Shareholder activism, corporate social responsibility and financial performance

<p>The thesis examines the influence of shareholder activism on corporate social responsibility (CSR) disclosure of targeted firms and its spillover effects on CSR disclosure, corporate social performance (CSP) and financial performance (FP) respectively in peer firms. The research is motivated by filling the research gaps in prior literature and providing insights to shareholders, the management and regulatory bodies in practice. The thesis consists of three parts. Firstly, this thesis reviews the literature surrounding shareholder activism by conducting narrative reviews of 92 working papers and publications and meta-analysis on 55 working papers and publications, published during 2000-2017 period. Theories from prior literature, namely agency theory, stakeholder theory and stakeholder salience theory are analysed through narrative review analysis at the beginning of the chapter. Then, the analysis of narrative review also documents mixed findings of the associations among shareholder activism and FP and CG and CSP, including spillover effects. That is, the associations could be positive, negative and not significant in prior literature. The results of meta-analysis indicate that shareholder activism improves FP and CSP respectively. In addition, the thesis also examines the major types of shareholder activists and main forms of shareholder activism. Overall, through the analysis, the thesis identifies the research gaps of prior literature, thereby pointing out future research directions. Secondly, by employing shareholder proposals from Standard & Poor's 1,500 (S&P 1,500, hereafter) companies in the United States as a proxy of shareholder activism during 2006-2014 period with 13,572 separate observations, this thesis examines whether the whole sample of shareholder activism, institutional shareholder activism and coordinated shareholder activism could influence CSR disclosure level respectively. Simultaneously, this thesis also investigates whether shareholder activism affects CSR disclosure level given the other corporate governance mechanisms, namely board size, the presence of female directors, outside directors and CEO incentives. The results typically demonstrate that: (1) while shareholder activism negatively relates to CSR disclosure level, larger board size or the presence of female directors combined with shareholder activism directly relates to maintaining better CSR transparency; (2) coordinated shareholder activism could decrease social disclosure level. The findings also indicate that CSR disclosure provides an approach to strategically manage risks. Thirdly, the thesis explores spillover effects from different types of shareholder activism on CSR disclosure level, CSP and financial performance by using data gathered from S&P 1,500 companies during 2007-2014 period. The findings show that shareholder activism increases social disclosure level and environmental disclosure level in peer firms. It also shows that there is a weak positive association between shareholder activism and CSP. It therefore demonstrates the weak influences of shareholder activism in changing firms’ CSP. It also illustrates that institutional shareholder activism has an advantage over coordinated shareholder activism in terms of increasing corporate transparency. In this manner, it indicates that the collective action problem among coordinated shareholders could also attenuate the impact of shareholder activism in peer firms. The thesis contributes to the literature on shareholder activism practically and theoretically. The findings provide useful insights to shareholders, management teams and regulatory bodies for their policy-making. Beyond the practical contribution, the thesis also provides empirical evidence to stakeholder salience theory and analyses the collective action problem.</p>

Shareholder activism, corporate social responsibility and financial performance

<p>The thesis examines the influence of shareholder activism on corporate social responsibility (CSR) disclosure of targeted firms and its spillover effects on CSR disclosure, corporate social performance (CSP) and financial performance (FP) respectively in peer firms. The research is motivated by filling the research gaps in prior literature and providing insights to shareholders, the management and regulatory bodies in practice. The thesis consists of three parts. Firstly, this thesis reviews the literature surrounding shareholder activism by conducting narrative reviews of 92 working papers and publications and meta-analysis on 55 working papers and publications, published during 2000-2017 period. Theories from prior literature, namely agency theory, stakeholder theory and stakeholder salience theory are analysed through narrative review analysis at the beginning of the chapter. Then, the analysis of narrative review also documents mixed findings of the associations among shareholder activism and FP and CG and CSP, including spillover effects. That is, the associations could be positive, negative and not significant in prior literature. The results of meta-analysis indicate that shareholder activism improves FP and CSP respectively. In addition, the thesis also examines the major types of shareholder activists and main forms of shareholder activism. Overall, through the analysis, the thesis identifies the research gaps of prior literature, thereby pointing out future research directions. Secondly, by employing shareholder proposals from Standard & Poor's 1,500 (S&P 1,500, hereafter) companies in the United States as a proxy of shareholder activism during 2006-2014 period with 13,572 separate observations, this thesis examines whether the whole sample of shareholder activism, institutional shareholder activism and coordinated shareholder activism could influence CSR disclosure level respectively. Simultaneously, this thesis also investigates whether shareholder activism affects CSR disclosure level given the other corporate governance mechanisms, namely board size, the presence of female directors, outside directors and CEO incentives. The results typically demonstrate that: (1) while shareholder activism negatively relates to CSR disclosure level, larger board size or the presence of female directors combined with shareholder activism directly relates to maintaining better CSR transparency; (2) coordinated shareholder activism could decrease social disclosure level. The findings also indicate that CSR disclosure provides an approach to strategically manage risks. Thirdly, the thesis explores spillover effects from different types of shareholder activism on CSR disclosure level, CSP and financial performance by using data gathered from S&P 1,500 companies during 2007-2014 period. The findings show that shareholder activism increases social disclosure level and environmental disclosure level in peer firms. It also shows that there is a weak positive association between shareholder activism and CSP. It therefore demonstrates the weak influences of shareholder activism in changing firms’ CSP. It also illustrates that institutional shareholder activism has an advantage over coordinated shareholder activism in terms of increasing corporate transparency. In this manner, it indicates that the collective action problem among coordinated shareholders could also attenuate the impact of shareholder activism in peer firms. The thesis contributes to the literature on shareholder activism practically and theoretically. The findings provide useful insights to shareholders, management teams and regulatory bodies for their policy-making. Beyond the practical contribution, the thesis also provides empirical evidence to stakeholder salience theory and analyses the collective action problem.</p>

Nonprofit Online Responsiveness: An Exploratory Field Experiment in China

This article assesses sources of nonprofit responsiveness and identifies potential drivers for responsiveness, using an online field experiment involving philanthropic foundations in China ( N = 3,254). Baseline requests were sent out to the foundations through emails and vignettes were applied to treatment groups by inserting different identity claims or prompts into the contents of the emails. Experimental results showed that, compared with the control group, potential donors were more likely to receive responses, claims concerning government ties or media backgrounds resulted in fewer responses, and citing legal obligations could increase the odds of receiving satisfactory responses. Interpreting the results with reference to stakeholder salience theory, we argue that potential donors are the most salient stakeholders to foundations. Donor requests and legal obligations are the most effective forces driving foundations’ responsiveness in China.

THE EFFECT OF POLITICAL CONNECTIONS ON FORWARD- LOOKING INFORMATION DISCLOSURE FROM THE PERSPECTIVE OF THE STAKEHOLDER SALIENCE THEORY

This study examines the effect of political connections (PCONS) on firms’ disclosure of forward-looking information choices in the context of developing countries. Using multivariate regression of panel data comprising 360 firmyear observations of non-financial firms listed on Bursa Malaysia between years 2014 and 2017, PCONS are found to be positively associated with disclosure of forward-looking information. However, such relationship only exists for non-financial forward-looking information. Using the stakeholder salience theory to further contribute to the body of knowledge, the strength of the connections suggests that a high composition of politically-connected directors on the board promotes greater information about the future in firms’ disclosure. The common connection through ownership of firms in emerging countries suggests the effective role of institutional shareholders in improving forecasting activities through high disclosure of forward-looking information. The study suggests a better appreciation of the hierarchical role of politically-connected directors on the board of types of forward-looking information presented to the stakeholders.

Eco-Efficiency and Private Firms’ Relationships with Heterogeneous Public Stakeholders in China

Private firms have been struggling to simultaneously achieve both environmental and economic goals. The concept of eco-efficiency captures the extent to which firms gain competitiveness through environmental management. Based on stakeholder salience theory and organizational learning theory, this study proposes that relationship with public stakeholders can hinder or promote private firms’ eco-efficiency. Our findings showed that firm eco-efficiency is reduced by a relationship with the government but is enhanced by relationships with non-governmental organizations (NGOs). This study also found that the effects on eco-efficiency of a firm’s relationship with public stakeholders are contingent on firm size. The findings of this study shed light on the organizational learning perspective of eco-efficiency and multi-stakeholder management by theoretically and empirically differentiating the effects on firm eco-efficiency of relationships with the government and NGOs.

Change recipients’ resistance and salience to organizational re-creation: the effects of participation and coercion strategies on change derailment

Purpose For change initiatives to succeed, change managers are required to address recipients’ needs. Although strategies to deal with change recipients and their resistance are widely explored, there is a dearth of studies that consider the different salience of change recipients. This paper aims to propose a framework on the effects of participation and coercion as strategies to deal with change recipients and their impact on change derailment. Design/methodology/approach Conceptual based upon that change recipients are classified into three levels according to their salience in relation to change. Based upon the recipients’ power and legitimacy in relation to change, stakeholder salience theory constitutes a theoretical provision used in this research to categorize the salience of change recipients. Findings The framework integrates change recipients’ salience levels (i.e. definitive, expectant and latent) and the effects of participation and coercion strategies on change derailment in times of organizational re-creation. The paper develops six hypotheses, which yield insights that advance the understanding of dealing with change recipients in the context of organizational re-creation. Research limitations/implications The paper is conceptual and not yet tested empirically. To empirically test the framework, research adopting survey methodology to gather data from organizations that experience a re-creation change as defined in this paper. The unit of analysis for future research is described in this paper and it is how organizational re-creation is defined in this paper. Originality/value Stakeholder salience theory is used to develop a framework that combines three classes of change recipients’ salience, as well as the effects of two strategies to deal with them and their resistance (i.e. lack of involvement and coercion) to examine their influence on change derailment. The potential contribution will expand the current literature discussed in this paper about dealing with change recipients’ resistance to change.

Do Employee Fraud Reporting Intentions Differ between For-Profit and Nonprofit Organizations?

ABSTRACT Scant coverage of fraud in nonprofit organizations and smaller firms exists despite surveys and headlines indicating fraud prevalence is at greater levels among these firms than at for-profit and larger firms. Applying a combination of stakeholder salience theory and whistleblowing theory, this paper establishes a background for such comparisons. Results of a survey of 153 fulltime employees uncover differences in whistleblowing between for-profit and nonprofit organization types. We find those who work at for-profit organizations are more likely to whistleblow than those who work for nonprofit organizations. The results and supplemental analysis suggest whistleblowing intention for fraud is significantly more likely for larger organizations (measured by number of employees) regardless of organization type. Further, as geographic reach increases, for-profit employees are increasingly likely to report.

Accountability perception of Thai Government: to whom and what counts

PurposePublic sector entities face conflicting demands from stakeholders. The literature suggests identifying and prioritizing stakeholders can improve accountability. Thailand, an emerging economy, and currently under military rule, provides an interesting context to investigate stakeholder tensions. The purpose of this paper is to investigate how and why the Thai Government bureaucrats prioritize their stakeholders.Design/methodology/approachThe study draws on the managerial branch of stakeholder theory and stakeholder salience theory to examine the importance of various stakeholders and of the stakeholders’ salient attributes perceived by the Thai Government bureaucrats in discharging its accountability. The study uses a survey questionnaire mailed out to the central government departments in Thailand.FindingsThe study finds that single most important stakeholder is the Office of the Auditor-General. The public is perceived as the second. This is dissimilar to the western-centric accountability focus on the public, and challenges claims by the Thai military coup that it will bring democratic rule. “Legal power” supporting the stakeholders’ claims for government accountability is the most influential attribute in determining stakeholder importance and prioritizing attention for government bureaucrat’s discharge of its accountability.Originality/valueSuch findings increase understanding of the applicability of stakeholder theory and stakeholder salience theory in the context of military rule in emerging economy countries such as Thailand. This paper also provides suggestions of how stakeholders may shape their salience in order to gain priority. This also provides an immediate suggestion for reforms of the Thai regulatory frameworks in prioritizing stakeholders and promoting the government’s greater accountability.