Shareholder Pressure Research Articles

Determinants on Sustainability Report Quality and Moderation of Company Size

This study examines the effect of Shareholder Pressure and Assurance Report on Sustainability Report Quality with Company Size as a moderating variable. The study population consisted of 75 energy companies listed on the IDX during the 2018-2022 period. Sampling was done by purposive sampling, resulting in 21 companies as samples. The analysis technique used is panel data linear regression using Eviews 12 software. The results showed that Shareholder Pressure has a significant effect on Sustainability Report Quality, while Assurance Report has no effect on Sustainability Report Quality. Company size as a moderating variable cannot moderate the relationship between Shareholder Pressure and Assurance Report on Sustainability Report Quality.

The effect of shareholder pressure on stakeholder interests: Evidence from corporate tax avoidance

AbstractResearch on how shareholder pressure influences the interests of stakeholders has recently witnessed a sharp increase, but yields mixed findings. We revisit this question by investigating the impact of managers' attempts to meet or beat earnings expectations on corporate tax avoidance. Using a sample of Chinese listed firms during 2005–2022, we find that firms with earnings pressure are more tax‐aggressive. Furthermore, such a higher level of tax avoidance due to earnings pressure is associated with higher real activity management. Cross‐sectional analysis shows that the effect of earnings pressure on tax avoidance is weaker among firms with better environment, society, and governance performance, but becomes more salient for state‐owned enterprises, firms with higher financial constraints, and during periods when local officials are devoid of incentives for career advancement. Taken together, our study sheds light on the consequences of shareholder pressure stemming from capital markets on corporate tax policies, and provides implications for enterprises and policymakers concerning taxation in emerging markets.

Why Are Corporate Investment Horizons Shrinking? Uncovering the Spillover Effects of Shareholder Litigation

Existing research shows that shareholder pressures can shorten firms’ investment horizons. Yet studies have so far been limited to the actions shareholders take directly toward a focal firm. Considering that shareholder pressures may spill over between organizations, we argue that firms shorten their investment horizons following shareholder-initiated lawsuits against their peers in an effort to boost their short-run performance and preempt being sued themselves. We further posit that the negative relationship between this form of litigation threat and a firm’s investment horizon is weakened among firms with more long-term shareholders or future-focused CEOs, both of which guard against managers becoming overly short-term oriented. An examination of 18 years of shareholder litigation data supports our theory. This study highlights shareholder litigation as a distinct form of shareholder voice and one that is sufficiently potent to create spillover effects between firms.

Beyond the finish line: How losing in patent race drives post‐race innovation

AbstractResearch SummaryAlthough patent races of leading technology firms have garnered significant attention in the prior literature, it remains unclear how the outcome of a patent race affects subsequent firm‐level innovation. Drawing on agency theory, we propose that losing a patent race drives firms to pursue more technological innovation than winning due to managerial concerns. To investigate the mechanism, we hypothesize that the positive impact of a lost race on a firm's innovation is more pronounced when more shareholders hold near‐term investment horizons and when a CEO is less protected against the pressure of shareholders. By constructing a unique dataset of simultaneous patent applications, we find evidence consistent with the proposed theory.Managerial SummaryThis study explores the impact of a patent race on the subsequent innovation of leading technology firms. We find that losing firms tend to pursue more innovation after the race, surpassing the winner in terms of innovation. This finding is particularly pronounced when top managers are more pressured by the shareholders. Specifically, we show that the positive effect of a lost race is especially evident in publicly listed companies with a higher ratio of short‐term institutional investors and where CEOs have less protection from shareholder pressures in the public market. This research underscores how a setback in a technology competition can act as a catalyst to change innovation dynamics among competitors at the technology frontiers.

Pengaruh Tekanan Karyawan, Tekanan Pemegang Saham dan Gender Diversity terhadap Kualitas Sustainability Report

The purpose of this research is to examine the impact of employee pressure, shareholder pressure and gender diversity on the quality of sustainability report. To assess the quality of sustainability reports, this study employs the SRQ value, which is a disclosure index based on the GRI-Standard. The population of this research are companies listed on the Indonesia Stock Exchange (IDX) over a five-year period from 2017 – 2021. By using the purposive sampling method, this research obtained 48 samples that met the criteria. This research uses multiple linear regression analysis in hypotheses testing. The findings indicate that employee pressure and shareholder pressure has a negative and significant effect on the quality of sustainability reports. On the other hand, gender diversity do not have any effect on the quality of sustainability reports.Thus, all the hypotheses proposed in this study were rejected.

Pengaruh Tekanan Stakeholder, Ukuran Perusahaan, dan Kepemilikan Institusional Terhadap Publikasi Sustainability Report

The purpose of this study is to determine the effect of the audit committee, stakeholder pressure, company size, institutional ownership on the publication of the sustainability report. In Manufacturing companies listed on the Indonesia Stock Exchange for the 2018-2021 Period. This study uses a quantitative approach. The population in this study were 195 manufacturing companies listed on the IDX. The sampling technique used is purposive sampling. Based on the predetermined criteria, 11 samples of manufacturing companies were obtained. The type of data used in this research is secondary data. The method used is panel data regression analysis. The results of this study indicate that simultaneously Shareholder Pressure, Company Size, Institutional Ownership simultaneously affect the Sustainability Report Publication. Partially, the size of the company has a positive effect on the publication of the sustainability report. while the audit committee, shareholder pressure, institutional ownership have no effect on the publication of the sustainability report.

Pengaruh Good Corporate Governance, Tekanan Pemegang Saham, dan Umur Perusahaan terhadap Kualitas Sustainability Report

The quality of the sustainability report shows that the company is responsible and helps stakeholders understand and make decisions. Sustainability reporting is a tool or vehicle for companies to report and communicate environmental, economic and social aspects to their stakeholders. All reports issued by the company must be of high quality. This study aims to determine the simultaneous and partial effects of good corporate governance, shareholder pressure and company age on the quality of sustainability reporting. The subjects of this research are companies in the food and beverage manufacturing sector that are listed on the Indonesia Stock Exchange for the 2018-2021 period. The sampling technique used was purposive sampling. The research sample consisted of 80 observational data. Analysis of research data by panel data regression using the Eviews 12 application. The results of this study indicate that shareholder pressure has a significant positive effect on the quality of corporate sustainability reporting. Good corporate governance and company age have no effect on the quality of sustainability reports. Based on the results of this study, companies can improve the quality of their sustainability reports according to GRI standards and investors should consider sustainability reporting as one of their personal criteria. Future researchers will be able to use other independent variables or use different proxies for these variables and can also choose different research subjects.
 Keywords: good corporate governance, kualitas sustainability report, tekanan pemegang saham, umur perusahaan, 

The effects of profit-maximization on ethical climate in higher education: a qualitative study utilizing neutralization theory

ABSTRACT This paper develops a neutralization framework of the effects of shareholder pressures on ethical climate, organizational behaviours, and student outcomes in the for-profit higher education (FP) industry. Using a qualitative interpretative approach, we interviewed twenty former and current FP employees with direct insight and experiences into FP. We present empirical evidence showing how employees realized their organizations’ unethical climate and used neutralization techniques to rationalize their continued participation in these organizations. This paper advances ethics research in higher education marketing by unpacking how profit maximization goals lead to unethical recruiting tactics, creating a cascade of ethical problems throughout the organization.

Environmental awareness and shareholder proposals: the case of the Deepwater Horizon oil spill disaster

Purpose The authors study the effect of increasing environmental awareness on shareholders' activism. Specificallly, this study aims to examine whether growing environmental awareness is reflected in more aggressive environmental shareholder proposals. Design/methodology/approach This study uses the 2010 Deepwater Horizon oil spill disaster as an exogenous event that increased shareholders' environmental awareness. This study analyzes the spill’s effect on the tone of proposals about environmental issues and nonenvironmental topics. Findings After the disaster, the tone of environmental proposals (i.e. the treatment group) is significantly more negative. In contrast, the tone of nonenvironmental proposals (i.e. the control group) is unaffected. This study interprets this finding as direct evidence that the oil spill led to increased shareholder environmental activism through proposals that targeted the environmental risks surrounding the business more aggressively. By contrast, this study finds no effect of the oil spill on the tone of managers' responses to the proposals, consistent with managers refraining from emphasizing environmental threats. Originality/value Anecdotal evidence and recent studies suggest a link between environmental disasters and shareholder pressure for corporate change. However, no prior research has investigated the channel through which shareholders could have exerted such pressure or has looked for direct evidence of it in the negotiations between shareholders and managers. By finding such evidence in shareholder proposals, this study fills in this gap.

Effect of Stakeholder Pressure and Corporate Governance on Sustainability Reports Disclosure: Empirical Study on Mining Sector Companies in Indonesia

Stakeholder pressure and corporate governance empirically have relevance to the sustainability reports disclosure, which this research will prove at mining sector companies listed on Indonesia Stock Exchange (IDX). All mining sector companies that are always listed on the IDX for 2016 – 2020 are the population of the research. Using a purposive sampling technique, the sample for this research is 15 companies with a total number of observations of 75 samples. The data analysis method uses multiple regression analysis. This study proves that only stakeholder pressure has a significant and positive effect, namely pressure from environmentally sensitive industries and employee pressure, while consumer and shareholder pressure have no significant effect on sustainability reports disclosure. All aspects of corporate governance, such as the board of commissioners, independent commissioners and audit committees, have no significant effect on sustainability reports disclosure.

The Influence of Social Pressure, Market Pressure, Shareholder Pressure and The Reputation of Public Accounting Firms on Carbon Emission Disclosure

This study aims to examine and obtain empirical evidence regarding the effect of social pressure, market pressure, shareholder pressure, and public accounting firm’s reputation on carbon emission disclosure in non-financial companies in Indonesia. In this study, carbon emission disclosure was used as the dependent variable, while the independent variables of this study are social pressure, leverage and profitability which represent market pressure, market capitalization and ownership concentration as proxies for shareholder pressure, and then public accounting firm’s reputation.This research was conducted quantitative methods. The population in this study are non- financial companies listed on the Indonesia Stock Exchange in 2017-2019. The sample of this study was selected using purposive sampling method to obtain 39 non-financial companies that published sustainability reports and were listed consecutively on the Indonesia Stock Exchange from 2017 to 2019. Multiple regression analysis is the statistical method used to test the hypothesis in this study.The results of this study showed that social pressure have a significant effect on carbon emission disclosure. Meanwhile, market pressure with leverage and profitability proxies, then shareholder pressure represented by market capitalization and ownership concentration, and the reputation of public accounting firms doesn’t have significant effect on carbon emission disclosure.

Moonshots

In the last half-century, technological progress has stagnated. Rapid advances in information technology disguise the slow pace of productivity growth in other fields. Reigniting technological progress may require firms to invest in moonshots—long-term projects to commercialize innovations. Yet all but a few giant tech firms shy away from moonshots, even when the expected returns would justify the investment. The root of the problem is corporate structure. The process of developing a novel technology does not generate the kind of interim feedback that shareholders need to monitor managers and managers need to motivate employees. Managers who anticipate these agency problems invest in incremental innovations instead.
 In the last few years, a new structure designed to commercialize long-term innovations has emerged—the venture carveout. A venture carveout is a private company with one or two public company parents, outside private investors, and employee ownership. The parents provide intellectual property and a long-term strategic commitment. The private investors supply patient capital that insulates the project from short-term shareholder pressure. The employees’ equity motivates them to bring a product to market. The first venture carveouts are attempting to commercialize autonomous vehicles. If they succeed, they will validate a new model for innovation. This Article argues that venture carveouts could enable more companies to invest in moonshots, compete with the tech giants that dominate our economy, and accelerate technological progress.

Pengaruh Tekanan Pemegang Saham dan Umur Perusahaan terhadap Kualitas Sustainability Report

Sustainability report is a report submitted to the company's stakeholders to report the impact of company's activities on environment, social, and economy. Companies are expected to submit quality information to demonstrate corporate responsibility and can be used as a consideration in making decisions. However, there are still many companies that have not submitted a good and quality information in sustainability report. This study aims to determine the effect of shareholder pressure and company age on sustainability report quality. The population in this study are mining sector companies listed on the Indonesia Stock Exchange in 2018-2020. This study uses purposive sampling technique. Based on the sampling technique and criteria, 11 companies were obtained with an observation period of three years, so the total observations are 33 samples. This study uses descriptive statistical analysis methods and panel data regression models using Eviews 12 SV software. The results of this study indicates that the age of the company has a significant positive effect on sustainability report quality. Meanwhile, shareholders pressure do not affect the sustainability report quality. Based on the results of this study, the company is expected to improve the quality of the sustainability report in accordance with the GRI Standards and investors are expected to make the sustainability report as one of the considerations in investing. Future researchers are expected to use other independent variables or use different proxies for the variables and are also expected to choose a different research object.

Tekanan Stakeholder dan Ukuran Perusahaan pada Sustainability Report

The research aims to determine the effect of stakeholder pressure and company size on the Sustainability Report. The research was conducted at the Indonesia Stock Exchange (IDX) using the 2017-2020 research period. The population in the research is all companies listed on the IDX in 2017-2020 which issued Sustainability Reports and used the GRI Standards. The number of samples used were 84 observations. In this research using non-probability sampling method with purposive sampling technique. Research using multiple linear analysis. The research results show that environmental pressure and company size have a positive effect on Sustainability Report, employee pressure and shareholder pressure have no effect on Sustainability Report and consumer pressure has a negative effect on Sustainability Report.
 Keywords: Sustainability Report; Stakeholder Pressure; Company Size.

Stakeholder pressure and environmental performance of manufacturing companies on the Indonesian stock exchange

Environmental performance is the company's efforts to create a good environment. This study aims to empirically examine the effect of stakeholder pressure on environmental performance and the role of profitability in moderating the influence of Stakeholder Pressure on the environmental performance of manufacturing companies listed on the Indonesia Stock Exchange. The number of samples was 114, of which 38 manufacturing companies during the 2017-2020 observation year. This study uses a nonprobability sampling method with a purposive sampling technique. The data analysis technique uses moderated regression analysis. The study results show that Stakeholder Pressure, as proxied by environmental pressure, consumer pressure, employee pressure, and shareholder pressure, has a significant effect on the environmental performance of manufacturing companies listed on the Indonesia Stock Exchange. Profitability can moderate the influence of environmental pressure, consumer pressure, employee pressure, and shareholder pressure on the environmental performance of manufacturing companies listed on the Indonesia Stock Exchange.

Profit-Seeking Corporate Social Responsibility in Developing Countries: The Risk of Conflating CSR and R&D

Strategic corporate social responsibility (CSR) has drawn praise for representing the "sweet spot" between communities’ needs and firms’ resources, capabilities and efforts. But what if the concept is pushed to its limits? A firm can initiate CSR projects not just to help communities, but to directly realize profit from them. In this conceptual paper, we ask how CSR is understood and functions when the intent of CSR projects is to conduct a form of research and development (R&D). The intended innovations are not science-based, but socially oriented; they seek to determine how to profitably meet the needs of poor people in developing countries. We develop our argument from conversations with managers and teaching cases that explain how executives believe CSR helps firms (learn how) to profitably serve new potential customers – whether through developing new markets or new products and services with a social purpose. Using CSR as a form of "living R&D" allows firms to make mistakes and to avoid short-term shareholder pressures. But there are very real risks to what in essence is unregulated experimentation on poor people, and we highlight some of them. Our argument highlights the ways in which such innovation and profit-oriented CSR challenge thinking on both CSR and R&D, and we make practical recommendations for how to ensure that intended beneficiaries are not harmed, but can instead benefit.

How do Managers use Management Control Systems in Response to Shareholder Activism?

We study how managers interactively use management control systems (MCS) in response to shareholder activism in a context of performance declines. We predict that broad-scope MCS design is a key factor that helps explain variation in the level of interactive use. In addition, we argue that the extent to which diagnostic use of MCS alleviates shareholder pressures depends on analysts’ recommendations. We empirically test our hypotheses with survey and archival data. Data on shareholder activism is hand-collected. The results provide support for our predictions, suggesting that managers use MCS interactively to assuage shareholder activism in the context of performance declines. This effect is less pronounced for managers equipped with broad-scope information from their MCS. Our findings indicate that in a setting of favorable analysts’ recommendations, managers use MCS diagnostically instead of interactively to cope with shareholder activism. Overall, the findings may help inform our understanding of how firms manage shareholder activism from a management control perspective.

Corporate directors as heterogeneous network pipes: How director political ideology affects the interorganizational diffusion of governance practices

AbstractResearch SummaryScholars have long recognized that interlocking directors act as conduits (or “pipes”) in the interorganizational diffusion of governance practices. Yet, this research generally depicts interlocks as homogenous, overlooking the possibility that directors differ in their beliefs about a given practice. Our study explores this idea in the context of the spread of two practices—lone‐insider board structures and CEO‐chair separation—across S&P 500 firms from 1997 to 2016. We theorize and show that politically conservative directors are more likely to transmit the lone‐insider structure, whereas politically liberal directors are likelier to transmit the CEO‐chair separation structure. We further illustrate that these effects are stronger when the focal firm faces shareholder pressure for governance reform, and weaker when the institutional norms curtail director discretion.Managerial SummaryPrior research suggests that corporate directors who sit on multiple boards cause those firms to learn from each other and adopt similar practices. Yet, directors differ in their views on governance practices, which means that they should also differ in their propensity to act as “pipes” in this diffusion process. We argue and show that interlocking directors' political ideologies influence this process, such that conservative directors are likelier to transmit the lone‐insider board structure (where the CEO is the only firm employee on the board), whereas liberal directors are likelier to transmit the practice that separates the CEO and board chair roles. These differences are most evident when firms' shareholders exert pressure for governance reform, although they have diminished somewhat since the 2002 Sarbanes‐Oxley Act.

Pengaruh Tekanan Lingkungan, Tekanan Pemegang Saham, dan Ukuran Perusahaan terhadap Kualitas Sustainability Reporting

Company to have good environmental and social performance, besides its financial performance. Stakeholders demand this information in a report called sustainability reporting. The size of a company is directly proportional to the public attention received, so that large companies are more receptive to get negative views. To answer this view, the company will increase the transparency of its information, including sustainability reporting. This study aims to determine the effect of environmental pressure, shareholder pressure, and company size on the quality of sustainability reporting. This research was conducted on 22 companies that participated in ASRRAT in the period 2018-2020 which were selected using purposive sampling. This study uses a panel data logistic regression model. The results show that environmental pressures and company size have a positive influence on the quality of sustainability reporting. Meanwhile, shareholder pressure shows a negative effect on the quality of sustainability reporting.
 Keywords : Quality of Sustainability Reporting, Environmental Pressure, Shareholder Pressure, Company Size, Asian Sustainability Reporting Rating.

The Impact of Executives\u2019 Gender, Financial Incentives, and Shareholder Pressure on Corporate Social and Ecological Investments

Archival research suggests that female executives have an impact on corporate decision-making and generally finds positive associations between female board representation and Corporate Social Responsibility (CSR) performance. However, archival research does not reveal why female executives decide differently in the context of CSR. As this is our starting point, we conduct an experiment and examine executives’ decision-making in terms of CSR investment. While female executives seem to be more oriented towards social and ecological practices, we find strong evidence that participants’ real-world incentive program mainly drives their CSR decision-making. We also examine if selected gender-specific character traits (risk propensity, sustainability attitude, and empathy) cause gender differences in executives’ CSR decision-making. In an exploratory analysis, we furthermore show that executives’ risk propensity affects their CSR decision-making conditional on the level of shareholder pressure they face. Our study contributes to the literature on executives’ decision-making and to the CSR literature by enhancing our understanding of determinants of executives’ CSR decision-making.