A study of governance practices in corporate foundations

Mindlin, Sérgio Ephim

doi:10.5700/rausp1051

Cited by 5 publications

(6 citation statements)

References 8 publications

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“…Even though the authors found a relationship, this indirect way to measure IC has several failings, as it counts on opinions, not disclosure data, to identify value. This fact goes to the wrong way of what investors, analysts, and the stock exchange commission of any country desire (Copeland et al, 2010;Mindlin, 2012). Marr and Schiuma (2004) emphasize the importance of IC in creating value and of applying rigorous research methods to measure the effectiveness of each existing model.…”

Section: Ic In Tangible Intensive Firmsmentioning

confidence: 99%

Intellectual capital in tangible intensive firms: the case of Brazilian real estate companies

Britto

Monetti

Lima

2014

Journal of Intellectual Capital

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Purpose-The purpose of this paper is to clarify whether value created by real estate (RE) companies (tangible intensive firms) can be evaluated better using intellectual capital (IC) elements (human, structural and physical assets) or traditional accounting measures of efficiency (ROIC and profit margins). Design/methodology/approach-Correlations and cross-sectional OLS regressions with robust standard errors were used to find relationships between variables explaining value creation. Data were collected from 2007 to 2011 for Brazilian RE firms. To measure market risk, the authors used a new approach to deal with low liquidity. VAIC and I j ratios were used as IC proxies even though both have limitations. Findings-IC has a significant inverse relationship with market value. The more valuable companies showed lower levels of IC except for CEE which explains value as much as ROIC. Also, IC does not influence market risk caused by size and leverage and does not explain ROIC. Research limitations/implications-The limitations of this study result from time and proxy variables. IC was measured by a VAIC model using data from a period of intense volatility. To increase the robustness of the conclusions, other variables should be used as proxies for IC and the results compared. The VAIC model has certain deficiencies in measuring IC. Practical implications-Managers and investors in the RE sector need to change the way they create value and measure value creation. The low level of HC explaining either ROIC or market value is a signal of low innovation which, combined with high CEE, induces a short-term outlook. Originality/value-This study opens discussion of IC in the Brazilian RE sector. A new methodology for identifying value creation is necessary for better evaluation and determining the fair value of firms.

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Section: Ic In Tangible Intensive Firmsmentioning

confidence: 99%

Intellectual capital in tangible intensive firms: the case of Brazilian real estate companies

Britto

Monetti

Lima

2014

Journal of Intellectual Capital

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“…As a specific and new way of CP, corporate foundations play a very important role in public welfare and charity (Westhues & Einwiller, 2006). Corporate foundations are a kind of non-profit organizations established by profitable firms and thus show highly dependence on their founder firms in terms of resources and management, leading to their lack of independence and autonomy (Mindlin, 2012). Therefore, corporate foundations may be used as substantial tools by their founder firms to pursue economic benefits (Xu et al, 2018).…”

Section: Further Analysis Based On Corporate Foundationsmentioning

confidence: 99%

Dual effects of corporate philanthropy on firm value: Evidence from China

Zhang

Kong

et al. 2023

Manage Decis Econ

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This study demonstrates that corporate philanthropy (CP) has dual attributes by theorizing and testing the existence of rational CP and irrational CP and their opposite effects on firm value. The empirical results show that rational CP has a positive effect on firm value, while irrational CP has a negative effect on firm value. Further analysis shows that the negative effect of irrational CP on firm value is stronger in firms with corporate foundations and in state-owned firms. The findings can coordinate the theoretical contradiction and empirical divergence between the efficiency view and the agency view existing in the current research.

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“…As the trustee, the foundation is responsible for giving donated assets to beneficiaries according to the donor's wishes. As an independent nonprofit organization, "non-distribution constraint" is an important characteristic of foundations, that is, after donors donate property to the foundation, the foundation cannot distribute net income to the donors (Mindlin, 2012). Because the donor's donation to the foundation is a unilateral legal act without forming consideration, it will not form an equal power and obligation relationship with the donated property.…”

Section: Theoretical Analysis and Research Hypothesismentioning

confidence: 99%

The Effects of Listed Company Charitable Foundation on Business Relationship of Supply Chain: Based on the Empirical Research of Corporate Social Responsibility

Chang,

Li,

Xiao

2023

REA

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<p class="MsoNormal" style="text-align: justify;">The Public Welfare Foundation of a listed company is a non-profit organization with independent legal personality. It is established and funded by a listed company. The purpose of establishing a foundation for a listed company is generally to carry out charitable activities and make important contributions to charitable causes. However, due to the special power separation model, the autonomy of the foundation is poor, and there may be serious agency conflicts, ultimately leading to listed companies becoming beneficiaries of the foundation's charitable activities. We have found from the perspectives of commercial credit, sales, and cooperative relationships that social responsibility initiating organizations (listed companies) can obtain potential benefits from social responsibility fulfilling organizations (listed company public welfare foundations) in supply chain commercial relationships, that is, listed companies that establish public welfare foundations have good supply chain commercial relationships. When a listed company and a public welfare foundation have a close relationship in terms of fund donation, decision-making, business, and naming, the public welfare foundation has a strategic preference in selecting project names, project service areas, project beneficiaries, and project service areas. It prioritizes the interests of the listed company, enabling the listed company to obtain better supply chain business relationships.</p>

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A study of governance practices in corporate foundations

Cited by 5 publications

References 8 publications

Intellectual capital in tangible intensive firms: the case of Brazilian real estate companies

Intellectual capital in tangible intensive firms: the case of Brazilian real estate companies

Dual effects of corporate philanthropy on firm value: Evidence from China

The Effects of Listed Company Charitable Foundation on Business Relationship of Supply Chain: Based on the Empirical Research of Corporate Social Responsibility

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