepen our knowledge of media shaming by highlighting how media polices firms by eliciting different sentiments in stakeholders.

Title: The Impact of Public and Private Politics on Social Value: The Case of Contracting out Public Services

Authors

  • Ilze Kivleniece, INSEAD
  • Bertrand Quelin, HEC-Paris

Abstract: We use the context of contracting out public services to private firms to examine how public and private collective action, commonly arising within such exchange, influences the distribution of value between firms and social constituents. Drawing on organizational governance and collective action literature, we demonstrate that in settings characterized by high asset-specificity, the effectiveness of collective political pressures may be subject to underlying governance setup within which the pressures take place – yielding higher social value, when exercised by public actors operating within the governance framework while, by contrast, reducing the social value when driven by external end-user activism. Importantly, our analysis highlights private collective pressures as a critical source of governance hazards and points out important limits to end-user activism in achieving desired social outcomes.

Title: U.S. State Chartering Competition: Evidence of Director Primacy in Corporate Governance?

Authors

  • Jill Brown, Bentley University
  • Anne Anderson, Lehigh University
  • Parveen Gupta, Lehigh University

Abstract: Utilizing concepts from agency theory as well as director and shareholder primacy models, this study examines U.S. state chartering competition and the debate about whether Delaware incorporation provides additional firm value for shareholders. In a longitudinal study of firms with data from 1996-2011, we found that in line with director primacy and race to the top arguments, Delaware incorporated firms have less debt, and a higher Tobin's Q than similar firms in other states. However, when taking into account fixed effects, and expanding the sample to include those companies that are publicly traded in the U.S. but incorporated overseas, the effect of Delaware incorporation is negligible. Foreign incorporated firms provide significantly more value for shareholders over longer periods of time than do Delaware corporations.

All Sessions in Track O...

Sun: 08:00 – 09:15
Session 311: The Power of Power: The Role of Power and Politics in Strategy Processes
Session 386: Entrepreneurial Corporate Governance
Sun: 11:15 – 12:30
Session 476: The Dark Side of Strategic Leadership and Governance
Sun: 15:45 – 17:00
Session 435: What Happens After the CEO Has (Been) Gone?
Sun: 17:15 – 18:30
Session 611: Strategic Leadership and Governance IG Business Meeting
Mon: 08:00 – 09:15
Session 335: Internationalization and Strategic Decisions
Session 458: Those at the Top Matter!
Mon: 11:00 – 12:15
Session 336: CEO Roles, Frames, and Traits
Mon: 14:45 – 16:00
Session 331: CEO Compensation: What we Know, What we Need to Study
Mon: 16:30 – 17:45
Session 337: Power at the Top - The Influence of Directors
Session 411: Ownership and Governance
Tue: 08:00 – 09:15
Session 428: Managing External Dependencies
Session 467: Putting Pressure on the CEO
Tue: 11:00 – 12:15
Session 465: The Importance of Corporate Governance
Tue: 15:30 – 16:45
Session 429: Director Selection and Influence
Tue: 17:15 – 18:30
Session 431: Agents, Principals, and Owners
Session 432: Upper Echelons Revisited


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