scholarly journals Can compensation committees effectively mitigate the CEO horizon problem? The role of co-opted directors

2020 ◽  
Vol 34 (1) ◽  
pp. 1-21
Author(s):  
Ruonan Liu
Keyword(s):  
Corporate Governance ◽  
Research And Development ◽  
Empirical Evidence ◽  
Design Methodology ◽  
Ceo Compensation ◽  
Content Type ◽  
Horizon Problem ◽  
Accruals Management ◽  
Compensation Committees

Purpose This study aims to examine whether compensation committees dominated by co-opted directors are less effective in mitigating the CEO horizon problem. Design/methodology/approach The author uses a sample of 7,280 firm-year observations from 1998 to 2011. Findings In this study, the author finds evidence of opportunistic research and development (R&D) reduction and accruals management in firms with retiring CEOs and compensation committees dominated by co-opted directors. Moreover, it is found that R&D reduction and income-increasing accruals are less discouraged when determining the compensation for retiring CEOs by compensation committees that are dominated by co-opted directors. The results suggest that compensation committees dominated by co-opted directors are less effective in adjusting CEO compensation to mitigate the CEO horizon problem. Originality/value The study reveals that co-opted directors are weak monitors. Moreover, the study adds empirical evidence to the debate of organizations’ CEO horizon problem. Finally, the study adds to the literature on corporate governance, revealing that compensation committees play an important role in mitigating an organization’s CEO horizon problem by adjusting CEO compensation.

scholarly journals Stewardship theory: is board accountability necessary?

2017 ◽  
Vol 59 (6) ◽  
pp. 1292-1314 ◽  
Author(s):  
Andrew Keay
Keyword(s):  
Corporate Governance ◽  
Agency Theory ◽  
Design Methodology ◽  
Agency Problems ◽  
Stewardship Theory ◽  
Content Type ◽  
General Terms ◽  
Practical Implications

Purpose The purpose of the paper is to demonstrate that notwithstanding the fact that stewardship theory embraces things like trust of directors, their professionalism, loyalty and willingness to be concerned for the interests of others, as well as rejecting the foundations of classic agency problems that are asserted by agency theory, board accountability is as relevant to stewardship theory as it is to agency theory. Design/methodology/approach The paper applies the theory underlying board accountability in corporate governance, which is so often applied both in the corporate governance literature and in practice with agency theory in mind, to stewardship theory. Findings While the idea of accountability of boards is generally associated with an explanation and conceptualisation of the role and behaviour of directors as agents within classic agency theory, the paper demonstrates that board accountability is a necessary part of board life even if the role of directors is explained and conceptualised in terms of stewardship theory. Practical implications The paper suggests some accountability mechanisms that might be employed in a stewardship approach. Originality/value While many authors have talked in general terms about board accountability and its importance, this is the first paper that has engaged in a substantial study that links board accountability directly with stewardship theory, and to establish that accountability is necessary.

Soldier or actor?

2019 ◽  
Vol 27 (1) ◽  
pp. 94-108
Author(s):  
Amit Shukla
Keyword(s):  
Empirical Evidence ◽  
Design Methodology ◽  
Positive Relationship ◽  
Psychological Ownership ◽  
Matched Sample ◽  
Content Type ◽  
Workplace Fairness ◽  
Strong Positive Relationship

Purpose Though widely studied, organisational citizenship behaviour (OCB) is yet to emerge as a thoroughly understood concept. For instance, citizenship behaviours emanating from self-serving motives remain largely unexplored. The purpose of this study is to investigate the role of psychological ownership in differentiating individuals with genuine motives (“soldiers”) from those with self-serving motives (“actors”). Design/methodology/approach The study defines and operationalises genuineness of OCBs by comparing self-rated and others-rated citizenship behaviours. It is hypothesised that psychological ownership is positively associated with citizenship behaviour, and this relationship is positively moderated by degree of genuineness. All the hypothesised relationships are tested on the basis of empirical evidence produced by a two-wave study on a cross-hierarchical matched sample (n = 338) in a large Indian IT MNC. Findings A strong positive relationship between psychological ownership and citizenship behaviour was observed. A positive moderation by genuineness was also found suggesting that relationship between psychological ownership and citizenship behaviour became stronger with higher genuineness. In a nutshell, the results indicated that soldiers and actors could be differentiated on the basis of their relative scores on psychological ownership. Originality/value Apart from theoretical contributions, the present study offers a headway to managers in identifying employees who engage in citizenship behaviour out of genuine motives toward their organisation. As citizenship behaviours increasingly find prominence in employees’ self-appraisal, this differentiation assumes importance in promoting workplace fairness.

Two routes of service modularization: advancing standardization and customization

2019 ◽  
Vol 33 (1) ◽  
pp. 73-87 ◽  
Author(s):  
Ida Gremyr ◽  
Aku Valtakoski ◽  
Lars Witell
Keyword(s):  
Empirical Evidence ◽  
Design Methodology ◽  
Longitudinal Case Study ◽  
Manufacturing Firm ◽  
Content Type ◽  
Service Module ◽  
Using Data ◽  
Practical Implications

Purpose This study aims to investigate service modularization in a manufacturing firm, identifies service modularization processes and examines how these processes change the service module characteristics. Design/methodology/approach The study is based on a longitudinal case study (2008-2017) of a manufacturing firm. The development of six service modules was analyzed using data from interviews with key informants, informal meetings and internal documentation. Findings This study suggests five service modularization processes, and that service module characteristics, such as standardization and interconnectedness, change in different ways depending on the service modularization processes used. It further identifies two service modularization routes that each combine the service modularization processes in unique ways with replication as a key process to improve both standardization and customization. Practical implications This study elaborates a framework for service modularization, which can serve as a guideline for developing service modules. It also highlights the differences between product and service modularization, suggesting that the role of service module characteristics such as standardization and customization is specific for services. Originality/value This longitudinal case study (2008-2017) provides empirical evidence on service modularization and extends existing knowledge on service modularization processes and how they influence service module characteristics.

Mapping the determinants of carbon-related CEO compensation: a multilevel approach

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Julija Winschel
Keyword(s):  
Climate Change ◽  
Corporate Governance ◽  
Ceo Compensation ◽  
Behavioral Science ◽  
Theoretical Perspective ◽  
Chief Executive ◽  
Content Type ◽  
Change Impact ◽  
Research Propositions

Purpose In view of the current climate change emergency and the growing importance of the climate-related accountability of companies, this paper aims to advance a comprehensive understanding of the determinants of carbon-related chief executive officer (CEO) compensation. Design/methodology/approach Building on the agency-theoretical perspective on executive compensation and existing work in the fields of management, corporate governance, cultural studies, and behavioral science, this paper derives a multilevel framework of the determinants of carbon-related CEO compensation. Findings This paper maps the determinants of carbon-related CEO compensation at the societal, organizational, group, and individual levels of analysis. It also provides research propositions on the determinants that can support and challenge the implementation of this instrument of environmental corporate governance. Originality/value In the past literature, the determinants of carbon-related CEO compensation have remained largely unexplored. This paper contributes to the academic discussion on environmental corporate governance by showcasing the role of interlinkages among the determinants of carbon-related CEO compensation and the possible countervailing impacts. In view of the complex interdisciplinary nature of climate change impact, this paper encourages businesses practitioners and regulators to intensify their climate change mitigation efforts and delineates the levers at their disposal.

The impacts of ad skip option and ad time display on viewer response to in-stream video ads: the role of perceived control and reactance

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Dongwon Choi ◽  
Jooyoung Kim
Keyword(s):  
Cognitive Control ◽  
Empirical Evidence ◽  
Perceived Control ◽  
Design Methodology ◽  
Online Experiment ◽  
Content Type ◽  
Multiple Dimensions ◽  
Viewer Response ◽  
Practical Implications

PurposeThe primary purpose of the current study was to examine how the presence of two digital ad features – an ad skip option and an ad time display, representing behavioral and cognitive control, respectively – might influence viewer response to in-stream video ads in terms of perceived control, reactance and advertising outcomes.Design/methodology/approachA 2 (Ad skip option: presence vs. absence) × 2 (Ad time display: presence vs absence) between-subjects experiment was conducted online with 217 participants recruited via Qualtrics.FindingsThe results of the online experiment show that the presence of the ad skip option and ad time display related to a higher level of perceived control, predicting lower ad intrusiveness and ad irritation and more favorable attitude toward the ad.Practical implicationsThe findings confirm that an ad skip option and an ad time display could minimize negative responses to in-stream video ads by increasing perceived control and reducing viewer reactance.Originality/valueThe findings provide empirical evidence that multiple dimensions of control features (i.e. behavioral and cognitive) can increase perceived control and strengthen its impact on advertising outcomes.

Market orientation and service quality: opponents or colleagues

2014 ◽  
Vol 6 (2/3) ◽  
pp. 98-111 ◽  
Author(s):  
Angelos Pantouvakis
Keyword(s):  
Service Quality ◽  
Empirical Evidence ◽  
Market Orientation ◽  
Business Performance ◽  
Design Methodology ◽  
Combined Effects ◽  
Present Survey ◽  
Content Type ◽  
Marketing Orientation

Purpose – This paper aims to investigate the effects of market orientation (MO) and service quality (SQ) logic on business performance. It is generally believed that MO and SQ are different philosophies, as the first, mainly, focuses on the “external orientation or market based considerations”, whereas the second mainly falls into the “internal orientation or resource based” of the firm. However, very little empirical evidence is provided to examine their relationships and comment on their role in achieving superior business performance. Design/methodology/approach – Drawing evidence from 400 shipping firms, this study examines the role of these two concepts (MO and SQ) on shipping companies’ business performance and attempts to classify cases according to their score on those constructs. Findings – Analysis revealed that despite what was thought by most managers inside and outside the maritime sector, all shipping firms are strongly market-oriented and that SQ and business performance are closely related to each other. Originality/value – The present survey, using a sample of 700 maritime professionals from some 400 shipping companies in Greece, aimed at exploring the combined effects of marketing orientation and quality on their performance. It further discriminates among three types (states) of companies based on their MO and SQ scores.

scholarly journals Treatment of psychopathy: a conceptual and empirical review

2018 ◽  
Vol 4 (3) ◽  
pp. 186-198 ◽  
Author(s):  
Michael Lewis
Keyword(s):  
Early Intervention ◽  
Empirical Evidence ◽  
Design Methodology ◽  
Psychopathic Traits ◽  
Personality Pathology ◽  
Future Research ◽  
Content Type ◽  
The Core ◽  
Effective Interventions

Purpose For decades, psychopathy has been thought to be untreatable. Yet, conceptualisations, and indeed its assessment, have deviated away from viewing the disorder as personality pathology towards a behavioural focus where the core underlying deficits in cognition and affect have been ignored. Interventions have followed suit leading to a premature discounting of the role of therapy in adjusting psychopathic traits. The paper aims to discuss these issues. Design/methodology/approach The review critically evaluates the conceptual and empirical evidence relevant to the treatment of psychopathy, deciphering components integral to the disorder that require intervention. Psychopathy is approached from a developmental perspective, with the review identifying several mechanisms thought to be responsible for precipitating and perpetuating its expression. Findings There appears some utility in targeting psychopathy from multiple angles, addressing experiences of trauma, associated schemas and the underlying cognitive-affective dysfunction noted to give rise to psychopathic traits. A new model for treatment was proposed integrating these factors to encourage the design of effective interventions that will address the origins and underlying deficits of the disorder, rather than symptomology. Originality/value The review encourages future research to consider the aetiology of psychopathy, with the aim of informing early intervention and containing the disorder whilst in its infancy, as well as addressing neurobiological dysfunction when most malleable.

Culture based development: empirical evidence from Shilpgram Fair, Rajasthan

2015 ◽  
Vol 7 (4) ◽  
pp. 393-402 ◽  
Author(s):  
Shweta Tiwari
Keyword(s):  
Economic Growth ◽  
Empirical Evidence ◽  
Financial Development ◽  
Design Methodology ◽  
Tourism Development ◽  
Secondary Data ◽  
Rural Life ◽  
Content Type ◽  
Group Association

Purpose – The purpose of this paper is to investigate the role of culture in economic growth in areas where the Shilpgram fair is facilitated in Rajasthan. Design/methodology/approach – The data are acquired through primary and secondary data with individual meetings, interviews and questionnaires. Findings – The study uncovered that the Shilpgram fair is expanding mindfulness and financial development of rural life and crafts particularly for younger people. Originality/value – This study presents recognition of the financial effects of tourism on neighbouring group association in tourism development.

Can directors' liability reduction promote corporate innovation?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sanghak Choi ◽  
Hail Jung
Keyword(s):  
Regression Analysis ◽  
South Korea ◽  
Research And Development ◽  
Empirical Evidence ◽  
Design Methodology ◽  
Content Type ◽  
Corporate Innovation ◽  
Development Expenditure ◽  
Innovation Strategies ◽  
Director Liability

PurposeThis study aims to explore the effects of director liability reduction (DLR) laws on corporate innovation strategies in South Korea.Design/methodology/approachRegression analysis is used to investigate the effects of the directors' liability reduction coverage on the corporate innovation. The data includes 7,517 firm-year observations spanning from 2011 to 2017.FindingsThe authors provide empirical evidence that directors feel protected by the coverage and are able to focus more on innovative projects. Using research and development expenditure and the number of patents registered to measure the firm's innovation, we find that covered firms spend more on R&D and register more patents than non-covered firms.Originality/valueThis study extends the literature on corporate innovation. A vast amount of literature empirically tests how best to motivate directors to engage in innovative activities. On the same line, this study is the first to empirically test the effect of DLR shelters on directors' motivations toward innovation.

scholarly journals Corporate governance and earnings conservatism in Malaysia

2016 ◽  
Vol 29 (4) ◽  
pp. 391-412 ◽  
Author(s):  
Marziana Madah Marzuki ◽  
Effiezal Aswadi Abdul Wahab ◽  
Hasnah Haron
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Audit Committee ◽  
Design Methodology ◽  
Content Type ◽  
The Third ◽  
Financial Expertise ◽  
Two Measures ◽  
The Relationship

Purpose This paper aims to investigate whether the revised Malaysian Code on Corporate Governance in 2007 enhances earnings conservatism. In addition, the authors examine the relationship between board of directors’ expertise and conservatism. The third objective is to investigate the relationship between audit committee characteristics and earnings conservatism. Design/methodology/approach The sample of this study is based on 3,183 firm-year observations for a period of 2004-2009. The authors hand collected the corporate governance variables, whereas the remaining data were extracted from Compustat Global. The authors used two measures of conservatism. The first is the market-based model by Basu’s (1997), and the second measure is the accrual-based measure by Ball and Shivakumar (2005). Findings The authors find that the revision of Malaysian Code on Corporate Governance 2007 results in improving earnings conservatism. The authors find two audit committee characteristics, namely, audit committee financial expertise and independence increase earnings conservatism, after 2007. However, the authors could not find support whether board financial expertise mix affect conservatism. Research limitations/implications This study did not consider other possible corporate governance variables that could influence earnings conservatism, as it would be a difficult task to gather them. Originality/value The authors provide evidence on the role of corporate governance and earnings conservatism in Malaysia.

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