Galvanising shareholder activism: a prerequisite for effective corporate governance and accountability in Nigeria

Shareholder activism has been largely neglected in the few available studies on corporate governance in sub Saharan Africa. Following the recent challenges posed by the Cadbury Nigeria Plc, this paper examines shareholder activism in an evolving corporate governance institutional context and identifies strategic opportunities associated with shareholders‟ empowerment through changes in code of corporate governance and recent developments in information and communications technologies in Nigeria; especially in relation to corporate social responsibility in Nigeria. It is expected that the paper would contribute to the scarce literature on corporate governance and accountability in Africa

Sustainability reporting and the professional accountant in Nigeria

We wish to acknowledge the funding assistance of the Institute of Chartered Accountants of Nigeria (ICAN) to conduct this study, to which we are grateful to the Council of the Institute for approving the research grant.Sustainability reporting is increasingly being mandated internationally, including in the emerging markets. The latest effort has been a proposal by International Integrated Reporting Council (IIRC) to integrate sustainability and financial reporting. Integrating sustainability and financial reporting presupposes the existence of sustainability reporting knowledge. This study seeks to gain an insight into the views, attitude and understanding of the concept of corporate sustainability and sustainability reporting by the Nigerian professional accountant who is expected to play a role in integrating sustainability and financial reporting in the Nigerian environment. Adopting an exploratory qualitative research design and snowball sampling survey, 1, 857 questionnaires were administered among Nigerian professional accountants out of which 860 usable responses were received. Analysis of the responses show that the accountants understand corporate sustainability as the incorporation of social and environmental concern in business decisions to ensure responsible business practices but within the context of shareholders value maximisation as opposed to being about the right thing to do. According to them sustainability is not about accountants helping corporations to internalise the cost of their externality or providing stakeholders with social and environmental accountability information. This is at variance with its original definition which emphasises meeting the needs of the present without compromising the ability of future generations to meet their own needs. They are of the view that corporations operating in industries with sustainability concerns in Nigeria may not be motivated to engage in sustainability reporting because of lack of public awareness and the non-applicability of most of the business cases for sustainability. As such sustainability reporting should be predicated upon effective regulation, enforcement and sanctions. However, the accountants are favourably disposed to corporations engaging in sustainability reporting; playing some roles in its reporting chain. They support an accounting standard on sustainability reporting as well as Financial Reporting Council of Nigeria (FRCN) mandating it. There is also evidence that the accountants’ sustainability knowledge derives 65% from international linkages and only 1% from the local accounting profession, with a high 24% claiming no knowledge of sustainability reporting. To this end the study recommends that the accounting profession should intervene to equip its members with the relevant knowledge of sustainability reporting and that the corporate reporting regulatory authorities should mandate sustainability reporting in the Nigerian environment.Final Published versio

Multiple influences on corporate governance in sub-Saharan Africa : actors, strategies and implications

This paper examines the influences of three major actors – the international organisations, rating agencies, and indigenous African institutions - on the fledging corporate governance and accountability practice in Nigeria. Findings from this study suggest that corporate governance in Nigeria seems to be in a flux resulting from a degree of ‘confusion’ in the country’s corporate governance system with regards to ‘which corporate governance model’ to follow, due to the influential powers of these three actors, pulling the governance phenomenon in somewhat different directions. As a result, this paper adds to the debate on the diffusion and translation of governance practices across different institutional contexts, particularly drawing out inferences for the literature on the convergence of national systems of corporate governance

Corporate Social Responsibility in Supply Chains of Global Brands: A Boundaryless Responsibility? Clarifications, exceptions and implications

Corporate social responsibility (CSR) is increasingly becoming a popular business concept in developed economies. As typical of other business concepts, it is on its way to globalization through practices and structures of the globalized capitalist world order, typified in Multinational Corporations (MNCs). However, CSR often sits uncomfortably in this capitalist world order, as MNCs are often challenged by the global reach of their supply chains and the possible irresponsible practices inherent along these chains. The possibility of irresponsible practices puts global firms under pressure to protect their brands even if it means assuming responsibilities for the practices of their suppliers. Pressure groups understand this burden on firms and try to take advantage of the situation. This paper seeks to challenge the often taken-for-granted-assumption that firms should be accountable for the practices of their suppliers by espousing the moral (and sometimes legal) underpinnings of the concept of responsibility. Except where corporate control and or corporate grouping exist, it identifies the use of power as a critical factor to be considered in allocating responsibility in firm-supplier relationship; and suggests that the more powerful in this relationship has a responsibility to exert some moral influence on the weaker party. The paper highlights the use of code of conducts, corporate culture, anti-pressure group campaigns, personnel training and value reorientation as possible sources of wielding positive moral influence along supply chains

Who matters to UK and German firms? Modelling stakeholder salience through corporate social reports

Drawing from a longitudinal study of stakeholder salience in the UK and Germany, using data from corporate social reports and relying on the varieties of capitalism theoretical framework, we found that investors and employees came top on UK list while collaborative networks (including suppliers and alliances) and management were top on German list of important stakeholders. This finding suggests that stakeholder salience, to a large extent, reflects dominant characteristics of UK and Germany capitalist systems, respectively and gives further credence to the embedded nature argument of corporate stake-holding practices

Neither national boundaries nor transnational social spaces: accounting for variations of CSR practices in varieties of capitalism

The paper empirically re-examines the role of national institutions and trans-national social spaces in accounting for variations in CSR practices. Based on a longitudinal study of corporate social reporting in UK and Germany, the paper concludes that corporate stakeholder salience patterns are outcomes of interaction effects between national institutional boundaries and trans-national social spaces. It pushes the institutionalist frontier of research to corporate stakeholder salience – which is a precursor and intrinsic to both corporate accountability and corporate social responsibility. In addition, it opens a new vista of looking at corporate social reports – i.e. not only as artefacts of accountability, but also carriers and reflectors of national and trans-national characteristics and influences. The paper finally highlights implications of the findings for CSR and comparative capitalism research, respectively

Rational Choice, Scientific Method and Social Scientism

The eighteenth-century introduction of the scientific method of the natural sciences to the study of social phenomena draws a line between moral philosophy Ethat aspect of ancient and medieval philosophy that dealt with social issues Eand the social sciences as known today. From the onset, the emerging social science, or rather, its epistemological orientation to ‘social scientism,Ewas vigorously challenged by many critics who saw it as a reductionist and mechanistic understanding of human beings and their society. In recent times, this criticism has narrowed down to the critique of the rationalist assumptions or rational choice theory on which much of social scientism is built. Critics of the natural science ideal in the social sciences argue that the subject matter of the social sciences Ehuman beings, their society and interactions Eis so complex and different a system that subjecting it to the crucible of the scientific method of the natural, positivist sciences not only limits its understanding but leaves it with an abrasive and distorting impact. In the same manner, critiques of rational choice theory argue that it is a reductionism that does not account for a significant proportion of human actions and motives. What seems to be advocated for is a sort of social science method that addresses the shortcomings of the scientific method applied to social phenomena and employs a more robust model of human action that supersedes the rational choice model. This paper however posits that rationalist assumptions or rational choice theory is not peculiar to social scientism but lies at the foundation of modern and contemporary science and its method. We trace out the centrality of individual rationality assumptions in the general epistemology of the scientific method and social scienticism within the context of the centuries-old debate on the limitations of the scientific method in the social sciences. Our thesis hints at the impossibility of a modern and contemporary scientific model of either nature (physics) or society that does not assume individualist or subjective rationality.Scientific Method, Social Scientism, Rational Choice

Knowledge Governance for Open Innovation: Evidence from an EU R&D Collaboration

This chapter highlights a particularly challenging arena for knowledge governance, by focussing on the issues associated with large-scale R&D programmes of 'open innovation'. The chapter develops a theoretical framework for analysing these governance challenges by focussing on the interplay between the knowledge processes and inter-organizational relationships involved. This framework is subsequently applied to a casestudy of a major open innovation programme, namely, a major interfirm research programme sponsored by the European Union (EU) in the aerospace sector. Analysis of this case suggests that the stability and fit of governance mechanisms may be less important than their ability to adapt to the dynamics of the innovation process, and particularly to shifts between the open and closed networks which offer very different routes to appropriating value from that process

Exploring the institutional embeddedness of corporate stakeholding and social responsibility : a comparative political economy perspective

This research study contributes to emergent interests in both academic and professional literature to uncover variations of corporate social responsibility practices across national institutional contexts by focusing on stakeholder salience as a precursor to corporate social responsibility and its ancillary constructs and practices - e. g. corporate governance and accountability. The stakeholder groups considered in the study are: (1) Employees, (2) Networks, (e. g. alliances/partnerships and suppliers), (3) Shareholders, (4) Environment, (5) Community, (6) Consumers and (7) Management. Stakeholder salience, as used in the study, in a nutshell refers to the importance accorded to any of these particular stakeholder groups by firms. The study complements the managerialist theorisation of corporate stakeholder salience, which has hitherto dominated the extant stakeholder management literature, by leveraging the institutionalist theoretical lens. It draws specifically from the varieties of capitalism model to examine how corporate stakeholder salience patterns are not only products of managerial strategic choices, but are also reflections of the institutional contexts in which they are embedded and enacted. To do this, the study focuses on a specific population of firms - i.e. Fortune Global 500 firms - across two national institutional contexts (UK and Germany) and three sectoral contexts (Aviation, Financial Services and Utilities). This yielded a total of 73 firms (37 UK and 35 German firms). It particularly tracks the manifestations of stakeholder salience in corporate social reports, produced by these firms, as artefacts of organisational communication, accountability and legitimacy. The study is longitudinal (2000 - 2006) in order to capture the dynamics of corporate stakeholder salience patterns in the two institutional contexts over time. Empirical data are extracted using the content analytical methodology focusing on such disclosure media as texts, graphics and photographs. In all, the corporate social reports of the firms used in this study from 2000 to 2006 - which amounted to a total of three thousand eight hundred and twenty two pages of report (3,822) - generated a cumulative total of two thousand nine hundred and eighty six (2,986) images, one thousand eight hundred and thirty three (1,833) graphics, and one hundred and twenty five (125) pages of Chairman (management) Statements (CS) and eight hundred and seventy two (872) paragraphs of these Chairmen (management) Statements. Data from corporate social reports are triangulated with data from online survey of these Fortune Global 500 firms (61% response rate). The data are analysed using three different but complementary statistical methods: (1) correspondence analysis, (2) Pearson's chi-square statistic and (3) multivariate analysis of variance (MANOVA). The results of the study identify recognisable and differentiable patterns of corporate stakeholder salience between the UK and German institutional contexts moderated by sectoral patterns of corporate stakeholding patterns - thereby suggesting that corporate stakeholder salience patterns are implicated in interactions between national institutional characteristics and sectoral attributes. This finding confirms the main proposition of the research study that corporate stakeholder salience patterns are not only outcomes of managerial discretional choices, but that they are also products of their institutional contexts. However, it brings to the fore a different dimension to understanding the impacts of institutional contexts on corporate stakeholder salience patterns and broader corporate social responsibility practices, which have hitherto being under-explored in the literature. This different dimension is the fact that institutional contexts are not necessarily homogenous, as often presented by the varieties of capitalism model, but are outcomes of continuous contestations between heterogeneous local and global influences, sometimes embodied in trans-national spaces exacerbated by either globalisation and or trans-national actors. The study further explores this interaction between heterogeneous local and global influences on corporate stakeholder salience patterns; and later concludes by highlighting possible areas for complementary future research