Download e-book Corporate Social Responsibility in KMUs (German Edition)
Insofar, the general link between corporate governance variables, as well as firm performance and disclosure can be transferred to the growing research activities in corporate governance and CSR management and disclosure by modifying the existing models. By taking the gender diversity in board composition into account, several possible theories concerning CSR reporting can be supported. For instance, Hillman et al. Thus, the greater efficiency of monitoring activities can be explained by better information processing and a willingness on the part of the supervisory committee to engage in dialogue [ 16 ].
This could result in a higher intensity in sustainability reporting. This phenomenon suggests that conflicts of interest arise more often among male board members since memberships with multiple groups and cross-shareholding has been more frequent with men than women in the past.
Corporate Social Responsibility in Germany
In recent years gender diversity has been empirically examined in relation to company performance. An influence of CSR performance regarding gender issues could affect the intensity of sustainability reporting. Thus, the influence of gender diversity on CSR must be considered. The predominance of this research can be attributed to its comparative simplicity of categorization as well as to the political debate that has been ongoing for many years about whether a quota of women on boards should be established by law.
Studies have shown a pronounced heterogeneity of results in this area, which means that a causality between gender diversity and firm performance remains uncertain. While some have found a positive relation e. Gender diversity has been taken into account more frequently when analyzing its impact on CSR reporting. Liao et al. Furthermore, Zhang et al.
- Public Health and Infectious Diseases.
- Mittelstand - Wikipedia;
- Navigation menu!
- Editorial: SMEs or… Mittelstand? - CEA-PME.
- Corporate Social Responsibility – A Comparative Analysis of Germany and the USA!
- Old Granny Mac’s Curiosity Shop?
Thus, board composition can be classified as an effective approach to increase moral legitimacy of the society. Galia et al. The positive effects on board effectiveness are mediated through increased board development activities and decreased level of conflict. Therefore, we expect that female supervisory board members will also have an impact on CSR reporting. In addition to diversity, empirical corporate governance research stresses the importance of appointing financial experts to the supervisory board in order to guarantee an appropriate quality of corporate governance.
Empirical research suggests that the independence of members is directly related to their financial expertise. For this reason, it is impossible for board members without sufficient financial expertise to give advice to other board members. The economic influence of financial experts has frequently been the subject of empirical studies. Wild [ 29 , 30 ] and DeFond et al. Corresponding findings have also been found for combinations of independent financial experts e. Since the economic effects of financial expertise on CSR reporting have so far received comparatively less attention, a research gap clearly still exists.
Jizi et al. This supports the assumption that financial expertise alone is not sufficient to have an effect on CSR reporting.
Table of Contents
Michelon et al. These are renowned scientists, politicians, and high-ranking executives from the military and non-profit organizations who have a greater social impact. In the mentioned study, these board members are said to exert a positive influence on CSR reporting. These findings are confirmed by De Villiers et al. Thus, the following Hypothesis 2 can be deduced.
Agency theory, for instance, explains the importance of the independence of monitoring persons from company management. Independence represents a necessary condition for monitoring measures with the aim of achieving the best possible CSR reporting. The subject of empirical corporate governance research is, for instance, the influence of independent members on the board on earnings quality [ 38 ], the existence and prevention of management fraud [ 39 ], as well as the quality of the external audit [ 31 ] and the cost of capital of the company [ 40 ].
Therefore, the necessity for an internal division between executive and supervisory tasks on management boards can be justified by agency theory. This theory states that management is mainly guided by the intent to maximize its own profit and wealth on the one hand while shirking on the other [ 41 ].
GNF - Conservation of Resources
In the so-called CEO model, where the chief executive officer CEO is also the chair of the board, major conflicts of interest can arise [ 42 ]. There is increased risk when companies carry out their own assessments as the chairperson of the board needs to evaluate situations that are associated with his or her own functions as CEO. However, appropriate management advice by the board necessitates a comprehensive knowledge of business strategy.
There are many studies on the CEO model in which the impact on company performance on the US capital market has been analyzed. There is no solid evidence of any positive [ 43 ] or negative connection [ 44 ].
A positive interconnection between the CEO model and reporting on greenhouse gas emissions was demonstrated by Prado-Lorenzo et al. Identical results were presented by Jizi et al. Li et al. In two-tier systems, an appropriate surrogate for the CEO model is the existence of former management board members on the supervisory board. The following hypothesis states that there is a negative impact according to the growing risk of conflicts of interest in two-tier systems, which can lead to a decrease in the intensity of CSR reporting.
- Table of Figures!
- Download e-book Corporate Social Responsibility in KMUs (German Edition)?
- Violin Concerto No. 2 in E Major: For Violin and Piano (Kalmus Edition).
- Gritos do Poeta: Poesias Reunidas (Portuguese Edition)?
- Navigation and service;
- Digital Heart?
- Download e-book Corporate Social Responsibility in KMUs (German Edition).
Both economic theory and empirical research are inconclusive in regard to the relationship between the frequency of the supervisory board meetings and the CSR reporting. There is evidence in support of a positive impact of frequency, but there is also evidence to the contrary. With regard to the economic principle of scarcity of time, arguments are taken from agency theory to suggest that a higher frequency of meetings is in the interest of stakeholders and that the additional time available would reduce agency costs [ 47 ]. Legitimacy theory provides the basis for a similar argument.
The dynamic business environment requires an increased frequency of meetings to ensure legitimacy. In particular, phenomena related to sustainability e. However, the assumption that an increased frequency of meetings inevitably raises the quality standard of corporate governance is questionable. Firstly, additional meetings also result in higher coordination costs.
Thus, a high number of meetings could lead to negative assessment effects [ 48 ]. Moreover, the members of the board could potentially decide to simply split the agenda between various meetings without expanding the agenda of corporate governance activities. Despite being easy to measure empirically, the effect of an increased frequency of board meetings on firm performance has been studied very rarely.
This might be due to the fact that little can be concluded from the frequency of meetings as a formal criterion for recruitment to the board. Vafeas [ 48 ], for instance, established a negative relationship between the number of meetings held each year and the company value for a sample of listed US companies covering the financial years — Surprisingly, there are in fact several empirical studies on this impact of board size on CSR reporting.
Van Staden et al. Therefore, we will analyze the following hypothesis. From the perspective of agency theory, an increase in conflicts of interest and coordination issues is related to a high number of board members, which in turn compromises corporate governance efficiency [ 50 ]. Large boards can result in flawed incentives in terms of free rider behavior [ 51 ].
The flexibility and dynamism of the decision-making process is reduced as the number of board members increases [ 52 ]. Insufficient critical self-reflection and a lower level of process discussion can be observed, resulting in higher agency costs [ 47 ]. Moreover, management monitoring requirements within the board are increased, thereby necessitating more time and specialist resources on a committee level [ 53 ]. Resource-based theory, however, suggests that broad factor endowments and consequently a higher number of board members should be endorsed. In line with the increased concentration of research on the impact of board size on performance, the economic impact on CSR reporting has frequently been examined.
Empirical studies that establish positive relationships refer initially to the board level [ 3 , 20 , 23 , 54 ].