Environmental performance and responsible corporate governance: an empirical note

Does it pay to be green? This question is by no means new or surprising; but what is really puzzling is that dedicated research efforts have failed to provide consistent evidence on this issue. Therefore, the ‘business case’ for sustainability is controversial, despite the fact that companies are more and more under pressure to standardize and expand their voluntary ethical practices. The research design serves the purpose of answering some of these questions: 77 large industrial European companies were included in a highly-relevant new dataset, containing aggregated greenhouse gas emission figures, as well as universally-accepted financial performance indicators. On these balanced panel data we conducted several types of analyses, tailored to capture the sign and strength of the relationship between environmental and financial performance. We also introduced an innovative measure of responsible governance, as an interaction term between board-level innovations and the level of independent assurance. Our results are mixed, largely dependent on different model specifications and the several procedures to obtain robust standard errors. As expected, there is no definitive conclusion on the aforementioned relationship. Responsible governance seems to have an insignificant contribution to real sustainability performance, as well as to the economic welfare of the firm. Overall, we support the results to be found in the prior literature, in that CSR attributes – here including emission reduction efforts – will bear higher costs, but also higher revenues, resulting in a neutral relationship between CSR activity and firm financial performance. Owing to the uniqueness of the database in use and to the complexity of the econometric analysis, our findings are another proof of the controversy surrounding the relationship between firm financial and environmental performance

Social Responsibility Practices Regarding Facilities Granted to Employees and Consumer Protection in Selected European Companies

CSR practices are marked by two essential attributes: their voluntary nature and their extraordinary diversity. In addition, it is difficult to draw the fine line between mere compliance with the law, and those initiatives that exceed the legal requirements, giving social partners a guarantee that companies have actually internalized their social and environmental responsibilities. This article aims to restructure this vast field, following two axes: the facilities granted to employees, on one hand, and consumer protection, on the other hand. In terms of methodology, a sample of the largest 13 listed European companies was selected from as many sectors. The content of annual and sustainability reports issued in 2009, was screened for narrative aspects related to social responsibility, and the material was organized according to the matters voluntarily described by companies. In the area of employment rights, several issues were identified: employee representation on the boards of directors, equal opportunities, professional development, and ethical issues. On the topic of consumer rights, suggestive examples were given on several aspects: healthy products, counseling, after-sales service and customer identity protection. The importance of this research goes beyond these case studies; its originality lies in providing a coherent picture of an area that is perceived as very unstructured. As can be seen from the examples included in this paper, most of the socially responsible initiatives that firms exhibit do not have a negative impact on a firm’s profitability, while actually being integrated into products and services as efficiency improvements. Instead, responsible actions can have a major positive impact whenever employees and consumers perceive the company as a fair and generous player who derives profits from the sale of products and services, not in violation of the social partners’ rights.corporate social responsibility, facilities granted to employee, consumer protection, European companies

Financial Ratio Analysis: the Development of a Dedicated Management Information System

This paper disseminates the results of the development process for a financial analysis information system. The system has been subject to conceptual design using the Unified Modeling Language (UML) and has been implemented in object-oriented manner using the Visual Basic .NET 2003 programming language. The classic financial analysis literature is focused on the chain-substitution method of computing the prior-year to current-year variation of linked financial ratios. We have applied this technique on the DuPont System of analysis concerning the Return on Equity ratio, by designing several structural UML diagrams depicting the breakdown and analysis of each financial ratio involved. The resulting computer application offers a flexible approach to the analytical tools: the user is required to introduce the raw data and the system provides both table-style and charted information on the output of computation. User-friendliness is also a key feature of this particular financial analysis application

Environmental performance and responsible corporate governance: an empirical note

Does it pay to be green? This question is by no means new or surprising; but what is really puzzling is that dedicated research efforts have failed to provide consistent evidence on this issue. Therefore, the ‘business case’ for sustainability is controversial, despite the fact that companies are more and more under pressure to standardize and expand their voluntary ethical practices. The research design serves the purpose of answering some of these questions: 77 large industrial European companies were included in a highly-relevant new dataset, containing aggregated greenhouse gas emission figures, as well as universally-accepted financial performance indicators. On these balanced panel data we conducted several types of analyses, tailored to capture the sign and strength of the relationship between environmental and financial performance. We also introduced an innovative measure of responsible governance, as an interaction term between board-level innovations and the level of independent assurance. Our results are mixed, largely dependent on different model specifications and the several procedures to obtain robust standard errors. As expected, there is no definitive conclusion on the aforementioned relationship. Responsible governance seems to have an insignificant contribution to real sustainability performance, as well as to the economic welfare of the firm. Overall, we support the results to be found in the prior literature, in that CSR attributes – here including emission reduction efforts – will bear higher costs, but also higher revenues, resulting in a neutral relationship between CSR activity and firm financial performance. Owing to the uniqueness of the database in use and to the complexity of the econometric analysis, our findings are another proof of the controversy surrounding the relationship between firm financial and environmental performance

HIGHLIGHTS FOR A HISTORY OF CORPORATE GOVERNANCE

ABSTRAC

Financial Ratio Analysis : the Development of a Dedicated Management Information System

This paper disseminates the results of the development process for a financial analysis information system. The system has been subject to conceptual design using the Unified Modeling Language (UML) and has been implemented in object-oriented manner using the Visual Basic .NET 2003 programming language. The classic financial analysis literature is focused on the chain-substitution method of computing the prior-year to current-year variation of linked financial ratios. We have applied this technique on the DuPont System of analysis concerning the Return on Equity ratio, by designing several structural UML diagrams depicting the breakdown and analysis of each financial ratio involved. The resulting computer application offers a flexible approach to the analytical tools: the user is required to introduce the raw data and the system provides both table-style and charted information on the output of computation. User-friendliness is also a key feature of this particular financial analysis application.financial ratio analysis; object-oriented development; unified modeling language; conceptual models.

Corporate Governance in Emerging Economies: The Case of Romania

In Romania corporate governance has emerged beginning with the early 2000s. The delay is explainable by the difficult steps taken on the line of political, legal, economic and social reform. In recent years, however, the corporate governance environment in Romania has changed. Transparency and accountability have become key factors not only for shareholders, but also for investors, buyers, suppliers, and other stakeholders. In this context, it is worth to consider, based on statistical data, the degree of development of corporate governance in Romania. The selected indicators are linked to attributes of the Board of directors, in particular Board structure, size, independence, frequency of meetings, and other factors. The sources used are based on the official data published by companies listed on the Bucharest Stock Exchange (BSE). The results will be compared with results of other case studies of emerging countries and the European best practice

Corporate Governance in Emerging Economies: The Case of Romania

In Romania corporate governance has emerged beginning with the early 2000s. The delay is explainable by the difficult steps taken on the line of political, legal, economic and social reform. In recent years, however, the corporate governance environment in Romania has changed. Transparency and accountability have become key factors not only for shareholders, but also for investors, buyers, suppliers, and other stakeholders. In this context, it is worth to consider, based on statistical data, the degree of development of corporate governance in Romania. The selected indicators are linked to attributes of the Board of directors, in particular Board structure, size, independence, frequency of meetings, and other factors. The sources used are based on the official data published by companies listed on the Bucharest Stock Exchange (BSE). The results will be compared with results of other case studies of emerging countries and the European best practice.corporate governance; emerging economies; Romania; disclosure; corporate governance indicators.