Search

A wave of company law reform has swept across Europe and has now reached Denmark, where a proposal for a new combined companies act has been put forward and will soon enter the legislative process. In this article, the driving forces behind these reforms are explored. They are: the freedom to choose among the company law regimes of the European Union that follows from the case law of the EC Court of Justice; the demise of the doctrine of protection of capital; and the increasing insignificance of the distinction within company law between public and private limited companies. The main tenets of the Danish reform are: the introduction of a combined companies act to cover both the public and the private limited company; the possibility to choose between the main corporate governance models known in European company law, which, in combination with the possibility to use English at board meetings, the general meeting of shareholders and in public documents and accounts, should cater to the needs of crossborder business and investment; and a relaxation of the capital regime allowing limited companies more freedom in deciding the structure of their share capital and the distribution of control. [ABSTRACT FROM AUTHOR]

This paper looks at different case studies of European lotteries operating games of chance for the public benefit. It takes the case studies of four national lotteries as most similar systems design comparative methodology to investigate the extent to which market structure and managerial strategy play a role in the profitability of the companies. The empirical data collected through process tracing, public statements and public records shows that while being bound to interact with each other, the market context does not dictate managerial strategies, and innovations in the latter offer very diverging results in terms of the bottom line of the different European lotteries operating games of chance. This paper contributes thus to the existing literature on market conditions for companies operating games of chance (e.g. Huttenen 2020, Grote & Matheson 2023, Clotfelter & Cook 1991) by developing a much-needed link to the academic literature on corporate governance in state-owned enterprises (e.g. Cao & Vittas 2017, Szarzec & Nowara 2017, Megginson & Netter 2019). [ABSTRACT FROM AUTHOR]

Purpose: This article studies the role played by sustainability operations management (OM) practices in the relationship between governance and environmental and social performance adopting the lenses of the upper echelons theory and the resource-based view. In particular, the authors study three main relationships: (1) the impact of governance on the implementation of sustainability OM practices, (2) the impact of sustainability OM practices on sustainability performance and (3) the mediating role of sustainability OM practices in the relationship between governance and sustainability performance. Design/methodology/approach: To test this study's research model, the authors retrieved secondary data of 430 firms from the United Stated (US) and Europe and analyzed it using partial least squares (PLS)-based structural equation modeling (SEM). Findings: This study's results suggest that sustainability OM practices are needed to achieve higher social and environmental performance outcomes from governance, highlighting the key role of the OM department in the achievement of a sustainability strategy. Originality/value: This paper adopts the environmental, social, governance (ESG) neglected focus and aims to provide a better understanding of and reveal the interrelationship between governance and sustainability OM practices (i.e. environmental and social). [ABSTRACT FROM AUTHOR]

Considering the relevance of the agricultural sectors for the European countries' development, but also the volatile features of agriculture, with unforeseen risks induced by climate, ensuring durable economic progress is foremost for the companies. This paper aims to assess the associations of the key parties in corporate governance (directors, managers, advisers, and shareholders), employees and the independence level with the main outcomes and capacity/size of the European companies operating in agriculture, fishing, and aquaculture activities. Using a newly compiled and complex dataset of 3 184 active companies from Europe, provided by the ORBIS database, advanced modelling approaches were employed, based on the robust regression (RREG) and Gaussian Graphical Model (GGM). The main findings emphasised that: directors, managers, and advisors had a strong positive influence on the firms' size, boosting their turnover, and the shareholders' funds; advisors induced positive connections with the companies' liquidity; the number of employees exerted positive impacts on the firms' size and outcomes of these companies; the independence level exerted a negative impact on the firms' size and outcomes. Finally, specific measures must be addressed to primarily reconsider the number of directors and managers and the shareholders' participation in the ownership of these companies due to their unfavourable exerted effects. [ABSTRACT FROM AUTHOR]

This paper examines whether sustainable institutional investors promote corporate social responsibility (CSR)‐contingent components (e.g., environmental or social aspects) in senior executive compensation in order to align top management interests in the promotion of sustainability with their own. Empirical analyses of a sample of 5979 firm‐year observations from European firms over the 2010–2017 period showed that the presence of sustainable institutional investors positively predicts the likelihood of firms offering CSR‐contingent compensation contracts. This paper significantly contributes to prior empirical research, which predominantly focuses on the effectiveness of CSR‐contingent components within compensation structures. Sustainable institutional investors as a potential driver of CSR‐contingent components have not yet been examined. We specifically investigate institutional investors that have either a substantial or a time‐dependent belief in CSR. Our results indicate that sustainable institutional investors represent a central external corporate governance mechanism and tend to align top management preferences with their own via compensation structures. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is to provide to the Board of Directors and CEOs of a firm to be aware of and accountable for the information they provide to the public. As long as the quality of the companies' public information is high, it will be able to retain its investors as well as to obtain new ones more easily. Design/methodology/approach: This paper introduces a Multi-Criteria Decision Aid (MCDA) tool with the use of the PROMETHEE II method to formulate an alternative aggregate ESG quality approach. We conduct comparisons in a sectorial and regional based perspective during different exam periods before and after the implementation of International Financial Reporting Standards (IFRS), in an attempt to provide a robust framework for corporate disclosure reporting. Findings: The findings are of particular interest to both scholars and decision-makers, including providers of corporate governance indices and rating agencies. The innovation of this paper lies among others in using the MCDA method with the ESG framework, which proposes a combination of qualitative and quantitative criteria, enabling experienced and/or not experienced analysts to avoid manipulating techniques in business information. Research limitations/implications: The sample of companies based on the US and Europe companies incorporating only large-sized ones. Practical implications: Findings are of particular interest to both scholars and decision-makers including providers of corporate governance indices and rating agencies. Social implications: Better understanding features pay key importance for increasing the "quality" information in firms financial statements, especially after the use of IFRS in reporting standards. Originality/value: The authors proceed to analysis using a multiple perspective use that is decomposed into the following options: (a) Time-period oriented option, (b) Regional-oriented option and (c) Sectoral-oriented option respectively. [ABSTRACT FROM AUTHOR]

This paper aims to analyze factors that influence social performance-related information disclosure in European countries. Specifically, the objective is to investigate the Board's attributes (Diversity, Inclusion, People Development and Controversies). To achieve the goal, an empirical analysis was conducted with 2494 listed companies in Europe as support for the economic year 2021. To measure a possible link between the variables under study, a regression analysis was performed. Our results show that Board Diversity, Inclusion and People Development contribute positively to social performance disclosure, whereas Board Controversies negatively affect the dependent variable. Furthermore, the study results reveal that the country's legal system is relevant to the company's transparency. The model variables determine 62% of the social performance reporting variance. Our Results are useful for all non-financial information users, governments and organizations in developing sustainability reporting standards. [ABSTRACT FROM AUTHOR]

This article introduces a special issue of the periodical discussing the governance of cross-locality networks as a determinant of local economic development. Growing awareness of the potential for cross-locality networks of business enterprises has coincided with the relationship between European economic success and the capacity of particular localities to achieve 'competitiveness.' Openness in terms of knowledge and information exchange, innovation co-operation and production linkages are crucial for the sustainable development of business enterprises.

This paper argues that the internal structure in complex, multi-unit organizations such as a multinational corporation (MNC) is not homogeneous throughout the organization, but is systematically differentiated so as to 'fit' the different environmental and resource contingencies faced by the different national subsidiaries. Based on a survey of 66 of the largest European and North American MNCs, yielding data on 618 cases of headquarters-subsidiary relations, it is shown that the different contextual conditions faced by the different subsidiaries of the MNC can be meaningfully classified into four generic situations. Furthermore, for each of these situations the exchange relation between the MNC headquarters and the subsidiary is characterized by a 'fit' governance structure consisting of a different combination of structural elements such as centralization of authority, formalization of rules and systems, and normative integration of members. Following the existing literature, these 'fit' structures are labeled in this paper as hierarchical, federative, clan and integrative. The multinational is then described as an internally differentiated organization in which each headquarters-subsidiary link corresponds to one or the other of these administrative forms. [ABSTRACT FROM AUTHOR]

This paper proposes a broad measure of the country-level intensity of the main monitoring activities that are likely to affect financial reporting quality. The overall indicator (FRC) is a composite indicator combining three components, which measure the intensity of three different financial reporting controls (FRCs) exercised through corporate governance, audit, and enforcement. The indicator design adds to country measures used in accounting research in several ways. First, it employs recent process-oriented data to capture the intensity of controls in a regulatory context that is characterized by increasing harmonization. Process data can be updated periodically, and thus is also suitable for longitudinal analyses. Additionally, the development of the FRC indicator applies standard techniques for constructing composite indicators without a priori assumptions and weights. The paper presents the values of the FRC indicator in 17 European countries, revealing a diversified mix of FRC intensity across Europe. Our analysis shows that the three domain-specific indicators, which can also be used separately, measure different aspects of the intensity of financial reporting controls rather than an overall country attribute. Consistency analyses also show that the FRC indicator is not capturing a latent construct of financial reporting quality present in other metrics, thus providing support for its innovative use in cross-country accounting research. [ABSTRACT FROM AUTHOR]

Responding to regulators' requests and filling a void in the academic literature, this paper provides comprehensive empirical evidence on the role of proxy advisors in 14 European countries. Exploiting coverage data and using content analysis of proxy voting reports by Institutional Shareholder Services and Glass Lewis, we provide descriptive analyses of proxy advisors' firm coverage, the variation and determinants of voting recommendations, the relation between voting recommendations and shareholder voting at annual general meetings, and market reactions to the release of voting recommendations. Overall, our findings suggest an economically important role of proxy advisors in European markets. Throughout our analyses, we document that this role varies with governance- and ownership-related firm characteristics and with country-level measures of institutional strength. [ABSTRACT FROM AUTHOR]

Purpose The Scandinavian boards are known for their “best practices” for corporate governance. This paper aims to examine the management incentives behind corporate disclosure via an empirical study.Design/methodology/approach Many of the previous empirical work have focused on the US data, but the generalizability of such findings is geographically bounded. The set of management incentives in this paper is examined using a total sample of 123 local annual reports via some of the largest publicly listed firms in the Scandinavian countries between the years 2008-2012.Findings The findings of this study reveal that a firm’s financial success originates from the different attributes of corporate governance. Correlation and regression analyses reveal that in terms of firm size, leverage ratio, the existence of audit committee and the independence of CEO, there is a correlation between firm-specific factors and the level of disclosure. In contrast to the previous literature, a positive relationship between corporate disclosure and information asymmetry was not found.Originality/value The results of this study are valuable to the policymakers when implementing regulations on corporate governance control. The strategic implications of the findings on business decisions and future research are also discussed. [ABSTRACT FROM AUTHOR]

Purpose This paper aims to answer how corporate governance and corporate social responsibility (“CSR”) affect the relationship between value creation and tax avoidance. This study further analyses the impact of the institutional environment, i.e. whether a country is rather a liberal or a coordinated market economy, on the relationship between CSR and tax avoidance.Design/methodology/approach The empirical analysis comprises a panel data set of 7,924 observations for the years from 2005 to 2014 for European companies. The relationship between value creation and tax avoidance is tested by grouping the sample in high and low CSR performers. Similarly, the impact of the type of market economy is analysed for the firms.Findings The research design does not find evidence that tax avoidance is creating value. The empirical findings reveal that there is a positive relationship between value creation and the effective tax rate for firms with low social and environmental characteristics. Further, this analysis could show that stronger corporate governance is associated with a lower effective tax rate in both coordinated and liberal market economies. The analysis identifies social strengths being associated with a higher effective tax rate for coordinated market economies.Practical implications It is proposed to encourage CSR disclosure. The creation of incentives for social strengths could increase tax revenue. Firms should reconsider whether the engagement in tax avoidance is worth it and pursue social responsibility to achieve higher value creation for their stakeholders.Originality/value The paper challenges the intuitive expectation that tax avoidance creates value. It is suggested that the governance and CSR culture, as well as the tax legislation in Europe, is different to the USA. Conclusively, tax avoidance is not generating value for the European sample. [ABSTRACT FROM AUTHOR]

Over the last decade, there has been an increasing emphasis on corporate social responsibility in business. The idea has evolved from CSR (Corporate Social Responsibility) to ESG Reporting (Environment, Social, Governance), with the latest trends developing towards a green transition. This genesis of development has been followed by corporate practice and legislation at European and national levels. Consequently, ESG and Green Transition guidelines have been incorporated into the liabilities and duties of the management and supervisory bodies of the company, resulting in a new view of the performance of these functions and their accountability. In this paper, the authors outline the basic postulates and roles of corporate governance bodies and their respective responsibilities for the implementation of ESG and the Green Transition. Sustainability as a value is highlighted in the EU and companies are committed to respecting human rights and reducing their impact on the planet. However, progress by companies (corporates) in integrating sustainability into their governance processes, in particular human rights and environmental due diligence, is still slow, and progress is visible with the drafting of the Corporate Sustainability Due Diligence Directive (CSDD) as a follow-up to the Directive 2014/95/EU (NFRD). The new rules are intended to provide companies with legal certainty and a level playing field. It should provide greater transparency for consumers and investors and should accelerate the green transition and protect human rights in Europe and beyond. These tasks are directly linked to the responsibilities of the authorities in society, who will have to respect these rules and be held accountable for failing to enforce them or for failing to achieve a transfer of capital to the green transition. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is to study the impact of some corporate governance mechanisms on the market risk (stock price return and volatility, exchange rate) and on the exchange rate and Treasury Bill during the financial crisis. In order to better clarify the firms' resistance to financial crises, the effect of exchange rate, Treasury Bill and the market risk are also considered. Design/methodology/approach: The study uses a sample data of the SBF 120 on a panel of 99 French firms over the period between 2006 and 2015 divided into three sub-periods: the first sub-period, which covers the period between December 31, 2006 and December 31, 2009, was characterized by the outbreak of the subprime crisis. The second sub-period considers the sovereign debt crisis in Europe between December 31, 2010 and December 31, 2012. The last sub-period includes the post-crisis period (December 31, 2013 to December 31, 2015). The GARCH and BEKK models are used to capture the effect of volatility and conditional heteroskedasticity of both corporate governance and market risk. Findings: The paper found that during the financial crisis (first sub-period, the sovereign crisis period), the high shareholders' protection had a positive and significant impact on the stock market returns. Furthermore, the shareholders' protection, the Treasury Bill, the institutional investors, the board's size, had a negative and significant effect on the stock returns volatility. During the post-crisis period, the high protection and the board's size had a negative and significant effect on the volatility of the stock returns. Research limitations/implications: This result implies that during the financial crisis, the high shareholders' protection played a role in increases the stock market return and minimized the stock return volatility. Practical implications: This study helps in improving the legal protection of investors and helps managers, shareholders and investors to evaluate their investments. This study also provides implications for policymakers and legal environment in order to evaluate the importance of the current corporate governance frameworks in place. Originality/value: This result implies that the institutional investors, as the results suggest, should follow the shareholders' protection in all the countries to make decisions about their investments since the high shareholders' protection increases the firm's stock returns and decreases the stock return volatility. [ABSTRACT FROM AUTHOR]

This paper presents a comparative analysis of three American (Enron, WorldCom and HealthSouth) and three European (Parmalat, Royal Ahold and Vivendi Universal) corporate failures. The first part of the analysis is based on a theoretical framework including six areas of ethical climate; tone at the top; bubble economy and market pressure; fraudulent financial reporting; accountability, control, auditing, and governance; and management compensation. The second and third parts consider the analysis of these cases from fraud perspective and in terms of firm-specific characteristics (ownership structure) and environmental context (coverage in media and academic literature, regulatory and corporate governance frameworks). The research analyses shed light on the fact that, despite major differences between Europe and U.S. in terms of political institutions, laws and regulations as well as managerial practices, there are significant similarities between six groups. The analysis also demonstrates that, the ethical dilemma has been coupled with ineffective boards, inefficient corporate governance and control mechanisms, distorted incentive schemes, accounting irregularities, failure of auditors, dominant CEOs, dysfunctional management behavior and the lack of a sound ethical tone at the top. Significant similarities were also observed in the analysis from the fraud triangle perspective. However, there are several major differences between the six corporate failure cases particularly with regard to ownership structure, coverage in media, and legal, regulatory and governance frameworks. This research study may have several academic and practical contributions, particularly because of multidisciplinary, international features, and comparative analyses used in the paper. [ABSTRACT FROM AUTHOR]

Purpose: This paper aims to report on the quality of corporate social responsibility (CSR) disclosure in S&P Europe 350 companies. The paper also examines the impact of corporate governance structure and other firm-specific characteristics on the quality of CSR disclosure in European companies. Design/methodology/approach: The paper uses a disclosure index adopted from Jizi et al. (2014). Moreover, the paper contributes to the CSR disclosure literature by developing a new index that includes all the aspects introduced by the Global Reporting Initiative version 4.The data of CSR reporting are manually collected from the firms' reports. The population and sample of this study are related to 350 companies operating in 16 European countries. Tobit regression analysis is used to test the hypotheses. Findings: The results reveal that directors' ownership, the presence of a CSR committee and firm size positively affect the quality of CSR reporting. Further testing of the independent variables on each CSR sub-category is made. The CSR sub-categories used are, namely, community involvement, employees, environment, social product and service quality, supply chain sustainability and business ethics. The presence of a sustainability committee inside the company is the only factor that shows a strong positive effect on the disclosure of every CSR sub-category and the CSR inclusive index. Research limitations/implications: The limitations of this research are that it focuses exclusively on the effect of the internal corporate mechanisms on the quality of CSR reporting; disregarding the economic, institutional, political and cultural factors that can play a role in influencing sustainability reporting of the companies. Practical implications: Better CSR disclosure leads to the firm having a better image in the society; this, in turn, has implications on firm performance, attracting funds, as well as recruiting and retaining high profile employees. Stakeholders are placing cumulative significance to corporate transparency particularly in the area of CSR. Managers should exert more efforts into not only improving the disclosure of the various facts of CSR but also into using the various media available for disclosure. Companies should take the initiative of establishing a CSR committee to ensure effective formation and implementation of CSR policies and disclosure of CSR activities. Social implications: The CRS research itself bears the merit of social implications. Moreover, the findings of this research pave the way for future researches to examine the effect of the adoption of global CSR initiatives and frameworks on the quality of CSR reporting. Originality/value: This paper contributes to the CSR disclosure literature by developing a new index that includes all the aspects of CSR and exploring the relation between the rarely explored "presence of sustainability committee" and CSR disclosure, as well as testing a vast number of CSR sub-categories that is not extensively covered in previous studies. Moreover, the paper covers a large sample of companies across 16 European countries, in terms of their stand-alone sustainability reports, dedicated chapters of CSR in annual reports, integrated reports, website CSR information and any attachments/links provided on the websites for further CSR documents, brochures or data sheets. [ABSTRACT FROM AUTHOR]

The author reflects on the audit policy in Europe in 2011, in which many questions have been raised on corporate governance and transparency of information due to the 2007 financial crisis. He cites the green paper "Audit policy: Lessons from the crisis," by the European Union, which explores the audit sector to know the improvements to be made in the public interest. He also notes that finding the steps to improve international cooperation is the one of the objectives of the green paper.

Purpose ? This paper seeks to illustrate the development of corporate governance issues in the transition economies of Central and Eastern Europe (CEE) and to analyze if codes based on directives or standards are better for these economies.Design/methodology/approach ? A chapter about corporate governance codes and the respective (dis)advantages of directives and standards starts the paper. Then common European and specific transition economies' corporate governance problems followed by a discussion of directives versus standards for CEE countries are described.Findings ? The paper finds that historical development of the transition economies in CEE leads to specific corporate governance problems such as high court delays, corruption and immature institutional investors. The introduction of corporate governance codes for these economies seems useful but should not rely on broad standards but on legally enforced binding rules accounting for the discussion of directives versus standards.Research limitations/implications ? Research on the weaknesses of legal systems in transition economies is mainly verbally argued and needs more empirical backing. The discussion of directives versus standards is limited as we live in a world of flux ? standards are becoming directives over time.Practical implications ? The paper argues against the blindfold implementation of corporate governance codes of other countries and argues for country specific solutions keeping in minds the different effects of directives and standards.Originality/value ? The paper opposes the mainstream thinking that corporate governance codes are the ultimate ratio for transition economies in countries of CEE. [ABSTRACT FROM AUTHOR]

The paper re-examines the short-term and long-term performance following announcements of mergers and acquisitions. This is the first study that comprehensively explores this phenomenon in Central and Eastern European countries. We find strong evidence that announcement of a takeover creates value for both bidders and acquirers in the short run. Simultaneously, contrary to the stylized fact reported by a majority of U.S. based studies, after controlling for local value, size, and momentum factors the mergers and acquisitions do not destroy the value of the acquirers in the long term. The observations are important for corporate governance and portfolio management. The research is based on 109 deals in years 2001–2014. For the short-horizon event studies, we calculate average cumulative abnormal returns and we employ of the zero, index, and market models. For the long-run studies, we build equally and capitalization-weighted calendar-time portfolios and test their performances with CAPM, three-factor and four-factor models. [ABSTRACT FROM AUTHOR]

Different Model Acts and national approaches to the Business Judgment Rule, some by means of its codification, others through the requirements to be considered when delimiting the directors' responsibilities, have tried to give a better orientation to the positions assumed by directors when they have to deal with business affairs on behalf of the company. Even in cases where there is not a specific section in internal law, the Business Judgment Rule is a common reference in many jurisdictions when the circumstances and elements of directors' decisionmaking are considered. In Spain, Law 31/2014, of December 3, to improve corporate governance, has codified the "protección de la discrecionalidad empresarial" in Article 226 of Ley de Sociedades de Capital, assuming the developments of the Business Judgment Rule in other jurisdictions. However, international principles and Model Acts, and other European jurisdictions, such as Germany, do not face codification of the Rule in the same way, and even consider differently requirements for its application. This paper discusses, through the approaches in Comparative law, particularly in other areas where the Business Judgment Rule has a greater tradition, the impact that the codification of the "protección de la discrecionalidad empresarial" may have in Spanish corporate governance. To this end, the paper focuses on the scope of this singular protection on directors' discretion, as well as on the requirements for its application, which shall serve at last to provide judges with a useful tool to decide on business matters where directors' responsibility is involved. Comparison with Common Law and more recently with other European approaches is a starting point to critically check whether Spanish systematization avails of the dynamics of the Rule in order to improve and properly coordinate the whole system of corporate governance. [ABSTRACT FROM AUTHOR]

Purpose The purpose of this paper is to explore the impact of the mechanisms of corporate governance on the volatility of companies’ financial profitability.Design/methodology/approach For the period 2002-2014, the authors evaluate the relations linking various indices involved in corporate governance with the systematic risk supported by these companies for a sample of 355 firms domiciled in Europe. To empirically test these relationships, the authors calculated a synthetic index of corporate governance quality (QGI) based on the 53 items of assessment of the companies’ governance proposed by the database ASSET4. Following the method used by Boncori et al. (2016), the authors first reduced the number of dimensions of corporate governance by performing a principal component analysis of the sample, which resulted in the following five components: management’s shareholder commitment, shareholder rights, characteristics of the board of directors, transparency of the financial information and independence of the audit.Findings The results of the tests indicate that the synthetic index of governance that the authors have built is only significant at the 10 percent threshold. The impact of this variable on the systematic risk of the company is of the order of one-tenth of a point. The decomposition of this index into five variables shows that management’s commitment to shareholders and the effectiveness of the board of directors in carrying out its supervisory tasks are likely to reduce, but again to a limited extent, the risk borne by the company.Research limitations/implications This observation guides the future work in introducing variables that reflect the social responsibilities of the companies in the sample in order to distinguish the effects of social responsibility from those of purely shareholder-oriented governance on systematic risk.Practical implications This paper demonstrates the interest of good governance on the risk of firms and identifies certain characteristics upon which to act.Originality/value Although the relations between corporate governance mechanisms and profitability expectations have been the subject of numerous studies, few authors have examined the influence of governorship on the volatility of this profitability, particularly in Europe. To the best of the authors’ knowledge, the rare work on this topic relates to only a limited number of countries. [ABSTRACT FROM AUTHOR]

This paper sheds new light on the assessment of firm networks via multiple directorships in terms of corporate firm performance. Using a large sample of European listed firms in the period from 2003 to 2011 and system GMM we find a significant compensation effect on corporate firm performance for the initial negative effect of horizontal multiple directorships by product market competition. In markets with effective competition, horizontal multiple directorships turn out to be an efficient mechanism to increase firm performance and thus assure competitive advantages. By contrast, linkages between up- and downstream firms have no significant influence on financial performance, irrespective of the level of competition intensity. [ABSTRACT FROM AUTHOR]

This paper investigates the determinants of a "successful" IPO from a corporate governance perspective upon a representative sample of European listings from 2000 to 2015. We use an extensive dataset of market performance, financial data, and corporate governance characteristics to run the investigation. Differently from previous studies, our analysis embraces both a short‐term perspective and a medium–long‐term perspective, where the board of directors seems to perform different tasks, moving from a value creation to a value protection strategy. Among the others, we find that board size, board independence, and their qualifications, together with their experience in other boards, are associated with a positive performance of the IPO in a short‐term horizon and in the medium–long‐term period, although significant differences emerge among those time perspectives. [ABSTRACT FROM AUTHOR]

This paper addresses the 'policy dimension' of the TOWN project drawing on the implications of the case studies for policy(ies) for small and medium-sized towns (SMSTs) across Europe. It first considers approaches at European and national levels to SMSTs arguing in recent years there has been limited recognition that SMSTs have a significant role to play in the European territory. The paper provides an illustrative selection of towns from the ten case study countries. The research shows that the category SMSTs contains a varied and often dissimilar group of towns in a wide variety of regional contexts. This is true not only between countries but within them. The results indicate that while there are actions to support SMSTs that can be done at European level a prescriptive 'one-size fits all' approach should be avoided. Policy approaches should be developed within particular national and regional contexts supported by the European level. [ABSTRACT FROM AUTHOR]

Purpose This paper aims to analyse the relationship between ownership structure and financial performance in the five major European football leagues from 2007-2008 to 2012-2013 and examine the impact of the financial fair play (FFP) regulation.Design/methodology/approach The sample used comprises 94 teams that participated in the major European competitions: German Bundesliga, Ligue 1 of France, Spanish Liga, English Premier League and the Italian Serie A. The estimation technique used is panel-corrected standard errors.Findings The results confirm an inverted U-shaped curve relationship between ownership structure and financial performance as a consequence of both monitoring and expropriation effects. Moreover, the results show that after FFP regulation, the monitoring effect disappears and only the expropriation effect remains.Research limitations/implications The lack of transparency of the information provided by some teams has limited the sample size.Practical implications One of the main issues that the various regulating bodies of the industry should address is the introduction of a code of good practice, not only for aspects related to the transparency of financial information but also to require greater transparency in the information concerning corporate governance.Social implications Regulating bodies could also consider other additional control instruments based on corporate governance, such as for example, corporate governance practices, corporate governance codes, greater transparency, control of the boards of directors, etc.Originality/value This study tries to provide direct evidence of the impact of large majority investors in the clubs and FFP regulation on the financial performance of football clubs. [ABSTRACT FROM AUTHOR]

Copyright of Polish Journal of Management Studies is the property of Czestochowa University of Technology, Faculty of Management and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Purpose – This paper aims to shed light on corporate practices regarding the integration of CSR into corporate communication in large European companies. Design/methodology/approach – An e-mail survey was conducted among large European companies in a total of 14 European countries. The questionnaire focuses on the organization of corporate communication activities, the organization of CSR activities, and the cooperation between the two. Findings – The authors find that CSR is managed most frequently by CSR departments, but also by communication departments to a small extent. Whichever organization is chosen, the communication departments frequently engage in cooperation with the CSR departments. The more frequently the two cooperate, the more likely they are to have formalised their cooperation. The authors also conclude that the communication department is generally aligned to the strategic management of the organization, whereas this is not always the case for the CSR department. Research limitations/implications – A limitation of the study is clearly the sample size, which could have been larger. However, corporate policies against survey participation pose an obstacle to large-scale surveys among companies in general. Originality/value – The question of whether and how companies integrate CSR and communication responsibilities is an under-researched area. This paper provides empirical evidence of how large companies manage the two functions in their organizations. [ABSTRACT FROM AUTHOR]

Purpose – In Central Eastern Europe (CEE) the transition to market democracy significantly influenced the emerging corporate governance practice. The region, however, demonstrates much more diversity in corporate governance than expected in generally similar transition economies and the variables and their impacts only partially overlap with the variables of corporate governance in other regions. This research aims to focus on how to help discover and explain these similarities and differences.Design/methodology/approach – This paper is a review of the secondary literature. The review is carried out with the intention of providing an opportunity to map out new terrains or provide critiques of the direction of a research field. The majority of literature reviewed in the paper is published in refereed journals, but other resources like book chapters, conference papers, reports and in certain cases unpublished materials are added. The paper discusses the key topics and variables according to the requirements of a holistic approach to corporate governance.Findings – The review of available literature indicates that much work has been done on a significant set of variables of corporate governance, both in the domestic (privatization and the legal environment primarily, institutions and market conditions secondarily) and the international (impact of foreign direct investment, European Union directives and expectations, globalization and global institutions like OECD and the WB) context, but this body of research has not been discussed comparatively, within the context of a holistic model. Existing literature in the first two decades after transition has devoted less attention to issues of hierarchy and institutions of corporate governance, although they have relevance to better understand the impact of the macro-level factors on corporate governance practices and their differences in the region. The paper has indicated the importance of a systematic review of macro-level factors, both internal and external from a national perspective, influencing corporate governance practices.Research limitations/implications – A systematic review of the variables of corporate governance in CEE has been missing to date and the theoretical framework adequate for pursuing such research is emerging only recently. The further elaboration and application of a holistic approach is necessary to analyze the numerous aspects that influence and shape corporate governance structures and practices in transition economies and to understand the differences that prevail even after two decades of transition to market democracy.Originality/value – The paper provides a comprehensive review of the literature on corporate governance practices and the factors influencing the emergence and impact of those codes in CEE. It argues for a holistic approach not applied before in the research of corporate governance in transition economies; and discusses the role of external and domestic macro-level factors in explaining the differences in the emerging national practices. It emphasizes the importance of the holistic analysis in future research. [ABSTRACT FROM AUTHOR]

The ensuring of a good corporate governance is a relatively new target on the list of objectives for international economic convergence, and the way that audit committee could contribute for the achievement of this objective is becoming a subject of greatest interest and debate among members of both academics and practitioners or specialists. The attention given to the audit function, especially in the context of corporate governance becomes a priority for European Commission (EC), one significant proof in this way being represented by the latest green-papers issued by EC that outlines the social role and responsibilities of audit function in terms of corporate governance, in order to rebuild and to establish the investor confidence in the effectiveness of financial markets. The major purpose of this paper is to develop and to propose a methodology for measuring the score of good audit committee practices in the context of corporate governance used by European countries. During its evolution, the audit committee also had known significant mutations from its objectives' point of view, and so if at the beginning audit committee was mostly focused over the financial reporting process, actually the objectives of the audit committee started to be more extended, being strongly focused over the ensuring the soundness of corporate governance of the entity (Porter, 2009). Based on a well-documented literature review, with a focus on significantly research developments and studies with respect to the audit committee's role and responsibilities it was developed a synthesis of main audit committee practices that should be taken into account into an integrated framework of good audit practices in the context of corporate governance. The results consist of a set of certain criteria that should be taken in consideration when considering the methodology for measuring the score of audit committee practices in the European context. These results represent only a preliminary step in a major research project dedicated to the analysis of good audit practices in European context. The following step in developing this major research will be to determine based on the methodology proposed a score for more than 550 European economic entities, listed at European markets capital in the most significant indexes, finally trying to determine a synthesis of the most significant practices of audit committee when speaking about the good audit practices in the context of corporate governance. By presenting the main criteria included in the proposed methodology, the author hopes to stimulate further constructive debates on this field of research which might contribute at the value-added improvement of the developed methodology, assigning to the further results a better relevance. [ABSTRACT FROM AUTHOR]

Purpose - The purpose of this paper is to describe the need for workplace innovation policies and practices in Europe and evaluate programs that already have been developed. Design/methodology/approach - The paper describes the concept of workplace innovation and trends in society explaining its emergence. The paper then presents and discusses the results of evaluation research as far as this is available. Findings - A growing number of countries is conducting or developing some kind of programme on workplace innovation. These programmes differ in size and governance. Evaluation research shows that simultaneous improvement of performance and quality of working life is possible under certain conditions such as the participation of employees in change projects. Research limitations/implications - Concepts and designs of evaluation research projects differ considerably. This gives new challenges for companies, trade unions, governments and researchers. In EU2020, little attention is paid to workplace innovation but there is a ray of hope in the draft integrated guidelines for employment policies and in the Flagship Initiative Innovation Union. Originality/value - Social innovation in the workplace, or workplace innovation, is a new concept, covering to some extent new practices that appear to be relevant for organisations and governments. [ABSTRACT FROM AUTHOR]

Purpose - This paper seeks to establish a benchmark for the evaluation of the quality of corporate governance (CG) and to detect the factors that affect it in Greece. Design/methodology/approach - An index of corporate governance quality is constructed using binary variables. Data from annual reports are used to identify the mechanisms and practices of corporate governance. An ordinal probit model is used to identify the drivers of corporate governance. Findings - CG quality in Greece is quite low, in terms of international best practices. The main drivers of CG quality are firm size, leadership or power concentration and board characteristics. Greek firms' CG quality depends mainly on the balance of power within the firm, rather than performance or market for corporate control. Research limitations/implications - Data for the constructed index have been collected from the annual reports, and not from questionnaires. Practical implications - The study provides evidence that there is a different set of factors that affect CG quality from those in Anglo-Saxon countries. The paper addresses the issue of the relevance of proposed CG mechanisms to real CG problems. By identifying the factors that have an impact on CG quality, policy makers can focus on them to create a legal-regulatory framework that can improve the level of CG. Originality/value - The paper not only measures CG, but pinpoints its formulating factors as well. Furthermore, the need for new benchmarking tools to address the fundamental elements of the corporate environment (i.e. ownership concentration, the lack of a market for corporate control, etc.) in continental Europe is highlighted. [ABSTRACT FROM AUTHOR]

Purpose - The purpose of this paper is to examine the electronic identity (eID) market from a social, technical and regulatory viewpoint, and the opportunities/challenges for policymakers. The paper also aims to discuss whether a single European market for identity is realistic and whether a common eID framework for Europe is timely and appropriate. Design/methodology/approach - The paper presents a structured review of user behaviours, a timeline of technical developments, and an analysis of market trends and policy analysis in relation to the eID ecosystem. Findings - Users of electronic systems and applications disclose increasingly more identity-relevant data. These data are often a prerequisite to the supply of advanced electronic services. In economic terms, the utility functions of users and service providers in relation to eID data are divergent. This generates a market asymmetry, as service providers are able to extract value from user data via opaque value propositions. European policymakers have different options to redress this unbalance. An eID framework based on the ''privacy by design'' approach is seen to offer a solution to excessive disclosure, market fragmentation and unclear value propositions. The strengths and weaknesses of the approach are assessed. Research limitations/implications - Results from the application layer of the eID market are based on exploratory research. Evidence from a larger number of cases and sectors is required to determine and articulate emerging value chains. Practical implications - In discussing an eID framework, policymakers should address critical issues concerning resources and funding, balance between online versus offline transactions and between present versus future technologies, users' actual behaviours, the infrastructure of certification and trust, and governance at the industrial, member state and EU levels. Originality/value - The paper draws together research in four domains - social, technical, market and regulatory. It addresses for the first time the barriers to the ''privacy by design approach'', alongside its virtues. [ABSTRACT FROM AUTHOR]

Purpose - The aim of this paper is to evaluate the significance of the link between corporate environmental and financial performance in order to show managers how an adequate management of environmental factors could contribute to the financial success of the firm. Design/methodology/approach - The paper analyses the environmental and financial performance of a sample of 230 European companies. Under the stakeholder approach, the commitment to environmental performance is analysed and linked with the firms' financial improvement. The paper proposes a partial least squares model (PLS) for measuring corporate environmental and financial performance that seems to be the first time which has been applied in the field. Findings - The results support the idea that enterprises which obtained higher rates of environmental performance show better financial performance levels in the future. Research limitations/implications - The lack of a long series of environmental performance data for organisations is an obstacle for a broader analysis. This research shows the usefulness of the multivariate modelling for analysing the environmental and financial performance of businesses. Practical implications - In practice, this research may show managers the need of taking into account the environmental management factors when configuring the strategic policy of the firm and how environmental management can impact to the financial success of the firms. Originality/value - The use of PLS modelling for measuring environmental and financial performance theoretical concepts and considering a sample of European companies for the empirical analysis. [ABSTRACT FROM AUTHOR]

Based on agency theory, we focused on the influence of corporate governance in the dividend policy of large listed firms with headquarters in continental Europe countries. Previous research focused on the influence of corporate governance on the performance and risk of listed firms, but the influence of corporate governance on the dividend policy has rarely been addressed despite the importance of dividends for shareholders and the implications on the free cash-flow, whose application may be a source of conflicts between managers and shareholders. In this paper, we study the influence of a set of governance mechanisms on the dividend policy over 12 years (2002 to 2013). The results, based on a panel data analysis, support the importance of governance mechanisms toward the protection of shareholders' interests, and reveal that the decisions on whether to pay dividends and how much to pay are grounded on different antecedents. [ABSTRACT FROM AUTHOR]

In this paper, we argue that the relationship between shareholder conflicts and corporate assets can generate multiple equilibrium configurations that can be helpful to understand how corporate governance systems may change under different historical models of capitalism. These relationships can be modeled as 'meta-complementarities' existing among two different sets of institutional complementarity. The first institutional complementarity arises in realm of the conflicts among different stakeholders and generates multiple equilibria that define different systems of rights on corporate assets. The second institutional complementarity arises between corporate rights and assets. Dispersed shareholders and non-unionized workers are complementary organizational forms and generate a form of corporate governance interacting with complementary corporate assets. A similar set of institutional meta-complementarities characterizes the relation between concentrated ownership, unionized workers and corporate assets. [ABSTRACT FROM AUTHOR]

Purpose: The impairment-only approach to goodwill has regularly been criticized for offering too much discretion to managers and facilitating the manipulation of goodwill impairment losses. Extant research provides mixed results on whether managers exploit their inherent discretion informatively or opportunistically. The purpose of this paper is to examine the determinants of discretionary goodwill impairment losses in Europe. Design/methodology/approach: The authors divide goodwill impairment losses into economically induced and discretionary parts. Thereafter, the authors examine the determinants of discretionary goodwill impairments. Findings: The results indicate that discretionary goodwill impairment losses are used opportunistically rather than informatively. The authors find that managers exploit their discretion to "clear the deck" and to meet or beat analysts' forecasts. However, the opportunistic behavior is constrained by corporate governance and enforcement mechanisms. Research limitations/implications: The findings contribute to the current discussion on the suitability of the impairment-only approach by introducing inferences on how areas of discretion inherent in goodwill impairment testing are associated with management incentives and governance mechanisms in a European setting. Practical implications: The results offer enforcers and standard-setters important insights into how mangers exploit discretion in goodwill accounting. These insights can help to identify firms that are likely to infringe upon the applicable accounting standards. Originality/value: In contrast to prior research, the authors analyze the association among management incentives, governance mechanisms and discretionary goodwill impairment losses rather than the association with total or expected goodwill impairment losses. Moreover, to the best of authors' knowledge, there is little empirical evidence based on a European (IAS 36) setting. [ABSTRACT FROM AUTHOR]

EXECUTIVE SUMMARYThe question of whether companies' share structure should be based on proportionality between ownership and control has been debated for decades. Powerful institutional investors have over the years tried to convince the EU that a harmonisation of share structures across Europe improves corporate governance. This, however, has been heavily disputed by the several listed companies and their organisations, which fear a standardisation is not in the long-term interests of the firms stakeholders. This paper describes the latest attempt by the EU Commissioner Charlie McCreevy to challenge nonproportional share structures such as dual-class voting shares — a highly relevant question, as it turns out that nonproportionality is often more the rule than the exception. The paper provides sound arguments as to why regulators should not set aside the freedom of contract principle in order to standardise listed companies' share structure as ‘one size does not fit all’. However, the freedom of contract principle goes hand in hand with transparency. Moreover, disclosure about a company's share structure is essential in order to give investors information about which types of shares best satisfy the preferences of different investor groups. EU Commissioner McCreevy surprised almost everybody last year when he declared at the European Parliament that he had decided to abandon his quest for imposing a system of ‘one share–one vote’ across Corporate Europe. This does not mean that the debate is over, as the issue of share proportionality will come up again in a few years when the takeover directive is to be reconsidered, hence we may speak about ‘a newer ending story’. This paper seeks to tell the story's most interesting pages.International Journal of Disclosure and Governance (2008) 5, 126–139. doi:10.1057/jdg.2008.4 [ABSTRACT FROM AUTHOR]

The purpose of this paper is to investigate the links between a company's ultimate owner and the risk involved with financial performance. The study tests hypotheses on the relation between ultimate ownership origin and risk of return on assets. The research adopts cross-sectional data from a unique sample of 32,614 companies across 43 European countries with ultimate owners from 105 countries. The results indicate that the domestic ultimate owner is, in general, less likely to be a risk-taker than overseas investors. The research develops the nature of ownership-performance relations in the specific economic context of Europe. The results add robust evidence on attitudes towards performance risk of Europe wide ultimate owners. [ABSTRACT FROM AUTHOR]

Germany and the UK are paradigms of systems in which the control of managing directors of companies either lies in the hand of a separate supervisory board (two-tier system) or is an additional task of the board itself (one-tier system). This paper provides for an empirical test of the effectiveness of both systems of corporate governance. The analysis of the financial performance and board turnover of the largest companies listed on the stock exchanges in Frankfurt and London over a total of 400 financial years establishes that both systems are effective means of control. Yet the analysis also demonstrates that it is not possible to assign superiority to either of them. Therefore, the often raised question as to whether one of the two systems will finally prevail and whether there will be ultimate convergence of both systems, has to be answered in the negative. As the discussion of the strengths and weaknesses will show, however, there is still scope for improvements in each of the two board models. [ABSTRACT FROM AUTHOR]

This paper examines the unique functions of corporate headquarters in diversified firms and reports on a survey of the structure and staffing of more than 600 headquarters in Europe, the United States, Japan, and Chile. It explores the extent to which corporate headquarters are contingent on size of the company, corporate strategy (corporate portfolio and corporate structure and policies), and governance system (ownership and regulation, and country of origin). The results confirm that factors in each of these areas are important determinants of the size and structure of headquarters. Performance data suggest that these findings are not merely descriptive but that corporate headquarters should be designed to fit the corporate strategy. Although the results are capable of alternative interpretations, analysis provides no support for the view that ‘lean and mean’ headquarters lead to better performance. Copyright © 2007 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

The paper addresses two as yet unexplored issues regarding the uptake of host-country employment relations practices, contributing to a better understanding of findings for hybrid host-market economies such as Switzerland. Host-country effects are differentiated by practices that belong to either industrial relations or education and training, as per the varieties of capitalism approach. There follows an investigation of the extent to which foreign subsidiaries' overall uptake of host-country employment relations practices is determined by the subsidiary incorporation type and size for practices related to industrial relations and education and training. Analyses of US subsidiaries in Switzerland, and, in contrast, those in Germany and the UK, on the whole support the propositions that distinguish between industrial relations and education and training-related host-country effects. [ABSTRACT FROM PUBLISHER]

Increasing the participation of women in top-level corporate boards is high on the agenda of policy-makers. Yet, we know little about director appointment dynamics and the drivers and impediments of women appointments. This study builds on organizational and group-level behavior theories and empirically investigates how ex-ante board structures and gender-specific board dynamics impact the representation of women on corporate boards. We study boards of listed firms in Europe between 2002 and 2019 and find a declining appointment probability for every additional woman, i.e., the share of women already on the board negatively predicts the likelihood of additional women appointments. Further, we find evidence of a replacement effect, i.e., the likelihood of a woman being appointed as director is significantly larger when a woman, compared to when a man, leaves the board. We do not find spillover effects from non-executive to executive boards. These results are robust to econometric model specifications that address potential endogeneity concerns using matching and instrumental variables. Our results confirm that board director appointments are gender specific and suggest that demand-side factors such as explicit and implicit norms drive women appointments up to a certain threshold. [ABSTRACT FROM AUTHOR]

The paper examines causes and effects of ownership concentration among the largest companies in 12 European countries. As a reference point the paper takes a seminal empirical study on US data and examines to what extent the model is applicable in European countries. The findings indicate that both general economic effects and system effects are significant. Ownership concentration is found to decrease with firm size and to increase with earnings volatility. But in support of the system theories advocated nationality is also found to have a significant effect which is partly attributable to institutional differences between nations such as stock market size and the frequency of large banks. Finally ownership concentration is found to have an insignificant effect on accounting profitability (return on equity). [ABSTRACT FROM AUTHOR]

Drawing on data collected in interviews with investors and corporates in the United States and Europe, this paper sheds light on the motives behind shareholder engagement. It explains why index funds engage in corporate governance, despite their apparent lack of financial incentive to do so. Applying Hirschman's concepts of exit and loyalty to the investment management industry, this paper suggests that for many institutional shareholders today, voice is more feasible than exit. For the largest index investors, the cost of engagement has fallen to a level where it is today negligible. The immense concentration amongst index funds, with the three largest fund managers controlling over 90 percent of assets, ensures sufficient return on their governance investments. Furthermore, interviews with activist investors suggest that they have learned to work with index investors and that index funds do not present barriers to successful campaigns. This paper therefore advocates against restricting index funds' voting rights. Doing so would muzzle those shareholders with the deepest pockets and the greatest potential for corporate oversight. Instead what is needed is regulation to ensure greater disclosure of engagement efforts by the largest fund companies enabling greater academic and public oversight of asset managers' engagement activities. [ABSTRACT FROM AUTHOR]