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PurposeThis paper examines contextual factors that affect the association between board gender diversity and firm performance.Design/methodology/approachThe authors use a global sample of listed firms in the tourism industry in 30 countries from 2015 to 2020.FindingsFirst, firm performance is positively associated with the proportion of female directors on a board. Second, the positive association between firm performance and the proportion of female directors on the board is higher in (1) countries with stronger shareholder rights, (2) countries with stronger securities law regulation stipulating disclosure of board diversity, (3) countries with stronger economic empowerment of women, and (4) during the COVID-19 crisis. Third, corporate financial distress risk is lower in firms with higher proportion of female directors on the board. Fourth, the negative association between corporate financial distress risk and the proportion of female directors on the board is more pronounced in (1) countries with stronger securities law regulations stipulating disclosure of board gender diversity, (2) countries with stronger economic empowerment of women, and (3) during the COVID-19 crisis.Originality/valueThe results indicate that contextual factors (comprising country-level corporate governance structures, economic empowerment of women and economic crisis) can affect the association between board gender diversity and firm performance.
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This article examines the infusion of information communication technology (ICT) into Nigeria's new company legislation to promote corporate democracy. While the initiative is laudable, especially in the age of the COVID-19 pandemic, the article argues that the reform is of limited value, as only private companies are empowered to deploy ICT in the conduct of general meetings. By excluding public companies, the article argues, inter alia, that the reform overlooks the role that ICT could play in addressing the assumed passivity of latent, large groups, which typify the shareholders of public companies. In making a case for inclusive reform, the article examines the reforms already undertaken by some countries in the common law jurisdictions, whose templates on the subject may inform the changes Nigeria needs to effect in her law.
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We examine whether CEO pay cut announcements during the COVID-19 pandemic are symbolic and made to appease various stakeholders. We find that firms announcing a CEO pay cut are more likely to announce news that has a negative impact on their stakeholders, suggesting that pay cut announcements were used to alleviate stakeholder pressure. We also document that the pay cut announcements are associated with lower CEO salary but not total pay. In fact, our results suggest that pay cut announcements were symbolic, whereby salary cuts were substituted with increases in cash bonuses. Furthermore, we find a lower rate of shareholder dissent votes if a firm announced a pay cut. However, this effect is reduced if the CEO received higher total pay. Finally, we document higher shareholder dissent votes if a firm received government subsidies and paid higher CEO compensation or increased dividends. This suggests that shareholders do not prioritise their immediate financial interests and hold managers accountable for actions perceived negatively by the public. © 2023
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This paper investigates whether there exists a clear relationship between ESG indicators and financial performance with specific reference to the CoVid-19 crisis and to discover what are, if any, the key takeaways for issuers that emerge from such relationship. To assess this connection, we carried out an ESG scores based long-short portfolio analysis in the spirit of Fama and French (1992) on the European market in the period 2016‒2021. The results indicate that there is robust evidence that the bottom decile portfolio provides negative alphas and some weak evidence that the long-short portfolio provides some positive abnormal returns compared to all three most prominent asset pricing models (CAPM, Fama-French three-factor model and Fama-French five-factor model). © 2022
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During financial crises or other unexpected events, investors often seek to include lower-risk assets in their portfolios. Some assets are more sensitive than others to such phenomena. In the equities markets, adjustments tend to be made to the shareholdings of companies that are associated with a higher level of uncertainty. In this work, we explore the evolution of shareholder structure of various well-known companies in the technology sector during the COVID-19 pandemic and beyond. We model, as graphs, shareholder ownership data about twenty US-listed companies between 2020 and 2022. We use freely available tools to explore the bipartite interactions and generate a wide range of topologies that facilitate the identification of how shareholding structures have evolved during the pandemic. In addition, we study the role that some nodes play in the network topology and the process of change that is observed. Our findings include that (1) most investors reduced the amount invested in technology stocks during the pandemic and that these investments tended to bounce back in the post-pandemic era;(2) Vanguard Group, Inc., is the most influential investor in the network;(3) Apple has the highest market capitalization of all technology stocks for all quarters in this study, Microsoft Corp has a significantly lower market capitalization, but a significantly higher number of investors;and (4) While investors for Apple and Microsoft tend to be from London and New York, companies such as Oracle have investors from a variety of locations. © 2022 Copyright for this paper by its authors. Use permitted under Creative Commons License Attribution 4.0 International (CC BY 4.0).
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The article presents legal solutions of the European Union (EU) and Member States (MS) with respect to the digitalisation of company law. We analyse and evaluate the EU’s efforts to overcome the backlog of legislation concerning technological development, with legal solutions in the field of the electronic formation and registration of companies and in shareholders’ communication with company board members. The analysis shows that company law in the EU is lagging behind technological development. Despite ongoing dynamic efforts to modernise it on the EU level, the MS reveal differences in their speed of implementing the EU’s directives. The case of Slovenia shows that while digital tools are in wide use for ensuring transparent data disclosure and publication, along with the realisation of basic corporate governance functions, big differences remain between the minority of companies traded on the regulated market and the majority of companies for which such regulation is deficient. © 2022, Ljubljana University, Faculty of Social Sciences. All rights reserved.
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This paper investigates whether there exists a clear relationship between ESG indicators and financial performance with specific reference to the CoVid-19 crisis and to discover what are, if any, the key takeaways for issuers that emerge from such relationship. To assess this connection, we carried out an ESG scores based long-short portfolio analysis in the spirit of Fama and French (1992) on the European market in the period 2016‒2021. The results indicate that there is robust evidence that the bottom decile portfolio provides negative alphas and some weak evidence that the long-short portfolio provides some positive abnormal returns compared to all three most prominent asset pricing models (CAPM, Fama-French three-factor model and Fama-French five-factor model).
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Purpose The authors compare two market collapse incidents, focusing on their role as turning points for ESG considerations among investors that do not fall under the SRI class. The authors draw from the signaling theory to posit that ESG performance acts as a buffer to retain institutional shareholders under stress conditions. Design/methodology/approach The authors collect extensive data on institutional shareholdings and corporate performance during the pandemic and the 2008 financial crisis to examine the potential of ESG to act as a downward risk hedging mechanism. The authors test whether superior ESG scores function as insurance and resilience signals that lock investors in through times of high probability of divestments. Findings Findings indicate that ESG weighs in investment decisions during economic downturn and poor returns. The nature of this positive relationship is not static but dynamic contingent on overall risk materiality considerations. Research limitations/implications The authors update regulators, firms, investors and academics on ESG, risk and crisis management. The shifting materiality and the altering impact of ESG practices is our core implication, as well as limitation, in terms of metrics, temporal evolution and interaction with institutional factors, along with portfolio alpha and safe haven potential in ESG asset classes. Originality/value The authors extend current literature focusing on portfolio returns and firm valuations to highlight the role of ESG in shareholder retention during poor return periods. The authors further add to existing studies by examining the shifting materiality of ESG pillars during different crisis settings.
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Legal systems around the world apply various strategies to mitigate agency costs between controlling and minority shareholders. A systematic review of the transnational law on the loyalty and care obligations of controlling shareholders reveals various doctrinal choices. This study aims to uncover the evolution of these choices by employing a law-in-context methodology. Accordingly, it seeks to explain the differences in governance selections by exploring the cultural, historical and socio-economic backgrounds of the particular legal systems in which organisations and decisions are embodied. I conduct a macro-level inquiry which focuses on the cultural environment and business history development to understand different doctrinal designs. In particular, I argue that those dissimilarities are a result of unique cultural-non-formal norms of corporate governance regarding the protection afforded to shareholders’ interests and they correspond to the historical development of the law of corporate groups across nations. As the macro-level investigation indicates, any initiative to globally converge corporate law and governance should be carried out with caution because it may distort the delicate normative equilibrium represented in a given jurisdiction.
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Coronavirus is here to contend with as a new normal at the global level. The solution to the pandemic is what scientists, politicians, pundits and non-governmental organisations (NGOs) are battling with little outcome. Many kinds of literature abound since the outbreak of the epidemic that those who are the main target of this are the ones with comorbidity ailments. The impacts of this contagious disease call for academic interrogation since what brings about this, majorly, is the lack of organic food in the age of genetically modified (GM) food imposed on us. The dictum, healthy profit and unhealthy people are here to stay as long as biotechnologists are after the profit of multinational corporations (MNCs) and to some extent, farmers '. It has been proved that organic food is an agent of anti-hidden hunger and by implication, a source of medicine as against taken medicine as food. This paper intends to adopt an agroecological thesis in the promotion of food security through food sovereignty that is home-made without reliance on importedfood that are sources of compromising immunity, which is a target of COVID19 as documented by some students of development studies, and food and nutrition security (FNS). Relying on secondary data and content analysis approach, a conclusion will be drawn that the COVID-19 vaccine is not only a ruse, but another means to subject developing areas to abject poverty through the importation of one-size-fits-all drugs for the pandemic. A need to promote healthy people as againstfocussing on healthy profit that benefits only MNCs executives and their shareholders against stakeholders in the food and pharmaceutical industries.
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This study aims to estimate the consequences of a value-added tax (‘VAT’) rate increase on the profitability of the Kingdom of Saudi Arabia (‘KSA’) non-financial companies. Using statistical empirical approaches such as Ordinary Least Squares, Wilcoxon-signed-rank test and Difference-in-Differences, the analysis targets data before and after the VAT rate increase as well as the discovery of COVID-19. The findings support the hypothesis that after-VAT rate increase firms are, on average, less profitable. The imposed 10% VAT rate increase has caused, on average, a-2.16% decrease in profitability of Saudi firms. The results explore the notion that government debt negatively influenced firm profitability in 2020 which means that will affect Saudi companies' growth in the long term. This paper recommends implementing some VAT incentives in the tax system and conducting further studies on VAT incentives efficiency using data in the long term. © 2021, Australasian Tax Teachers' Association. All rights reserved.
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The functioning of the world social and economic order in the 21st century has faced many challenges, but the global Covid-19 pandemic has caused unpredictable tendencies that require immediate, effective and adequate reactions that will respond seriously to the new situation. No society, including Macedonia, has remained immune to the consequences caused by this pandemic, penetrating deeply into all segments of society. The Covid-19 pandemic directly raised the question of the readiness of national socio-economic orders to function in digital format. The functioning of the main carriers of economic fluctuation, i.e., business entities and their capacity for digitalization, is one of the main preoccupations imposed by the pandemic. These issues are current in global and Macedonian aspects. The main purpose of this paper is, through analysis of the practice of joint stock companies listed on the Macedonian Stock Exchange and those with special reporting obligations, to identify the degree of utilization of the opportunity provided in the Law on Trade Companies for organization at shareholders' assemblies by electronic means during the conditions of the pandemic. At the same time, the paper concentrates on the effects that the pandemic causes in the realization of the shareholder rights under the newly created conditions. In addition to analyzing the current situation, the paper provides guidance for improving the provisions for the organization of shareholders' assemblies by electronic means and the exercise of shareholders' rights. © 2021, Goce Delchev University of Shtip. All rights reserved.
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Purpose The study, by focusing on a context dominated by firms with a concentrated ownership, in which type-II agency problems (principal-principal conflicts) may occur, aims to depict which board configurations may be effective in protecting minority shareholders by mitigating the risk of controlling shareholders' expropriation via cash holdings.Design/methodology/approach The research adopts a configurational approach and empirically conducts a fuzzy set/qualitative comparative analysis on a sample of 268 Italian listed companies.Findings The analysis depicts three combinations of board configurations and ownership structures that can be considered effective, namely Active Independent Control, Female Active Control and Double Internal Control.Originality/value The study revisits the topic of the risk of expropriation via cash holdings in a type-II agency problem framework and delineates the meaning of board effectiveness in a mature context ruled by family firms, like Italy. Furthermore, by drawing on a configurational approach, it overcomes the causality relationship between each board characteristic and cash holdings policies and reasons from a “bundle” perspective.