Supply chain sustainability governance lacks a framework connecting indirect greenwashing to the governance responses feasible under varying resource dependence constraints. Indirect greenwashing is defined as the transmission of misleading environmental claims from suppliers to lead firms that lack the informational or structural capacity to detect them. Prior research treats disengagement as the default governance response, abstracting from the resource-dependence conditions under which exit is neither economically nor operationally feasible. This paper asks how companies can respond structurally to indirect supplier greenwashing across varying configurations of resource dependence and environmental, social, and governance (ESG) transparency. Drawing on an integrative literature review, the paper develops the Indirect Greenwashing Strategies Prevention (IGSP) framework, a four-quadrant matrix that crosses supplier ESG transparency with buyer resource dependence to generate contingent governance prescriptions. Four strategic propositions are advanced, each associating a distinct governance logic with a relational configuration: mitigation, transformation, monitoring, and co-creation. The framework makes three contributions. First, it integrates resource dependence theory with the emerging stream of indirect greenwashing into a unified analytical structure. Second, it moves beyond the binary integration-versus-engagement logic that characterises prior upstream governance research. Third, it specifies the relational conditions under which blockchain-based transparency tools function as complements to governance rather than autonomous solutions.
Private equity (PE) has expanded into a major owner type over the last decades. With its ever-increasing relevance and the latest opening of the asset class to retail investors, controversies about its impact on their acquired companies’ innovation activities have recurrently intensified. However, research in this field lacks a coherent structure and remains insufficiently embedded within a broader context. Using a large corpus from the Web of Science (WoS) and EBSCO, this study presents a structured analysis of the literature body in the field, summarizing and synthesizing the current state of the art. The review reveals that PE ownership has an impact on the quantity and quality of research and development (R&D) outcomes at the acquired companies. A strong focus of research on the United States (U.S.) is found, and the predominant measurement of a company’s innovation through patent metrics and R&D expenditures is identified. The study yields implications for PE practitioners by providing an outlook on value-enhancing timing, innovation-based value creation, and divestment channel strategies. Policymakers gain new insights informing the design of PE-related legislative frameworks promoting innovation.
This study deals with the performance analysis and volatility estimation of conventional indices including Dow Jones, S&P 500, Brent Oil, Crude Oil and Gold and cryptocurrencies including Bitcoin and Ethereum for the period January 3, 2011 to November 26, 2021 for all of the indices except Ethereum for which the period chosen was from March 10, 2016 to November 26, 2021 due to late incorporation of the cryptocurrency. The stationarity, heteroscedasticity, and serial correlation of the data were considered. Time series regression using the GARCH model is applied for performance analysis and volatility estimation. GARCH (1, 1) estimates show the high performance of cryptocurrencies over the conventional indices, except Gold, which was insignificant, with Ethereum followed by Bitcoin being the most volatile among the different indices. However, Gold remains inert in response to the different indices. However, although the cryptocurrencies add to the country’s revenue, thus minimizing the deficits, there should still be proactive policies and practices to prevent the exploitation of stakeholders, especially for the sake of minority ones.
The operation of the board of directors constitutes a central mechanism of corporate governance. Directors play a critical role in monitoring top management and shaping managerial decisions. Environmental, social, and governance (ESG) performance has emerged as a salient dimension of contemporary strategic orientation, yet the role of institutional investors’ representative directors remains largely underexplored. These representatives, easily replaced by appointing institutions, can increase large shareholders’ control, potentially impairing governance and firm performance. This study investigates whether the presence of institutional representative directors is negatively associated with firm ESG performance. The empirical analysis is based on a panel of 1,722 listed non-financial firms in Taiwan from 2016 to 2024. Using correlation analysis and multiple regression estimation, the results indicate that a higher prevalence of institutional representative directors is associated with a deterioration in overall ESG performance. However, dimension-specific analysis suggests that such firms exhibit relatively stronger performance in the environmental and social dimensions. The adverse effect on overall ESG performance is primarily driven by a significant decline in the governance dimension.
This study examines the principal determinants of internal control quality (ICQ) in Egyptian non-financial listed firms, focusing on corporate governance attributes and firm-specific characteristics. ICQ is measured using survey responses from external auditors for the period 2013–2016, based on a balanced panel dataset of 236 firms listed on the Egyptian Stock Exchange (EGX). The findings indicate that board independence is positively and significantly associated with ICQ under a combined leadership structure, but exhibits a negative association under a separated structure. Ownership dispersion significantly enhances ICQ when leadership roles are separated, but becomes insignificant under a combined structure, suggesting that leadership concentration may empower block holders over minority shareholders, potentially weakening ICQ. Regarding leverage, the association with ICQ is positive under combined leadership and negative under a separated structure, indicating that concentrated leadership may strengthen creditor monitoring in highly leveraged firms, thereby improving ICQ. Overall, the results demonstrate that the effects of corporate governance and firm-level characteristics on ICQ are contingent upon the company’s leadership structure. This study contributes to the accounting literature by providing evidence from an emerging civil law environment and by extending the analysis of Chen et al. (2017), originally conducted in the United States. The findings offer policy implications for Egyptian regulators regarding internal control disclosure requirements and challenge the conventional view that combined leadership necessarily undermines transparency in emerging economies.
The paper analyses the role of artificial intelligence (AI) in supporting enterprise risk management and improving operational efficiency through a systematic review of 85 peer-reviewed articles published between 2014 and 2024. The aim is to develop a research agenda by mapping the current scientific literature on the contribution of AI to risk identification, prediction and mitigation, with a focus on its impact on organisational performance. This study provides a novel cross-sectoral perspective by systematically comparing public and private sector applications, an aspect that remains underexplored in the existing literature. The findings suggest that AI is increasingly positioned as a key enabler for predictive analytics and data-driven decision-making. However, the literature remains fragmented. The most significant gaps include a lack of empirical studies on implementation failures, insufficient integration of sustainability goals, and limited benchmarking between public and private sector applications. In particular, the public sector appears to be less dynamic in adopting AI than the private sector due to regulatory and structural constraints. Furthermore, the focus of the literature is more on citizen service delivery than on risk management, contributing to a misalignment between the two domains. By synthesising dispersed evidence and highlighting sector-specific differences, this article contributes an original framework for understanding how AI can support risk governance across organisational contexts. This article contributes a structured synthesis of existing knowledge and proposes future research directions to guide an effective and responsible integration of AI across organisational domains.
This study examines the relationship between managerial ability (MA) and quantitative environmental, social, and governance (ESG) disclosure metrics and investigates whether this relationship differs between manufacturing and non-manufacturing firms. Regression results show a significant and positive relationship between MA and ESG disclosure after controlling for executive- and firm-specific characteristics. The industry analysis indicates that this association is stronger among non‑manufacturing firms than among manufacturing firms. These results provide valuable insights for firms, practitioners, and investors regarding the impact of firm-specific factors on firms’ ESG disclosure decisions. The study’s contribution includes empirically linking a validated MA measure to detailed ESG disclosure and documenting industry-specific heterogeneity, thereby extending the governance-performance discourse to disclosure practices and informing both academic theory and market participants. These findings offer valuable insights for firms, practitioners, and investors regarding the impact of firm-specific factors on ESG reporting decisions.
This article examines whether auditor independence is compromised, resulting in a poor-quality audit when the auditors provide substantial non-audit services to their client. If the provision of non-audit services affects auditor independence, regulators and policymakers should take actions to eliminate them and provide fair financial reporting. Although earlier studies did not find any such evidence, subsequent studies provided evidence consistent with this (Gul et al., 2007; Lau & Mensah, 2009). This study uses the likelihood that a firm will violate Generally Accepted Accounting Principles (GAAP) (Beneish, 1999; Beneish & Vorst, 2022; Beneish et al., 2023), a proxy for audit quality, to examine auditor independence. The study’s results indicate that Fortune 500 firms, whose auditors provide significant non-audit services, tend to have a higher propensity to violate GAAP. The findings of this study, based on a historical event, have implications for regulators who consider making changes in any regulations on auditors’ independence, especially on the outsourcing of non-audit services.
The recent issue of the journal Corporate Ownership and Control is devoted to the issues of environmental, social, and governance (ESG), board practices, chief executive officer (CEO) practices, internal control, accountability, auditing, earnings management, etc.
Organizations operating in decentralized and multi-departmental structures frequently face persistent challenges related to budgetary slack and limited independent scrutiny in budgeting processes. This study develops a conceptual framework to examine how accountability architecture redesign can enhance internal cost governance. Adopting a deductive conceptual research methodology grounded in agency theory, behavioral decision research, and responsibility accounting literature, the paper proposes the constructive organizational friction (COF) model and formalizes the cross-functional budget governance mechanism (CFBGM). Although the study does not rely on empirical sampling, it systematically synthesizes established theoretical perspectives to construct testable propositions. The findings suggest that structural redistribution of evaluative authority may reduce confirmation bias, mitigate informational asymmetry, and strengthen cost scrutiny within recurring budgeting cycles. The model contributes to corporate governance scholarship by conceptualizing friction as an architectural governance mechanism capable of reinforcing sustained cost discipline without intensifying hierarchical monitoring.
The objective of this study is to explore the relationship between deferred taxes and the cost of debt in the South African setting. More specifically, this paper examines how different tax assets and different tax liabilities may affect the cost of debt. For instance, deferred tax liabilities (assets) may signal future tax payments (savings), which may increase (decrease) the risk premium and default risk charged by creditors. A quantitative approach is employed, using manually collected panel data from the annual reports of companies listed on the Johannesburg Stock Exchange (JSE) from 2013 to 2020. The empirical results show a positive association between deferred tax liabilities and the cost of debt. This suggests that creditors may interpret higher deferred tax liabilities as an indicator of future increases in debt or earnings uncertainty. Conversely, deferred tax assets are negatively correlated with the cost of debt, suggesting they are viewed as indicators of future benefits and improved financial performance, thereby reducing borrowing costs. These findings provide empirical evidence of the specific informational value of deferred taxes on the South African stock exchange. They offer valuable insights for financial managers seeking to optimize capital structures and policymakers aiming to improve financial reporting transparency.
This paper reassesses the relationship between central bank independence (CBI) and inflation dynamics in a panel of sixteen inflation-targeting countries over the period 2000–2020. To account for the potential endogeneity between inflation and institutional independence, we estimate a simultaneous equations model using three-stage least squares (3SLS). Governor turnover is employed as a proxy for de facto independence, while gross domestic product (GDP) growth and gross fixed capital formation are included as control variables. The results reveal a positive and statistically significant short-run association between CBI and inflation in several developing economies, contrasting with the conventional negative relationship documented for advanced countries. These findings suggest that the effectiveness of CBI depends critically on institutional maturity and fiscal conditions. Unlike earlier studies that assume a uniform disinflationary effect of independence, this paper provides evidence of heterogeneous and context-dependent outcomes, thereby contributing to the ongoing debate on the inflation–CBI nexus.
Risk disclosure is a central element of Solvency II’s third pillar to enhance transparency and market discipline, yet empirical research on the determinants of insurers’ risk disclosure remains largely neglected, particularly regarding corporate governance (CG) and ownership characteristics. This study provides the first evidence on the association between narrative risk disclosure and CG characteristics and extends the evidence on ownership determinants in the insurance sector under Solvency II. Using 462 solo Solvency and Financial Condition Reports (SFCRs) from 77 non-listed German life insurers in the reporting periods 2016–2021, the study finds that the volume of risk disclosure is positively associated with management board size, not significantly associated with management board gender diversity, and negatively associated with government ownership and mutual ownership. Except for the latter, the results hold across the two perspectives on risk disclosure and various robustness tests. Additional analyses reveal that risk disclosure has no significant association with supervisory board size, supervisory board gender diversity, or an incumbent Big Four auditor, which is consistent with the absence of regulatory requirements in Germany for supervisory board and auditor involvement in SFCR risk disclosure. Overall, this study suggests that CG and ownership characteristics are related to insurers’ narrative risk disclosure.
This study investigates the threshold effects of executive compensation on both financial and non-financial performance in the Nigerian insurance industry. Using panel data from 16 quoted Nigerian insurance companies (2010–2022), the study employs a dynamic panel threshold regression framework based on the generalised method of moments (GMM). The results reveal inverted U-shaped relationships across all metrics. Moderate increases in executive pay enhance profitability and market valuation, but excessive compensation leads to diminishing returns. Threshold points were identified at 202 per cent for return on assets (ROA), 273 per cent for Tobin’s Q (TOQ), and 544 per cent for corporate social responsibility (CSR). The findings suggest that boards should avoid open-ended incentive structures. Regulators can use these thresholds as benchmarks for assessing corporate governance quality and preventing rent-seeking behaviour. This study provides an empirical application of dynamic panel threshold regression to analyse executive compensation in the under-researched Nigerian insurance sector. By identifying specific inflection points for financial efficiency (ROA), market valuation (Tobin’s Q), and social legitimacy (CSR), the research moves beyond the traditional linear pay-performance debate. It offers a unique evidence-based framework for regulators like the National Insurance Commission (NAICOM) and corporate boards to optimize executive rewards, ensuring they incentivize performance without triggering managerial entrenchment or governance breakdown in a volatile emerging market.
This paper investigates how cyberattacks affect the market valuation of European financial institutions. Using an event study methodology on a sample of 31 cyber incidents affecting European financial firms between 2016 and 2024, we document a clear and statistically significant negative market reaction concentrated on the announcement day. Importantly, we find no evidence of abnormal price movements prior to disclosure, which is inconsistent with systematic insider trading. In contrast to prior studies that report pre-announcement abnormal returns (ARs) around cyber incident disclosures, our findings suggest that information leakages and insider trading may be less of a concern in the European financial sector. A time-trend analysis reveals diverging patterns: while the impact of non-confidential attacks has intensified, the market response to confidentiality breaches has weakened, consistent with improved disclosure and crisis management practices.
It is a puzzle that the institutionalization of institutions has not yet been well explained. The present study gives an answer by explaining why the accrual accounting (AA) practices introduced to public entities (PEs) in Sri Lanka failed through an empirical explanation of the loss of logic of appropriateness of the institution (i.e., AA practices) and the institutionalization (i.e., implementation process). Accordingly, institutional theory becomes the theoretical scope of this study. Engaging the longitudinal study for 26 years (1999–2025), the study espoused the interpretive stance, case study strategy, and theoretical deductive thematic analysis method. The data collection was carried out among the purposive sample cases. The sample cases selected are from the initiating agency, the implementing agency, the divergent voice, and the controlling agency. The study is significant since it explores that the logic of appropriateness has been lost at all the rostrum of institutionalization, causing an overall insignificant pressure to the PEs, and hence the AA reform failed in Sri Lanka. The study concludes that the failure of AA reforms is due to the loss of logic of appropriateness of the institution and the institutionalization.
Empirical research related to computer-assisted audit tools and techniques (CAATTs) has been limited as the developing information technology (IT) audit environment in Sudan expands. To address this limitation, this study examines the relationship between user-based drivers of CAATTs usage and perceived CAATTs usage outcomes in Sudanese auditing firms. By testing a conceptual framework with survey data collected from 234 auditors, we find that six of ten hypothesized variables are statistically significant and relate to CAATTs usage; notably, however, perceived ease of use, client pressure, industry pressure, and user trust were not. Furthermore, CAATTs usage was associated with higher levels of three of the four CAATTs outcomes: audit services, task effectiveness, and auditor performance. We conclude that our study provides a starting point for understanding CAATTs enabling and CAATTs benefiting factors in developing environments, but provides evidence that further investigation is warranted to encourage wider CAATTs usage and therefore enhance overall audit efficacy.
This study examines the effect of financial statement comparability on directors’ and officers’ (D&O) insurance coverage. Using a comprehensive sample of firms listed in the Taiwan capital markets, we find that the more comparable a firm’s financial statements are to its peers’, the less D&O insurance coverage the firm would purchase. The results remain robust after addressing potential concerns related to omitted variables, reverse causality, and sample selection bias. Consistent evidence emerges when we conduct change analyses and employ alternative measures of financial statement comparability. Furthermore, we document that higher comparability reduces abnormal D&O insurance coverage. Taken together, our findings suggest that enhanced financial statement comparability mitigates agency costs, as reflected in lower D&O insurance coverage, thereby benefiting shareholders.
he subprime mortgage crisis and the COVID-19 crisis have severely damaged banks’ image and the climate of trust they enjoy with their customers. As a result of this deterioration, social responsibility is increasingly being developed within banking establishments to overcome the undesirable effects of these crises. This study aims to evaluate the contribution of environmental, social, and governance (ESG) to the financial performance of banks. The final sample is made up of 52 banks from different countries, and our study covers the period from 2007 to 2020. The results show that the overall ESG score, environmental, social, and governance scores separately, and the bank size are positively correlated with banks’ financial performance measured by return on assets (ROA) and return on equity (ROE). On the other hand, debt is negatively correlated with the latter variables. Also, for more robustness, we assessed the effect of each ESG criterion on banks’ financial performance. The contribution of this work can be seen in the fact that it is the first multinational analysis including 52 banks to assess the relationship between ESG and financial performance during the period of the subprime and COVID-19 crises.
This paper investigates the interplay between chief executive officer (CEO) overconfidence, a prominent behavioral bias, and the governance role of inside debt. We argue that the well-documented effects of CEO overconfidence on corporate risk-taking and firm value are moderated by the structure of CEO compensation, specifically deviations from a firm-specific optimal level of inside debt, which is a structure of deferred and/or pensions meant to align CEOs with the risk facing traditional debtholders. Using a large panel of the United States (U.S.) firms, we find that overconfident CEOs are associated with larger negative deviations from optimal inside debt levels. Our results show that positive deviations from optimal inside debt mitigate the risk-taking behavior of overconfident CEOs, particularly in research and development (R&D) investment. Conversely, negative deviations amplify their risk-taking tendencies. Furthermore, we find that the positive effect of overconfidence on firm value is significantly stronger when constrained by above-optimal inside debt. These findings contribute to the behavioral corporate finance literature by highlighting the importance of tailoring executive compensation to the psychological traits of managers.
