Corporate Form Research Articles

Integrated Reporting and Integrated Thinking: Proposing a Reporting Model That Induces More Responsible Use of Corporate Power

The obligations of corporations to members of society have been problematic since the corporate form came into existence. Under different rubrics, reporting firms’ socially responsible behavior has been extensively debated, and researched, for at least the past half century. The latest incarnation of corporate social reporting is labeled integrated reporting—the blending of the traditional financial report with a report on the firms’ achievements as socially responsible beings. In this paper, we provide a brief history of corporate social reporting to provide sufficient context for our discussion of a model of integrative reporting that provides for a better representation of just how socially responsible firms are. Progress so far in achieving meaningful integrated reporting that produces more socially responsible corporate citizens is disappointing. The structured narrative of financial performance still dominates the unstructured narrative about social performance. We argue this is partially attributable to two intellectual constraints limiting our ability to imagine systems that could produce better social outcomes from corporate behavior. One constraint is the dominance of “decision usefulness” as the purpose of accounting. The second intellectual constraint is the reluctance to seriously consider that the problem of corporate social responsibility (CSR) lies in the corporate form itself. Thus far, the integration of these reports to give equal status to financial and social performance is not close to achievement. We propose that a first step to developing an integrated report is to adopt a governmental reporting model for corporations. If the six capitals model proposed by IIRC is to be a movement toward more ethical corporate behavior, then the six capitals must be deemed as equally valuable ends and certainly not subservient to only financial ends. The current financial reporting model strongly mitigates against this happening. We argue that each of the capitals is analogous to what in governmental parlance is a “program” or “function,” which require the commitment of financial resources for accomplishment. Thus, a truly integrated report will disclose to all stakeholders what resources are committed to enhancing each of the six capitals as ends in themselves.

Not by Contract Alone: The Contractarian Theory of the Corporation and the Paradox of Implied Terms

Contractarians view the corporation as a nexus of contracts, constituted by the express or implied consent of each party to or contracting with it. Strong-form contractarianism takes this claim literally and holds that a corporation can be created and sustained by contract alone, thanks notably to the courts’ supportive gap-filling role. We argue that this view is undermined by the way courts actually treat implied terms. While courts do attempt to fill gaps and hold parties to their bargains, they do not typically manufacture counterfactual consent by resorting to the hypothetical bargain logic of contractarianism. Even under the most flexible form of contract law, the common law contract, the capacity of courts to imply third-party obligations in multi-party contracts is highly limited. This makes the contractarian reliance on contract and the courts to construct the complex set of multi-party obligations that make up the corporate form implausible.

Virtual social capital: features of network and gaming resources in the development of cognitive and educational activities of high school students

Introduction. In the context of digitalization of education, the information and educational environment is actively developing, including formal corporate information resources and communication networks, as well as informal (non-corporate) interaction networks, whose function is performed by popular social networks and instant messengers. The digitalization of education is becoming an important factor in the formation of virtual interaction between the main parties of the educational process, namely, students, their parents and teachers. Virtual social capital is being formed as one of the ways to maintain, develop and structure human social ties in the information society. The purpose of this article is to study the features of the use of social network resources for solving cognitive and educational problems by high school students. Materials and methods: 1) handout survey for 358 students of grades 9-11 of secondary schools, lyceums and gymnasiums in the city of Kirov (Russian Federation); 2) secondary analysis of data from empirical studies on this issue (descriptive analysis). Results. The high involvement of teachers and high school students in popular social networks has been shown: up to 98% of high school students have their personal accounts, every fifth teacher uses social networks for work. Every day, teenagers spend 1 to 3 hours on social networks, regardless of their grade (χ2=3.5, df=6, р=0.74), 1 to 2 hours playing online games. 70% of high school students are subscribed to public pages that help to do homework, one third, to popular science public pages. High school students noted that thanks to computer games they improve their skills in mastering a foreign language, knowledge of basic subjects, and in every tenth case, they developed a desire for self-knowledge. Conclusion. The study showed that virtual social networks and online games perform important auxiliary functions, complementing the information and educational environment of the student: in addition to the communicative and leisure functions, they also perform organizational and information search functions. Social networks are becoming an important part of the virtual social capital of contemporary schoolchildren, as well as other parties to the educational process.

Philanthropy and the For-profit Corporation: The Benefit Corporation as the New Form of Firm Altruism

Currently the issue of sustainability is at the heart of the debate on corporate governance of business companies. In Europe, an intense activity of revising and updating European rules applicable to financial markets and company law has started. In Italy, such debate became more intense after the legal transplant of the US benefit corporation model in late 2015. The Italian società benefit allows, through a voluntary choice of the founding members or the shareholders’ meeting, to internalise values typical of corporate social responsibility in the articles of association, making them legally binding on the company and the directors. Considering the traditional dichotomy between for-profit entities and non-profit entities, hybrid models such as the benefit corporation appear to struggle in finding an adequate space within capitalist systems and corporate governance theories. This study attempts to offer an interpretative key for understanding these hybrid models, abandoning the classical homo economicus paradigm to embrace a reading based on behavioural law and economics and the Yale approach to economic analysis of law, according to which altruism and beneficence should be considered as ends in themselves, as goods desired by people and for which they are willing to pay a price. In this line of reasoning, benefit corporations and other hybrid models, because of their ability to bring altruistic values into the corporate purpose, departing from shareholder value maximisation as the raison d'être of the corporate form, can be considered as a further manifestation of ‘firm altruism’, given that they are characterised by a deep and lasting impact on the environment and civil society.

Family social capital and governance of family businesses: The emerging market evidence

Considered as the most dominant business form in the entrepreneurial fabric in Morocco, as in the majority of countries in the world (Salhi, 2017), the family business is distinguished by a family social capital (FSC) making it competitive and perennial (Mesfar & Ben Kahla, 2018). This paper aims to analyze the influence of this capital, through its three dimensions — structural, relational, and cognitive — on the governance system of Moroccan family firms. The results of our exploratory study conducted among 30 family businesses in the form of interviews showed, on the one hand, that the existence of a strong FSC within the company makes its governance system based on informal family mechanisms. On the other hand, the weakness of the said capital has not led the companies that are the subject of our study to adopt formal corporate governance mechanisms as shared by several researchers. This is due, according to the interviewees, to socio-cultural considerations. Our results contribute to the enrichment of the literature while showing that the informality of governance mechanisms can be explained, not only by the strength of its FSC but also by such a socio-cultural context where the family model is of a communal and clan type welded by Islamic religious values of group cohesion

The role of beneficial ownership reporting obligations and the reckless trading provision to prevent front companies in terms of the Companies Act 71 of 2008

The corporate form has the potential to be abused by natural persons. A front company is an example of such abuse. A front company is an incorporated company that is used as a vehicle to conduct illegal activities. The natural persons that control this front company and ultimately benefit from proceeds derived from the illicit conduct conceal their identity by hiding behind the company’s separate legal personality to escape civil and criminal liability. A report indicates that billions of rands are obtained through illegal activities perpetrated against the corporate form in South Africa. This means that natural persons can successfully misuse the corporate form as a front. For this reason, it is imperative that a legal framework is in place to circumvent the formation and operation of front companies. Foreign jurisdictions such as the United States of America and Kenya deter front companies by recognising beneficial ownership and placing a reporting obligation on beneficial owners to reveal themselves to a regulatory body. The abuse of the corporate form as a front is a company law issue and ought to be regulated by the South African Companies Act 71 of 2008 (Companies Act). However, the Companies Act does not recognise beneficial ownership per se. The Companies Act recognises beneficial interest only in relation to persons that exercise a legal right held in securities. It is argued that to prevent front companies in South Africa, the Companies Act should be amended to fully recognise beneficial ownership and place a report obligation on these persons to reveal themselves to the Companies and Intellectual Property Commission. It is further argued that the statutory remedy, the reckless trading provision, should be expanded to apply to beneficial owners to act as an instrument to prevent the operation of front companies.

Promenjena pravila komanditnog društva u mađarskom građanskom zakoniku - sa posebnim osvrtom na izmenu pravila upravljanja

The Act XCV of 2021 amending Act V of 2013 on the Civil Code (hereinafter: Civil Code) introduced significant changes concerning business associations in Hungary. In my study, I examine certain amendments affecting limited partnerships, with a particular reference to the rules for the election of a limited partner as managing director and whether the corporate form is shifting from a limited partnership to a capital partnership under the changed provisions.

Capturing non-financial information in integrated reporting

In the contemporary business scenario, integrated reporting is a transformational form of corporate reporting. Integrated reporting provides material and substantial information about an entity's prospects, governance, strategy and actions that serve as a reflection of social and commercial viability within the holistic environment in which it operates (IIRC, 2013). Thus, in integrated reports, along with financial information the critical non-financial aspects that affect the reputation, performance and sustainability of the firm are also required to be reported by companies. While regulations are instituted for compulsory divulgence of non-financial information as part of annual reports, there is a lot of ambiguity regarding the non- financial items to be included and the manner of reporting. This paper delineates the non-financial capital components for disclosure in integrated reports. It also discusses the current practices of integrated reporting world over, which will help organisations gain clarity in presenting the non-financial items under different heads of non-financial capitals.

ЦИФРОВІЗАЦІЯ ЯК ІНСТРУМЕНТ ЗАБЕЗПЕЧЕННЯ СТАЛОГО ОБЛІКУ

The article examines the essence of sustainable accounting and its influence on the development of modern business and management. The existence of an objective need for high-quality and complete management accounting on the basis of the global concept of sustainable development were shown by the main research results. At the last time the sustainable accounting becomes an effective tool for achieving the goals of sustainable business development based on the preparation and provision of corporate financial and non-financial reporting. As sustainable management continues to spread, sustainable accounting is embodied in new digital business models and additional forms of corporate reporting. A clear practice of sustainable accounting requires an appropriate legal and methodological basis, the basis of which is the international standards for sustainable development developed by international organizations (IFRS, SASB, IASB, etc.). Today, digital accounting has significant advantages over traditional accounting. Among them are: increasing the efficiency of accounting due to the automation of accounting processes (availability, productivity, efficiency, economy, elimination of the risk of human errors); real-time tracking and access to accounting; the possibility of remote access and work for accountants; possibilities of virtualization of accounting processes and display of accounts that automatically reach each party participating in economic transactions. As the main tools of digitization of accounting in practice are already used: blockchain technologies; spreadsheets; the system of accumulating and storing information using computer clouds – «cloud accounting»; mobile accounting and reporting programs; technologies of optical recognition and contactless identification of data. Digitization in the field of accounting and financial reporting today helps to increase business capital and increase its value. Digitization of accounting for Ukraine is a significant opportunity to intensify the processes of harmonization and unification of accounting and reporting with the global system.

Assessing Corporate Entrepreneurship in Conglomerates in Nigeria

The Government in Nigeria has of recent years raised the awareness of Entrepreneurship practices through the introduction of different entrepreneurship programmes among all forms of corporations including the Small & Medium Enterprises (SMEs) and conglomerates in the country; especially those manufacturing Corporations in the densely populated areas of the South western Nigeria. The Government has also raised entrepreneurship awareness among the citizenry by improving the accessibility to bank loans and also by including entrepreneurship courses in the curriculum of all post-secondary tertiary institutions in order to improve employability status of young graduates before they are recruited by the conglomerates. Unfortunately, mere observation of the Nigerian economy has not shown any improvement. Hence the need to assess the level of Entrepreneurial variables and Corporate Entrepreneurship (CE) in Conglomerates in South-western and Lagos industrial axes of Nigeria. Data were collected from primary and secondary sources. The variables/elements of Corporate Entrepreneurship (CE) were categorized into innovation/invention, risk-taking, and proactiveness. Corporate entrepreneurship in this paper is measured by behaviour and characteristics of the Chief Executive Officer (CEO) and the coalition group. Multi-stage sampling technique was adopted in selecting the sample population. Subsequently, the data generated were analysed with appropriate descriptive and inferential statistics. The findings showed that: Nigerian manufacturing industries were not highly entrepreneurial oriented. Though traces of innovations were observed, none for invention, Corporate Entrepreneurship (CE) practices among the top management team were dominated by men. This gender imbalance calls for further research in future; The paper discovered that poor infrastructural development repelled most industries away from industrial estates as most CEOs prefer outright purchase of private sites. This made advantages of economies of scale to elude them, especially in the areas of research resulting in poor CE activities. Also, not many of these industries were listed on Nigerian Securities Exchange (NSE), thereby limiting amount of public funds available for research activities in these companies, and lastly, the three key variables/elements/Dimensions (Invention/Innovation, Proactiveness and Risk-taking) of Corporate Entrepreneurship were identified as channels through which Corporate Entrepreneurship (CE) can be promoted in Nigeria.

The government, private firms, and dual-track private sector development: China's experience in two crucial decades

A key to understand the evolution of an economy is the property rights institution and the contracting institution that the government set up to shape the business environment of private firms. Focusing on China during its crucial two decades of transition (from the early 1990s to the early 2010s), this paper documents how the country's business environment and the characteristics of entrepreneurs evolved, along with the role played by local governments. Relying on multiple comprehensive data sets, the paper shows that many aspects of local business environments improved: infrastructure, development of the court system, and access to external finance. Meanwhile, the share of politically connected private firms remained large, and their advantage in accessing key resources increased. Under this dual-track private sector development, private firms became larger and more innovative and adopted more formal corporate governance mechanisms. Entrepreneurs became better educated, with more diverse sectoral experiences. Market competition increased over time, especially after China's World Trade Organization entry. The paper offers suggestive evidence that this dual track development had negative consequences, such as a lower tendency to innovate by politically connected firms.

Проблемы стимулирования инновационного развития нефтедобывающих и нефтеперерабатывающих предприятий

The development of corporate forms of management in oil production and oil refining is impossible without the introduction of the latest technical and technological developments that increase the efficiency of production that deepen the processes of processing and further use of oil products, which is currently imposed by the high wear of fixed assets; low level of loading of production capacities; the lack of incentives for the introduction of innovation and the use of NTP achievements, etc. In order to ensure the further innovative development of corporate forms of management in oil production and oil refining, it is necessary to develop a system of stimulation of it, which allows the use of earned funds, both to promote employees and to finance measures that ensure innovative development.

The two faces of power-sharing

Lijphart’s claim that power-sharing spurs democratization in divided societies has strongly influenced ‘institutional engineering’ and is widely accepted among scholars despite the fact that empirical tests of its merits remain rare. This article revisits the democratic effect of power-sharing, arguing that it has two antagonist faces. On the positive side, it provides guarantees of inclusion to political elites, allowing them to commit to democratic rules. On the negative side, it also has an illiberal face, entailing limits on competition and individual rights. In this article, these contrary characteristics are traced back to two institutional types of power-sharing: a more flexible and open, liberal, type and a more rigid, corporate one. Using a novel dataset on power-sharing rules for 138 multi-ethnic countries and the period from 1945 to 2016, their respective democratic merits are tested. Conforming to theoretical expectations, the findings indicate that only liberal forms of power-sharing exhibit strong positive effects on democracy while corporate forms exert mixed or even negative ones. These findings are robust to a series of alternate model specifications and operationalizations as well as to instrumental variable approaches. In conclusion, the article indicates only a partial democratic effect of power-sharing, limited to its liberal subtype.

THE PUBLIC COMPANIES LAW AND SUBSTANTIVE IMAGES OF PERSONS OF PUBLIC LAW IN MODERN RUSSIAN LEGISLATION

The article outlines the general problems arising in the system of the Russian legislation associated with the contradiction between the legal forms set forth in the Civil Code and the forms of legal entities that were actually formed in public law. As a specific example, it was impossible to inscribe those entities which had special legal status (Central Bank of the Russian Federation, the Pension Fund of Russia, Vnesheconombank of the USSR, Bank for Foreign Trade of the RSFSR) in the proposed by Civil Code classification. The emergence of the legal form of a public corporation is seen in the article as an attempt to remove the existing contradictions in legislation.

Beneficial Ownership and Corporate Governance in Ghana

One of Ghana’s most recent innovations in corporate law is the introduction of a statutory beneficial ownership disclosure regime. This article explores the contribution of the regime to corporate governance in Ghana. The article examines whether the disclosure regime would in any way enhance the relationship among the various stakeholders in both listed and private companies. It is argued that while the newly introduced statutory disclosure regime is likely to contribute towards promoting good corporate governance of companies in Ghana, that alone may be insufficient to protect the interests of a company’s stakeholders in the absence of other safeguards. Ghana, beneficial ownership disclosure, corporate governance, Act 992, Act 920, financial and economic crimes, central register, anti-money laundering, abuse of the corporate form

Transformasi Kelembagaan Petani menjadi Badan Usaha Milik Petani (BUMP): Studi Kasus di BUMP PT. Pengayom Tani Sejagad Wonogiri

BUMP is an agribusiness institutional innovation that aims to empower farmers and increase the economic benefits of farmers through farming. Changes in the form of farmer associations to BUMP certainly cannot be separated from problems, therefore research on the transformation of farmer institutions to BUMP is needed to find institutional development models. This study aims to analyze the institutional model and the development of institutional transformation into BUMP at BUMP PT Pengayom Tani Sejagad. This study uses a qualitative approach with a descriptive method. The research location was carried out at BUMP Pengayom Tani Sejagad which is located in Wonogiri Regency. Determination of the research location is done purposively. The method of determining the informants was done by purposive sampling. Sources of data used include primary data and secondary data. Data collection techniques were carried out in several ways, including: in-depth interview, observation, Focus Group Discussion (FGD), recording and documentation. The data analysis technique uses the Miles and Huberman interactive analysis model. The form of corporation in PT. Pengayom Tani Sejagad is a limited company. Activities carried out by BUMP PT. Pengayom Tani Sejagad in the context of agribusiness includes organic farming business activities that covers on-farm to off-farm. BUMP PT. Pengayom Tani Sejagad plays a role in terms of organizational management and farm business management that supports the goal of protecting and empowering farmers.Keywords: transformation; institutional; farmers; BUMP

To be or not to be corporate heritage oriented? A study of managers’ corporate heritage mindsets

Corporate heritage is a research topic in branding with managerial relevance to achieve competitive advantages. Research has mainly focussed on companies with a formal corporate heritage orientation, neglecting other companies. In this study, a novel framework has been developed for analysing managers' corporate heritage mindsets as a precondition for a corporate heritage orientation in a non-heritage-oriented company. Individual managers’ corporate image heritage depicts how managers perceive their company over time, hence revealing their corporate heritage mindset. This article proposes that two managerial mindset dimensions matter – corporate heritage recognition and stance. This abductive study combines theory and empirical findings from an industrial company with a long history, but no corporate heritage orientation. The proposed framework offers companies with a history a way to analyse whether corporate heritage could be recognised and employed. This article contributes to corporate heritage research by broadening the applicability of corporate heritage issues.

The Effect of Dialect Sharing on Corporate Cash Holdings in China

Language is an important dimension of culture. Dialect diversity is a prevalent phenomenon in many countries. This paper examines whether dialect sharing between the chairperson and the CEO (CCDS) affects corporate cash holdings and, if so, through which channels. We obtain robust evidence that CCDS has a negative and significant effect on the level of corporate cash holdings, and this effect remains after controlling for home‐town sharing. Moreover, this negative effect occurs by mitigating the company's agency motive and precautionary motive for cash holdings. We further demonstrate an information mechanism, a reputation mechanism, a CEO risk‐incentive mechanism, and a cooperation mechanism through which CCDS reduces cash holdings. The negative effect of CCDS on cash holdings is more pronounced among firms whose chairperson and CEO both work outside their home towns, but the difference is insignificant between state‐owned enterprises (SOEs) and non‐SOEs. Finally, we find that CCDS improves the optimal level of cash holdings by reducing excess cash. These results indicate that this cultural connection can be a substitute for formal corporate governance mechanisms when corporate governance is weak. It can also be used as a useful financial risk management tool in dealing with firms’ uncertainty.

The butterfly effect: Theoretical implications of an apparently minor corporate transparency proposal

The UK government has proposed a seemingly minor change to the UK corporate transparency regime, being to require Companies House to verify the identity of new directors of companies, persons of significant control and those incorporating companies, to help in the fight against corporate crime. These proposals seem sensible and innocuous. However, there are a number of theoretical implications which flow from this seemingly minor change. First, it starts the process of making the UK corporate register an effective gatekeeper. Second, it involves the state more in the establishment and operation of the company, strengthening the argument that the corporate form somehow exists as a gift from the state. Third, shareholders are ignored, which challenges argumentation structures for those who believe in shareholder primacy. This illustrates how dependent ostensibly universal company law theory is on a particular doctrinal structure, and thus how exposed particular calibrations of arguments are to being undermined. Every time the UK government proposes a minor change to company law doctrine, the butterfly flaps her wings and those advancing existing company law argumentation structures must brace themselves.

Mouldy Matriarchs and Dangerous Daughters

Mouldy Matriarchs and Dangerous Daughters