2,687 research outputs found
Handbook of accounting, accountability and governance edited by Garry D. Carnegie and Christopher J. Napier
No full textCountry‐, firm‐, and director‐level risk and responsibilities and independent director compensation
No full textResearch Question
This study investigates how and to what extent country‐level institutional characteristics, firm‐ and independent director‐level risk and responsibilities are related to independent director compensation, in terms of amount and design.
Research findings/Insights
Using an international sample of 5,220 independent directors on 727 non‐financial listed firms in 16 countries, this study revealed that both country‐level institutional characteristics and firm‐ and director‐level agency account for the variation of independent director compensation amount. Firm‐level ESG‐related reputational risk and director‐level observable responsibilities on the board are strongly related to independent director compensation amount. These agency relationships vary in the different institutional settings. Country‐level director liability substitutes for firm‐level and director‐level monitoring. Firms conform to institutional pressures for independent director compensation design. Institutional embeddedness comes from the firm’s primary institutional environment and its exposure to foreign financial markets.
Theoretical/Academic implications
This study develops a multilevel theory of the antecedents of independent director compensation. Firm‐ and director‐level agency issues are nested in, and interact with, the institutional context in which the agency relationship between shareholders and independent directors is embedded.
Practitioner/Policy Implications
This study helps practitioners to understand how director liability regulations, a firm’s ESG‐related reputational risk and the specific responsibilities on the board are related to independent director compensation. It helps firms explain to shareholders (and stakeholders) how independent director compensation is determined. Firms should consider that the consequences of their ESG practices extend beyond direct costs. Policymakers can find our results useful when regulating on director liability and developing best practices
Are optimal contracting and managerial power competing or complementary views? Evidence from the compensation of statutory auditors in Italy
No full textResearch Question/Issue
This study examines whether and to what extent the compensation of independent monitors at the board-level is the outcome of an optimal contract between independent parties or the result of involvement with corporate insiders.
Research Findings/Insights
By using a hierarchical linear regression model with a sample of 559 statutory auditors, whose main task is to monitor the acts and the decision-making process of the board of directors, this study provides evidence that the statutory auditors’ compensation is mainly based upon the effort and responsibilities that are observable by shareholders. However, our findings highlight that the additional, poorly disclosed, compensation that a statutory auditor may receive, unrelated to his/her role, is associated with his/her involvement with corporate insiders.
Theoretical/Academic Implications
By analysing a de facto three-tier hierarchical agency model, this study gives insights of how and to what extent the optimal contracting and managerial power perspectives provide complementary, rather than competing, explanations to compensation basis and design at the board-level. Not only do these perspectives of agency theory co-exist at an aggregate-level, but also seem to be complementary at both the firm-level and individual-level.
Practitioner/Policy Implications
This study offers insights to policymakers by questioning the current regulation that allows threats to the de facto independence of a formally independent corporate governance mechanism. We recommend further disclosure about the criteria and the rationales of the additional compensation perceived by statutory auditors. In addition, we suggest investors and other stakeholders, who may rely on the work of the board of statutory auditors as independent monitor, to be careful about the way statutory auditors are paid
The determinants of compensation of the board of statutory auditors in Italian non-financial listed firms
No full textManagement accounting systems in venture capital-backed start-up companies
No full textManagement Accounting Systems (MAS) can help start-up companies to manage resource allocation and satisfy investors’ information needs. This study helps to investigate the main features of MAS adopted by Italian venture capital-backed startup companies. Also, the study aims to analyse how venture capitalists monitor their investment through management accounting. Thirty semi-structured interviews were carried out to gather information from a corporate and an investor perspective. Our results show that both start-up companies and investors consider MAS as useful to make conscious and target-oriented decisions. MAS are used by investors to monitor the investee’s performance and contribute in aligning goals’ time horizon. In addition, MAS help investors to develop a cooperative relationship with start-up companies and to provide business advices. This study contributes to the agency-theory debate by showing that MAS help not only to reduce information asymmetries but also to foster a dialogue and to benefit from investors’ human capital
The evolution of CSR contracting in Italian non-financial listed companies
No full textMost of the prior studies on executive remuneration lack nuanced qualitative analyses of the design of sustainability-related incentive plans. In particular, little is known about several design elements, such as the types and weights of key performance indicators (KPIs), the KPIs targets, and their range of values and achievement levels. Through in-depth documentary analysis, this chapter aims to fill this gap by exploring, through a detailed and comparative analysis, the design of incentive plans addressing environmental, social-, and governance-related goals. Specifically, this chapter focuses on the sustainability-related incentive components for CEOs of Italian non-financial companies listed on the FTSE-MIB index. The main findings show a general enhancement in the design of sustainability-related incentive plans, considering their use, scope, and specificity regarding targets and their attainment. However, weaknesses persist, particularly concerning the motivation behind adopting this form of incentive plan and the related KPIs. In addition, this chapter highlights a biased focus on a small subset of stakeholders, the delayed presentation of targets, and the low difficulty level in achieving these targets. For these reasons, this study stresses the need for more robust, transparent, and challenging sustainability-oriented incentive structures to contribute to corporate social, environmental, and governance-related goals effectively
The future of financial reporting 2024: Private companies' and SMEs' reporting - future trends and challenges
No full textLa sicurezza sul lavoro negli incentivi degli amministratori: prime evidenze empiriche e riflessioni
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