Browsing by Author "Schiehll, Eduardo"

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Board Response to Transnational Regulation on Corporate Governance: A Case Study on EU Banking Regulation
(2024-01) Ikäheimo, Seppo; Schiehll, Eduardo; Sinha, Vikash
A1 Alkuperäisartikkeli tieteellisessä aikakauslehdessä
How does a board of directors respond to stringent transnational regulations on corporate governance? We explore this question in a case study that includes interviews with key governance actors of a bank dealing with regulatory changes in the European Union (EU) initiated in 2010 in response to the financial crisis of 2007–2008. Our findings suggest that transnational regulations introduced a conflicting prescription to the directors, who were caught between two needs: existing local governance practices and transnational regulatory compliance. Contributing to the international corporate governance research, our findings corroborate the resistance to transnational regulations and the distrust attributable to boards of directors’ role struggles and the invasive accountability mechanisms introduced by such regulations. We, therefore, contribute to the ongoing discussion on how the conflicting layers of corporate governance—local versus global—and how the discontinuities between competing existing practices and the prescriptions of transnational regulations can provoke micro-resistance.
A configurational perspective of boards' attention structures
(2023-09) Schiehll, Eduardo; Lewellyn, Krista; Yan, Wenxi
A1 Alkuperäisartikkeli tieteellisessä aikakauslehdessä
Research Question/Issue What combinations of board attributes and contextual factors explain boards' selective distribution of attention between their dual role of resource provisioning and monitoring? At the board level, we consider board structure and breadth of knowledge, while the context in which boards operate is captured by the degree of external scrutiny, operational complexity, performance, and ownership structure. Research Findings/Insights Our study demonstrates that there are multiple ways board attributes bundle and combine with important elements of the context to promote similar board attention structures. Our findings provide evidence of the causal complexity underlying this phenomenon and corroborate the notions of equifinality and asymmetric causality among board-, firm-, and institution-level conditions conducive to boards allocating more attention to either their resource provisioning or monitoring roles. Theoretical/Academic Implications Our findings support the attention-based view (ABV), suggesting that boards' selective distribution of attention is regulated by the combination of skills and knowledge directors bring to the firm and the stimuli provided by contextual factors. In doing so, we underscore the need for an extended theory on board effectiveness, as resource dependence- and agency-based prescriptions about boards' behavior may be incomplete, since there is limited consideration by these theories of the bounded rationality of directors and the complex relationships between the factors that can frame boards' selective distribution of attention. Practitioner/Policy Implications Our study informs efforts to disentangle the conditions under which different attributes combine and regulate boards' distribution of attention, which has implications for nomination committees and powerful actors who have influence on board appointments. Because our results reveal several causal paths that can promote similar board attention structures, decision makers may wish to recruit directors with specific attributes that will be the best fit for the firm's contextual conditions.
ESG outcasts: Study of the ESG performance of sin stocks
(2021-09-01) Paradis, Gabriel; Schiehll, Eduardo
A1 Alkuperäisartikkeli tieteellisessä aikakauslehdessä
Certain economic actors are considered by many as involved in or associated with an activity that is considered unethical or immoral, such as the producers of tobacco, alcohol and firearms (often referred to as sin stocks). In an environment in which stakeholders are increasingly interested in sustainable development and corporate social responsibility, it is important to understand how firms respond to these issues which divide public opinion. Our study compares the environmental, social and governance (ESG) performance for a targeted sample of 79 sin stocks and a control group of comparable firms. We observe that sin stocks have a lower overall ESG performance as well as for each of the three ESG pillars, and that this difference is more significant in relation to governance and some key social and environmental issues for which sin stocks could have compensated risk exposure with responsible management practices. In other words, our results demonstrate that sin stocks are exposed to more severe ESG issues and consistently lack the necessary practices to mitigate these issues. Our study provides relevant insights into the informativeness of ESG scores to distinguish firms (and sectors) investing in management practices that offset ESG risk exposure.
Investment–cash flow sensitivity and investor protection
(2023-07-01) de Castro, Luiz Ricardo Kabbach; Martins, Henrique Castro; Schiehll, Eduardo; Terra, Paulo Renato Soares
A1 Alkuperäisartikkeli tieteellisessä aikakauslehdessä
We examine the role of country-level legal investor protection (i.e., shareholder and creditor protection) on firm investment-cash flow sensitivity (ICFS). Using underexplored research data on investor protection across 21 countries and working with a conservative empirical design, we extend prior literature on the relation between investor protection and ICFS and provide new evidence on how these country-level attributes interact to explain a firm's ICFS. We find that either the strong legal protection of minority shareholders or the strong legal protection of creditors reduces the sensitivity of investment to internal cash flow. However, in countries with strong levels of both minority shareholder and creditor protection, ICFS increases. Our results remain robust after controlling for several alternative explanations. The results support the argument that overregulation arises when policymakers increase investor protection at levels that lead firms to avoid external sources of finance, hampering firm investment. Our findings suggest that countries face a regulatory trade-off such that increasing investor protection (either shareholder or creditors protection) enhances financial markets efficiency, but excessive regulation can indeed lead to financial markets inefficiencies.
La percepción de la controlabilidad y de la justicia en la evaluación de desempeño
(2014-01-01) Schiehll, Eduardo; Landry, Suzanne
A1 Alkuperäisartikkeli tieteellisessä aikakauslehdessä
We investigated the effects of environmental uncertainty, decentralization of decisions rights, and the use of subjective performance measures on managers’ perceptions of outcome controllability and performance evaluation fairness. Based on a survey of 339 middle- and upper- level managers, our results suggest that environmental uncertainty adversely affects perceptions of outcome controllability and that this effect is not moderated by the decentralization of decision rights. Our results also show a positive association between perceived controllability and performance evaluation fairness. Although we found no direct effect of the use of subjective performance measures on perceived performance evaluation fairness, it appears to moderate the positive effect of perceived controllability on fairness. We also show that the positive effect of the use of subjective measures may depend on contextual and job-related factors. The overall results underscore the need to consider the organizational context (environmental uncertainty and decentralization of decision rights) to investigate how performance measures affect perceived controllability and fairness. Because perceived controllability and fairness affect individual attitudes and behaviors within an organization, our results have important implications for the design and use of performance evaluation systems.