Carine Girard and Stephen Gates
This paper aims to demonstrate that state shareholders are confronted with contradictory logics leading to institutional contradictions that activist shareholders can exploit. The…
Abstract
Purpose
This paper aims to demonstrate that state shareholders are confronted with contradictory logics leading to institutional contradictions that activist shareholders can exploit. The competing logics of the state as shareholder and their impact on corporate governance and shareholder activism offer fertile grounds for research advances in Coordinated Market Economies (CMEs).
Design/methodology/approach
Through an extensive literature review of state ownership, institutional contradictions and shareholder activism, this paper analyzes two case studies involving the French State as shareholder.
Findings
In the French context, these two cases illustrate how institutional contradictions result in opportunities for shareholder activism. By focusing on the institutional contradictions of the state shareholder, this investigation suggests a need for experimental research to observe how shareholder activists adapt to each institutional change in CMEs. This experimentation can help policymakers to avoid creating additional conditions that shareholder activists can exploit.
Research limitations/implications
This focuses only on France and its state shareholdings. To generalize results, studies of other CMEs and state shareholders are needed.
Practical implications
Policymakers should consider all legislative proposals for their potential to deviate from corporate governance practice by experimenting with them in a laboratory setting. Shareholder activists can compare state shareholders’ actions against the state’s legislation to emphasize institutional contradictions that counter minority shareholders’ rights.
Originality/value
This research is the first to analyze how the state as shareholder can exploit its competing logics to resist against shareholder activism and support management or to become itself a shareholder activist.
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Suzanne Young and Stephen Gates
Purpose – This chapter introduces this book’s topics, purpose, and key themes. It summarizes the purpose of the book which is to explore through both descriptive…
Abstract
Purpose – This chapter introduces this book’s topics, purpose, and key themes. It summarizes the purpose of the book which is to explore through both descriptive and conceptual means the use of power by institutional investors in bringing about changes to corporate behavior, so that corporations engage in improved environmental, social, and governance actions.
Methodology/approach – This chapter reviews literature and chapters and offers conceptual development.
Findings – The forces driving the actions of institutional investors are different from many other shareholders being determined by a unique set of costs, benefits, and objectives. As such three general categories of institutional elements constrain and guide this behavior: regulative elements which include constitutions, laws, and property rights; normative elements which include informal norms, values, and codes of conduct; and cultural-cognitive elements which include shared beliefs, identities, and mental models. It highlights the role of regulation and “soft” law, the impact of values and customs, and the way sense-making and cognition impacts on decisions and actions.
Practical/social implications – The chapter highlights the interplay between hard and soft law in progressing the agenda. It seems that hard law is a hygiene factor forming the base on which initial gains can be made in the application of institutional shareholder power. Moreover, the use of soft law such as the Global Reporting Initiative and the newly founded Sustainability Accounting Standards Board, institutional investors can gain improved disclosure of sustainability performance to incorporate into their investment decisions. Moreover, it highlights the gaps in the use of the power that exists. The movement is still emerging with the focus on corporate governance and environmental considerations primarily. There are still improvements to be made for institutional investors in the social aspects of the responsibility agenda as well in pushing companies to be more transparent, improve reporting, and engage in more long-term decision-making.
Originality/value – The chapter contributes to the debate on governance convergence between liberal market economies (LMEs) and coordinated market economies (CMEs). It is important to look beyond national characteristics alone and demonstrate that organizations, even though they are impacted by institutions, are not necessarily passive acceptors of their fate. Hence this chapter highlights that in expanding from a dyadic approach comparing LMEs and CMEs, the strategic choice of decision-makers, the power of the actors, and the processes used by institutional investors in changing corporate behavior are important considerations.
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Stephen Gates and Pascal Langevin
The purpose of this paper is to report the results of a survey and interviews with human resource (HR) professionals to identify and better understand their perceptions and…
Abstract
Purpose
The purpose of this paper is to report the results of a survey and interviews with human resource (HR) professionals to identify and better understand their perceptions and expectations of human capital measures' (HCM) content, links to strategy, and impact on performance.
Design/methodology/approach
This paper relies on a quantitative analysis of survey questionnaires collected from 104 HR executives, as well as on a qualitative investigation using six interviews. Two types of HCM are derived using principal component analysis. One factor measures employees' work efficiency and cost consciousness (efficiency indicators), whereas the second factor measures employees' entrepreneurial and innovative capabilities (innovation indicators).
Findings
The results confirm the following hypotheses: first, according to HR managers, the more advanced a company is in the development of HCM, the higher the company's performance; and second, in companies following a differentiation strategy, HR managers are interested in innovation indicators, while in those following a cost reduction strategy, HR managers are interested in efficiency indicators.
Research limitations/implications
Results are based on a cross‐sectional study of HR professionals' perceptions. However, it underscores the critical role that HCM plays in delivering performance in the HR managers' opinion. It also shows that HR managers are conscious that HCM should be aligned with strategy.
Practical implications
Based on HR managers' perceptions, the paper suggests that HR professionals might invest more effort in creating and implementing their HCM to deliver higher levels of performance. It also implies that HR managers and management accounting and control systems experts have a common interest to collaborate when implementing HCM.
Originality/value
The paper demonstrates the importance of implementing human capital (HC) metrics into a strategic performance management system to deliver performance from a company's HC. It contributes to a cross‐disciplinary (HRs, management control, and strategy) perspective on HC strategy.
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A company's increasing global presence, unfortunately, seems to coincide with the increasingly vague role many foreign‐subsidiary managers get to play. Foreign‐subsidiary managers…
Abstract
A company's increasing global presence, unfortunately, seems to coincide with the increasingly vague role many foreign‐subsidiary managers get to play. Foreign‐subsidiary managers of global companies are losing authority and control over production decisions, which are being transferred to headquarters' product divisions, according to a report from the Conference Board in New York. In the past, these executives exercised considerable decision‐making autonomy over all operational activities.
Purpose – The purpose of this chapter is to explore the proactive role played by investor relations officers (IROs) in enhancing the quality and delivery of corporate social…
Abstract
Purpose – The purpose of this chapter is to explore the proactive role played by investor relations officers (IROs) in enhancing the quality and delivery of corporate social performance (CSP) information to social responsibility investment (SRI) analysts and investors, thereby improving the link between CSP and corporate financial performance (CFP). The increasing pressures on corporations to produce and communicate CSP information will be described, as well as how the timely and meaningful communication of CSP can improve CFP.
Methodology/approach – Subsequent to a review of relevant literature, three case examples from McDonald’s, Nestlé, and Stora Enso illustrate Hockerts and Moir’s grounded theory framework that suggest how IROs can improve communication of CSP.
Findings – This chapter illustrates three levels of communicating CSP information. First, IROs target SRI investors and respond to ESG inquiries and surveys. At the second level, IROs integrate ESG information into business strategy and financial results. At the third level, IROs actively market CSP and create a two-way proactive dialogue between SRI investors and senior management and the board.
Practical implications – This chapter provides practical examples to improve ESG activities and their communication via the IRO to SRI analysts and investors.
Originality/value of chapter – This chapter contributes to the literature on the CSP–CFP link by illustrating how proactive IROs are improving the CSP information channel to SRI securities analysts and investors. Furthermore, it advances the theory and research concerning the impact of the information channel between IROs and securities analysts behind the CSP–CFP link.
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This paper seeks to present the positions and conclusions of scholars to support a proposition that the asset approach to human resource accounting has failed.
Abstract
Purpose
This paper seeks to present the positions and conclusions of scholars to support a proposition that the asset approach to human resource accounting has failed.
Design/methodology/approach
Reviews the history of human asset accounting.
Findings
The paper offers an alternative “liability approach” to account for and report human resources.
Originality/value
The paper provides an argument and rationale to demonstrate that a liability paradigm would be compatible with normal accounting and reporting procedures.