S. Leanne Keddie and Michel Magnan
This paper aims to examine how the use of environmental, social and governance (ESG) incentives intersects with top management power and various corporate governance mechanisms to…
Abstract
Purpose
This paper aims to examine how the use of environmental, social and governance (ESG) incentives intersects with top management power and various corporate governance mechanisms to affect excess annual cash bonus compensation.
Design/methodology/approach
The authors use a novel artificial intelligence (AI) technique to obtain data about ESG incentives use by firms in the S&P 500. The authors test the hypotheses with an endogenous treatment-regression and a contrast test.
Findings
When the top management team has power and uses ESG incentives, there is a 32% reduction in excess annual cash bonuses implying ESG incentives are an effective corporate governance tool. However, nuanced analyses reveal that when powerful management teams with ESG incentives are from environmentally sensitive industries, have a corporate social responsibility (CSR) committee or have long-term view institutional shareholders, they derive excess bonuses.
Practical implications
Stakeholders will better understand management’s motivations for the inclusion of ESG incentives in executive compensation contracts and be able to identify situations which require closer scrutiny.
Social implications
Given the increased popularity of ESG incentives, society, regulators, boards of directors and management teams will be interested in better understanding when these incentives might be effective and when they might be abused.
Originality/value
To the best of the authors’ knowledge, this study is the first to examine the use of ESG incentives in relation to excess pay. The authors contribute to both the CSR and executive compensation literatures. The work also uses a new methodological technique using AI to gather difficult-to-obtain data, opening new avenues for research.
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Emilio Boulianne, Leanne S. Keddie and Maxence Postaire
This study seeks to identify how professional accountants in France are educated in sustainability; we examine the French accounting programs in regard to sustainability…
Abstract
Purpose
This study seeks to identify how professional accountants in France are educated in sustainability; we examine the French accounting programs in regard to sustainability accounting education recommendations.
Design/methodology/approach
We analyze a variety of documents to ascertain what comprises the typical accounting education program in France. Additionally, we conduct five interviews of various stakeholders to understand the importance of sustainability accounting and education in the French context.
Findings
We note an interesting paradox in the French context: while the government requires the reporting and auditing of corporate sustainability information, we find that sustainability is not greatly present in the government-funded French accounting education program. We determine that the government’s power in setting the education agenda combined with its budget restrictions and ability to defer responsibility to other parties has resulted in this paradox in the French setting.
Practical implications
This research draws attention to the consequences of society ignoring sustainability education for professional accountants.
Social implications
This paper contributes to the discussion on how to educate responsible professional accountants and the implications for the planet if accountants are not trained in sustainability.
Originality/value
This research contributes to the important domain of sustainability accounting education. We also explore additional implications for the accounting profession and the general public.
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Emilio Boulianne and S. Leanne Keddie
This study explores how Canadian CPAs (Chartered Professional Accountants) are trained in sustainability. The main research questions are: What place should sustainability take in…
Abstract
Purpose
This study explores how Canadian CPAs (Chartered Professional Accountants) are trained in sustainability. The main research questions are: What place should sustainability take in the accounting program? What place does sustainability occupy in the CPA accounting program? And, over time, has sustainability gained or lost ground within the Canadian professional accounting education program?
Methodology/approach
Content analysis and interviews.
Findings
We find that sustainability is not a key component of the CPA education program since its sustainability content has shrunk over the years. We believe that the groupthink phenomenon may have influenced the selection of CPA Competency Map participants (whose backgrounds reveal a lack of sustainability expertise) as well as the participants’ discussions. Additionally, a lack of consideration for society as a key stakeholder may have also influenced the shortage of sustainability content. Finally, power dynamics might have contributed to the financial accounting and reporting competencies dominating the new map.
Research limitations
We did not have access to the live meetings when the Map was created, although we conducted interviews with representatives involved in the process. This research is bound by a confidentiality agreement that limits us from providing sensitive details. However, we do not consider that these limitations undermine our contribution or reduce the relevance of our research.
Originality/value
Our research contributes to the under-researched domain of sustainability education and to understanding how groupthink, stakeholder theory and power dynamics may have contributed to the dearth of sustainability coverage in the new Canadian CPA program.