Reputational Damage Research Articles

Corporate, Social Responsibility (CSR) in Nigeria: Investigating Discrepancy between Practices and Blind Spots

Corporate social responsibility (CSR) has been recognized as a significant contributor to the economy of developing countries. The study uncovers the potential causes of CSR discrepancies in Nigeria, a nation with divergent business prospects, evaluates their implications, and provides effective way-outs. CSR has achieved substantial interest worldwide as enterprises attempt to weigh profit-making services with social and environmental obligations. Yet, there is extensive interest in disagreements between organizations’ CSR obligations and their actual implementation. By synthesizing documented literature, the study reveals factors responsible for the discrepancy of CSR in Nigeria, such as ineffective stakeholder involvement, consumer attitude, inadequate resources, poor frameworks, and lack of consistent reporting. Furthermore, the implications imposed by CSR are examined, including missed chances for social impact, reputational damage, consumer perception, and workers' morale and commitment. Since CSR discrepancies are crucial to both enterprises and legislators, the study underscores addressing stakeholder engagement, clear frameworks for CSR implementation, transparency in reporting, and adequate resource allocation that can bring about sustainable development. The insights provided by this study can inform CSR policy development and effective corporate practices in Nigeria.

International Humanitarian Law and Business: Finding a Bridge

This article aims at analysing whether rules of international humanitarian law are applicable to business and if yes, to what extent. Additionally, the consequences for International Humanitarian Law (IHL) violations by companies are analysed. We highlight that enterprises, their personnel and property which are not directly linked to a conflict enjoy the protection under Geneva Conventions from deliberate or indiscriminate attacks, as well as from pillaging and violations of private property. However, keeping neutrality in armed conflicts is a difficult task for companies and there are different ways in which they can contribute to human rights violations and abuses as well as commit international crimes. In order to prevent such violations, companies should conduct hHRDD and comply with IHL rules. Non-compliance with them may lead to reputational and organisational risks for companies as well as bring companies to criminal and/or civil responsibility.

Bank Corporate Governance: Shield Against Fraud

An efficient corporate governance system in a bank is crucial for maintaining financial stability, boosting stakeholder confidence, promoting corporate accountability, and mitigating fraud risks. This paper investigates the role of bank corporate governance in safeguarding against fraud, reviwing 20 artciles published from 2017-2024. The study belives that fraud in banking institutions is a significant threat to the financial system, causing financial hardship and disrupting the banking system, indicating that opportunity such poor governance, weak control systems, poor organizational culture is the most contributing factor of these illegal and unethical behavior. The paper found that strong corporate governance significantly reduces the risk of fraud, with the board and audit committee playing a crucial role in ensuring accountability and boosting governance. To achieve bank corporate governance goals, it is necessary to utilize all available resources, including human and technological resources. The paper also found that corporate governance brings benefits such as increased transparency, accountability, reduced risk, enhanced decision-making, compliance, ethical conduct, and improved brand value, underlying that fraud risk incurs financial costs, reputational and regulatory risks, and decreased employee efficiency. The review concludes that bank corporate governance can act as shield against fraud, adding that ethical leadership, focusing on transparency and accountability, is essential for effective governance and deterring bank fraud. The study suggests investigating various types of fraud in the banking sector and their correlation with corporate governance, as well as conducting longitudinal studies to assess the long-term effects of robust corporate governance. Originality/contribution: The study asserts that effective governance is crucial for banks to become secure, stable, and robust. It emphasizes the importance of the board, audit committee, and moral leadership as crucial elements, and offers a how bank fraud is mitigated through good bank governance.

Risk Assessment of Banks and Financial Institutions When Interest Rate Hikes

This article delves into the multifaceted risks precipitated by a bank's decision to increase interest rates. It commences with an overarching overview contextualized within The Times, elucidating the significance of the subject matter. Subsequently, it delineates various extant risks, each accompanied by a succinct exposition and an outline of corresponding mitigation strategies. Following this introductory phase, the article conducts a meticulous analysis of these identified risks, methodically dissecting liquidity risk, reputation risk, market risk, and systemic risk. Each risk is meticulously defined, substantiated with historical precedents, and elucidated with comprehensive management methodologies. This paper underscores the myriad risks attendant to a bank's interest rate hike. This synthesis serves to underscore the overarching theme that such policy decisions not only reverberate through the financial ecosystem but also necessitate vigilant risk management protocols to safeguard against potential ramifications. Finally, the article concludes by summarizing the numerous risks posed by a bank's interest rate hike. It emphasizes the need for careful consideration and proactive risk management to mitigate potential consequences.

Optimizing risk management in oil and gas trading: A comprehensive analysis

The oil and gas trading sector is inherently volatile, influenced by geopolitical events, market dynamics, and regulatory changes. Effective risk management is crucial for mitigating these uncertainties and ensuring operational stability and profitability. This paper presents a comprehensive analysis of optimizing risk management in oil and gas trading, highlighting strategies, tools, and best practices to manage and mitigate risks. Risk management in oil and gas trading encompasses a broad spectrum of activities, including market risk, credit risk, operational risk, and compliance risk. To optimize risk management, firms must employ a multifaceted approach that integrates advanced analytics, robust risk assessment frameworks, and strategic decision-making processes. Key strategies include the use of financial instruments such as futures, options, and swaps to hedge against price volatility. These instruments enable traders to lock in prices and margins, thereby reducing exposure to market fluctuations. Advanced analytics and data-driven decision-making are essential components of effective risk management. By leveraging big data, machine learning, and artificial intelligence, traders can gain deeper insights into market trends, forecast price movements, and identify potential risks. Predictive analytics allows for proactive risk management, enabling firms to anticipate and respond to market changes swiftly. A comprehensive risk assessment framework is also critical. This involves regular monitoring and evaluation of risk exposure, stress testing, and scenario analysis. Such practices help identify vulnerabilities and ensure that risk mitigation measures are in place. Additionally, fostering a risk-aware culture within the organization is vital. This includes training and educating employees on risk management practices and encouraging transparent communication and reporting of risks. Compliance risk, driven by regulatory changes, is another significant aspect of risk management in oil and gas trading. Staying abreast of regulatory developments and ensuring compliance with international and local regulations is essential to avoid legal penalties and reputational damage. Implementing robust compliance programs and leveraging technology to monitor regulatory changes can help firms stay compliant. In conclusion, optimizing risk management in oil and gas trading requires a holistic approach that combines financial hedging, advanced analytics, comprehensive risk assessment, and compliance management. By adopting these strategies, firms can effectively mitigate risks, enhance decision-making, and achieve sustainable growth in a highly volatile industry. Keywords: Optimizing, Risk Management, Oil and Gas, Trading, Analysis.

Study of the Reaction of Stock Markets to the Cancel Culture Phenomenon in Relation to Russia

Suspension of business in Russia by most foreign corporations after the events of 24 February 2022 led to the fact that the social phenomenon of “cancel culture” is now also considered within the framework of global economy and finance. In recent years, the IT industry is appraised as one of the fastest-growing, and the study of its reaction to global events is highlyrelevant. Using the Event Study method, this study proves that there is no significant impact of the declaration of the Russia-Ukraine conflict on US stock market dynamics of IT companies with branches in Russia. The analysis of individual cases from the sample of companies shows that the companies’ decision to suspend or continue business in Russia depended only on the presence of a significant share of revenues in Russia, the degree of reputational and sanctions risks, and the specifics of corporate ESG policies. The model is limited by the sample and period of analysis. In order to verify model reliability, we applied the t-test that determined the significance of the results. The research is of practical relevance because internationally operating companies may use its data to evaluate risks and make strategic decisions.

Are the media drivers of R&D?

Research exploring how extra-legal institutional aspects might impact corporate investment policy in innovation is still in its early stages. This lack of research is even greater when it comes to studying the role of media attention in corporate innovation. This study extends prior literature by investigating the relationship between media visibility and research and development (R&D) investment in a continental European context. Using a sample of Spanish listed firms in the 2008–2022 period, results indicate that media attention has a positive effect on corporate innovation. The results provide support for arguments that the media reduce agency conflicts, facilitate fundraising, and increase the reputational risk of internal agents as well as the pressure to meet stakeholder demands and the chances of obtaining external help to develop new ideas and projects. Moreover, we show that media attention encourages innovation in companies who are more isolated from stakeholder demands, who face greater agency conflicts, or who suffer from financial difficulties.

Administrative penalties and corporate resilience

This study examines the intrinsic relationship between administrative penalties and corporate resilience through an empirical analysis of Chinese A-share listed companies. The findings reveal that administrative penalties have a detrimental effect on corporate resilience. However, factors such as financial status, internal control quality, and nature of property rights exhibit heterogeneity in their impact on corporate resilience in the face of administrative penalties. Furthermore, moderating variables, including corporate financing costs, corporate reputation, and operational risks, play significant roles in this process.

Ethical issues concerning UK veterinary surgeons practicing in equine sports medicine.

The ethics of equine sports medicine is a complex subject that is currently understudied. It combines veterinary ethics, sports ethics and associated regulation. Equine sports medicine may raise unique ethical issues and combines common ethical issues in ways distinct from other forms of veterinary medicine. The purpose of this research was to identify and describe ethical issues concerning United Kingdom (UK) veterinary surgeons arising within the practice of equine sports medicine. Survey. An online questionnaire was distributed to UK veterinary surgeons via veterinary organisations and veterinary social media. Responses to questions were collated and descriptive analysis performed. Open ended responses were analysed thematically. Ninety-seven respondents completed the questionnaire. The most commonly identified ethical challenges were the conflicts of interest and the pressures faced by the veterinary surgeon. The primary competing interest was balancing the horse's health and welfare with client wishes for the horse to continue in training and competition. Specific ethical challenges were identified; these related to competition integrity, medication control and prohibited substances, treatment evidence and acceptability, among others. As anticipated with the use of a questionnaire, the responses did not provide in-depth information about an individual veterinary surgeon's experiences, however, it did provide evidence of the extensive range of issues and concerns facing this group. There is also potential for response bias, whereby respondents may have provided answers they perceived were ethically desirable. This is the first empirical study that explores the ethical issues faced by equine sports medicine veterinary surgeons and has identified wide ranging concerns that demand further study. Areas which may pose reputational risk to equestrian sport, or the veterinary profession were identified. Governing bodies should consider how to improve support for veterinary surgeons facing ethical challenges, as for some, these cause moral distress and may impact retention within the profession.

How does corporate social irresponsibility affect organisational reputation? The mediating role of moral anger and distrust

Purpose Once established, a strong reputation is not indestructible. To protect this intangible asset, the process of reputation damage needs to be explained. Drawing on the irresponsibility and crisis communication literature, this study seeks to better understand this process. Specifically, this study aims to show how moral anger and distrust mediate the relationship between the awareness of an irresponsible incident and organisational reputation. Design/methodology/approach This study examined the proposed conceptual model in the empirical context of retailers bending the law. A large survey (n = 991) on consumer responses to retailers’ misbehaviour was used to collect data. The hypotheses were tested using Hayes’ PROCESS macro. Findings The study revealed that the mere awareness of corporate misbehaviour is not enough to directly harm accumulated positive information about a firm. Discrete emotions of moral anger and distrust fully mediate the effects of knowledge about wrongdoing. The irresponsibility appraisal is a moderator of this process that substantially changes the impacts of misbehaviour on organisational reputation. Originality/value By demonstrating how moral anger and distrust mediate the effects of misbehaviour awareness and identifying a boundary condition, this study advances our understanding of how corporate wrongdoing affects organisational reputation.

Do firms with environmental, social, and governance reputational risk take into account board gender diversity? An analysis on a global scale

AbstractObjectiveThis article studies whether a firm's environmental, social, and governance (ESG) reputational risk influences board gender diversity. Besides, we are also interested in the moderating role of gender equality and country development level toward the relationship between reputational risk and board gender diversity.MethodUsing a comprehensive sample of firms from 52 countries between 2007 and 2019, we employ multiple regression with fixed effects. Our findings remain robust when using alternative measures of variables and addressing endogeneity concerns by employing a two‐stage systems generalized method of moments estimation and an instrumental variable approach.ResultsCompanies with high levels of ESG reputational risk tend to add more women directors to resolve these problems. Furthermore, the empirical results point out that the positive impact of ESG reputational risk on board gender diversity is more pronounced for countries with a higher degree of gender equality or developed countries.ConclusionsOverall, our study is the first international study to link ESG reputational risk via media channels to board gender diversity.

Framework for Mitigating Phishing E-mail in the Kenyan Banking Industry Using Artificial Intelligence (AI)

Purpose: Phishing is a significant cybercrime threat that affects individuals and organizations globally, including the banking industry in Kenya. The sophistication of phishing attacks continues to increase, and it is increasingly challenging traditional security measures to mitigate these threats. The purpose of this thesis is to build a framework for mitigating phishing e-mail attacks in the banking industry in Kenya using artificial intelligence. Phishing emails are among the most common techniques of cyber-attacks utilized by assailants to gain unauthorized access to sensitive information such as financial details, personal information, and login credentials. These attacks can have devastating effects on the victims, leading to financial loss, reputation damage, and even identity theft. Methodology: The framework development consists of four main stages: data collection, data preprocessing, model training, and deployment. In the data collection stage, a dataset of phishing and non-phishing emails is gathered from various sources such as public databases, dark web forums, and bank employees mail. In the data preprocessing stage, the collected data is cleaned, preprocessed, and labeled. In the model training stage, machine learning algorithms and NLP techniques is used to develop a robust phishing and non-phishing emails detection model. In the deployment stage, the model is integrated into the bank's email system to detect and block phishing emails in real-time. The framework is then evaluated using a dataset of phishing and non-phishing e-mails collected from the banking industry in Kenya. Various metrics such as accuracy, precision, recall, and F1-score are used to evaluate the framework. The framework is able to detect new phishing e-mails that were not previously included in the dataset, demonstrating its ability to adapt to new threats. Findings: The framework is based on a hybrid approach that combines machine learning algorithms, natural language processing (NLP) techniques, and human expertise that identify and prevent phishing emails from reaching their targets. The four main components of this framework include e-mail filtering, feature extraction, classification, and response. The e-mail filtering component uses several algorithms to identify and filter suspicious e-mails. The feature extraction component analyzes the content of the e-mail and extracts relevant features to help classify the e-mail as either legitimate or phishing. The classification component uses machine-learning algorithms to classify the e-mail as either legitimate or phishing. Finally, the response component takes appropriate action based on the classification results. Unique Contribution to Theory, Practice and Policy: The framework provides an effective way to identify and mitigate phishing e-mail attacks, reducing the risk of data breaches and financial losses.

Contagious corporate reputation risk: Uncovering the pandemic's impact

Firms' Reputation Risk Index (RRI) co-move with their industry and local peers in the US market, suggesting that managers follow their industry and local peers to conduct ESG-related irresponsible activities. Moreover, the RRI co-movement with local peers is attenuated during the COVID-19 pandemic period, and the reduction is more significant in democratic states with stringent social distancing policies and in states with higher pandemic mortality rates. In contrast, the industry-level RRI co-movement is not significantly affected during the pandemic period. Our findings suggest that social interactions among local managers may be an essential driver for the regional RRI co-movement before the pandemic.

The equity market response to climate change litigation

We document a significant decline in defendants' stock prices after the filing of litigation cases on climate change issues in the US. Economically, we document a 0.5% decline on the filing day and a 2.7% cumulative abnormal decline in the eight days following the filing. Cross-sectional analysis shows that the negative response is more pronounced in firms with greater external financial constraints, higher cash flow volatility, and lower environmental, social, and governance ratings. The difference-in-differences analysis shows a decline in total and responsible institutional ownership and an increase in corporate reputation risk after a climate change litigation is filed.

Navigating Reputational Risks: Cautionary Considerations for South African Banks in the Unilateral Termination of Bank-Customer Relationships

Bredenkamp v Standard Bank of South Africa Ltd (SCA) and subsequent cases that followed this precedent exhibit that banks have the right to terminate the bank-customer relationship unilaterally. This right is usually entrenched in the contract between the bank and its customer and may also have its origin in an implied term of the contract. Some major banks in the Republic of South Africa have recently been under the spotlight for unilaterally terminating the bank-customer relationship with their customers (the Sekunjalo Group) based on reputational risks. It is alleged that in terminating the relationship, these banks unfairly discriminated against Sekunjalo Group, therefore asserting that the principle of reputational risk is not attributed similarly across customers of different racial groups. Whereas the paper does not intend to decide on such allegations of racial discrimination, the paper asserts that the unilateral termination of a bank-customer relationship is both a right and an obligation. The paper adopts a qualitative research approach in analysing the contractual nature of a bank-customer relationship, the common-law principles regarding the termination of the bank-customer relationship, and the developments in the application of the principle of reputational risk by South African banks and courts in the wake of the applications lodged by members of the Sekunjalo Group.

Trends in multi-jurisdictional enforcement of anti-corruption in the global petroleum industry

Abstract The global petroleum industry has been much maligned over the past 10–15 years for its involvement in foreign corrupt activities due to well-publicized instances of US-led prosecution for bribery of foreign public officials. Among the high-profile cases include the infamous Technip, Snamprogetti, Kellogg Brown & Root, JGC (TSKJ) conspiracy bribing Nigerian officials of the Bonny Island LNG terminal to the far-reaching Odebrecht/Petrobras Brazilian Lava Jato and more recent global Unaoil bribery scandals. What these cases and others have in common is the incidence of ‘multi-jurisdictional’ prosecution for foreign bribery rather than simply prosecution by US authorities as occurred prior to 2005. Through detailed quantitative analysis, we show how this multi-jurisdictional enforcement is a petroleum industry trend. The financial and reputational risk in terms of both likelihood and impact of a foreign bribery event has increased dramatically over the past 10 years. Despite this increased risk, we found little evidence of a risk-based compliance approach among industry participants. We show that the current practice of limiting liability is not an efficient risk-based approach towards corruption compliance and is not likely to meet new anti-corruption compliance guidelines by international regulators. Our research examines a possible cause-and-effect model behind this heightened corruption risk. We profile and describe the nature of the top 10 petroleum industry multi-jurisdictional bribery cases. We then provide a display of a corruption event’s drivers, consequences, and barriers in the form of a risk-based ‘bow-tie’ diagram. Finally, we recommend ways the industry can move towards a more risk-based corruption compliance approach.

Financial mismatch and corporate litigation risk

This study investigates how financial mismatches impact corporate litigation risk among China's A-share listed companies from 2017 to 2022. A financial mismatch generally refers to a situation in which a company's financial resources are not optimally aligned with its investment needs, which can lead to inefficiencies and higher financing costs. Our study found that such mismatches increase the likelihood that companies will face legal disputes, which can escalate costs and damage reputations. Additionally, financial linkages—connections between companies and financial institutions—can mitigate these risks by reducing companies’ financing constraints, thereby lowering litigation risk. Using robust statistical methods, including ordinary least squares regression, robustness, and endogeneity tests, we confirm these findings, thus contributing to our collective understanding of the financial dynamics that influence corporate litigation risk and highlighting the importance of aligning financial strategies with corporate needs to minimize legal challenges and enhance stability.

Risk Perception Disparities in E-Business: Analyzing SME Roles, Experience and Legal Compliance Challenges

This study examines how e-business experience and organizational roles impact on the perception of dependency risks including external service provider risks, legal and compliance risks, and security risks among SMEs. Thus, the first research objective is to examine how and to what extent general and specific e-business experience influence the perceived risks and their priorities. In the present research, a mixed research approach and Kruskal-Wallis test were adopted to compare the risk perception of the respondents. We dissect the findings further by applying qualitative analysis on the impressions shared by the respondents. The findings show that e-business experience has direct effects on risk perception and the firms with less e-business experience perceive dependency risks as more severe, especially in terms of website developer, hardware, and software dependencies. On the other hand, larger and more experienced SMEs consider legal and compliance risks as more important especially where the cross-border transactions and data privacy issues are involved. Moreover, IT staff showed better appreciation of the reputational and employee risk factors more than the non-IT staff showing that technical knowledge is key to risk perception. Based on these results, this study posits that as SMEs gain e-business experience, their risk perceptions change and so do their understanding of external vulnerabilities and regulations.

Revisiting the (disappearing) cost of data breach disclosures

Purpose The detrimental impact of data breaches on organizations and their customers has been well documented in the literature. These breaches expose sensitive information, raising concerns about reputational damage and substantial financial losses for affected firms. Prior research has consistently demonstrated the significant financial repercussions of data breach disclosures, with a significant decline in the market value of breached firms following the incident’s revelation. However, recent literature has documented the shift in consumer perception toward data breaches, warranting a revisit of this important and relevant issue with more recent data. This study aims to revisit the cost of data breach disclosures by empirically analyzing the impact of recent data breach incidents on the market value of affected firms. Design/methodology/approach The authors collect the data regarding data breach incidents among publicly traded companies in the USA listed in the S&P 500 index from 2013 to 2021. The empirical analysis relies on the event study approach, and the market value of each firm is estimated using the Fama-French three-factor model. Findings This study finds that the negative market reaction to data breach announcements in recent years has been significantly weaker than those reported in prior works from the past decade. This result confirms the shift in consumer perception toward data breaches in the market. Originality/value While prior research has quantified the cost of data breach disclosures, the authors posit that a renewed examination is essential within the contemporary digital environment. Consumer behavior and market sentiment have undergone significant transformations in recent years, necessitating a revisit of this important issue with updated data. This study not only documents this evolving phenomenon but also yields crucial policy recommendations. Notably, it challenges the conventional wisdom to rely on market forces as an adequate deterrent against data breaches. Consequently, updated regulations may be necessary to effectively navigate the complexities of the evolving digital landscape.

Unethical Pro–Organizational Behavior and Employee Performance in Côte d’Ivoire: The Effects of Leader–Member Exchange and Affective Organizational Commitment

ABSTRACT Unethical pro-organizational behavior (UPB) that is intended to promote the functioning of the organization but violates ethical norms impacts employees’ in-role performance negatively due to the potential reputational and economic damages that such behavior may cause. Based on social exchange theory, we suggest that leader-member exchange (LMX) and affective organizational commitment moderate the UPB-performance relationship. We test our hypotheses with dyadic data collected in two waves from 218 employees and their 22 direct supervisors working in a federal government ministry in Côte d’Ivoire. Our findings support our hypothesis about the negative effects of UPB on employee performance and show that employees engaging in UPB hurt their own performance appraisal. We also find evidence for the moderating effects of LMX and affective organizational commitment. Our study contributes to a greater understanding of the effects of UPB in public organizations.