Shareholder Perspective Research Articles

Habitus in elite public high schools: A case study from the perspectives of shareholders

This case study employs a Bourdieusian theoretical framework to analyze the relationship between an individual’s habitus and their perceptions about the value of education as described by students, teachers, and principals from two elite public high schools in Aydin, Turkey. The study argues that, as a part of school climate, the elite schools contribute to the reproduction of cultural capital that funds elite student habitus. Study results show that all the participants have positive perceptions about their schools, and all participants' habitus is supported by and reflective of the existing habitus of their school. This situation is sometimes a preference for elitism, but sometimes it is experienced as an obligation. The results confirm prior studies and related literature on the interrelationship between schooling, student habitus, and socio-economic reproduction.

Legal considerations when advising on business continuity

With the rise of climatic concerns and cybersecurity incidents comes the expectation that investments are made in business continuity measures. This expectation has legal teeth from the perspective of shareholders as well as regulatory bodies, contracting attorneys, vendors and supply chain entities. This paper explores the use of US legal system as a tool for enforcing liability and action from decision makers like the board of directors and C-suite officers, as well as between the parties of contracts. Shareholder derivative lawsuits, which occur predominately in the USA but have, as recently as 2020, started to include foreign-owned businesses, and breach of contract claims are two of the more prominent issues with business continuity tie-ins. This paper intends to arm the business continuity professional with a knowledge base about legal liability for failure to have a business continuity plan, an understanding of how disasters and disruptions will excuse the full performance of a contract and an ability to determine proper courses of action with respect to supply allocation after an incident.

Institutional investors, non-mandatory regulations, and board gender diversity

This study investigates the interaction between institutional investors and non-mandatory regulations, specifically, their impact on board gender diversity. Using a sample of UK FTSE All-Share firms from 2000 to 2017, we find that higher institutional ownership leads to higher female director representation on boards. We also find that this effect is more pronounced after the Davies intervention, a campaign promoting gender balance on British corporate boards. The findings highlight the complementary role of institutional investors and the Davies intervention in shaping board gender diversity, thereby offering insightful implications for shareholder perspectives and demand for board diversity.

경영권방어수단과 타인자본비용

[Purpose]This study examines the effect of Anti－Takeover Provisions(ATP, hereinafter referred to as ATP) on the cost of debt capital using credit ratings and borrowing interest rates. Through this, it is intended to clarify whether creditors interpret ATP, which means weakening shareholder rights, differently from shareholders.
 [Methodology]From 2011 to 2018, domestic companies listed on the KOSPI Market excluding the financial industry were selected as samples, and ATP were identified through the articles of incorporation. We conducted a regression analysis to verify the effect of Anti－Takeover Provision on the cost of debt.
 [Findings]As a result of the analysis, companies with ATP had relatively lower credit ratings and higher borrowing interest rates than those without ATP. And the more ATP they had, the lower their credit rating was. This is consistent with overseas empirical studies that the weakening of shareholder rights is also disadvantageous to creditors, supporting that mergers and acquisitions can benefit from coinsurance effect, which reduces the risk of default by improving the company’s debt capacity after the merger.
 [Implications]This study has contributions in that it analyzed the impact of strengthening (or weakening) shareholder rights on creditors using domestic data. Research and systems related to corporate governance have been dealt with a lot from the perspective of shareholders, but there is a lack of various studies on how they affect creditors. Creditors are major stakeholders of the company and play an important role in corporate governance. In this study, it is meaningful in that the impact of changes in corporate governance on them from the perspective of creditors was analyzed through ATP.

Shareholder or Investment Account Holder Interest: Which One Does Management of Islamic Banks Pay Attention to?

Governance and performance studies are often viewed from the perspective of shareholders, including in Islamic banks. However, the Investment Account Holders (IAH) are equally important stakeholders. Profit-sharing contracts, the absence of representation in the Annual General Meeting, and larger fund amount place the IAH at greater risk. In reality, the impact of governance should also prioritize protecting their interests. This study examines the effect of implementing corporate governance on the performance of Islamic banks from the perspective of shareholders and IAHs. This study tabulates data from the annual reports of 14 Indonesian Islamic banks. This research has found that Islamic bank governance has no effect on performance from the perspective of IAHs. On the other hand, governance can significantly influence performance from a shareholder perspective. From the perspective of stakeholder theory, these findings explain that Islamic banks have not made IAHs the main party to pay attention to. Business policies and strategies that are overseen by corporate governance have not had an impact on wider stakeholders. The IAHs in Islamic banks should also be categorized as key stakeholders.

Developing a self-funding model for private schools in Jordan

The purpose of the study was to identify the sources of self-financing in private Jordanian schools from the perspective of shareholders, the challenges that limit the increase and diversification of self-financing sources, and the actual procedural steps that school principals need to take to increase and diversify these sources in private schools. The researcher used the mixed method (quantitative and qualitative) as the general method for the study. To achieve the objectives of the study, two instruments were used to collect data. The first was a one-on-one semi-structured interview with school shareholders to explore the sources of self-financing of private schools, and the second was a five-scale questionnaire that included two axes. The first axis refers to the actual procedural steps taken by private school principals to increase and diversify sources of self-financing. The second axis was intended to capture the challenges faced by principals of these schools that limit their ability to increase and diversify these resources. The validity and reliability of the study instruments were tested. The study sample included (50) shareholders and (250) school principals in the capital city of Amman.The results of the study showed that from the shareholders’ perspective, school fees ranked first in relative importance as a source of self-financing for private schools and that the best executive measure that would lead to increased self-financing is the “Providing additional paid academic services for students (notes, question banks, photocopying, etc).” The results also showed that the biggest challenge that would limit self-financing is the “Limited purchasing power of local community members in light of emergency crises such as the Corona pandemic.” The findings also showed that school principals believe that expanding executive procedures to diversify resources would reduce the challenges they might face. The study recommended the development of a strategic plan to diversify the self-financing sources of private schools in Jordan to reduce their dependence on student fee as basic funding, as well as the development of an appropriate procedural guide to assist school principals in implementing the strategic plan.

WHO IS GOING TO WIN: THE EU ESG REGULATION OR THE REST OF THE WORLD? – A CRITICAL REVIEW

This paper aims to explore the past and the present challenges of EU ESG regulatory framework. Moreover, it attempts to make an in-depth analysis of the major ESG frameworks and standards used at a global level: GRI, SASB, IIRC, CDP, CDSB, TCFD, CSRD, and EU Taxonomy. The analysis considers 5 criteria: framework vs. standard, shareholder perspective, reporting format, metrics, and materiality. In addition, we draw insights into the complexity of the EU ESG reporting scheme and its added value compared to already existing frameworks and standards. Our results have implications on three levels: 1) for reporting companies that are faced with the option of selecting a reporting framework that will minimize the cost of compliance but also help them implement their climate transition strategy; 2) for employees and consumers of goods and services provided by companies that incorporate ESG in their long term economic activities and 3) policymakers that want to make sure they design the best standards that will ensure a smoother and effective transition to a low carbon economy.

The Financial Determinants of Integrated Reporting Disclosure by Jordanian Companies

The paper aims to investigate the effect of financial leverage, profitability, liquidity ratios, cash holdings, and interest coverage ratios on the level of integrated reporting disclosure—as one of the reports that promotes sustainable development—of Jordanian industrial listed companies. The content analysis method was used to analyze the annual reports of 51 listed Jordanian industrial companies during the years from 2014 to 2019 (306 firm-year observations). The analysis showed that financial leverage, profitability, liquidity and cash holdings are important determinants for integrated reporting, whereas the analysis did not support the effect of the interest coverage ratio. To the best of our knowledge, this is the first empirical study that deals with the impact of a set of financial variables on integrated reporting in the context of emerging countries such as Jordan. This is also the first study that deals with disclosing integrated reports through the perspective of shareholders and stakeholders, as integrated reporting contains two parts, financial and non-financial; therefore, the current study contributes to the disclosure literature by providing new theoretical and empirical evidence in the context of emerging markets.

Roy’s (1952) Revisited in Today’s Investing Contexts

Prior research has documented effects of bank loan covenant violations on various firm behaviors from the perspective of shareholders. Our paper extends this stream of research by examining how bank loan covenant violations affect public corporate bondholders. Using an event study approach, we find that the bond price response to a bank loan covenant violation is marginally negative in the 1990s and becomes significantly positive in the 2000s. The favorable price response in more recent years indicates that bondholders benefit from covenant violations. The differential bond price responses suggest an evolution of banks' use of loan covenants. Specifically, banks gradually take covenants as "trip wires," enabling them to step in and take necessary actions to safeguard their interests when early warning signals show up through covenant violations. Such disciplinary actions benefit not only banks but also bondholders. In addition, this paper finds that bondholder and stockholder reactions are positively correlated in the 2000s and that managerial entrenchment could decrease banks' influence after covenant violations.

INTERNAL RATE OF RETURN AS AN ENHANCEMENT OF THE DECISION-MAKING PROCESS IN THE ASPECT OF CHOOSING THE INVESTMENT PROCESS

The functioning of the enterprise in a dynamically changing environment requires constant shaping of its effectiveness, development, investment activity. Investment activity is inscribed in every type of business. Evaluation of investment projects has to indicate the best solution from among the proposed ones. The result of investment project efficiency evaluation depends directly on the stream of net cash flows and the level of discount rate applied to its updating. The relevance and quality of investment decisions affects, among other things, the competitiveness of the entity, its market share, prospects for revenue generation. Internal Rate of Return (IRR) is the discount rate at which the net present value of an evaluated project is equal to zero. IRR shows the rate of profitability of a project, which is paid when its internal rate of return is higher than the cut-off rate, which is the lowest rate of profitability acceptable to the investor. This indicator is focused on a single project with regular capital flows, which can also be a disadvantage for some investments. With IRR it is possible to evaluate the cash flows associated with a project. IRR helps in making the right decision from the perspective of shareholders and other decision makers.

Betting against bank profitability

There is an ongoing debate about the economic implications of excessive bank risk-taking and profitability. We examine this issue from the perspective of bank shareholders. Contrary to evidence for non-financial stocks, we find that operating profitability is negatively related to risk-adjusted bank stock returns. This negative relationship can be attributed to the nature of the banking business, where profit and systematic risk are intrinsically linked, and the previously documented ‘betting against beta’ anomaly. We further demonstrate that more profitable banks are riskier and therefore have greater demand from leverage-constrained investors, resulting in higher valuations and lower than expected subsequent returns. The negative relationship between profitability and risk-adjusted returns is increasing in bank scale, as moral hazard problems and the use of market-based activities accentuate the link between profit and systematic risk in large banks.

Deconstructing the Language of Accounting Textbooks to Make Power Relations Visible

The paper is motivated by the realization of the absent of critical engagement research problematizing the mainstream accounting worldview within accounting textbooks in the context of Indonesia. By doing so, this study uses the Thompson’s (1990) Schema of analyzing ideology to examine the content of popular introductory financial accounting (IFA) textbooks adopted by universities to reveal how, and the extent to which, the ideological status quo is reflected within these texts. This means the analysis tries to understand how ideological meaning is constructed within the textbooks. The analysis shows that the investigated textbooks portray accounting as an abstracted notion of a practical and calculative tool. Meanwhile, the ideological assumptions and socio-political and cultural background and conflict inherent in accounting are concealed and obscured. The textbooks have not scrutinized the concepts and measurement of accounting beyond employing a shareholder perspective. Consequently, the users’ attention is deflected from or glossed over the underlying ideological nature of the textbooks

Determining the managerial perception on triple bottom line performance

PurposeThe purpose of this paper is to determine managerial perception on social and environmental performance and its effect on financial performance in the Indian banking industry. In addition, the study tests moderating role of gender and experience of bank managers in influencing the association between the constructs.Design/methodology/approachThe empirical study is conducted using survey methodology. Responses were collected from 182 bank managers covering the private sector, public sector, foreign, regional rural and cooperative banks. Structural equation modelling technique was used to test hypothesized relationships between the constructs using Smart partial least squares software (3.3.2 version).FindingsResults of the study endorse the stakeholder perspective. Bank managers perceive that involvement in socially responsible practices strengthens the relationship between stakeholders and banks, which eventually improves financial performance. Conversely, results indicate that environmental practices by banks do not influence financial performance, thereby sustaining shareholder perspective. Further, results suggest that gender and experience of bank managers are not effective moderators in determining the relationship between the constructs.Practical implicationsFindings would be valuable for investors to better assimilate social and environmental performance along with its effect on the financial performance of banks. The study would also facilitate policymakers and regulators to outline pertinent policies and rules to uphold financial strength and integrity in the banking industry. Further, bank managers’ perception would have a marked influence on customers’ understanding of social and environmental activities that might shape customer satisfaction, trust, engagement and loyalty.Originality/valueThe study underscores the eminence of endorsing socially responsible practices in the banks. This would facilitate in improving the sustainability in the Indian banking industry.

Societal challenges and business leadership for social innovation

PurposeToday’s pressing global societal challenges are urgent and require substantial solutions and innovations that tackle the roots of a problem. These challenges call for new forms of leadership, stakeholder engagement and innovation. This paper aims to examine whether, why and how business leaders engage in social innovation. The authors argue that leadership perspective and motivation are important drivers for developing substantial social innovations suited to resolving societal challenges at their roots. More specifically, the authors propose that intra-personal factors (degree of care and compassion), an inter-relational perspective of leadership (shareholder versus stakeholder) and the corresponding leadership motivation (personalized versus socialized) may unveil what quality of social innovation (first-order versus second-order solutions) is pursued by a business leader. Implications for future research and practice are provided.Design/methodology/approachThe authors revisit the concept of social innovation and explore its connection with care and compassion. They suggest a series of propositions pertaining to the relationship between different configurations of leadership and different forms of social innovation.FindingsResponsible business leaders with an integrative leader trait configuration (stakeholder perspective, socialized motivation, high degree of care and compassion) are more likely to foster substantial second-order social innovations for uprooting societal problems than business leader with an instrumental leader trait configuration (shareholder perspective, personalized motivation, low degree of care and compassion). An organization’s stakeholder culture plays a moderating role in the relation between leadership and social innovation.Social implicationsThis paper reveals a path for conceptualizing leadership in social innovation from a stakeholder perspective. Future research should investigate the role of business leaders, their mindsets, styles and relational competencies in co-creation processes of social innovation empirically. If the development of substantial second-order social innovations requires leaders with a stakeholder perspective and socialized approach, then this has implications for leader selection and development.Originality/valueThis paper advocates for new kinds of leaders in facilitating and sustaining social innovations to tackle global societal challenges.

Voluntary disclosure and information asymmetry: do investors in US capital markets care about carbon emission?

PurposeThis paper aims to exploit the varying level of responses to the carbon disclosure project (CDP) to assess the economic consequences of carbon emission disclosure by disclosure level. Economic theory suggests that increased disclosures by a firm should lower the information asymmetry component of the firm’s cost of capital. Using CDP disclosures by US firms, the authors study the effect of voluntary carbon emission on the information asymmetry risk in capital markets.Design/methodology/approachThe authors conduct cross-sectional analyses to examine whether, from the investor perspective, firms with varying CDP disclosure levels experience differential information asymmetric risk. The authors also conduct a pre- and post-disclosure comparison to examine whether the market responds to first-time carbon emission disclosure with decreases in the relative bid-ask spread.FindingsIn the cross-sectional analysis, the authors find that firms that decline to disclose carbon emission information, firms that provide incomplete information and firms that do not respond to the CDP survey have higher information asymmetry than firms that provide complete information and opt to make it available to the public. Using a pre- and post-disclosure comparison, the authors find that the market responds to first-time carbon emission disclosure with decreases in the relative bid-ask spread. Additionally, only firms that participate, provide complete disclosures and opt to make it available to the public enjoy the largest reduction in bid-ask spreads, which is followed by firms that provide incomplete information. Other firms do not experience a reduction in information asymmetry.Research limitations/implicationsThis study examines the impact of CDP disclosures on information asymmetry using a US sample. The results of the study may not be generalizable to other countries that have different institutional arrangements and settings.Practical implicationsThe study has important social and policy implications. The findings on the role of carbon emission disclosures in reducing information asymmetry in the capital markets suggest the need for policymakers to promote greater carbon emission disclosures in the USA and other countries where such disclosures have been traditionally less emphasized. As to stakeholders, bringing corporate carbon emission disclosure in line with recommended guidelines will require them to exercise more direct stakeholder pressure to encourage firms to fully participate in the CDP project. This is particularly critical in settings of regulatory inaction and weak enforcement with respect to environmental policies and disclosure such as the USA.Social implicationsThe results span the current gap between two broad perspectives on corporate social responsibilities. The traditional shareholder perspective argues that companies only participate in socially responsible activities which increase shareholder value, while an alternate perspective argues that companies also undertake social responsibilities to benefit society even at the cost of shareholders (Moser and Martin, 2012). The study demonstrates that the two perspectives are not always at odds, carbon emission disclosure not only provides important information on the corporate social responsibility of the firm but also contributes to enriching the information environment leading to reduced information asymmetry in the equity markets for US firms. Thus, from both a stakeholder and capital market perspective, firms have incentives to provide carbon emission disclosures voluntarily. More direct stakeholder pressure may be helpful to encourage more firms to provide complete carbon emission information and opt to make it available to the public.Originality/valueFew studies investigate the impact of CDP disclosure on the information environment of public companies. The lack of research on this key connection between new disclosures on carbon emissions and information asymmetry in the capital markets is the primary motivation for the paper. The study also provides important insights on disclosure level; just participating in the CDP survey is not enough, the degree of participation is also important. The results of the study suggest that the varying level of disclosure matters, the greatest benefits in terms of reduction of information asymmetry accrue to firms that provide complete information and opt to make it available to the public.

The Corporate Objective Revisited: The Shareholder Perspective

AbstractShareholder value maximization has spurred a long‐standing and heated debate between the proponents of a unified corporate objective function and the supporters of multi‐constituency goals of the corporation. We weigh in on the corporate purpose debate from a different point of view: that of the shareholders. Specifically, we seek to critically assess the assumptions about shareholders embedded in the shareholder value maximization doctrine and examine the implications of three contemporary shareholding practices: (a) shareholders investing concurrently in competing firms, (b) residual‐risk bearing decoupling, and (c) heterogeneous shareholder interests. Our critique draws out the challenges that contemporary shareholder practices pose for corporate governance and highlights the need for strategic corporate governance, or governance policies and practices that prioritize the sustainable competitive advantage of the firm.

Solar Photovoltaic Architecture and Agronomic Management in Agrivoltaic System: A Review

Agrivoltaic systems (AVS) offer a symbiotic strategy for co-location sustainable renewable energy and agricultural production. This is particularly important in densely populated developing and developed countries, where renewable energy development is becoming more important; however, profitable farmland must be preserved. As emphasized in the Food-Energy-Water (FEW) nexus, AVS advancements should not only focus on energy management, but also agronomic management (crop and water management). Thus, we critically review the important factors that influence the decision of energy management (solar PV architecture) and agronomic management in AV systems. The outcomes show that solar PV architecture and agronomic management advancements are reliant on (1) solar radiation qualities in term of light intensity and photosynthetically activate radiation (PAR), (2) AVS categories such as energy-centric, agricultural-centric, and agricultural-energy-centric, and (3) shareholder perspective (especially farmers). Next, several adjustments for crop selection and management are needed due to light limitation, microclimate condition beneath the solar structure, and solar structure constraints. More importantly, a systematic irrigation system is required to prevent damage to the solar panel structure. To summarize, AVS advancements should be carefully planned to ensure the goals of reducing reliance on non-renewable sources, mitigating global warming effects, and meeting the FEW initiatives.

Does Performance Breed Slack? Ownership as a Contingency to the Performance Feedback and Slack Relationship

Although organizational slack is a prominent construct in strategic management, it is often treated as an antecedent or enabler of other organizational outcomes, and thus our understanding of where slack comes from is underdeveloped. We draw on the behavioral theory of the firm to develop a better understanding about the antecedents of organizational slack. In so doing, we address a gap in the literature on the antecedents of slack by developing base models showing how and why performance feedback influences the three most common types of slack studied in the literature. Moreover, we contend that ownership is an important contingency that influences these relationships because different types of owners are motivated by different norms. Within a “communitarian” culture such as Japan, domestic owners generally have a multifaceted relationship with the firm and hence are motivated by norms of reciprocity and embeddedness, thereby allowing managers to adopt a stakeholder perspective. In contrast, foreign investors typically have only an arm’s-length relationship with the firm and are thus motivated by stock price, thereby putting “contractarian” pressures on managers to adopt a shareholder perspective. This domestic/foreign ownership distinction influences how resources are allocated and therefore the relationship between performance feedback and different types of slack in the firm. We further emphasize that these relationships will vary in accordance to where the slack resides: internal or external to the firm. We find general support for our hypotheses.

Sustainable Corporate Governance: The Role of the Law

The debate on sustainable finance seldom includes the perspective of shareholders. However, shareholders are important for the governance of publicly held corporations today, because their holdings are concentrated in the hands of few institutional investors. Institutional investors can therefore have an impact on the sustainability of the largest companies in the world, as they often claim they do – particularly in communications with their beneficiaries. Whether institutional investors actually have such an impact is an open question. Recent changes in EU financial regulation will bring more clarity on this matter. For instance, the revised Shareholder Rights Directive requires companies, on a comply-or-explain basis, to disclose voting policies and behaviours concerning sustainability. Moreover, the EU soon will be the first jurisdiction in the word to supply standard definitions of sustainable investment, to be used in institutional investors’ mandatory disclosure to their beneficiaries. This essay discusses whether this legislation can align the incentives of institutional investors to pursue sustainable corporate governance with the prosocial preferences of their beneficiaries.

The Effect of Corporate Social Responsibility Activities on Investors’ Heterogeneous Beliefs: A Study of Korea’s Data Set

This study analyzes the effect of corporate social responsibility (CSR) activity on investors' heterogeneous beliefs. The hypothesis of this study is based on the conflicting effects of CSR activities on firm value and earning's quality. Investors' heterogeneous beliefs used in the empirical analysis of this study are trading volume, and CSR activity is measured by the KEJI Index (Korea Economic Justice Institute Index). This study performs an empirical analysis using regression analysis including control variables. CSR activities are found to have a positive relationship with trading volume. This is consistent regardless of the low and high accounting information (earning's quality). It can be interpreted that Korea's CSR activity acts as an incentive to increase investors' heterogeneous beliefs about target companies. In other words, it implies that the investor judges CSR activities negatively when evaluating firm value. This study could have a policy implication in that it analyzes how CSR activities affect investors' decision-making. In other words, this study analyzed CSR activities from the perspective of shareholders. Therefore, this study is expected to provide useful information for policymaking by regulatory agencies. In particular, its contribution is to presents data that CSR activities can be a negative factor in evaluating firm values.