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Shareholders
Kinds of Shareholders Terms modified by Shareholders Selected AbstractsPARTNERS AND SHAREHOLDERS ASCOVERED EMPLOYEES UNDER FEDERALANTIDISCRIMINATION ACTSAMERICAN BUSINESS LAW JOURNAL, Issue 4 2003Stephanie M. Greene First page of article [source] DO MARKETS PENALIZE AGENCY CONFLICTS BETWEEN CONTROLLING AND MINORITY SHAREHOLDERS?THE DEVELOPING ECONOMIES, Issue 3 2007EVIDENCE FROM CHILE G32; G34; O16 Using a sample of Chilean listed firms with widespread presence of economic conglomerates that use pyramid structures to control affiliated companies, we find that firms where controlling shareholders have higher coincidence between cash and control rights are persistently more valued by the market. We carefully check that our results are not driven by omitted variable biases and control for reverse causation using a feature of Chilean Corporations Law that provides an exogenous instrument for ownership concentration. [source] DO MULTIPLE LARGE SHAREHOLDERS PLAY A CORPORATE GOVERNANCE ROLE?THE JOURNAL OF FINANCIAL RESEARCH, Issue 4 2009EVIDENCE FROM EAST ASIA Abstract We examine the governance role of multiple large shareholder structures (MLSS) to determine their valuation effects in a sample of 1,252 publicly traded firms from nine East Asian economies. We find that the presence, number, and size of multiple large shareholders are associated with a significant valuation premium. Our results also show that the identity of MLSS influences corporate value and that the valuation effects of MLSS are more pronounced in firms with greater agency costs. Our results imply that MLSS play a valuable monitoring role in curbing the diversion of corporate resources. [source] Protecting Minority Shareholders: Listed versus Unlisted FirmsFINANCIAL MANAGEMENT, Issue 1 2010Claudio Loderer Listed firms have an incentive to render themselves attractive to investors at large. This paper examines whether listed and unlisted firms differ in their care for minority shareholders and finds supporting evidence. We examine control structure, disclosure, board architecture and processes, and director compensation. The corporate governance package in listed firms differs from that in unlisted firms in terms of levels and mix of the different provisions. The data also suggest that listed firms perform better. [source] Insolvency, tax and liquidation distributions: dividends, capital gains and the dead hand of the pastINTERNATIONAL INSOLVENCY REVIEW, Issue 2 2006John Duns Shareholders are normally entitled to the surplus, if any, which remains after a liquidator has paid off the company's creditors and discharged all of its outstanding liabilities. Surplus distribution to shareholders is an anticipated event in the liquidation of a solvent company. Shareholders in insolvent companies, by contrast, are likely to be pleasantly surprised to receive surpluses prior to the cancellation of failed investments. Taxation liabilities are likely to arise for the shareholders in both events,under independent and, to a degree, inconsistent regimes provided by the Income Tax Assessment Act 1936 (Cwth) (,ITAA36') and the Income Tax Assessment Act 1997 (Cwth) (,ITAA97'). This paper analyses Australian taxation of liquidation surpluses, noting historical factors and the approaches taken in four comparable tax jurisdictions. Company law applicable to liquidation surplus distributions is surveyed by way of introduction. Copyright © 2006 John Wiley & Sons, Ltd. [source] Self-Serving Attributions in Corporate Annual Reports: A Replicated StudyJOURNAL OF MANAGEMENT STUDIES, Issue 1 2002Eric W. K. Tsang This study is a replication of Bettman and Weitz (1983) in the Singapore context. Data from Letters to Shareholders in 208 annual reports published in 1985 and 1994 were used to analyse the patterns of causal explanations for corporate performance outcomes. The general self-serving pattern of attributions found in the original study was also identified in this study. However, the data of the original study do not unequivocally support either the motivational or informational explanation for the existence of self-serving attributions, whereas the latter explanation is strongly supported by the data of this study. This finding is consistent with the growing evidence provided by cross-cultural psychological research indicating East Asians' greater sensitivity to situational influences when making causal attributions. In short, the present study clearly illustrates the important role of replication in the knowledge accumulation and theory development of strategy research. [source] When Financial Institutions Are Large Shareholders: The Role of Macro Corporate Governance EnvironmentsTHE JOURNAL OF FINANCE, Issue 6 2006DONGHUI LI ABSTRACT While financial institutions' aggregate investments have grown substantially worldwide, the size of their individual shareholdings, and ultimately their incentive to monitor, may be limited by the free-rider problem, regulations, and a preference for diversification and liquidity. We compare institutions' shareholding patterns across countries and find vast differences in the extent to which they are large shareholders. These variations are largely determined by macro corporate governance factors such as shareholder protection, law enforcement, and corporate disclosure requirements. This suggests that strong governance environments act to strengthen monitoring ability such that more institutions are encouraged to hold concentrated equity positions. [source] Predictable Investment Horizons and Wealth Transfers among Mutual Fund ShareholdersTHE JOURNAL OF FINANCE, Issue 5 2004WOODROW T. JOHNSON ABSTRACT This study analyzes the distribution of investment horizons in a large, proprietary panel of all shareholders in one no-load mutual fund family. A proportional hazards model shows that there are observable shareholder characteristics that enable the fund to predict reliably on the day each account is opened whether the account will be short term or long term. Simulations show that the liquidity costs imposed on the fund by the expected short-term shareholders are significantly greater than those imposed by the expected long-term shareholders. Combining these results, the analysis argues that mutual funds do not provide equitable liquidity-risk insurance. [source] Do Controlling Shareholders Manage the Timing of Information Disclosure When Making a Stock Gift?,ASIA-PACIFIC JOURNAL OF FINANCIAL STUDIES, Issue 6 2009Woon-Oh Jung Abstract In Korea, controlling shareholders in general tend to transfer their shares to their family members or related parties. In this paper, we investigate whether Korean controlling shareholders attempt to influence stock prices by managing the timing of information disclosures when they transfer stocks to related parties as gifts. Because gift taxes are levied based on the average market value of the stock transferred for a certain period known as the valuation period, controlling shareholders may have incentives to depress the stock prices in this period in order to reduce the gift tax. We make a specific conjecture that controlling shareholders may wish to time the disclosure of good news and bad news so that the latter (the former) is released during (outside of) the valuation period for the stock to be transferred. To test this hypothesis we examine the disclosure timing of good and bad news for a sample of 118 gift transactions by 83 firms over the period of 2000,2004. We find that during the valuation period (i.e., the 4-month period extending over the 2 months before and after the gift transaction) the frequency of good news was considerably lower than in other periods, whereas the frequency of bad news during the valuation period was substantially higher. This result supports the hypothesis that controlling shareholders may delay good news and bring forward bad news in an attempt to influence stock prices during the valuation period. Despite the attempts by controlling shareholders to keep stock prices depressed in the valuation period, we also find that the prices tend to increase after the gift announcement date. We provide some of the potential explanations for the upward price movement subsequent to gift transactions. [source] Are Friendly Acquisitions Too Bad for Shareholders and Managers?BRITISH JOURNAL OF MANAGEMENT, Issue S1 2006Friendly Acquirers, Long-Term Value Creation, Top Management Turnover in Hostile The well-documented failure of the majority of acquisitions to create value is often identified in popular discussion with hostile acquisitions, whereas friendly acquirers seem to get a friendly press. The relative performance of friendly and hostile acquirers therefore warrants a rigorous empirical investigation. Clear evidence of superior value creation in hostile over friendly acquisitions allows us to judge the efficacy of the market for corporate control. In this article we examine the long-term shareholder wealth performance of four types of acquirers , friendly bidder, hostile bidder, white knight and hostile bidder facing a white knight or another hostile bidder. For a sample of 519 acquisitions of UK target firms during 1983,1995, we estimated the three-year post-acquisition gains to acquirer shareholders and found that hostile acquirers deliver significantly higher shareholder value than friendly acquirers. We found that friendly acquirers with high stock-market ratings destroyed more value than hostile acquirers with a similar rating. Friendly acquirer top managers suffered greater job losses than those of hostile acquirers, perhaps paying the price for their inferior value-creation performance. Our study provides evidence of the superior value-creation performance of hostile acquirers and makes the case against takeover regulatory rules that may impede hostile takeovers. [source] Shareholders versus stakeholders: corporate mission statements and investor returnsBUSINESS ETHICS: A EUROPEAN REVIEW, Issue 4 2002Mohammed Omran This paper seeks to discover whether companies that adopt a stakeholder approach, and thereby demonstrate a wider remit of corporate responsibility, provide inferior returns to those that embrace the shareholder value approach. To classify approaches, mission statements were analysed, the final sample comprising 32 shareholder oriented companies and 48 stakeholder oriented companies. To assess performance both accounting,based and market,based measures were used. A number of moderating variables were taken into account: systematic (beta) risk, gearing (long,term debt to total long,term finance), tax ratios, and firm size. ANOVA and Kruskall,Wallis tests revealed that mission orientation did not affect performance, whether in terms of stock returns or excess returns. Neither were accounting returns on equity different overall, although shareholder oriented companies experienced wider variations in this measure. A number of multiple regressions were also performed. However, the mission dummy was not found to be a significant variable. [source] The responsible shareholder: a case studyBUSINESS ETHICS: A EUROPEAN REVIEW, Issue 1 2002Richard C. Warren Shareholders are sometimes considered to be, in moral terms, the owners of a company, they are after all the carriers of the residual liabilities and bear a higher proportion of the financial risk. However, in company law, the shareholders' responsibility is limited, and in financial terms shareholders are only liable up to the fully paid value of the share certificate. Moreover, when the shares are sold, the responsibility and risk are transferred completely to the new bearer of the shares. Whether this gap in moral and legal perceptions can be judged to be satisfactory in business ethics terms is a moot point and will be partly explored in this case study which seeks to analyse the shareholder's responsibility towards a firm in which they own shares. The case study company chosen as a vehicle to explore these issues is that of Turner & Newall; a company that subjected its employees, communities and customers to a major health hazard , asbestosis. This paper will use the Turner & Newall archive materials to illustrate the moral hazards that can arise for shareholders. In particular it will examine the ethical responsibilities of shareholders towards those stakeholders who were exposed to the dangers of asbestos. This case is a significant test of the veracity of the legal system of company control, and exposes the ineffectiveness of that system in accountability terms. The case study also deals with specific issues that arose in the asbestos crisis, as well as with more general issues in our present system of corporate governance and shareholder responsibilities. [source] Do Different Audit Report Formats Affect Shareholders' and Auditors' Perceptions?INTERNATIONAL JOURNAL OF AUDITING, Issue 3 2008Kar-Ming Chong This study investigates the impact of three different audit report formats on shareholders' and auditors' perceptions. The formats are derived from the Guidance Note Report to Australian Standard AUS702 which aims to improve communications between auditors and shareholders. Formats include an expanded report, a ,plain language' expanded report with the audit opinion at the end, and a ,plain language' expanded report with the audit opinion at the start. A questionnaire research instrument was mailed to shareholders and auditors. In general, the audit report formats did not reduce the expectations gap between shareholders and auditors. A greater number of significant differences between shareholders' and auditors' perceptions were evident for the expanded format (vis-à-vis the AUS 702 short format), while fewer significant differences existed for the ,plain language' expanded report with the audit opinion at the start. [source] Agency Relations within the Family Business System: an exploratory approachCORPORATE GOVERNANCE, Issue 3 2003L.A.A. Van den Berghe Researchers use various definitions to describe the family firm. The characteristics of family firms that are stressed in each of these definitions are somehow related to family control. All characteristics together reflect a spectrum of family firm types along one core dimension: family involvement in the firm. However, it is more helpful to distinguish among family firms by using their precise type. Each particular family firm type is characterised by a set of agency relations within and between the family system, ownership system and the business system. This paper is a first attempt to apply the insights from agency theory on a highly simplified (reference) family firm situation where the father is full owner and the daughter manager of the family firm. Agency theory establishes the foundation for the optimal contract conditions between father and daughter. While real life is often characterised by bounded rationality and incomplete information, future research should help identify the "optimal contract" be-tween the family/shareholders and management in various family firm types under these circumstances. [source] What Do Shareholders' Coalitions Really Want?CORPORATE GOVERNANCE, Issue 2 2007Evidence from Italian voting trusts This paper studies the effects of having multiple large shareholders who share the control of firms, by analysing a unique dataset of Italian shareholders' agreements (voting trusts). We investigate the separation between ownership and control granted by such agreements, showing that, on average, a voting trust owning 52 per cent of the total company's cash-flow rights is able to exercise up to 87 per cent of the total board rights; the wedge is particularly beneficial to the largest shareholder within the voting trust who is able to get the majority of board rights despite owning only a minority fraction of the company's cash-flow rights. Then, an event-study analysis of a sample of voting trusts' announcements is performed. The results support the "entrenchment effects" hypothesis (Stulz, 1988) linking the ownership structure and the firm value, and are consistent with the view that, in Italy, voting trust agreements are mainly aimed at both protecting controlling shareholders from hostile takeovers and entrenching incumbent management. [source] Corporate Governance and Financial Distress: evidence from TaiwanCORPORATE GOVERNANCE, Issue 3 2004Tsun-Siou Lee Prior empirical evidence supports the wealth expropriation hypothesis that weak corporate governance induced by certain types of ownership structures and board composition tends to result in minority interest expropriation. This in turn reduces corporate value. However, it is still unclear whether corporate financial distress is related to these corporate governance characteristics. To answer this question, we adopt three variables to proxy for corporate governance risk, namely, the percentage of directors occupied by the controlling shareholder, the percentage the controlling shareholders shareholding pledged for bank loans (pledge ratio), and the deviation in control away from the cash flow rights. Binary logistic regressions are then fitted to generate dichotomous prediction models. Taiwanese listed firms, characterised by a high degree of ownership concentration, similar to that in most countries, are used as our empirical samples. The evidence suggests that the three variables mentioned above are positively related to the risk for financial distress in the following year. Generally speaking, firms with weak corporate governance are vulnerable to economic downturns and the probability of falling into financial distress increases. [source] Creating Value Through Corporate GovernanceCORPORATE GOVERNANCE, Issue 3 2002Robert A.G. Monks Value and governance are such familiar words that we do not often enough reflect on their meanings in a specific situation. This paper will suggest: Value is in the eye of the beholder. The appearance of governance may be preferable to the real thing. In order better to understand value, we will work with a simple question , is it appropriate for a global investor to purchase common shares in Volkswagen? There are many kinds of shareholder, each with distinctive interests that are not always compatible with the interests of the other investors. A global investor is typically the trustee of a pension plan with the simple obligation to collateralise the pension promise by maximising the long,term value of trust assets. The beneficiaries of pension funds are not rich people. Fluctuations in market values are no longer primarily a question as to whether rich people are a bit richer or poorer, they are a question as to whether pensions will be paid to the roughly half of the population of the OECD world who have interests in employee benefit plans. This makes investment a matter of social and political concern. At the end of our trip through the mythology and prospects for adding value to corporate enterprises through effective governance, we come to a very simple conclusion. I bastardise a celebrated principal of physics to conclude that both in science and in business a watched particle behaves differently than one that is not watched. "An observed board behaves differently" and is more likely to generate value for corporate owners. [source] Corporate Governance in IndiaJOURNAL OF APPLIED CORPORATE FINANCE, Issue 1 2008Rajesh Chakrabarti The Indian corporate governance system has both supported and held back India's ascent to the top ranks of the world's economies. While on paper the country's legal system provides some of the best investor protection in the world, enforcement is a major problem, with overburdened courts and significant corruption. Ownership remains concentrated and family business groups continue to be the dominant business model, with significant pyramiding and evidence of tunneling activity that transfers cash flow and value from minority to controlling shareholders. But for all its shortcomings, Indian corporate governance has taken major steps toward becoming a system capable of inspiring confidence among institutional and, increasingly, foreign investors. The Securities and Exchanges Board of India (SEBI), which was established as part of the comprehensive economic reforms launched in 1991, has made considerable progress in becoming a rigorous regulatory regime that helps ensure transparency and fair practice. And the National Stock Exchange of India, also established as part of the reforms, now functions with enough efficiency and transparency to be generating the third-largest number of trades in the world, just behind the NASDAQ and NYSE. Among more recent changes, the enactment of Sarbanes,Oxley type measures in 2004,which includes protections for minority shareholders in family- or "promoter"-led businesses,has contributed to recent increases in institutional and foreign stock ownership. And while family- and government-controlled business groups continue to be the rule, India has also seen the rise of successful companies like Infosys that are free of the influence of a dominant family or group and have made the individual shareholder their central governance focus. [source] Large Shareholder Entrenchment and Performance: Empirical Evidence from CanadaJOURNAL OF BUSINESS FINANCE & ACCOUNTING, Issue 1-2 2008Yves Bozec Abstract:, Recent empirical evidence indicates that the largest publicly traded companies throughout the world have concentrated ownership. This is the case in Canada where voting rights are often concentrated in the hands of large shareholders, mostly wealthy families. Such concentrated ownership structures can generate specific agency problems, such as large shareholders expropriating wealth from minority shareholders. These costs are aggravated when large shareholders don't bear the full costs of their decisions because of the presence of mechanisms (dual class voting shares, pyramids) which lead to voting rights being greater than the cash flow rights (separation). We assess the impact of separation on various performance metrics while controlling for situations when the large shareholder has (1) the opportunity to expropriate (high free cash flows in the firm) and (2) the incentive to expropriate (low cash flow rights). We also control for when the large shareholder has the power to expropriate (high voting rights, outright control and insider management) and for the presence of family ownership. The results support our hypotheses and indicate that firm performance is lower when large shareholders have both the incentives and the opportunity to expropriate minority shareholders. [source] Planning to win: The best way to predict the futureJOURNAL OF CORPORATE ACCOUNTING & FINANCE, Issue 3 2005Lawrence B. M. Serven Planning in many organizations today is often more of a mechanical exercise than a value-adding process. But planning should not be about merely forecasting results. Instead, it should be about making results happen. Planning is about driving shareholder value each and every day. © 2005 Wiley Periodicals, Inc. [source] Performance and trade-offs in Microfinance Organisations,Does ownership matter?JOURNAL OF INTERNATIONAL DEVELOPMENT, Issue 5 2008Roy Mersland Abstract Policy advocates argue for the transformation of non-government Microfinance Organisations (MFOs) into shareholder owned firms (SHFs). This paper investigates whether the proposed superiority of shareholder owned MFOs is empirically supported. The findings indicate that the difference between shareholder owned MFOs and non-government MFOs is minimal. Our results contradict established paradigms and policy guidelines in the industry. However, the results are not necessarily surprising since ownership theories support our findings. So do also studies from the general banking markets as well as historical studies. Adaptation of legal frameworks allowing well-performing NGOs to mobilise savings appears to be a better option than transformation. Copyright © 2008 John Wiley & Sons, Ltd. [source] Relative importance of stakeholders: analysing speech acts in a layoffJOURNAL OF ORGANIZATIONAL BEHAVIOR, Issue 7 2002Wendy L. Guild Grounded in a participant observation study of a ski resort, this paper explores the (re)production of legitimate discourses through speech acts pertaining to an organizational event, a layoff. Manager's justifications and employees' reactions and critiques put sanctioned discourses into play. And while the stated organizational values include shareholder, customer, and employee concerns, the relative importance of these stakeholders is only made clear through the conversation of the speech acts and their reception. The shape of the conversation, in locution, illocution and perlocution, shifts the relations between managers and the employees and creates longer term consequences for the organization. This focus on language use serves as a micro-foundation for the study of legitimation processes and its consequences within organizations. Copyright © 2002 John Wiley & Sons, Ltd. [source] A New Perspective on Ownership Identities in China's Listed CompaniesMANAGEMENT AND ORGANIZATION REVIEW, Issue 3 2006Andrew Delios abstract We introduce a new perspective on the conceptualization and measurement of ownership identities of China's listed companies. Previous work analyzing the strategy and performance implications of the ownership structure in Chinese firms has used the official categorization provided by state bodies in China. In this categorization, state shareholding, legal person shareholding and A-shares dominate. This official categorization, however, obscures the ultimate identity of a shareholder; this can confound conceptual and empirical work on the strategy and performance implications of ownership identity. We refine the existing classification by recategorizing shareholders into 16 types, which can then be regrouped into relevant categories of shareholders, such as government or private, to enable analysis of ownership identity and ownership concentration issues in China's listed companies. Our new classification can help provide consistency in the burgeoning research on the strategy and performance implications of the concentration and identity aspects of ownership structure in China's listed companies. [source] Patterns of corporate governance and technical efficiency in Italian manufacturingMANAGERIAL AND DECISION ECONOMICS, Issue 1 2007Sergio Destefanis The purpose of this paper is to analyse the relationship between the corporate governance system and technical efficiency in Italian manufacturing. We use a non-parametric frontier technique (DEA) to derive technical efficiency measures for a sample of Italian firms taken from nine manufacturing industries. These measures are then related to the characteristics of the corporate governance system. Two of these characteristics turn out to have a positive impact on technical efficiency: the percentage of the company shares owned by the largest shareholder and the fact that a firm belongs to a pyramidal group. Interestingly, a trade-off emerges between these influences, in the sense that one is stronger in industries where the other is weaker. Copyright © 2007 John Wiley & Sons, Ltd. [source] A note on equity ownership and corporate value in GreeceMANAGERIAL AND DECISION ECONOMICS, Issue 8 2004G.A. Karathanassis This study attempts to investigate whether corporate performance is affected by the ownership structure, using data from companies quoted on the Athens Stock Exchange for the period 1996,1998. Given such an objective, the basic hypothesis examined, is that corporate performance as measured by Tobin's Q ratio is a function of ownership and other control variables. Our econometric approach relies on the use of a combination of time series and cross section data (panel-data analysis), a procedure that avoids many statistical problems. After examining the role of each identifiable shareholder, we find a positive relationship between institutional investors and corporate performance. Copyright © 2004 John Wiley & Sons, Ltd. [source] Law and Finance in Transition EconomiesTHE ECONOMICS OF TRANSITION, Issue 2 2000Katharina Pistor This paper offers the first comprehensive analysis of legal change in the protection of shareholder and creditor rights in transition economies and its impact on the propensity of firms to raise external finance. Following La Porta et al. (1998), the paper constructs an expanded set of legal indices to capture a range of potential conflicts between different stakeholders of the firm. It supplements the analysis of the law on the books with an analysis of the effectiveness of legal institutions. Our main finding is that the effectiveness of legal institutions has a much stronger impact on external finance than does the law on the books, despite legal change that has substantially improved shareholder and creditor rights. This finding supports the proposition that legal transplants and extensive legal reforms are not sufficient for the evolution of effective legal and market institutions. [source] How Might Companies Value ESOs?AUSTRALIAN ACCOUNTING REVIEW, Issue 26 2002Ross A. Maller There has been a steady growth in the use of employee equity compensation plans, and in the use of executive stock options (ESOs) in particular, along with a rise in shareholder and public perceptions that the values of compensation plans are not always fully disclosed. The IFSA of Australia recently called for separate reporting in financial statements of numbers and values of ESOs. Companies, when negotiating employment contracts, frequently agree to compensate an executive if a share option plan is subsequently not approved by shareholders. These facts suggest that reporting the value of an ESO plan is a useful and important exercise. We outline a model for the valuation of ESOs typically issued by Australian listed companies and illustrate the application of the model with a case study. [source] Bringing About Changes to Corporate Social Policy through Shareholder Activism: Filers, Issues, Targets, and SuccessBUSINESS AND SOCIETY REVIEW, Issue 2 2009MIGUEL ROJAS ABSTRACT We examine shareholder initiated social policy proposals' capacity to exert pressure on management to force it to adopt the suggested changes in policy. We show that social proposals, filed under the U.S. Securities and Exchange Commission's Rule 14a-8, have a more limited capacity to change corporate social policy than it has been previously reported. However, the capacity to exert pressure on firms can be substantially higher for some types of filers, notably pension funds and mutual funds. The analysis also suggests that the capacity to influence management is higher for some types of issues presented in the resolution, such as those related to board diversity, energy and environment, and international laborand human rights. We also provide suggestions explaining why shareholder activism is a persistent practice despite its limited results. [source] Corporate Governance in China,Is Economic Growth Potential Hindered by Guanxi?BUSINESS AND SOCIETY REVIEW, Issue 4 2005UDO C. BRAENDLE Despite the opening of the market and partial privatization of state-owned companies in China, the state still represents the controlling shareholder in larger companies. By analyzing the weaknesses of Chinese corporate governance we illustrate the framework for harmful corruption. China is characterized by a weak legal system and strong influences of traditions such as guanxi. In this article we analyze the influence of guanxi on the Chinese corporate governance system. We find that guanxi is in general a double-edged sword, but business-to-government guanxi in particular can harm the weak Chinese corporate governance system and hamper its further economic development and growth. [source] Shareholders versus stakeholders: corporate mission statements and investor returnsBUSINESS ETHICS: A EUROPEAN REVIEW, Issue 4 2002Mohammed Omran This paper seeks to discover whether companies that adopt a stakeholder approach, and thereby demonstrate a wider remit of corporate responsibility, provide inferior returns to those that embrace the shareholder value approach. To classify approaches, mission statements were analysed, the final sample comprising 32 shareholder oriented companies and 48 stakeholder oriented companies. To assess performance both accounting,based and market,based measures were used. A number of moderating variables were taken into account: systematic (beta) risk, gearing (long,term debt to total long,term finance), tax ratios, and firm size. ANOVA and Kruskall,Wallis tests revealed that mission orientation did not affect performance, whether in terms of stock returns or excess returns. Neither were accounting returns on equity different overall, although shareholder oriented companies experienced wider variations in this measure. A number of multiple regressions were also performed. However, the mission dummy was not found to be a significant variable. [source] | |||||||||||||||||||||||||||||||||||||||||||