Corporate Governance Approach Research Articles

Ethnomethodology Study on The Implementation of Social Responsibility Activities at PT Pertamina Lubricants

Financial Services Authority Regulation No. 51/POJK.03/2017, social and environmental responsibility or abbreviated as TJSL is a commitment to participate in sustainable economic development in order to improve the quality of life and the environment that is beneficial, both for the company itself, the local community, and the community in general TJSL or what we commonly know as Corporate Social Responsibility (CSR) is part of sustainable development that must be carried out by all development actors, namely the government, the community, and also the business community. This study uses a qualitative method with ethnomethodology studies to reveal the practice of CSR implementation at PT Pertamina Lubricants from 2019 to 2023. The purpose of this study is to reveal CSR practices in an effort to maintain sustainability activities at PT Pertamina Lubricants. The triple bottom line and good corporate governance approach are used in this study. Data collection was carried out through interviews, field observations, and literature studies. The results show that PT Pertamina Lubricants has transformed its CSR practices by emphasizing Creating Shared Value (CSV). CSR practices during the Covid-19 pandemic are still ongoing by implementing applicable protocols. The triple bottom line bottom line approach, namely profit, people, and planet, and good corporate governance , has also been implemented.

The impact of environmental stimuli on the psychological and behavioral compliance of international construction employees.

This study explores the overlooked psychological and behavioral dynamics of employees in compliance management, applying the Stimulus-Organism-Response (SOR) framework to assess environmental stimuli's impact on employees in international construction projects. A scenario-based survey involving 270 international construction employees was analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) and Necessary Condition Analysis (NCA), focusing on the relationship between environmental stimuli and compliance intentions. Findings categorize environmental influences on compliance into internal and external organizational dimensions, highlighting the significant impact of internal factors on compliance intentions. Key determinants identified for high compliance intention include individual traits and organizational climate, while project pressures, rules and regulations, and cultural differences show variable influence. This study enhances the understanding of the psychological factors driving non-compliant behaviors and introduces a binary micro-ecological approach to compliance management, effectively integrating individual and project organizational elements. In contrast to traditional corporate governance approaches, this strategy emphasizes the role of project organizational micro-ecology in the management of international construction projects. The strategy aims to improve compliance management among international contractors by influencing the psychological and behavioral compliance of frontline employees.

The Complementarity and Substitution Effects of CSR‐Focused Governance Mechanisms on CSR Decoupling

ABSTRACTResearch Question/IssueThe study examines whether CSR‐focused governance mechanisms (CSR committees, standalone CSR reports, and CSR contracting) operate as complements or substitutes for each other in mitigating CSR decoupling.Research Findings/InsightsThe study finds that CSR‐focused governance mechanisms diminish CSR decoupling and enhance CSR credibility in UK firms. In addition, the simultaneous presence of CSR committees and standalone CSR reports has a complementary effect in mitigating CSR decoupling. Conversely, the combinations of CSR committees and CSR contracting as well as standalone CSR reports and CSR contracting exhibit a substitute relationship. These impacts remain consistent when categorizing CSR decoupling into underreporting and overreporting. During the financial crisis of 2008–2009, the complementary relationship between CSR committees and CSR reports remained consistent, although the substitution between CSR committees and CSR contracting, and CSR reports and CSR contracting, is only observed after the crisis.Theoretical/Academic ImplicationsThe study innovatively contributes to the agency theory literature by adopting a bundle corporate governance approach while focusing on specific CSR governance mechanisms to address agency issues. It empirically shows that complementary combinations of CSR‐focused governance mechanisms signify a marginal benefit in reducing CSR decoupling, leading to a reduction in agency costs.Practitioner/Policy ImplicationsThe study offers several implications. First, it helps firms create ideal combinations of different CSR‐focused governance mechanisms that provide superior marginal benefits. Second, firms' stakeholders, especially the investors, could identify the usefulness of adopting CSR‐focused governance mechanisms in CSR reporting. Finally, it could also attract regulators' attention toward the weaker aspects of the existing corporate governance code regarding CSR.

Bon voyage: a vacation from food wastage

Learning outcomes The learning outcomes are as follows: to use advanced frameworks and tools to convey complex ideas related to strategy and sustainable business practices; apply relevant concepts and theories of corporate social responsibility and governance to a practical situation while making decisions; demonstrate understanding of the importance of stakeholders when developing socially responsible thinking; and analyze the different strengths and weaknesses of the organization when making a decision that would affect the company strategy. Case overview/synopsis Claire Humphry was the General Manager at the renowned The Nacre Hotel in Penang, Malaysia. Claire had a very busy job as she had many people who reported to her, and the hotel was always full of guests. One of the things Claire also managed was the restaurant OceanSound that was owned and operated by her hotel. OceanSound was a very thematic restaurant that specialized in making sculptures of food for special events. On the New Year’s Day in 2023, Claire came to work ready to tackle what was sure to be a long and busy day. However, Claire had not anticipated exactly how taxing the day would end up being. During Claire’s talks with her colleagues throughout the day, her conversation with her friend, the head chef of OceanSound, Poh, would nag at her head for the rest of the day based on the events that followed. The New Year’s special sculpture at OceanSound was to be a large rabbit made of cake to commemorate 2023 being the year of the rabbit according to Chinese zodiac. This is usually kept secret until the sculpture is revealed; but somehow this information had been leaked. This led to The Nacre Hotel and OceanSound being in the spotlight for bad reasons as this sparked a debate online regarding food wastage. This escalated quickly and even led to a famous food influencer commenting on this using specifically The Nacre’s name. Activists also quickly emerged in front of the hotel to protest the creation of sculptures and the food wastage in Malaysian hospitality industry, seeking to make an example out of The Nacre Hotel. The online criticism died down and was eventually replaced by praise for the sculpture. The activists were also eventually asked by the hotel security to leave, which led to the rest of the day to go as expected for a New Year’s Day at The Nacre. However, Claire’s nagging suspicion that they were not out of the woods led her to start looking into food wastage in the hospitality industry in Malaysia to educate herself and bring it up in a future meeting. Two days after this incident, on January 3, 2023, Claire found The Nacre Hotel posted on the newspaper headlines, dissecting the food wastage associated with the hotel now. After getting an urgent phone call from the Regional Manager, who was pressured by the board and shareholders, Claire decided the time to address this issue could not be delayed any longer. She wrote an email to her strategy team to come up with some ideas for possible solutions to the issue and to present them in a group meeting within a week’s time. At the conclusion of the meeting, Claire was contemplating about the decision that she had to make if she wanted The Nacre Hotel to continue operating successfully in Malaysia’s hospitality industry. Complexity academic level The main theoretical concepts illustrated in the case include corporate governance approaches, types of corporate social responsibility, stakeholders’ prioritization, organizational culture, organizational structure, industry analysis and strategic choices. Therefore, this case study can be used in a upper-level undergraduate business courses in the field of Strategic Management and Corporate Social Responsibility. The case study can be successfully used in a capstone course on Business Policy and Strategy, when tackling the concepts of corporate social responsibility, environmental sustainability strategy and corporate governance. Under this scenario, the usage of conceptual frameworks from Chapters 2 and 3 of the textbook titled “Concepts in Strategic Management and Business Policy: Toward Global Sustainability” by Wheelen and Hunger would be required. This case study can also be successfully applied to MBA level courses on Strategic Management in a Globalized World. In this case, the latest edition of the textbook titled “Exploring Strategy” by Whittington et al., could be used (particularly, the material from Chapters 2–9, 11, 14 and 15). Additionally, the case could also be used in courses related to Tourism and Hospitality, especially in schools which have specialized programs in this field. Supplementary material Teaching notes are available for educators only. Subject code CCS 12: Tourism and Hospitality.

IMPLEMENTATION OF FINANCIAL GOVERNANCE IN ISLAMIC EDUCATIONAL INSTITUTIONS OF MADRASAH IBTIDAIYAH IN MEDAN

<span>Financial Governanceis a policy that regulates and controls financial operations by protecting rights through controlling the company's operational processes to achieve company goals based on the provisions of Allah SWT. This study aims to look at the implementation of Financial Governance carried out at Islamic Education Institutions Madrasah Ibtidaiyah in Medan. This study uses a qualitative descriptive approach using primary data (through interviews and distributing questionnaires) and secondary data). The results of the study show that the Madrasah Ibtidaiyah Islamic Education Institution has implemented Financial Governance through the Good Corporate Governance approach and the addition of Shariah Complience indicators to this implementation.</span>

Strategy of Integrated and Sustainable DMO Governance Development: A Corporate Governance Approach on Wangi-Wangi Island

Destination Management Organization (DMO) is the most important element in tourism governance. As an integrated management system, the tasks and functions are inherent in the marketing and destination governance fields. The purpose of this study is to formulate a strategy for developing sustainable integrated DMO governance on Wangi-Wangi Island. The research analysis uses a participatory approach with the principles of corporate governance. The data was processed using descriptive qualitative analysis, Multi-Dimensional Scaling analysis, and Strength-Weakness Opportunity-Threat analysis. The results of the study identified that there were 4 main stakeholders of DMO on Wangi-Wangi Island, namely; Government, Private, Tourism Governance Forum, and Community. MDS analysis shows a sustainability index of 53.96% or is included in the moderately sustainable category. The results of the SWOT analysis show that the formulation of the development strategy is in quadrant III, namely strategic development. So the development strategy requires increasing social responsibility, utilizing digital media, increasing human resource capability of community organizations, preparing destination management plans and baseline destinations, implementing governance management training programs for tourism community organizations, and increasing opportunities for research collaboration with academics and collaboration with private stakeholders.

Directors’ Duties and Climate Change in Africa: Evidence from Kenya, Nigeria and South Africa

This paper investigates the extent to which, if at all, corporation law in select African jurisdictions obligates company directors to take into account climate-related risks and commit to mitigation and adaptation actions. The paper analyses provisions of the law relating to corporations law (Company Law) in select Commonwealth common law jurisdictions namely Kenya, Nigeria and South Africa within the new and varied context of emergent knowledge and climate attribution science, with a view to distilling any legal duties and potential liability of company directors. Applying the shareholder value approach of corporate governance, the paper argues that while corporate law has for the most part been concerned with governance of a company as a vehicle for profit making, largely informed by the shareholder primacy theory, this narrow construction of the company and directors’ duties is no longer tenable in light of actual and potential climate-related risks posed to companies and society alike.

An integrated ancient Chinese philosophical perspective on corporate governance

Although the concept of corporate governance began with the emergence of corporations, the concept of governance can be traced back to ancient China. Currently, discussions of this topic focus mainly on the differences between approaches to and theories about corporate governance and examine their effectiveness, an integrated view that draws on Chinese theories and cultures is missing. This paper attempts to address the gaps by conceptually synthesizing insights from ancient Chinese philosophies to construct an integrated framework; it further defines the legal and ethical constraints while incorporating both an ancient Chinese (i.e., Eastern) philosophical perspective and Western governance elements and both national-level and firm-level variables. Drawing on institutional theory (Scott, 1995, 2004, 2008a, 2008b) and considering the interaction of legal and ethical constraints, a model — the ethical-legal model — constructs and categorizes corporate governance approaches into four types driven by different types of institutions and compares how these approaches are related to different governance perspectives (agent, stewardship and stakeholder). An autonomous (Wu Wei) governance approach is trigged when the cognitive institution is formed as a result of high levels of both legal and ethical constraints and drives autonomous corporate governance with a shift in focus from compliance to commitments

PERFORMANCE ANALYSIS OF ROE, ROA, BOPO, FDR AFTER CONVERSION TO NOM BANK NTB SYARIAH

This study aims to analyze the effect of the performance relationship, analyze thecontribution, and find out how long the shock period of each variable is; (1) BOPO, (2) FDR, (3)ROA, and (4) ROE against Net Operating Margin at Bank NTB Syariah. This study uses theTheory of Good Corporate Governance approach, then the data is processed using the VARVECM and ECM methods on the EViews 12 application. There are two analysis results in thisstudy, the first through the VAR-VECM analysis and the second through the ECM, the results ofthe VAR-VECM test in the equation model have not found a balance both in the long and shortterm, but on the other hand there are shocks experienced by the independent variables. NOMthrough the dependent variables BOPO, FDR, ROA, and ROE worth 60.93%, 9.83%, 7.54%, and4.74%. While the response level of the BOPO variable was positively responsive by 0.012992 bythe NOM variable and was stable in period 25, for other variables such as FDR, ROA, and ROEthe response fluctuated and did not experience value stability. In contrast to the results of theECM test where in this test the variables that have a long-term effect are the BOPO, ROA, andROE variables with the probability values of 0.000, 0.0081, and 0.0375 while for the short-termperiod the variables that have an effect are only the BOPO variable with a probability value that isworth 0.0341

Shifting Microeconomic Indicators into Solving Macroeconomic Issues

Defining relations can be built between the state and the corporation on its capitalist structure with observable results in increasing economic performance. The idea of ​​sustainability results from Schumpeter's analysis of "healthy" economic growth of about 2% per year (according to the analysis between 1890 and 1940, including the unsustainable pre-crisis growth of 3.8% / year between 1890 and 1929). Basically, the relationship between government action and corporate governance can be likened to the relationship between urban management and business management (the ultimate goal is to attract investors / stakeholders to the city / corporation by offering advantages over other areas with similar characteristics but keeping the sense of economic logic). to maintain a competitive environment over the local government apparatus and an effective relationship with the inhabitants of that city, respectively, to maintain an organizational culture that resonates with the employees and with the initial purpose of the business), thus this research work having a character of rationalization of the economic environment of an emerging state through an integrated corporate governance approach to the issue.

A Bibliometric Analysis of World Issues—Social, Political, Economic, and Environmental Dimensions

Globalization has taken place for several decades and the world has become a connected place. As researchers are on the frontline to explore world (or global) issues, it is crucial to understand what research has been done and what the emerging topics relating to social, political, economic, and environmental dimensions are. This study investigates the trend and emerging topics of world (or global) issues using a bibliometric approach. A literature search using Scopus identified 1201 related documents, including journal articles, review articles, conference articles, books, and book chapters published during the period 1975–2022. Bibliometric data were analyzed using Scopus tools and VOSviewer software. Results show that the number of publications on world (or global) issues has increased over the last five decades, particularly after 2001. Two major streams of research were identified based on co-occurrence of keywords. They were “sustainable development and climate change”, and “environmental protection, economics, and politics”. Additionally, corporate social responsibility, governance approach, and COVID-19 were identified as emerging keywords in recent years.

A Corporate Governance Approach to Cybersecurity Risk Disclosure

AbstractThis article sheds light on cybersecurity risk disclosure practices, offering explanations based on the corporate governance literature. We argue that cybersecurity risk management poses particular challenges for corporations due to amplified agency problems. Cybersecurity risks are increasing in number and growing in complexity for companies worldwide. The financial sector in the Benelux region was already digitalising rapidly when, in 2020, enhanced remote-working requirements due to the COVID-19 pandemic further contributed to risk exposure. Substantiating our theoretical discussion, we present and discuss insights as to the most pressing cybersecurity risk management issues in the financial sector based on evidence from semi-structured interviews with Chief Information Security Officers/Chief Security Officers from financial sector leads in the Benelux region. We discuss contemporary factors that might induce management to dedicate more attention to cybersecurity. This apparent shift in companies’ approaches regarding cybersecurity is likely to encounter obstacles and should not be expected to be an even and linear process, given the challenges of processing and communicating information in an environment featuring high uncertainty and technical complexity as well as potentially misaligned incentives.

Elaborating on a new entrepreneur typology from the corporate governance perspective

Objective: This work aims to build a new entrepreneur typology in line with corporate governance approaches adopted by the enterprises and therefore to adequately implement public policy and strategy about entrepreneurship, since governance is an important basis for decision-making. Research Design & Methods: To achieve the above objective, associations are established between entrepreneur types and corporate governance approaches via multiple correspondence analysis with grouping method for discretization and variable principal for normalization. Findings: Findings highlight a new entrepreneur typology, which comprises four types of entrepreneurs with regard to corporate governance approaches. The new typology is as follows: structure-oriented shareholder; behaviour-oriented stakeholder; legal control oriented and economic-managerial control oriented. Implications & Recommendations: This work has theoretical implications which reside in the need to use corporate governance for strategic modelling. It also has practical implications in that it is easier and more appropriate to make decisions from corporate governance approaches than from types of enterprises. Thus, enterprises and the state must take advantage of these implications to improve the entrepreneurship productivity. Contribution & Value Added: This work conceives a new entrepreneur typology in line with corporate governance. Thus, it allows promoting strategic modelling based on corporate governance in business and public areas.

Disaster-Related Food Security and Past General Governance Strategies in a Worldwide Sample

AbstractClimate change is an increasingly pressing concern because it generates individual and societal vulnerability in many places in the world and also because it potentially threatens political stability. Aside from sea level rise, climate change is typically manifested in local temperature and precipitation extremes that generate other hazards. In this study, we investigated whether certain kinds of governance strategies were more common in societies whose food supply had been threatened by such natural hazards—specifically, floods, droughts, and locust infestations. We coded and analyzed ethnographic data from the Human Relations Area Files on 26 societies regarding dominant political, economic, and ideological behaviors of leaders in each society for a specified time period. Leaders in societies experiencing food-destroying disasters used different political economic strategies for maintaining power than did leaders in societies that face fewer disasters or that did not face such disasters. In nondisaster settings, leaders were more likely to have inward-focused cosmological and collectivistic strategies; conversely, when a society had experienced food-destroying disasters, leaders were more likely to have exclusionary tribal/family-based and externally focused strategies. This apparent difficulty in maintaining order and coherence of leadership in disaster settings may apply more to politically complex societies than to polities governed solely at the community level. Alternatively, it could be that exclusionary leaders help set up the conditions for disastrous consequences of hazards for the populace. Exceptions to the pattern of exclusionary political economic strategies in disaster settings indicate that workarounds do exist that allow leaders with corporate governance approaches to stay in power.

Evaluating Sharia Banking Financial Performance Before and After Initial Public Offering Using Risk Profile, Good Corporate Governance, Earning and Capital

Initial Public Offering is one of the steps that companies can take in order to obtain capital through the shares sold. Through the Islamic capital market, Islamic banking can increase its competitiveness and capital through the industry. The purpose of this study was to assess whether there were changes in the financial performance of Islamic banking before and after the IPO with the Risk Profile, Good Corporate Governance, Earning and Capital Methods (RGEC) approach which was further developed into financial ratios of NPF, FDR, ROA, ROE, and CAR. And to find out whether the decision of Islamic banking to conduct an IPO has been effectively carried out. This study uses the Wilcoxon test to see if the performance of Islamic banks that conducted an IPO in 2018 (Bank BTPN Syariah Tbk. and Bank BRI Syariah Tbk.) changed after conducting an initial public offering. The result is that the average FDR, CAR, and ROE ratios have a significant difference in the financial performance of Islamic banking before and after the IPO and there is no significant difference between the ROA and NP ratios.

Covid-19 dan Dampaknya Terhadap Kinerja Bank BUMN di Indonesia

Covid-19 has increased the risk of financial institutions. As countries struggle to strengthen economic activity and provide various fiscal stimuli to facilitate liquidity in the market, this study questions whether national banks are still in a healthy condition to face uncertainties in the market. This study applies the RGEC (Risk Profile, Good Corporate Governance, Earnings, and Capital) approach to assess the performance of state-owned banks in Indonesia during the new normal period since June 2020 (quarter II and III). Based on the analysis and discussion of this study, it can be concluded that the condition of state-owned banking in Indonesia during the new normal period was still healthy. Bank risk level remains at a safe level. Bank made huge profits and fixed capital is still at a healthy level. Thus, state-owned banks remain competitive and handle risk well. This is supported by the existence of stimulus assistance from the government in the form of the Countercyclical Policy. Cara Mengutip: Ilahiyah, M. E., Padilla, M. A. E., & Palupi, D. (2021). Covid-19 dan Dampaknya Terhadap Kinerja Bank BUMN di Indonesia. Esensi: Jurnal Bisnis dan Manajemen, 11 (1), xx-xx. https://doi.org/10.15408/ess.v11i1.19297.

A Comparative Analysis of Director Tenure in South Africa and Selected International Jurisdictions

Director tenure attracts attention worldwide and is increasingly being recognised as a crucial element in assessing an external (independent non-executive) director’s independence. Director tenure has recently come under the spotlight in South Africa. Shareholder activists are expressing disapproval of lengthy tenures of directors serving on boards of listed public companies and exerting pressure on long-serving directors to resign from office. This article examines whether the South African corporate governance principles regulating director tenure are adequate or in need of revision. The article examines further the corporate governance practices in leading jurisdictions such as the United Kingdom, Malaysia, Singapore, Hong Kong, and India that have recently revised their corporate governance practices. It then makes recommendations for enhancing the South African corporate governance approach to director tenure. It also calls on directors to collaborate with shareholders and independent external experts to examine their approach to director tenure and, if circumstances allow, revise the company’s memorandum of incorporation to limit directors’ tenure or provide for a staggered rotation of directors on the board.

The practices of Shariah governance systems of Islamic banks in Bangladesh

PurposeThe purpose of this study is to explore the practices of Shariah governance (SG) systems in terms of their guidelines, current operational procedures, internbal policies and structures and regulatory framework of Islamic banks in Bangladesh from the viewpoints of Shariah, Tawhidic approach/ontological approach and Shuratic process of Islamic corporate governance and institutional theory.Design/methodology/approachA semi-structured interview tactic has been applied to attain the objective. Overall, data has been collected from the regulators, Shariah supervisory board members, Shariah department executives and experts from the central bank and Islamic banks of Bangladesh.FindingsThe study finds that Islamic banks do not follow complete Shariah principles in all aspects of SG nor violate them fully in their overall functions due to less accountability, which contradicts the concept of the Tawhidi epistemological process of Islamic corporate governance. Islamic banks announce that they are following Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) guidelines, but in practice, they do not follow the instructions accurately because all of the standards and policies of AAOIFI and the Islamic Financial Services Board are not applicable in Bangladesh due to its cultural, legal and regulatory structures. It is found that Islamic banks in Bangladesh have a lower practice of maqasid as-Shariah and Tawhidic approach and Shuratic process.Research limitations/implicationsThe study significantly contributed to the central bank of Bangladesh and Islamic banks by exploring the SG systems for their further enhancement. The research provides some suggestions for improving existing SG systems and enhancing more application of SG guidelines and Shariah principles in the overall operations of the Islamic banks in Bangladesh.Originality/valueThis research extends the literature regarding the Islamic banks’ SG practices in Bangladesh. The study also contributes to Shariah, Tawhidic approach/ontological approach and Shuratic process of Islamic corporate governance and institutional theory by exploring the Islamic banks’ existing SG practices in Bangladesh.

Rethinking corporate governance approaches

Rethinking corporate governance approaches

Comparative Studies between UK-Listed and Japan-Listed Banks

Abstract This paper studies (i) the effects of external directors and managerial ownership, and (ii) the effects of shareholder monitoring, on risk-taking at banks. The former is part of the internal control mechanisms, the latter of external control. It also examines the difference between control mechanisms in the UK and in Japan. It shows that shareholder supremacy is likely to weaken corporate governance at banks. In particular, it finds that: (i) the substituted effects between internal and external controls differ between countries, or that the substituted effects of governance mechanisms may not exist; (ii) an internal corporate governance approach to shareholder supremacy increases risk-taking at banks; and (iii) foreign shareholders are likely to increase risk-taking at banks.