Corporate Ethics and Corporate Governance

Zimmerli, Walther; Richter, Klaus; Holzinger, Markus

doi:10.1007/978-3-540-70818-6

Cited by 56 publications

(9 citation statements)

References 186 publications

(125 reference statements)

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“…Friedman (2007) in his study argued that the management of the firm invests in CSR due to selfish reasons such as enhancing reputation of the firm at the expense of interest of the firm's shareholders. Similarly, Barnea and Rubin (2010), taking inspiration from Jensen and Meckling's principal-agent theory (1976), hypothesized the overinvestment hypothesis reasoning that as CSR investments are considered as a chief agency relationship between senior executives and shareholders therefore the agents of the firm may over invest to enjoy the benefits from the activities.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

The nonlinear effect of executive compensation on corporate social responsibility performance

Pareek

Sahu

2023

RAMJ

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PurposeTaking cues from the fact that there remains a dearth in the establishment of theoretical and empirical relationship between executive compensation and corporate social responsibility (CSR) performance of the firms, this study attempts to explore the non-linear relationship between the said variables.Design/methodology/approachThe study utilizes a strongly balanced panel data set of 179 non-financial National Stock Exchange (NSE) 500 listed firms for the study period of 2015–2020. The study further employs both static as well as Arellano-Bond dynamic panel model under generalized method of moments (GMM) framework to establish the relationship between executive compensation and CSR performance of the sampled firms.FindingsThe study acknowledges an inverted U-shaped relationship between executive compensation and environmental, social and governance (ESG) score of the firms. According to the robust estimator, an increase in the level of executive compensation is said to affect CSR performance positively until it surpasses a threshold level of 18.7 percent.Practical implicationsOne of the major takeaways that the study provides for the corporate policymakers is that the level of compensation can only motivate the executives to take up socially responsible work up to a certain level surpassing which the executives becomes resistant towards any benefits provided by the CSR performance and get inclined towards economical performances of the firm. At the later stage, the economical expansionary investment benefits overweigh the personal career benefit gained by the executives from the CSR performances of the firm.Originality/valueThe nonlinearity relationship between executive compensation and CSR performance and the threshold level providing the two-fold effect of compensation on the CSR performance of the firms attempted by this study is a rare attempt in an emerging economy like India.

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Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

The nonlinear effect of executive compensation on corporate social responsibility performance

Pareek

Sahu

2023

RAMJ

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“…Milton Friedman's arguments have been the most debated aspect of the literature on CSR. Its most popular version in the book titled Corporate Ethics and Corporate Governance (Zimmerli, Richter & Holzinger, 2007) has been cited 25,675 times (Google Scholar accessed on May 24, 2022). Friedman (1970) argues that since a corporation is an artificial person, "business as a whole cannot be said to have responsibilities" (p. 3), even in a vague sense and asks that the "doctrine of the social responsibility of Business" should examine and clearly state precisely "what it implies and for whom" (Friedman, 1970, p. 3).…”

Section: The Debate Surrounding Whether Business Has Social Responsib...mentioning

confidence: 99%

Corporate Social Accountability: Lessons from Coca-Cola’s Conflict at Plachimada

Motwani¹

2023

Int. J. Appl. Res. Manag. Econ.

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This paper explains the process by which a global corporate giant was made to account for its social responsibility by studying the conflict between Coca-Cola company and the local community in Plachimada (a small village in the south Indian state of Kerala) as a case study. The paper argues that the company suffered a long judicial battle and loss of reputation and finally lost ‘its license to operate’ for not discharging its responsibility to the local community (a major stakeholder). The analysis of the events in this conflict seems to suggest that the combination of new social movements and consumer activism in defence of human rights and environmental protection holds the promise of making the large global corporations more accountable for their social responsibilities. Fuelled by the speed of the internet and the resultant reach of media (including social media), these movements have become more effective and stronger during the last twenty years and the corporates therefore can ignore the responsibilities that society expects them to embrace only at their own peril.

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“…One of the most important responsibilities of managers in Corporate Governance is to promote a public opinion regarding accountability of the organization performance. The response time of admission requires moral and ethical consequences that follow (Zimmerli, Richter, & Holzinger, 2007).…”

Section: The Purpose Of Corporate Governancementioning

confidence: 99%

A Dialectic Model of Development of Stakeholders’ Theory and Corporate Governance: from Hume Utilitarianism to Aristotelian Virtue Ethics

Doaei¹

2012

International Journal of Financial Research

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Nowadays, developing the opinion of anti-corporation has formed a large part of biases and social judgments of the management science. Among these, because of performance of some companies and managers, the attention to the ethical issues in the field of theorizing and management practices has increased and has been considered by researchers in individual and organizational levels. In this study, the authors attempt to define a general orientation of management theories by emphasizing on the two theories of agency and stakeholders in the form of offering a dialectic model of developing the Stakeholder Theory and Corporate Governance. They intend to show that despite the proposed criticisms, the organizations are moving toward developing the ethical behaviors in their series and this movement is due to the change of ethical fundamentals of corporation theory from profit-orientation of Hume to Virtue Ethics of Aristotle.

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Corporate Ethics and Corporate Governance

Cited by 56 publications

References 186 publications

The nonlinear effect of executive compensation on corporate social responsibility performance

The nonlinear effect of executive compensation on corporate social responsibility performance

Corporate Social Accountability: Lessons from Coca-Cola’s Conflict at Plachimada

A Dialectic Model of Development of Stakeholders’ Theory and Corporate Governance: from Hume Utilitarianism to Aristotelian Virtue Ethics

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