Governance and Sustainability

One of the points of debate on the role of corporate governance in financial institutions is corporate accountability. Corporate accountability is arguably attainable if corporate governance in financial institutions is appropriately regulated. While there is the question of the adequacy of regulatory standards and enforcement in challenging institutional context of the developing and emerging markets (DEMs), corporate social responsibility (CSR) can play a complementary role to regulation by public agencies. The concept of CSR may be distinguishable from corporate governance, the former can play a strategic role in the promotion of good corporate governance, particularly in the banking sector. Drawing on the institutional theory, this paper examines the connection between CSR and corporate governance. It identifies the difficulties of implementing global CSR models in the disconnection between the models and the institutional environment. The chapter argues that CSR models of developed economies cannot be adopted effectively in the DEMs due to institutional challenges. Using Nigeria as a case study, it suggests ways of incorporating CSR as a corporate governance mechanism for banking institutions in the DEMs. This limited regulated form of CSR will, in particular, include the adoption by regulators banking-specific CSR principles that are appropriate for the institutional contexts as part of banking regulation and supervision and multiple stakeholder implementation and enforcement of CSR standards. A limited regulated form of CSR can help to fill the corporate accountability gap in the banking institutions of some countries in the DEMs. In light of the above, CSR could be integrated into the corporate governance framework of banks in the DEMs by compelling banks to consider the interest of all its stakeholders. Banks are generally expected to conduct their businesses with transparency and integrity. Therefore, this chapter suggests that CSR policies implementation within the banking sectors should be the responsibility of the board of directors. There should be a mandatory requirement within the corporate governance framework for the board of directors to report on their economic, social and environmental activities and also of those of their supply chains. The chapter further proposes the idea of integrating CSR into the corporate governance of banks by linking executive pay to their performance on economic, social and environmental issues. It also suggests that one of the qualifications for the office of executive and non-executive directors’ banks would be to have some form of CSR training or and work-related CRS experience for at least for a period of 3 years.

CSR concepts encourage the identification of specific core CSR categories. Such categories include ethical, legal, economic and environmental responsibilities and obligations. The Indian and UK contexts exemplify a variety of CSR-related legislative provisions enacted to underscore the importance of a company’s stakeholder obligations and responsibilities that extend beyond its corporate constituencies. However, the current CSR jurisprudence is carefully evaluated in Kuwaiti company law given the lack of CSR-related legislative provisions in the country. There is a need to explore and analyse these areas in different contexts, such as CSR in UK and Indian company laws, to form the basis of potential CSR provisions and legal vision for Kuwaiti company law. This chapter examines the CSR-related provisions in Kuwaiti company law. The chapter starts with a discussion of CSR practices and CSR in relation to the relevant provisions of Kuwaiti company law and corporate governance, including board of directors, CSR reporting and information disclosure, corporate constituencies, directors’ duties and corporate objectives. The visions of CSR in the UK and Indian Companies Act and Kuwait are discussed and compared throughout the chapter in order to determine a middle ground for Kuwait with respect to adopting more socially responsible principles.

The sustainable development has been the most important strategy for solving problems and joins it with smart information systems that change the answer of the organization to the new tendencies of appropriate transparency, ethical, and legal framework. So, the objective of this paper is to present a smart accounting and taxation system through a computerized and digital business model for the automation of accounting and taxation records that produce more robust information system, and then it contributes to the reduction and the elimination of physical document files and get faster decision to the stakeholder. The methodology of this paper is descriptive and exploratory, with qualitative approach and applied scientific research nature based on the international accounting standards and the Portuguese tax system. The empirical analysis used a technical procedure of the primary data collection that will build a survey through questionnaires and then applied them in accounting organizations in Portugal. The contribution of this paper is to discuss an interactive, connected, and sustainable accounting information system with online information that is capable of promoting digital transformation in two complementary areas (accounting and taxation), providing the stakeholder useful information for making economic and financial decisions in real time.

This work aims to analyze the impact of corporate governance characteristics on earnings management of Portuguese non-financial listed firms, for the period 2012–2016. Using panel data, we regress discretionary accruals, a proxy of earnings management, against corporate governance characteristics and control variables. The main results show that only two corporate governance variables: the independence of the board of directors and the type of corporate governance model adopted (one-tier or two-tier), and one control variable: level of indebtedness, are relevant to explain firm’s earnings management. Results show that discretionary accruals increase with the independence of the board of directors. Moreover, companies who adopt the two-tier model are less prone to increase accruals due to a greater separation of functions and supervision and an increase in the monitorization of opportunistic behaviors. Finally, this study provides evidence that a high level of indebtedness is a deterrent to earning management practices since creditors also monitor the company’s financial situation.

The notion of legislating Corporate Social Responsibility (CSR) has for the most part not been well received. This is evident from the fact that legislation directly regulating CSR (either in the public or private spheres) is almost non-existent, with only a handful of jurisdictions referring to CSR in national legislation, and where references to CSR are made it is generally in the context of taxation. In line with the international trend, South Africa also does not have legislation expressly addressing CSR, although it does have a regulatory framework with CSR content (such as socio-economic development initiatives in terms of the Broad-Based Black Economic Empowerment Act 53 of 2003, (the BEE Act) and the social and ethics committee in terms of the Companies Act 71 of 2008). However no explicit CSR legislation exist in the South African context. This contribution focuses on the following question: What could be included in a proposed CSR framework Act aimed at institutionalising CSR in the South African context? This contribution proposes a CSR framework Act for South Africa without creating an explicit right to CSR. The framework legislation proposed in this contribution should be regarded as being complementary to existing legislation addressing the rights addressed. With no comprehensive policy framework and no overarching legislation that addresses CSR in existence in South Africa, the country is in need of a framework law that addresses CSR and provides the necessary legal impetus for the establishment of a corporate conscience based on its social responsibility. It is evident, then, from noting the lack of an effective CSR enabling framework that the need exists to regulate aspects of CSR by means of a framework law. As a result, the aim of this contribution is to combine relevant national legislation and national and international guidelines into a framework Act that would institutionalise CSR.

The systemic nature of financial shocks has prompted much theoretical work on the channels of transmission of shocks between capital markets and other macroeconomic elements, and the transmission of volatilities within the capital market itself. It is within this framework of analysis that our research is written. We try to study the transmission of volatility shocks between stock markets and the interactions between these markets. In this framework of analysis, it is particularly necessary to study to what extent financial globalization and financial integration have led to a stronger correlation of global financial markets and more particularly between those of advanced and emerging countries? We focus here on the issue of the financial integration of emerging countries by proposing complementary econometric approaches. For this, we establish OLS regressions in slippery windows—which make it possible to evaluate the extent to which shocks in regional or advanced markets are transmitted to emerging countries, and the CCC-GARCH model estimating the dynamics of the integration of these markets emerging. For the period between 2008 and 2018, refer to empirical data from the Tunisian stock market.

Prevailing approaches to the structural challenges of Corporate Social Responsibility (CSR) tend to be monolithic and skewed towards CSR at the organisational level. Albeit, mirroring CSR at the organisational level with activities of practitioners at the social level can offer new reflexive approaches for identifying capabilities for and understanding thresholds of social learning. This chapter maps out how identity perspectives to CSR can offer new approaches for surfacing emergent properties inherent in the uptake of CSR institutionally and in practice. The chapter also presents an overview of the interplay between structure and agency (prescribed and actual CSR practices) and its underlying instrumental role for illuminating systemic factors which perpetuate such capabilities and thresholds. Using a morphogenetic theory of change, the chapter offers a framework for approaching CSR-based corporate identity. Empirical evidence from the applied framework is thereafter presented, in the context of the agro-processing industry based on a content analysis of annual reports, in-depth-interview data generated from four sustainability managers and corporate communication officers and the practices of extension and Local Economic Development (LED) officers. The framework demonstrates that companies with a disintegrated CSR identity inherently have more capacity to be change agents. Similarly, a strong corporate heritage identity is not indicative of a reciprocal link between espoused values and activity. Conversely, an enduring corporate heritage identity may not necessarily be improvisatory for social learning. In conclusion, the chapter gives an overview of a taxonomy of agential capabilities and associated cognitive resources inherent in the interaction between structural-cultural and personal emergent properties, which can initiate the positioning of social learning at the forefront of organisational deliberations.

The article analyzes the state and prospects of corporate management development in modern conditions, describes the distinctive features of the formation of agro-industrial structures; factors of functioning of agro-industrial associations are systematized; analyzed the evolution; and identified promising directions for the development of integration in the AIC of the Republic of Belarus.

The objective of this paper is to analyze the performance of the largest listed companies of the European Union between 2010 and 2017, and how they are affected by the gender influence of the Chief Executive Officer (CEO) and the percentage of women on their Boards of Directors. These companies were chosen due to the lack of studies based on companies in the European Union and because the studies related to this subject have ambiguous results. Those ambiguities relate to the finding of positive, negative, or no relationship between gender diversity and company performance. This study is measured utilizing two indicators: ROA and Tobin’s Q. Using a regression model based on a sample of 308 European companies, and the OLS method, a negative relationship was found between having a female CEO and Tobin’s Q. When the ROA is analyzed, this relationship is also negative, but not significant. These results suggest that the fact that the position of CEO is occupied by a woman, has no influence on the company when analyzing the accounting results (ROA). It also negatively influences the market value of the company which can be attributed to gender discrimination, an inequality that is still present in society in general, as well as the labor market. The ratio between the percentage of female board members and the performance indicators is positive, but not significant. This suggests that the percentage of women board members remains too low to allow companies to take advantage of the benefits of gender diversity.

In this article, we present the case of sugar cane farming and crushing in Maharashtra in India. This is an Arche-typical case of ethical dilemmas and climate justice in the transition of industrial civilization to become a more environmentally sustainable society. The dilemmas of the case are central to the challenges that we face with regard to the need to change our life-styles and modes of production in the contemporary industrial civilization. The sugar cane farming and agriculture of Maharashtra are central to the economy of the region. Sugar cane cultivation is important for the mode of production of the region. The government has been promoting this agriculture as a part of development of the region in the country. Sugar production has become central to industrialization and survival of stakeholder in the region. However, this production is also very costly for the environment, in particular with regard to use of water, which has led to shortage of water and depletion of ground water. Moreover, the farmers involved in sugar cane farming are also facing distress because of reduction of the price of sugar due to overproduction. In addition, the production has led to increased destruction of the soil in the region, In this situation, government faces many dilemmas of policy. A ban on sugar cane production has been recommended, but local stakeholders are critical to this because of the damage for the farmers who will lose their grounds of existence. Another option is slower transition to sustainability, but it is not clear how such change can be implemented. Thus in this paper, with a hermeneutic case-study we discuss the ethical dimensions of this situation. We discuss the case in terms of cosmopolitan business ethics, sustainability, responsibility, consequentialism, theory of justice and Sen’s justice approach of the development in order to find the correct sustainable solution for the future. We conclude that the practice of sugar cane farming and agriculture of Maharashtra is unethical and should be stopped immediately.

In India, CPSEs—Central Public Sector Enterprises—are the government-owned corporations in which, majority (51% or more) of the paid share capital is either held by central government or by any state government or partly by the central government and partly by one or more state governments. According to the Government of India, Public Enterprise Survey Report—2017–18, the top three CPSE’s are IOL—Indian Oil Corporation Ltd, ONGC—Oil and Natural Gas Corporation Ltd, and NTPC—National Thermal Power Corporation Ltd, contributing 13.37, 12.49, and 6.48%, respectively, to the total profit earned by the PSEs during 2017–18. CSR—Corporate Social Responsibility—in India is mandatory in nature. According to section 135 of Companies Act 2013, which came into effect from April 01, 2014, any company with a Net Worth of ₹500 crore or more, or a Turnover of ₹1,000 crore or more, or a Net Profit of ₹5 crore or more during the immediately three preceding financial year are required to spend 2% of their Net Profits on CSR programs as per Schedule VII of the Companies Act 2013. Such companies are required to form a CSR committee, formulate a CSR policy, and implement projects in accordance with Schedule VII of the Act and mandatorily report it in their annual reports in the prescribed format. The mandatory CSR reporting facilitates the company to demonstrate its commitment toward the society and also act as a communication tool to engage with different stakeholders, including shareholders, regulators, communities, customers, and society at large. Several Central Public Sector Enterprises (CPSEs) under the aegis of Government of India are regularly undertaking various social initiatives and fulfill their corporate social responsibility toward the society and the nation. This research paper reviews the corporate social initiatives undertaken by the top three CPSEs of India as per the Public Enterprise Survey report—2017–18. The duration of this research work is for the period of 04 years starting from 2014–15 to 2017–18.