Responsible Leadership Behaviour as a Determinant of Stakeholders' Health and Well-Being

Recent corporate scandals have prompted discussion of the role of business in society. Business leaders are increasingly held accountable for their actions and non-actions in relation to all stakeholders, both internal and external. The emerging challenges faced by business organizations today include economic, social, and environmental demands; globalization; rapid population growth; natural resources exploitation; extreme poverty and debt; global migration; unprecedented inequality; global migration; geopolitical and ecological crises; climate change and other environmental issues; competitive pressure; health issues; new information and communication technologies; and sustainable lifestyles. Responsible leadership represents a new type of leadership, which is better positioned to address these challenges through stakeholder consideration and in the context of sustainable development. Building on existing literature, the aim of this article is to present a conceptual framework of responsible leadership as a potential determinant of stakeholders' health and well-being.

Audit committee diversity and corporate scandals: evidence from the UK

Purpose This paper aims to empirically analyse specific characteristics of an audit committee that could be associated with the likelihood of corporate fraud/scandal/sanctions. Design/methodology/approach The sample includes all firms that were investigated by the Financial Reporting Council through the audit enforcement procedure from 2014 to 2019, and two matched no-scandal firms. It uses logistic binary regression analysis to examine the hypotheses. Findings Results based on the logit regression suggest that audit member tenure and audit committee meeting frequency both have positive associations to the likelihood of corporate scandal. Complementing this result, the authors find negative but insignificant relationships amongst audit committee female chair, audit committee female members percentage, audit committee qualified accountants members, audit committee attendance, number of shares held by audit committee members, audit committee remuneration, board tenure and the likelihood of corporate scandal across the sample. Research limitations/implications The results should help regulatory policymakers make decisions, which could be crucial to future corporate governance. Additionally, these results should be useful to investors who use corporate governance as criteria for investment decisions. Originality/value The authors extend, as well as contribute to the growing literature on the audit committee, and therefore, wider corporate governance literature and provide originality in that it is the first, to the knowledge, to consider two characteristics (i.e. remuneration and gender) in a UK context of corporate scandal. Also, the results imply that the structure and diversity of the audit committee affect corporate fraud/scandal/sanctions.

The fraud triangle – an alternative approach

Purpose In recent years, Public Accountability and Integrity have been matters of growing attention, both in the public and private sector, as citizens demand value for money entrusted to the governments through their taxes. In addition, in many countries, after the recent recession, government budgets and corporate returns have been reduced. Many corporate scandals have occasionally become known and have had a great impact on confidence in the market. Even worse, after the pandemic of COVID-19, «bare and exacerbated massive preexisting problems in the world’s economic, social and security order, threatens to push up to 100 million people into extreme poverty in 2020, struck at a time of dwindling trust in representative governance» (UNDP, 2020). The funds of organizations in the private and public sector have been shrinking, whereas the situational pressures of fraud are increased. In this context, Dorris, President and CEO of the ACFE warns for explosion of fraud in the coming years and reminds that during the 2008 economic, companies cut-off, non-revenue generating activities, such as the internal audit and the compliance departments leaving them exposed to fraud. Therefore, organizations have to do more with less. The purpose of this paper is to present the development of the fraud theory on the management’s perspective aiming to contribute to the efficient development of anti-fraud mechanisms Design/methodology/approach Having identified the fraud theory developed so far, we provide a framework for the fraud risk management. Findings This paper incorporates cost/benefits considerations, practical considerations and empirical evidence on fraud. Originality/value This paper provides valuable information to enable the management, who has the primary responsibility to prevent and detect fraud, to disclaim responsibility by broadening their understanding of fraud theory.

Same scandal, different moral judgments: the effects of consumer-firm affiliation on weighting transgressor-related information and post-scandal patronage intentions

Purpose Corporate scandals involving senior executives plague many businesses. Although customers and noncustomers may be exposed to news of the same scandal, they may appraise dimensions of the transgression differently, thereby affecting post-scandal patronage intentions. The purpose of this study is to investigate whether and how consumer-firm affiliation affects future patronage intentions by examining nuances in customers’ vs noncustomers’ reactions toward the transgressor’s professional performance and immoral behavior. Design/methodology/approach Four between-subjects experimental studies were used to test whether performance-relevant and/or immorality-relevant pathways drive customers’ vs noncustomers’ post-scandal patronage intentions. The results were analyzed using analysis of variance, parallel mediation and serial mediation. Findings The results demonstrate that performance judgment, and not immorality judgment, drive the relationship between consumer-firm affiliation and post-scandal patronage intentions (Study 1a), regardless of the order of information presented (Study 1b). Customers form more positive performance judgments because they give more weight to performance-related information (Study 2), demonstrating a sequential effect of consumer-firm affiliation on post-scandal patronage intentions only through the performance-relevant, and not immorality-relevant, pathway (Study 3). Research limitations/implications This research contributes to the literature on social distance and moral judgments. Future research should examine other deleterious outcomes such as brand sabotage and negative word-of-mouth, as well as potential moderators including repeated transgressions and prevalence of the infraction in other firms. Practical implications This research offers important nuances for understanding how performance and immorality judgments differentially operate and affect post-scandal patronage intentions. The findings highlight the strategic value of communicating the leader’s performance (e.g. professional contributions) as a buffer against potential declining patronage. Originality/value Offering new insights into the extant literature and lay beliefs which contend that harsh moral judgment reduces patronage intentions, this research uncovers why and how exposure to the same scandal can result in varying moral judgments that subsequently influence patronage intentions. Importantly, this research shows that the performance-relevant pathway can explain why customers have higher post-scandal patronage intentions compared to noncustomers.

How Novelty and Narratives Drive the Stock Market

'Animal spirits' is a term that describes the instincts and emotions driving human behaviour in economic settings. In recent years, this concept has been discussed in relation to the emerging field of narrative economics. When unscheduled events hit the stock market, from corporate scandals and technological breakthroughs to recessions and pandemics, relationships driving returns change in unforeseeable ways. To deal with uncertainty, investors engage in narratives which simplify the complexity of real-time, non-routine change. This book assesses the novelty-narrative hypothesis for the U.S. stock market by conducting a comprehensive investigation of unscheduled events using big data textual analysis of financial news. This important contribution to the field of narrative economics finds that major macro events and associated narratives spill over into the churning stream of corporate novelty and sub-narratives, spawning different forms of unforeseeable stock market instability.

Clawback Provisions in Executive Compensation Contracts

Clawbacks are contractual provisions in executive compensation contracts that allow for an ex post recoupment of variable pay if certain triggering conditions are met. As a result of regulatory responses to financial crises and corporate scandals, as well as growing shareholder pressure to implement effective measures against executive misbehaviour, the prevalence of such clauses has risen considerably in the recent past, beginning in the US after the 2000 financial crisis. As clawbacks have become a buzzword in the European debate about also ensuring good corporate governance beyond the financial sector, it is time to critically discuss the hopes that have been associated with various types of such provisions.

The Critical Analysis of Some Comparative Eastern Africa Corporate Governance Standards After Financial Crisis, Corporate Scandals and Manipulation

Even though corporate scandals and bankruptcy in US and Europe and Asia show some certain evidence on weak corporate governance, weak internal control system and weak audit, Global corporate governance forum noted corporate governance has become an issue of worldwide importance. Therefore, this paper chooses a different analytical approach and among its aims is to give some systematic opinions.First, it classifies Eastern Africa representative corporate governance (CG) standards into two (2) groups: Malawi and Kenya latest CG principles covered in group 1 and, group 2, including corporate governance guidelines from EVCA 2005, so-called relative good CGgroup, while it uses ACCA and CFA principles as reference. Second, it , through analysis, shows differences between above set of standards which are and have been used as reference principles for many relevant organizations. Third, it establishes a selected comparative set of standards for Eastern Africa representative corporate governance system in accordance to international standards.Last but not least, this paper covers some ideas and policy suggestions.

Mapping Ethics Education in Accounting Research: A Bibliometric Analysis

The attention being paid to ethics education in accounting has been increasing, especially after the corporate accounting scandals at the turn of the century. This paper provides a comprehensive overview of the existing research in the field of ethics education in accounting. To synthesize past research, a bibliometric analysis that references 134 primary studies is performed and three bibliometric methods are applied. First, we visualize the historical evolution of ethics education in accounting research through historiography. Second, we use bibliographic coupling to identify clusters of ethics education in accounting research before, during, and after major corporate scandals. Third, we perform a co-word analysis to connect the identified patterns into a map of a contextual space. The results reveal, in each decade, not only an increasing academic focus on this field of research, but also an increasing number of different research clusters. While the clusters Factors affecting moral judgement, Perception of ethics, and Lack of ethics topics in the last research period develop further from the respective clusters in the previous periods, Accounting beyond technical skills, Integration of ethics in accounting education, Use of developed ethics frameworks, and Professional values on the contrary develop anew in the last decade, as a consequence of a growing demand for teaching ethics. Overall, the paper presents the development patterns of ethics education in accounting research and sets up a research agenda that encourages future research.

Bonus Payments within the New Zealand Financial Services Sector

Some major corporate scandals have shown that bonuses have been put above basic client needs. As a result, organisations within the financial services sector have been advised to move away from paying bonuses. However, bonus payments are an expected part of the current remuneration package in this sector, which poses an interesting challenge for the employment relationship between employees and organisations. The present study gained employee insights into their bonuses by looking at performance and other factors. Qualitative interviews were undertaken within the financial services sector. Alternatives for bonuses and implications are discussed to manage remuneration and the employer/employee relationship.

Workplace Deviance in Public Sector Organizations: Evidence from Pakistan

Deviant workplace behaviors have become an important area of research due to the recent revelation of high-profile corporate scandals. Scholars view that deviant workplace behaviors can be controlled when the factors that affect workplace deviance are properly understood. Therefore, this study is having two sections. Section one identifies the level of workplace deviance prevailing in the public sector hospitals of Pakistan, for which data was collected from 219 respondents in the understudy sector. Findings of this study show that workplace deviance exists in the understudy sector at a moderate level. Section two describes the factors that have the ability to influence the emergence of deviant workplace behaviors. Thus, this study searched for workplace deviance related articles available at the academic research databases such as Scopus and Web of Science. The keywords that were used for searching articles were “workplace deviance”, “organizational deviance”, “deviance” and “deviant behaviors”. This study outlines twenty-five factors that affect workplace deviance, thereby highlighting how workplace deviance can be minimized. Lastly, implications and suggestions for further research and practice are highlighted.