When Good Turns to Bad: An Examination of Governance Failure in a Not-for-Profit Enterprise

This paper examines the assumption that is present in society (if not in law) that not-for-profit enterprises are unlikely to exhibit unethical behaviour in their governance function. It explores this issue by examining a recent case of governance failure within a not-for-profit social enterprise that had unethical behaviour at its root. This failure ultimately led to the organisation becoming bankrupt. A parallel is drawn with governance failures within the private sector which also resulted in bankruptcy. The paper draws on theories of governance and stakeholder management in order to reflect on whether unethical governance behaviour is a continuing threat to all sectors. In doing so, it concludes that there is merit in challenging the assumption that values-based organisations are immune to such a threat to their organisational existence

Pension funds and corporate social performance : an empirical analysis

This study examines the relationship between pension fund ownership of companies and corporate social performance using a unique database of more than 500 publicly listed U.K. companies. The empirical analysis emphasizes the heterogeneous character of pension fund holdings and the multidimensional nature of corporate social performance. The results highlight that the characteristics of pension fund management are significant drivers of preferences for social performance and that employee-related aspects of social performance are preferred by pension funds

Board Share-Ownership and Takeover Performance

We investigate the relation between takeover performance and board share-ownership in the acquiring company for a sample of 363 UK takeovers completed in the period 1985-96. In investigating this relationship we pay particular attention to the composition of board shareholdings as well as their size. Thus, in addition to the analysis of total board holdings, we analyse the separate impact of CEO shareholdings and of the pattern of non-executive and executive holdings within the board. In addition to our detailed examination of board holdings we assess the impact of non-board holdings. Our analysis controls for a number of non-shareholding constraints on discretionary director behaviour and for a variety of other influences on takeover outcomes including: the means of payment; acquirer size and market to book value; the relative size of the acquirer and the target; the nature of the bid in terms of hostility and industrial direction; and the pre-takeover performance of the acquiring company. We assess performance in terms of announcement returns, long run share returns and a portfolio of accounting measures. We find evidence that overall board ownership has a strong positive impact on long run share returns and a weak positive impact on operating performance. However, much stronger effects are found when the overall board measure is split into CEO, executive, and non-executive directors. We find strong evidence of a positive relation between takeover performance and CEO ownership, which holds for both long run returns and operating performance measures. This finding is robust to controlling for other factors that determine takeover performance and holds in a two stage least squares framework that controls for endogeneity effects. Shareholdings of other executive directors, non-executive directors, and non-board holdings are found to have no significant effect on takeover performance. Copyright Blackwell Publishers Ltd, 2006.

Corporate accountability and the politics of visibility in 'late modernity'

It is generally held that because of developments associated with late modernity large corporations are now much more visible and therefore more accountable. In this article, we challenge this idea and propose contrary and position: that precisely because of late modernity global corporations have become less accountable to their stakeholders. In particular, we argue that because of globalization, the explosion of scientific knowledge and the nature of risk in late modernity, it has in some respects become easier for corporations to conceal their unethical practices (making them less accountable). Drawing on sociological theory concerning late modernity, we seek is to demonstrate how the fashionable ‘ideology of visibility’ habors an insidious anti-democratic tendency apropos wider accountability. In light of this position, the article concludes by discussing the political implications and possibilities for rendering business corporations more democratically accountable