SACM - United Kingdom
Permanent URI for this collectionhttps://drepo.sdl.edu.sa/handle/20.500.14154/9667
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Item Restricted CEO characteristics and Real Earnings Management(University of Southampton, 2025) Alotaibi, Mohammed; Vithana, Krish; Tingbani, IshmaelReal earnings management (REM) behaviour can be influenced by external factors, including agency cost, political costs, and compensation motivations. Consequently, prior research investigated REM with respect to these aspects. While previous research has explored REM behaviour within these contexts, there has been a lack of attention paid to how a CEO's characteristics might play a role in these intricate situations. This thesis addresses this gap by demonstrating how a CEO’s traits interact with these external factors to shape REM practices, and the three papers are interconnected by this viewpoint. This method not only addresses gaps in the current body of literature but also underscores the significance of examining the decision-making processes of managers regarding REM by taking into account both internal CEO characteristics and external factors. Therefore, the first study investigates how narcissistic CEOs influence REM taking into account how this dynamic may change under Corporate Social Responsibility (CSR). Namely, this study set out how the interaction between CSR and CEO narcissism influences REM behaviour. To answer this question, a sample of firms listed on the S&P 500 Index from 2008 to 2020 was used. In accordance with previous studies, the first paper reveals a negative relationship between CSR and REM and a positive relationship between CEO narcissism and REM. Interestingly, the interaction term reveals that CSR improves earnings quality by reducing this positive association between CEO narcissism and REM. This is a consequence of the reduced information asymmetry and increased involvement of stakeholders that these CSRs bring, as well as the ability of CSR to redirect the interpersonal strategies of the CEO narcissism system, leading narcissistic CEOs to engage more in CSR and less in REM in order to improve the firm's image and achieve a sense of pride and dominance. The second paper examined whether the relationship between government contract and REM is conditional upon the ability of managers. While prior studies have examined political cost through government contracts as a factor determining earnings management (EM) behaviour in politically sensitive firms, this study demonstrates that managerial characteristics interact to determine EM behaviour. A sample of 162,756 firm-year observations of US companies in COMPUSTAT from 1980 to 2020 was examined. This study found that due to the monitoring that comes with government contracts, contractors engage in REM as a less detectable EM method. However, REM activity is reduced if the contractor firm is led by highly able managers. The third paper investigated whether the relationship between industry tournament incentives and REM is influenced by the ability of managers. The inconsistent results of previous studies that have examined the relationship between industry tournament incentives and REM have served as motivation for this study. The findings indicate that firms are more likely to engage in REM as a consequence of CEO industry tournament incentives. However, the level of involvement in REM reduces when the company is managed by high-ability managers. This finding suggests that managerial characteristics influence EM behaviour, highlighting the importance of employing high-ability managers to mitigate any potentially unethical consequences. This finding was achieved by studying a sample of 26,255 firm-year observations covering all US firms in COMPUSTAT from the years 1992–2020. The findings are robust, involving a number of sensitivity tests. This research empirically contributes to the EM literature by indicating that the influence of external factors (CSR, political connection, and industry tournament incentives) is subject to the CEO's characteristics.8 0Item Restricted Measuring the Variability of ESG: Implications for CSR and Corporate Financial Performance(University of East Anglia, 2024) Aljamaan, Bader; Markellos, RaphaelThis study develops four measures of variability to quantify a firm’s social responsibility performance over time, addressing a significant gap in the literature. Applying these measures on both the overall CSR performance scores, as proxied by ESG scores, and the variability of workforce performance, as scores proxied by workforce scores. While prior studies have extensively examined the impact of the overall CSR performance on corporate financial performance, there is a lack of empirical studies quantifying a firm’s social responsibility performance variability over time and its implications for financial outcomes. Therefore, this study fills this gap by proposing four measures to assess the variability of a firm’s social responsibility performance using ESG scores, and workforce scores and empirically examining their impacts on corporate financial performance. This research seeks to answer two key questions: Does stability in CSR performance improve corporate financial performance? And Does stability in workforce performance enhance corporate financial performance? Using a sample of 379 publicly traded U.S. firms from 2004 to 2022, this study evaluates CSR and workforce performance stability over time through annual ESG scores and workforce scores produced by LSEG (formerly known as Refinitiv, and before that was known as ASSETS4). ESG scores measure a company’s environmental, social, and governance performance, while workforce dimension of social pillar captures how well a firm promotes diversity and inclusion, career development and training, working conditions, and health and safety (Refinitiv, 2021). The study is structured in three parts. First, it develops four measures of stability: (1) coefficients of variation, (2) Beta, (3) temporal trend, and (4) residuals. Second, it applies these measures of a firm’s overall CSR performance using ESG scores, as well as workforce-specific performance using workforce scores. Third, it analyses the relationship between these stability measures and corporate financial performance. The findings reveal that less variability in CSR performance measured by coefficients of variation of ESG (ESGCV) leads to improved firm profitability (ROA). Additionally, Tobin’s q shows significant associations with two stability measures beta of ESG (ESGBETA), a negative impact, indicating that less deviation of CSR performance compared to the market overall CSR performance is rewarded with higher firm value, and CSR temporal trend (ESGTREND), a positive effect, suggesting that improving CSR performance over time in alignment with market trends enhance firm value. However, variability measures do not significantly impact stock returns as one of the corporate financial indicators. Regarding workforce stability performance and its impact of corporate financial performance, the results demonstrate a more pronounced impact on financial performance compared to CSR stability. Higher workforce variability measured by workforce scores coefficient of variation (WFCV) negatively affects both ROA and Tobin’s q, while improving workforce performance over time measured by temporal trend (WFTREND) is associated with marginally higher profitability. Notably, not all stability measures show significant relationships, suggesting that the link between CSR consistency and financial performance may be complex, potentially due to data limitations, measurement challenges or the multifaceted nature of financial performance metrics. Overall, the findings underscore the strategic importance of CSR as a long-term investment, emphasizing the need for continuity and consistency in CSR efforts, particularly in workforce-related initiatives. Firms that sustain or improve CSR performance over time are better positioned to ensure stakeholder satisfaction and secure a sustainable competitive advantage. This study contributes to the literature by introducing new measures of social responsibility stability performance and positioning CSR consistency as a strategic asset. By capturing the variability in both overall CSR and workforce performance, this study highlights the importance of integrating CSR efforts into business operations, with more emphasis on workforce performance as a key component of CSR dimensions. Integrating CSR into organisational strategies has become crucial, reflecting a commitment to ethical behaviour and sustainable efforts. By analysing the stability of CSR performance as a strategic aspect, this study reinforces the view that continuity in CSR efforts, as shown in workforce and overall ESG performance, not only enhances financial performance, but also aligns with the argument that emphasises mutual trust between a firm and its stakeholders. This study therefore provides evidence to support policymakers and managers in prioritising workforce stability as part of CSR, so as to maintain financial performance and generate benefits in the long term.35 0Item Restricted The effect of HRM practices on the CSR integration into organisational culture: A study of the role of HR in developing a socially responsible culture .(Saudi Digital Library, 2023-09-28) Almatrafi, Ghadeer; Ali, BaharCorporate Social Responsibility (CSR) significance in an organisation has been rapidly growing for many years, acknowledging the imperative of addressing Environmental, Social, and Governance concerns in the strategies of business. CSR integration into organisational culture is necessary for sustainable competitive advantage, societal well-being, and stakeholder trust. Human Resource Management (HRM) practices wield a profound influence on the culture, and they can share the CSR principles integration. The empirical investigation on the interaction between CSR and HRM integration is scarce. The study filled the gap by exploring how HRM practices support and contribute to the integration of CSR into organisational culture. The study investigated HR's role in nurturing a socially responsible culture, uncovering key benefits and challenges, and underscoring the importance of aligning both HRM and CSR practices. The research also underscores the HR professional vital contributions and provides insights to foster a socially responsible culture that drives social impact and sustainability, enriching strategic, practical, and academic understandings in the process.35 0Item Restricted Corporate Governance Policies Dedicated to Corporate Social Responsibility: Should CSR be Mandatory to Firms?(2022-09) AlWadadni, Mutlaq; Mollica, VivianaCorporate Governance (CG) policies have a significant impact on how organisations operate and their commitments, mainly because of Corporate Social Responsibility (CSR). The relationship between appropriate CG and CSR allows companies to maintain a good balance for their operations. It may also support and reinforce the organisations' efforts to establish mechanisms and strategies of control and management, which improve the satisfaction of stakeholders and shareholders and increase the value of shareholders. However, it is not clear whether CSR and CG policies are voluntary or mandatory for organisations. As a result, this research focus on disclosing how CSR is not an option for companies. It insists that CSR is an obligation of organisations that aims at responding to emerging market pressure. The paper demonstrates the concepts of CSR, showing how the concepts overlap with each other to facilitate fairness and satisfaction of both shareholders and stakeholders. It further provides an in-depth, comprehensive analysis of how various legal systems and frameworks undertake social responsibilities based on CG policies.15 0