Key Governance Research Articles

Beyond traditional synergies: exploring network, relational and nonmarket gains in European M&A

Purpose This study aims to explore the sources of synergy gains in European mergers and acquisitions (M&A) from 2010 to 2021, focusing on both traditional and emerging synergies. Empirically validate novel types of synergies, including relational, network and nonmarket synergies, alongside operational, financial and market power synergies. Examine the impact of firm characteristics, governance structures and market conditions on the magnitude and success of synergy gains postacquisition. Design/methodology/approach The research uses a quantitative approach, analyzing a sample of 342 European M&A transactions from 2010 to 2021. Synergy gains are evaluated through econometric modeling, examining the effects of various firm and transaction characteristics on value creation. Findings The study reveals that operational synergies, primarily driven by cost reductions and investment savings, are the most significant contributors to value creation in European M&A. Financial synergies, while present, have a more limited impact. Additionally, relational and network synergies emerge as crucial, enhancing firms’ positions within business networks. However, nonmarket synergies did not yield significant results, highlighting the challenges of quantifying intangible benefits. Firm characteristics such as board diversity and independence are found to positively influence the realization of these synergies. Practical implications For practitioners, the findings emphasize the importance of considering both traditional and emerging sources of synergies in M&A evaluations. Decision-makers should focus not only on operational efficiency but also on enhancing relational and network positioning to maximize postacquisition value. The study also highlights the role of strong governance, particularly board diversity and independence, in ensuring successful integration and synergy realization. Originality/value This study contributes to the existing literature by empirically validating previously unexplored synergies, particularly relational, network and nonmarket synergies, in the context of European M&A. By integrating network-based perspectives, it expands the scope of traditional synergy analysis and offers a more holistic view of value creation postacquisition. The research also provides practical insights by identifying key governance factors that influence the realization of these synergies, making it a valuable resource for both academics and practitioners.

Socio-material governance tensions in nature-based solution experiments: lessons from Turin

ABSTRACT Urban experiments are widely acknowledged as key vehicles for testing and implementing greener alternatives in real-life urban settings. Less studied, however, are the everyday governance practices through which actors involved in experiments attempt to co-materialize change. Mobilizing the concept of socio-material governance tensions, this paper sheds light on how actors engage with barriers but also with opportunities stemming from the social and material realities in which experiments navigate. Through the empirical analysis of Urban Living Laboratories (ULLs) fostering Nature-based Solutions in Turin (Italy), tensions are analysed starting from the strategic choice of intervention sites, moving to the incremental practices of embedding experiments within the social and spatial fabric of the city, then addressing the challenge of leaving a socio-material legacy that goes beyond short-term initiatives. Learning from the empirical analysis, this paper highlights key governance tactics used to navigate tensions; these can inform greening experiments across many contexts. Tactics relate to proactive leadership and conflict management, intermediation, collaboration and facilitation of maintenance practices, improvisational governance, and engagement in the politics of experimentation.

Practices of Good Governance in Budhanilkantha Municipality: Local Government Initiatives

This article explores good governance practices and public service delivery by elected representatives and administrative staff in Budhanilkantha Municipality, Nepal. It examines local government initiatives and emphasizes key principles of good governance such as accountability, transparency, justice, and participation. This study employs a mixed-methods approach, incorporating surveys and interviews, to assess key governance indicators, including transparency, accountability, public participation, and service delivery. Likewise, a stratified sampling method was used to select 120 respondents from all wards of Budhanilkantha Municipality. The findings provide a comprehensive overview of governance practices in the Municipality, highlighting strengths and improvement areas. While awareness of governance principles is generally high, challenges such as limited public participation, delayed public service delivery, and varying levels of transparency persist. The research underscores the importance of citizen engagement and the proactive implementation of good governance mechanisms to foster trust, enhance service delivery, and support sustainable local development. The insights derived from this case study offer valuable guidance for policymakers, practitioners, and community stakeholders seeking to strengthen governance frameworks at the local level.

Unlocking the power of internal audit function (IAF) and corporate social responsibility (CSR): enhancing integrated reporting quality in Malaysian companies

Purpose This study aims to seek to answer concerns about the sufficiency of traditional corporate reporting by examining the influence of the internal audit function’s (IAF) qualities on integrated reporting quality (IRQ) and the moderating effect of corporate social responsibility committee’s (CSRC). Even though integrated reporting (IR) is becoming more significant, nothing is known about the function of IAF in this setting. Design/methodology/approach This study uses ordinary least squares regressions, integrating two-way cluster-robust standard errors (clustered by firm and year), to examine the association between the quality IAF and IRQ, as well as the moderating influence of CSRC, for companies listed in Malaysia spanning the period from 2017 to 2020. Findings Analysing data from Malaysian-listed firms (2017–2020), findings show that increased IAF investments are associated with lower IRQ, particularly in the presence of a CSRC. However, firms with in-house show a positive association with higher IRQ, which is amplified by a CSRC. This suggests a complementary relationship between CSRC and in-house IAF, potentially guiding regulatory practices regarding CSR or sustainability committees. Thus, the presence of CSRC signifies the organization’s dedication to the advancement of sustainable development principles. Originality/value This study’s implications include promoting stronger internal mechanisms such as IAFs and CSRCs, which will ultimately improve IRQ. This research contributes to understanding the combined impact of IAF and CSRC on reporting quality by focusing on them as key governance components influencing both financial and non-financial reporting. As a result, regulators and practitioners can gain insights to improve IR efficacy and stakeholder decision-making.

(Micro)soft power in Dutch public education: making classrooms platform-ready through partner work

ABSTRACT This article explores how the global technology company Microsoft, supported by local partners, makes Dutch classrooms platform-ready by influencing how schools approach three key public governance responsibilities in their digital transformation: developing a vision for digital education, creating strategies for educational innovation and fostering digital literacy. Using the concept of soft power and extensive empirical research, the study shows how Microsoft aligns these responsibilities with its own corporate interests. As a result, the company gains control over schools’ digital infrastructure – not only in terms of hardware and software but also in terms of its pedagogical design. The conclusion emphasises the importance of collective and collaborative national efforts to resist the global influence of platforms like Microsoft on local digital education.

Shadow Economy and Environmental Sustainability in Global Developing Countries: Do Governance Indicators Play a Role?

Environmental sustainability has been a challenging issue all over the globe, with air pollution posing a significant threat. One main factor contributing to air pollution is the growth of the shadow economies. This study investigates the effect of the shadow economy on air pollution and explores how these effects depend on the levels of governance indicators. We utilize key air pollution indicators: carbon dioxide (CO2) and nitrous oxide (N2O) emissions. Furthermore, we examine the role of key governance indicators: corruption control, the rule of law, and regulatory quality. The study utilizes an annual panel dataset of 107 selected developing countries worldwide, spanning from 2002 to 2020, and employs the System GMM technique, which effectively tackles the omitted variable bias, potential endogeneity, and simultaneity issues in the model. The estimation results indicate that a sizeable shadow economy significantly increases the levels of CO2 and N2O emissions. Moreover, the results reveal that robust governance frameworks, evidenced by enhanced corruption control, a stronger rule of law, and superior regularity quality, mitigate the adverse effects of the shadow economy on CO2 and N2O emissions. This highlights a significant substitutability between the shadow economy and governance indicators, indicating that improvements in governance formworks will not only reduce the size of the shadow economy but also weaken its harmful impact on air pollution. Policy initiatives should thus focus on strengthening governance mechanisms, particularly enhancing control of corruption and the rule of law to effectively reduce the environmental impact of the shadow economies in developing countries. Additionally, governments should prioritize reforms in regulations and legal frameworks to limit the expansion of the shadow economy, thereby decreasing their contribution to air pollution.

Perceptions of Local and Traditional Government Leaders for Enhancing Community Development

Purpose: There are two key governance forms in Ghana, specifically traditional governance and democratic governance. Accelerating development in the local communities requires effective collaboration and the fusion of the two governances divide to harness the unique capabilities and opportunities embedded within each paradigm. The perceptions hold by local and traditional leaders about each other is fundamental to collaborative efforts. Such perceptions speak to the psychosocial, convictional and behaviour of local leaders. Methodology: This study through a field survey samples the views of two leadership divide about each other in terms of their ability to drive positive change in the community to drive accelerated community development. The study was conducted among three select districts specifically, the Accra Metropolis, Kumasi Metropolis and the Tamale Metropolis using key informant interviews, and focus group discussions to gather the data. The data was analysed using thematic analysis. Findings: The findings of the study indicated that there are shared perceptions of strengths of both systems of governance for developing local communities. The traditional leaders are seen to be strong on cultural legitimacy, moral authority, communication competence, and historical knowledge, all of which helps in social mobilization within the local communities. The local government leaders were found to exercise strength in the areas of access to money and resources, legal authority, and enforcement authority. Unique Contribution to Theory, Practice and Policy: We conclude that there are opportunities to harness each of these strengths such that a successful fusion of local and traditional systems of government will lead transformative leadership for sustainable local development.

Board gender diversity, CEO power and LGBTQ-supportive corporate policies

This study investigates the effect of two key corporate governance mechanisms, board gender diversity, chief executive officer (CEO) power, and their interactions on firms’ implementation of lesbian, gay, bisexual, transgender, and queer (LGBTQ)-supportive policies. Using 348 Fortune 500 firms from 2003–2023, our study reveals that the presence of three or more female directors on the board is positively associated with LGBTQ-supportive policies. We also find that CEO formal (informal) power has a positive (negative) impact on LGBTQ-supportive policies. Lastly, we document that whereas the effects of the interactions of CEO formal power with both the gender diversity measures are positive, the interactions between CEO informal power and gender diversity measures: critical mass and token are positive and negative respectively. Overall, the results suggest that CEO power could act as a double-edged sword, and a high female director representation reduces the negative effect of CEO informal power on LGBTQ-supportive policy implementations.

Tourism metagovernance and the role of the state: Insights from post-blast Beirut

This paper examines the institutionalised interests and values that underpin tourism governance (i.e., tourism metagovernance), to explain why certain governance arrangements appear and how they function. We examined the redevelopment of Beirut's tourism-dependent Mar Mikhael and Gemmayze neighbourhoods in the aftermath of the 2020 port blast. The chaotic post-disaster setting reflected and amplified the ineffectiveness of the already existing, strongly intertwined, metagovernance of urban development and urban tourism in Beirut. The state's absence resulted in enhanced community vulnerability, uncoordinated donor-led disaster responses, and limited strategic rebuilding of tourism and cultural activities. Even when the state as a key governance intermediary is absent, its relational and institutional roles affect tourism metagovernance and, therefore, influence the resilience of tourism governance and development.

The Interconnectedness of Earnings Management, Corporate Governance Failures, and Global Economic Stability: A Critical Examination of the Impact of Earnings Manipulation on Financial Crises and Investor Trust in Global Markets

This study critically examines the interconnectedness of earnings management, corporate governance failures, and their impact on global economic stability and investor trust. Focusing on the Enron (1993–1995) and Wirecard (2015–2019) scandals, the research identifies key financial and governance indicators that contributed to these collapses, including CEO duality, weak board oversight, and manipulated financial reporting. Data for the analysis were drawn from corporate financial reports, macroeconomic indicators sourced from the World Bank, and stock market data from MarketWatch. Financial ratio assessments and regression models reveal a statistically significant negative relationship between GDP growth and abnormal returns for Enron (p = 0.014), while inflation had a strong positive impact on abnormal returns in both cases (p < 0.001). Time series analysis was applied to assess the macroeconomic consequences of corporate collapses on global financial markets. The findings demonstrate how declining GDP growth and rising inflation amplify market responses to governance failures. Recommendations include enhancing corporate governance frameworks, intensifying regulatory enforcement, and fostering global regulatory cooperation to safeguard financial markets and restore investor trust.

Interlinking financial stability regulation and governance in German professional soccer: contribution and implications.

This study explores the integration of financial stability regulation in professional soccer within the framework of sport governance, focusing on the German context. The research examines how financial regulations influence key governance principles such as accountability, transparency, and sustainability, while also addressing the challenges posed by the dynamic nature of professional soccer. A qualitative methodology was employed, using focus group discussions with nine experts, including representatives from soccer clubs, auditing firms and other relevant stakeholders. The discussions aimed to capture diverse perspectives on the impact of financial stability regulation on governance practices within the German soccer league and clubs. The findings reveal that financial stability regulation is effective in promoting financial discipline and accountability at both league and club levels. However, the study also identifies challenges, such as the need for greater harmonization of regulatory frameworks across different levels of professional soccer and the potential benefits of implementing incentive mechanisms within the financial stability regulation to improve governance at the league and club levels. The study underscores the importance of a multi-dimensional approach to financial stability regulation, considering political, systemic, and organizational dimensions. It highlights the potential for improving governance through the adoption of independent governance models and more practical applications of governance principles. Future research could further explore these areas, offering insights that could enhance the effectiveness of financial regulation in professional soccer and potentially other sport contexts.

Corporate Governance: Exploring Key Concepts, Mechanisms, and Historical Evolution

Corporate governance involves several key concepts that help define its scope and purpose. Though review of key corporate governance concepts and historical evolution is widespread in the extant literature, detailed review across the globe is limited. Motivated by this dearth, this study reviewed these concepts and explored how firms rely on them to implement effective corporate governance. The study employed documentary and descriptive research methods to review concepts of corporate governance, systems, mechanisms and historical perspectives around the world. Our study discovered that understanding internal controls helps ensure compliance, minimize risks and safeguard the firm’s assets. Similarly, the study discovered that executive compensation structures help align management interests with shareholder value and external oversight through auditing and regulation which provides an unbiased assessment of the firm’s financial reports. Our historical perspective of corporate governance highlighted significant milestones that have shaped its evolution. Importantly, these include reports and acts aimed at addressing corporate scandals and improving governance practices. We also discovered that to improve corporate governance standards worldwide, multilateral organizations like the Organisation for Economic Cooperation and Development (OECD) among others have played a number of roles in developing international guidelines and codes of best practice. Further, the study explored the dynamic nature of corporate governance in response to evolving economic, social and technological trends. The study concluded that understanding the concepts, systems, mechanisms and historical perspectives of corporate governance is essential for firms and stakeholders to maintain transparency, accountability and sustainable performance.

Frontier AI developers need an internal audit function.

This article argues that frontier artificial intelligence (AI) developers need an internal audit function. First, it describes the role of internal audit in corporate governance: internal audit evaluates the adequacy and effectiveness of a company's risk management, control, and governance processes. It is organizationally independent from senior management and reports directly to the board of directors, typically its audit committee. In the Institute of Internal Auditors' Three Lines Model, internal audit serves as the third line and is responsible for providing assurance to the board, whereas the combined assurance framework highlights the need to coordinate the activities of internal and external assurance providers. Next, the article provides an overview of key governance challenges in frontier AI development: Dangerous capabilities can arise unpredictably and undetected; it is difficult to prevent a deployed model from causing harm; frontier models can proliferate rapidly; it is inherently difficult to assess frontier AI risks; and frontier AI developers do not seem to follow best practices in risk governance. Finally, the article discusses how an internal audit function could address some of these challenges: Internal audit could identify ineffective risk management practices; it could ensure that the board of directors has a more accurate understanding of the current level of risk and the adequacy of the developer's risk management practices; and it could serve as a contact point for whistleblowers. But frontier AI developers should also be aware of key limitations: Internal audit adds friction; it can be captured by senior management; and the benefits depend on the ability of individuals to identify ineffective practices. In light of rapid progress in AI research and development, frontier AI developers need to strengthen their risk governance. Instead of reinventing the wheel, they should follow existing best practices. Although this might not be sufficient, they should not skip this obvious first step.

Investigating the impact of multiple governance mechanisms on new infrastructure projects performance: evidence from China

PurposeThis study aims to construct a “contractual–relational–governmental” 3D governance framework for new infrastructure projects (NIPs) within China’s distinct institutional context. The primary objective is to explore the impact of multiple governance mechanisms on the NIP performance, thus identifying the key governance mechanisms and proposing targeted performance improvement strategies.Design/methodology/approachThe research design follows a sequential mixed methodology of integrating qualitative and quantitative data collection and analysis. Firstly, project governance and performance indicators were collected from relevant literature and expert interviews. Secondly, a questionnaire was developed, and data were collected through on-site and online means. Finally, the partial least square structural equation model (PLS-SEM) was utilized to examine and analyze the relationships between governance mechanisms and NIP performance.FindingsContractual, relational and governmental governance all have a certain role in promoting the NIP performance. Specifically, contract stringency, trust and governmental decision are the core elements of contractual, relational and governmental governance, respectively, while commitment does not significantly affect NIP performance. Generally, relational and governmental governance exert a more substantial influence compared to contractual governance, with governmental decision and trust being the most effective.Originality/valueThis paper contributes to the field by introducing PLS-SEM as a measurement tool for exploring the impact of multiple governance mechanisms on governance performance in NIPs. The results offer valuable insights for project managers, enabling them to concentrate on core factors while refining and optimizing governance mechanisms and strategies.

Integrating ecosocial policies through polycentric governance: A study of the green transformation of Danish vocational education and training

AbstractHow can polycentric governance promote the development of ecosocial policies within existing policy systems? Through a study of green reforms of Danish vocational education, the paper argues that polycentric governance institutions are particularly useful at engaging constituent actors in innovation and constructive collaboration over reforming education programs to integrate ecological goals into vocational education. Combining significant autonomy for governance units and their nesting in a larger governance structure, polycentric governance helps address three key governance challenges: developing agreement among actors with clashing material interests about what green transformation entails; identifying how joint gains can be reached within a common vision of the development of the economy; and setting up an institutional structure that supports continuous adjustment to respond to technological advances and shifting social demands. Polycentric governance is, however, not a panacea. The state thus plays an important role in supporting autonomous governance units to develop ecosocial policies.

Governance In Smart Cities: Identifying And Analyzing Key Indicators Of Governance Structures

Background: Smart cities are characterized by integrating Information and Communication Technology (ICT) to address urban challenges, involving human and social capital as well as smart governance. Although there is no consensus on their definition, smart cities are generally seen as innovative projects to foster urban development through technology. However, effective governance in these cities poses significant challenges, requiring a multifaceted approach that involves collaboration between public and private sectors and civil society. This study seeks to identify key indicators for constructing effective governance frameworks in smart cities. Materials and Methods: Through a qualitative analysis of 70 articles from the ScienceDirect portal (2020-2024), this study explores the criteria and indicators of governance in smart cities. The articles were reviewed and filtered using a protocol with nine guiding questions, resulting in the extraction of 311 terms, which were then grouped into 33 indicators across five themes. These themes - Governance and Participation, Policies and Regulations, Strategies and Urban Planning, Technology and Innovation, and Indicators and Assessments - form the foundation for effective governance structures in smart cities. Results: The results highlight that governance in smart cities must be dynamic and adaptable, incorporating citizen participation, transparent public policies, open data practices, and efficient use of ICT. The findings contribute to a more comprehensive understanding of how governance structures can foster sustainability, inclusivity, and efficiency in smart urban environments. By synthesizing key governance indicators, this research provides a framework to guide the development of governance models that can support the evolving needs of smart cities. Conclusion: Effective governance in smart cities requires dynamic, adaptable structures that foster collaboration between public and private sectors and civil society. This study provides a framework to promote sustainability, inclusivity, and efficiency in smart urban environments.

Creating a Responsible Renewable Energy Investment Model for the MENA Region's Low-Carbon Transition

Addressing climate change presents specific challenges for the countries of the Middle East and North Africa (MENA), particularly concerning oil production and water scarcity, but it also offers opportunities for new paths toward sustainability. The transition to low-carbon energy raises significant concerns for oil and gas producers in the MENA region, especially regarding their dependence on hydrocarbon revenues. Without proper adjustments, this transition could worsen macroeconomic imbalances and potentially threaten existing social contracts. Policymakers are working to promote various renewable energy sources and implementation strategies to mitigate the adverse effects of climate change. As a result, the development of an index capable of accurately measuring and benchmarking a country's overall sustainability and economic performance becomes essential. This index should provide a comprehensive assessment of both the current and future state of renewable energy. Additionally, it must highlight key environmental, social, governance (ESG), and economic factors within the renewable energy sector. This proposal aims to establish a composite index, referred to as the Renewable Energy Responsible Investment Index (RERII), covering 19 countries and utilizing 22 distinct metrics. The RERII trend is calculated from 2010 to 2019. The proposed index can serve as a screening tool, decision-making aid, benchmarking instrument, and guide for sustainable development.

The social contract theory meets cybersecurity: systematic literature review

Purpose This study aims to provide a comprehensive overview of social contract theory (SCT) utilization in cybersecurity literature, elucidating the current state of research, identifying major applications and themes and highlighting gaps, particularly in empirical studies, and the integration of emerging technologies. The study also maps the contractual parties and governance tools discussed in SCT and cyberspace interactions. Design/methodology/approach This study uses a systematic literature review to investigate the application of SCT within the cybersecurity domain. Using a mixed-methods approach that combines quantitative and qualitative content analysis with the Grounded Theory strategy, over 30,000 documents were initially screened. The final data set comprised 873 peer-reviewed papers from multiple databases. MAXQDA software facilitated coding and thematic analysis to identify key SCT applications, governance tools and research gaps. Findings The review revealed the following: emerging technologies such as artificial intelligence (AI) and blockchain are sparsely researched within the SCT-cyberspace intersection, yet they offer solutions to various SCT-related issues; empirical studies are underrepresented, with theoretical explorations dominating the discourse; there is a notable gap in integrating emerging technologies such as AI within SCT frameworks; governance tools discussed are varied, including economic incentives, regulatory measures and informational strategies. Originality/value This study synthesizes SCT applications in cybersecurity, highlighting the interdisciplinary nature and potential for richer theoretical integration. By systematically mapping the literature, it identifies crucial gaps and offers a foundation for future empirical and theoretical research. The findings emphasize the importance of considering traditional SCT themes and contemporary technological contexts, contributing to the development of more robust frameworks for cyberspace governance.

Corporate governance mechanisms and the quality of sustainability reporting – results from a systematic literature review

Purpose: The article investigates the extent to which corporate governance mechanisms have been researched in the context of sustainability reporting quality, given the lack of a standardized non-financial reporting framework and the use of different reporting guidelines by companies.Methodology/approach: We conducted a systematic review of the literature, which included 20 publications carefully selected from 881 publications extracted from the EBSCO database and Google Scholar.Findings: The literature review identified the impact of key corporate governance instruments/mechanisms/attributes on the quality of reporting disclosures, mainly in the area of social responsibility and, to a lesser extent, (developing) sustainability reporting. The results were analyzed geographically, culturally and contextually, with a primary focus on listed companies. Research limitations/implications: The literature review was limited to two databases and academic articles in English and Polish.Originality/value: This is one of the first studies to document the state of research to date on the quality of sustainability disclosures in conjunction with corporate governance.

Collaboration or Hierarchy: Experimental Evidence on Governance Modes and Legitimacy Perceptions

ABSTRACTAmidst growing interest in collaborative governance as means to enhance the legitimacy of public governance, this article investigates public officials' perceptions of this governance mode. Despite theoretical propositions linking collaborative governance to enhanced legitimacy, empirical validation is scarce. Using a factorial survey experiment with 932 public officials in the Finnish central administration, the article investigates if collaborative governance promotes legitimacy compared with hierarchical bureaucracy. The results are clear: collaborative governance does not inherently boost perceived legitimacy, but rather undermines it. This study captures the causal relationships between governance modes, key governance traits (stakeholder opposition/support and majority opposition/support), and perceived legitimacy, thereby challenging prevailing theoretical assumptions about the merits of collaborative governance.