Increasing shareholder focus: the repercussions of the 2015 corporate governance reform in Japan

The corporate governance reform promulgated in 2015 in Japan has contributed to a substantial increase of board independence and a reduction of average board tenure. Our empirical analysis covering 3405 public companies demonstrates that reinvigorated corporate oversight and an increasing post-reform shift towards prioritization of shareholder value have led to a persistent increase of corporate profitability, asset productivity, dividend payouts, acquisitions’ value, and valuation multiples. We also document a significant increase of sensitivity of executives’ and directors’ compensations to the dynamics of firms’ bottom lines. The positive changes are the most pronounced within companies where independent directors constitute a majority on the board. The most notable drawbacks of the reform are a significant reduction in net employment creation and in employee turnover within the largest companies. These might be a possible reason for the documented improvement in corporate performance. The number of part-time employees has also seen a significant increase. While being prima facie focused on reinvigorating the private sector, the corporate governance reform may implicitly undermine the established social contract based on job security. Therefore, our study is important from the perspective of sustainable development of the corporate sector as it demonstrates that while concentrating on improving corporate governance, it is also necessary to consider the business’ social responsibility.

Board committees and non-financial information assurance services

The objective of this study is to examine the role that the specialized committees, created within the board of directors, and the auditor play in relation to the hiring of a non-financial information assurance service and in relation to the choices of the assurance provider for such non-financial information. Specifically, this study analyses the effect of the independence and specialisation of the audit committee, the existence of a CSR committee, and the reputation of the financial auditor associated with its classification as Big4. The results indicate that those responsible for financial information do not show interest in contracting an assurance service, especially if it is realized by an accountant provider, except that the information is standardised according to the Global Reporting Initiative guidelines and the contracted service is comparable to the financial audit standards, has assurance for a reasonable/high level, and is carried out according to the ISAE3000 standard.

Gender diverse boards and goodwill changes: association between accounting conservatism, gender and governance

We study the relation between board gender diversity and goodwill (GW). GW on the balance sheet is connected to both the firm’s risk-taking and its accounting conservatism which are two popular topics in how gender diversity affects the governance of firms. GW captures the firm’s decision to acquire another business for a price exceeding the received identifiable net assets and the subsequent valuation of the purchase. We propose that board decisions affecting GW could depict information about board gender diversity and its potential effects. Specifically, we examine Nordic listed firms in the period 2009–2018, to determine whether and how female representation on the board of directors is linked to the GW change. Big GW increases are associated with risk-taking and GW write-downs are signs of conservative accounting. Thus, we hypothesize and evidence that firms with substantial GW increases (decreases) are associated with fewer (more) women on the board. These results provide insight on board composition and potentially also on good governance and their consequences for strategic decision-making. Our findings contribute to the board diversity literature in accounting and corporate governance.

Corporate social responsibility and stakeholder dialogue under institutional voids: decoupling the role of corporate motives, ethics, and resources

The present study aims at further understanding the relationships between Corporate Social Responsibility (CSR) and Stakeholder Dialogue (SD) by exploring whether and how corporate motives for CSR affect the engagement into SD under institutional voids. The study also builds on the vast existing literature discussing the role of institutional mechanisms, analyzing how local ethics influence the vision of stakeholders, and on the resource-based view, highlighting how the availability of resources shapes CSR and SD. The paper discusses the results of a study we ran in Mozambique and which involved 235 domestic and foreign firms operating in the country. Mozambique is an interesting setting to analyze CSR as it is characterized by institutional voids, it has a vibrant economic environment, and it is influenced by Ubuntu ethics. Our findings confirm that under institutional voids corporate motives for CSR influence firms’ commitment to SD, especially with regards to profitability, whereas firm driven by legitimacy reasons resulted in being less involved in activities towards stakeholders. Contrary to previous studies, the study highlights that ethics do not affect SD. Differently, the study support literature on the role of resources in influencing the behaviour of companies towards CSR and SD.

Women in top echelon positions and their effects on sustainability: a review, synthesis and future research agenda

This article aims to review and systematize prior works that investigate how the presence of women in top echelon positions of firms affects sustainability and to create an agenda to guide future research in this promising area. In contrast to previous reviews, ours examines how women in top echelon positions affect sustainability by distinguishing both the position women held in the firm (i.e. Board of Directors—BoD, top management team, CEO and relevant committees) and the specific elements of sustainability (i.e. activity, performance, and disclosure). Our structured systematic review resulted in 187 publications retrieved from Web of Science and Scopus and revealed that the presence of women in top echelon positions is associated with greater engagement in social and environmental projects. Their presence also positively influences the environmental and social performance and increases the level, quality, and transparency of sustainability disclosure. Furthermore, the presence of women in top echelon positions and the implementation of sustainable activities improve both the firm financial performance and value. However, conflicting results have also emerged. On the basis of these findings, research gaps and future research agenda are identified and presented.