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CSR Strategies in Greater China: Global, East Asian, American, European Style?

Abstract

The concept of Corporate Social Responsibility emerged in the United States and spread to Europe and Asia while being adapted to national/local characteristics. Since borders between markets and societies are blurring and globalization is promoting MNCs which find themselves acting in hybrid societies, international institutions put efforts into the development and moral acceptance of global CSR standards. The scientific interest in CSR focused on the conflicts between company returns and benefits for society. The resulting concepts of performance-oriented, awareness-oriented and welfare-oriented CSR should facilitate the evaluation of CSR strategies implemented by MNCs. In research on the cultural dimensions of economies, it might be possible to allocate geographically the three concepts. Regarding the newly emerging Chinese MNCs, the paper aims to shed light on which concept they follow. On the one hand, CSR concepts of American and/or European MNCs that are present in China might serve as a role model; on the other hand, by learning from Taiwanese/ Hong Kong MNCs, a “greater China CSR approach” might emerge. Empirical studies and own field research suggest that compared to American and European companies, CSR is less deeply rooted in Chinese companies. Furthermore, significant differences between Mainland China, Hong Kong and Taiwanese companies indicate that a Greater Chinese CSR approach does not yet exist. Therefore, it cannot be assumed that American and European CSR concepts will experience a Chinese influence in the near future.

Open access
An Analysis of Codified Corporate Governance Practices in the Banking Industry: The Case Study of Bangladesh

Abstract

Introducing a well-designed system of corporate governance is considered an effective tool to ensure the stability and resilience of a banking system. It was in 2006 when Bangladesh initiated its first corporate governance code (CG code). Despite trying to meet the code of enhancing the internal monitoring mechanisms and transparency in governance, it is apparent that the quality in bank credit portfolios continuously deteriorated. This paper aims to empirically analyze the impact of adopting the CG code on performance for eight years (2010–2017) of 21 major commercial banks of Bangladesh. In this case study, we suggest that the CG code may have given the Bangladeshi commercial banks an ill-incentive for the reduction of executive directors under the pressure of meeting a guideline to increase the ratio of independent directors. This incentive structure had a negative impact on bank performance during the period. Another finding is that the fundamental structure of ownership and control by sponsor directors remained unchanged during the period. This structure of maintaining the control of power by a group with its vested interest may have hindered the effectiveness of the CG code in Bangladesh. We suggest that the agenda of CG practices should go together with a policy for mitigating a potential bias under the ownership concentration because any attempt of adopting codified CG practices would be futile under the fundamental structure in Bangladesh.

Open access
Internet Transparentnost u Finansijskom Sektoru Bosne i Hercegovine/ Internet Transparency in Financial Sector in Bosnia and Herzegovina

Rezime

Podizanjem kvaliteta korporativnog upravljanja povećava se vrijednost preduzeća na tržištu, omogućuje korištenje svih oblika finansiranja: domaćeg i međunarodnog, javnog i privatnog, a samim tim jača i njihov dugoročni prosperitet. Svrha ovog rada je istraživanje internet transparentnosti u bankama i osiguravajućim društvima Bosne i Hercegovine i uočavanje razlika između sektora banaka i sektora osiguravajućih društava u pogledu stepena transparentnosti pojedinih oblasti iz domena korporativnog upravljanja. Podaci potrebni za istraživanje su dobijeni pregledanjem internet stranica posmatranih subjekata. Rezultati diskriminacione analize su pokazali da postoji razlika u internet transparentnosti između banaka i osiguravajućih društava.

Open access
The Relationship Between Supervisory Board And Management And Their Communication Processes In Publicly Listed Companies In Poland / Relacje Między Radą Nadzorczą I Zarządem Oraz Proces Ich Komunikacji W Praktyce Spółek Publicznych W Polsce

Abstract

The focal point of this study is to present the results of empirical research concerning operation of supervisory boards in the practice of companies listed on the Warsaw Stock Exchange (WSE).

The main subject of interest concerns two research areas: the character of the relationship between as well as the methods and tools employed in communications between a supervisory board and management. The research paper consists of theoretical concepts regarding the supervisory boards’ tasks and the relationship between a supervisory board and a management board. Moreover, another area of interests concerns legislative changes that, according to the author, have had a great influence on functioning of supervisory boards in the practice of WSE-listed companies.

The conclusions presented in the paper have been formulated on the basis of a review of the literature, analysis of pertinent regulations, and a questionnaire survey of members of supervisory boards which was conducted in September, October and November 2011 (the data was obtained by means of postal surveys).

Open access
Executive Remuneration Policy at Banks in Poland After the Financial Crisis - Evolution or Revolution?

Abstract

The executive remuneration policy of financial institutions has been indicated as one of the key factors that led to the recent financial crisis. As a consequence a number of legislative initiatives and best practices have been imposed,aimed at strengthening existing and creating new standards of good corporate governance at banks. The purpose of this article is to assess the effectiveness of Poland’s new regulations concerning banks' executive pay, which were introduced in the aftermath of the recent financial crisis. The research results indicate that the new legal rules have not been fully enforced. Public banks in Poland are not fulfilling the reporting obligations imposed by law and international principles. Given the crucial importance of executive remuneration policy in the financial sector to the stability of the banking sector, the inability to evaluate the progress made in the adjustment of executive remuneration practices to the new regulations may be perceived as one of the important risk factors that has not been effectively eliminated or even reduced in Poland yet.

Open access
The relations between the quality of financial statements and corporate governance

Abstract

Business entities operated in the form of capital companies, to maintain reliability and transparency of the activities conducted, should observe general supervisory framework of legal nature. The primary objective of the information policy is to provide stock market participants with appropriate standards of company transparency which through the corporate governance regulations should lead to the improvement in the quality of financial reporting. Financial statements should be reliable as it is only then that their aims and targets are met, and the image of business they depict should be created according to the true and fair principle, invoking the responsibility of individuals supervising the process of drawing up a financial statement. The aim of the paper is to indicate the essence of the relationship between the quality of financial statements and the application of corporate governance principles. The paper uses the analysis of regulations and review of literature in the field of corporate governance and reporting of listed companies. The results of the analysis confirm that the quality of reported information determines the effectiveness of corporate supervision; that integrated reporting (IR) is a tool enabling organizations to communicate their value to investors; and that corporate supervision allows said organizations to adopt the comprehensive approach in developing sustainable value.

Open access
The Impact of Interplay Between Formal and Informal Institutions on Corporate Governance Systems: a Comparative Study of CEECs

Abstract

The central point of this paper is to present the results of comparative case study research concerning the impact of the interplay between formal and informal institutions in the corporate governance systems (CGS) of Central and Eastern European Countries (CEEC). Particular focus was put on the values of the corporate governance codes (CGC) of CEECs, as well as on transparent ownership structures, transactions with related parties, the protection of minority shareholders, independent members of supervisory boards, and separation between the CEO position and the chairman of the board of directors. The main subject of interest concerns two research areas: the character of the relationship between formal and informal institutions, as well as whether the interplay between them is relevant to the CGSs of CEECs. Moreover, the author investigates whether the CGCs of CEECs consist of regulations that are compatible with the values set up in preambles using research methods such as individual case study or deductive reasoning. The conclusion presented in the paper was drawn on the basis of a review of the literature and research on national and European corporate governance regulations, as well as the CGC of CEECs. The primary contribution this article makes is to advance the stream of research beyond any single country setting, and to link the literature on the interplay between formal and informal institutions related to CGSs in a broad range of economies in transition (‘catch up’ countries) like CEECs. This paper provides an understanding of how the interplay between formal and informal institutions may influence the CGCs of CEECs.

Open access
Analyzing the Link Between Agency Problems, Governance and Control Attributes for Pakistan

Abstract

This research attempts to analyze the relationship between agency, control and corporate governance attributes for a sample of 267 firms listed on the Pakistan Stock Exchange (PSX) from 2005 to 2008. The results show that a) Pakistani listed firms are facing high agency costs problems in contrast to established markets. b) Factors are observed important to having strong effect on mitigating agency costs levels: corporate dividend policy, degree of board independence, and institutional ownership. c) Corporate governance factors reduce discretionary expenditure ratio, increase assets utilization ratio and free cash flow ratio. d) Control variables increases the asset utilization ratio and decreases the free cash flow and increases the managers’ performance (Tobin’s Q ratio). e) Ownership attributes regulate free cash flow and decrease the discretionary expenditure ratio. The outcomes of this research lead to the proposed use of recommended governance, control and ownership attributes to overcome agency problems and a sound policy for better corporate governance (better management of agency cost issues) for listed firms.

Open access
Integrated Reporting in the Context of Corporate Governance. Case study on the Adoption of Integrated Reporting of Romanian Companies listed on BSE

Abstract

Integrated Reporting (IR), the latest approach in corporate reporting, is one of the most discussed topics of the past several years. Recently, companies and companies have realized that the former business model, which was based only on profit-taking without regard to employees, the environment and society, needs to be revised and should take into account wider objectives than financial ones. Therefore, current societies adopt a pluralistic approach and aim to include in their concerns stakeholders’ needs, sustainability, business ethics and transparency. From the aforementioned aspects derives the research question of the present study, aiming in this way to determine the degree of adoption of the integrated reporting of the Romanian companies listed on the Bucharest Stock Exchange, as well as the analysis of the corporate governance reporting degree of the companies included in the study. The results show us the current state of the art for this issue.

Open access
Corporate Governance and Financial Performance Nexus: Any Bidirectional Causality?

Abstract

Most studies on corporate governance recognize endogeneity in the nexus between corporate governance and financial performance. Little attention has, however, been paid to the direction of causality between the two phenomena, and hence the Vector Error Correction (VEC) model, which allows for endogenous determination of the direction of causality, has not been widely employed. This study fills that gap by estimating the nexus and the direction of causality using the VEC model to analyze panel data on selected listed firms in Nigeria. The results agree with the findings of most previous studies that corporate governance significantly affects financial performance. Board skills, board composition and management skills enhanced financial performance indicators – return on equity (ROE), return on asset (ROA) and net profit margin (NPM); in many occasions, significantly. Board size and audit committee size did not, and can actually undermine financial performance. More importantly, financial performance did not significantly affect corporate governance. On the basis of the lag structure of the VEC model, this study affirms unidirectional causality in the nexus, running from corporate governance to financial performance, nullifying the hypothesis of bidirectional causality in the nexus.

Open access