Governance and the legitimacy of Corporate Power: A Path for Convergence of Heterodox Economics?

Stanfield, James Ronald; Carroll, Michael

doi:10.1080/00213624.2004.11506695

Cited by 23 publications

(13 citation statements)

References 4 publications

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“…On one hand, the business legitimacy is derived from the perceived legitimacy of CG practices. The aim is to ensure that corporate power is wielded for the benefit of the society to gain public confidence (Stanfield and Carroll 2004;Wilson 2004).…”

Section: The Impacts Of Esg Ratings In the Context Of Political Volatmentioning

confidence: 99%

The financial and market consequences of environmental, social and governance ratings

Aboud

Diab

2019

SAMPJ

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Purpose This study aims to examine the combined impact of environmental, social and governance (ESG) ratings on the market and financial performance of Egyptian companies during the period from 2007 to 2016 and, thereby, determines the influence of the recent political revolutions –that broke out in the MENA region in early 2011 – on the association between ESG practices and corporate performance. Design/methodology/approach The present work uses data from the S&P/EGX ESG index, which is the first of its kind in the MENA region. The ESG index is designed to increase the profile of companies listed on the Egyptian Exchange and is expected to boost the level and quality of ESG practices in the Egyptian context. The sample includes the 100 most active Egyptian companies in the Egyptian Stock Exchange as measured by the EGX 100 index in the financial year that ended in 2016. The sample begins in 2007, concurrent with the start of the ESG index, and ends in 2016. The period from 2007 to 2010 represents the pre-revolution period, and the period from 2012 to 2016 is the post-revolution period. Findings Firms with high ESG ratings are found to enjoy a better financial and market performance. The authors found some evidence that the influence of ESG ratings on financial performance is more obvious after the revolutions than before the revolutions. Practical implications This study provides insights regarding the impact of political events on the market in the Middle East region. Despite its increasing economic and political importance, this region still suffers from inadequate attention in the literature. The present work investigates the variances that evolved out of the events that started in early 2011 and the implications of these events on the market. The results of this study have implications for regulators and investors in the Egyptian stock market. The authors believe that the relatively new S&P/EGX ESG index provides a way to enhance ESG ratings in Egypt. Social implications The results of the present study provide insights for policymakers regarding the usefulness of the sustainability indices. Originality/value The present results contribute to the growing literature on the economic consequences of ESG ratings, especially in relation to a context characterized by intense political/revolutionary changes. In particular, this study contributes to the few works that have addressed the economic implications of ESG ratings in emerging markets.

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Section: The Impacts Of Esg Ratings In the Context Of Political Volatmentioning

confidence: 99%

The financial and market consequences of environmental, social and governance ratings

Aboud

Diab

2019

SAMPJ

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“…On the other hand, there are three power models, which include power-responsibility model involving two principles; firstly the social power equation, which represents the notion that the greater the power of the corporation, the greater the social responsibility and the iron law of responsibility, which predicts that where corporations do not use their power, they tend to lose it (Davis, 1960(Davis, ,1967; secondly the 'Techno-structure' alluding to the bureaucratic structure of the corporations exercising control and influence over the larger economic, political and social context (Galbraith, 1978) and finally the interpenetrating model stressing a system of interpenetration with society affecting business, as business affects society, a kind of symbiotic relationship in areas of mutual interest (Preston and Post, 1975). To this generalised classification, can now be added the new power model approach of 'powerlegitimacy', examining questions of the legitimacy of corporate power within modern society; both in the sense of power being exercised legitimately (Stanfield and Carroll, 2002) and in the sense, of having legitimacy for the exercise of such power (Palazzo and Scherer, 2006).…”

Section: Introductionmentioning

confidence: 99%

Theorising Corporate Social Responsibility as an Essentially Contested Concept: Is a Definition Necessary?

2009

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“…Conversely, when the corporate governance system is viewed as being illegitimate, national income and wealth stagnates and/or the economic system is typically perceived as being unfair. Hence, the legitimacy of the corporate governance system is pivotal to national and even global economic systems (Gold & Dienhart, 2007;Stanfield & Carroll, 2004).…”

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confidence: 99%

Institutional Antecedents of Corporate Governance Legitimacy

Judge

Douglas

Kutan

2008

Journal of Management

185

209

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The authors studied panel data for corporate governance ratings in 50 countries between 1997 and 2005 to understand what the country-level predictors of corporate governance legitimacy might be. Using neo-institutional theory, they found that all three pillars of institutionalization influenced perceptions of corporate governance at the national level—specifically, (a) the greater the extent of law and order, (b) the more the culture emphasized global competitiveness, and (c) the less the prevalence of corruption, the higher the corporate governance legitimacy within a nation. This study refines and extends the comparative corporate governance literature, as well as the neo-institutional perspective.

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Governance and the legitimacy of Corporate Power: A Path for Convergence of Heterodox Economics?

Cited by 23 publications

References 4 publications

The financial and market consequences of environmental, social and governance ratings

The financial and market consequences of environmental, social and governance ratings

Theorising Corporate Social Responsibility as an Essentially Contested Concept: Is a Definition Necessary?

Institutional Antecedents of Corporate Governance Legitimacy

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