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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.
Gabriel Paradis; Eduardo Schiehll. ESG Outcasts: Study of the ESG Performance of Sin Stocks. Sustainability 2021, 13, 9556 .
AMA StyleGabriel Paradis, Eduardo Schiehll. ESG Outcasts: Study of the ESG Performance of Sin Stocks. Sustainability. 2021; 13 (17):9556.
Chicago/Turabian StyleGabriel Paradis; Eduardo Schiehll. 2021. "ESG Outcasts: Study of the ESG Performance of Sin Stocks." Sustainability 13, no. 17: 9556.
The effect of considering the financial materiality of ESG (environmental, social and governance) issues on firms’ ESG performance scores and rankings is investigated using Morgan Stanley Capital International (MSCI) ESG Ratings and the financial Materiality Map® developed by the Sustainability Accounting Standard Board (SASB). Results show that when financial materiality is applied, firms’ ESG performance scores change significantly. Further corroboration is provided by significant changes in firms’ ESG rankings when ESG performance assessment is based on SASB-adjusted ESG performance scores. Environmental pillar issues, and particularly natural resource use, are predominantly responsible for the changes. Overall, the results suggest that financial materiality affects the informative value of ESG scores and rankings, allowing the identification of investment opportunities in firms with high scores on business-critical ESG issues. We argue that consideration of financial materiality can better inform investment decisions based on ESG performance. This study adds to the understanding and assessment of ESG performance and its information content.
Nicolas Madison; Eduardo Schiehll. The Effect of Financial Materiality on ESG Performance Assessment. Sustainability 2021, 13, 3652 .
AMA StyleNicolas Madison, Eduardo Schiehll. The Effect of Financial Materiality on ESG Performance Assessment. Sustainability. 2021; 13 (7):3652.
Chicago/Turabian StyleNicolas Madison; Eduardo Schiehll. 2021. "The Effect of Financial Materiality on ESG Performance Assessment." Sustainability 13, no. 7: 3652.
This study examines whether financial materiality in environmental, social, and governance (ESG) disclosure benefits the stock market by increasing the amount of accessible and relevant firm‐specific information. Based on the value relevance of information and the principle of financial materiality, we demonstrate that disclosing material ESG information increases stock price informativeness. We conduct an automated content analysis of 150,000 electronic documents filed by firms listed on the S&P/TSX Composite Index from 1999 to the end of 2014. Our findings show that ESG disclosure is indeed value relevant for investors and that financial materiality in ESG disclosure leads to more informative stock prices. In addition, the effect of ESG disclosure on stock price informativeness differs across the ESG components, being more sensitive to the social component. This study contributes to the literature on sustainability reporting, and in particular to the ongoing discussion about whether the financial materiality of ESG issues matters. This study also deepens the understanding of agency theory predictions about the economic effects of ESG disclosure.
Eduardo Schiehll; Sam Kolahgar. Financial materiality in the informativeness of sustainability reporting. Business Strategy and the Environment 2020, 30, 840 -855.
AMA StyleEduardo Schiehll, Sam Kolahgar. Financial materiality in the informativeness of sustainability reporting. Business Strategy and the Environment. 2020; 30 (2):840-855.
Chicago/Turabian StyleEduardo Schiehll; Sam Kolahgar. 2020. "Financial materiality in the informativeness of sustainability reporting." Business Strategy and the Environment 30, no. 2: 840-855.
This study examines the effects of the firm's ownership concentration and its institutional environment on corporate debt maturity choices. As ownership concentration and debt maturity are alternative governance mechanisms, we theorize and investigate whether their association is influenced by country‐level governance factors that enhance outside monitoring by minority shareholders and debtholders. Our investigation is based on a dataset of 50,599 firm‐year observations from 38 countries. We use a propensity‐score matching approach and find that the effect of ownership concentration on debt maturity is conditional to country‐level governance attributes. Ownership concentration has a negative effect on debt maturity in countries where both shareholder protection and creditor rights are weak. Ownership concentration, however, tends to lengthen debt maturity as protection increases, and this positive effect on the length of debt maturity is stronger in countries enhancing protection towards debtholders (instead of shareholders). We also explore other characteristics of ownership structure, such as the identity the presence of controlling shareholders. These results corroborate the view that entrenched shareholders may use debt maturity opportunistically. Our study provides new insights into the interplay between firm‐ and country‐level governance mechanisms and a deeper understanding of cross‐country differences in the association between ownership structure and debt financing. This article is protected by copyright. All rights reserved
Henrique Castro Martins; Eduardo Schiehll; Paulo Terra. Do shareholder protection and creditor rights have distinct effects on the association between debt maturity and ownership structure? Journal of Business Finance & Accounting 2019, 47, 708 -729.
AMA StyleHenrique Castro Martins, Eduardo Schiehll, Paulo Terra. Do shareholder protection and creditor rights have distinct effects on the association between debt maturity and ownership structure? Journal of Business Finance & Accounting. 2019; 47 (5-6):708-729.
Chicago/Turabian StyleHenrique Castro Martins; Eduardo Schiehll; Paulo Terra. 2019. "Do shareholder protection and creditor rights have distinct effects on the association between debt maturity and ownership structure?" Journal of Business Finance & Accounting 47, no. 5-6: 708-729.
Resumo Este artigo apresenta as perspectivas da pesquisa em Governança de Empresas Familiares no Brasil, resultantes da chamada desta edição especial da RAC endereçada ao tema. Os dois artigos tratam de temas relevantes no debate acadêmico, a saber: a necessidade de um arcabouço teórico para a avaliação de processos decisórios estratégicos de empresas familiares; e a importância da diversidade de gênero nos conselhos de administração destas empresas. As proposições e evidências elencadas nos dois estudos, relativas aos construtos e variáveis que apresentaram consistência teórica ou estatística, abrem uma nova frente de pesquisa sobre o tema no Brasil, relacionada à conciliação da heterogeneidade da composição dos Conselhos de Administração com a criação de valor em Empresas Familiares.
Aureliano Angel Bressan; Eduardo Schiehll; Jairo Laser Procianoy; Luiz Ricardo Kabbach De Castro. Perspectivas da Pesquisa em Governança de Empresas Familiares no Brasil. Revista de Administração Contemporânea 2019, 23, 696 -702.
AMA StyleAureliano Angel Bressan, Eduardo Schiehll, Jairo Laser Procianoy, Luiz Ricardo Kabbach De Castro. Perspectivas da Pesquisa em Governança de Empresas Familiares no Brasil. Revista de Administração Contemporânea. 2019; 23 (6):696-702.
Chicago/Turabian StyleAureliano Angel Bressan; Eduardo Schiehll; Jairo Laser Procianoy; Luiz Ricardo Kabbach De Castro. 2019. "Perspectivas da Pesquisa em Governança de Empresas Familiares no Brasil." Revista de Administração Contemporânea 23, no. 6: 696-702.
This study examines the human and relational capital attributes that enable Chief Executive Officers (CEOs) to acquire structural power in Chinese listed firms, and whether gender differences intervene in the attributes that explain this structural power. We show that CEOs with elite education, longer years of education and work experience and more outside directorships are more likely to gain structural power in Chinese listed firms. However, female CEOs are less likely than male CEOs to achieve similar structural power, while only outside directorships, as a proxy for relational capital, compensate for this gender inequality. Employing human capital theory, our study advances the knowledge on CEO leadership by revealing the role of human and relational attributes to explain CEO structural power. Further, our study provides new insights about upward mobility and gender inequality in a fast emerging economy.
Wenxi Yan; Eduardo Schiehll; Maureen I. Muller-Kahle. Human and relational capital behind the structural power of CEOs in Chinese listed firms. Asia Pacific Journal of Management 2018, 36, 715 -743.
AMA StyleWenxi Yan, Eduardo Schiehll, Maureen I. Muller-Kahle. Human and relational capital behind the structural power of CEOs in Chinese listed firms. Asia Pacific Journal of Management. 2018; 36 (3):715-743.
Chicago/Turabian StyleWenxi Yan; Eduardo Schiehll; Maureen I. Muller-Kahle. 2018. "Human and relational capital behind the structural power of CEOs in Chinese listed firms." Asia Pacific Journal of Management 36, no. 3: 715-743.
How do human and relational attributes explain chief executive officers’ (CEOs’) structural power in Chinese listed firms? Do gender differences in human and relational capital attributes help CEOs gain structural power? Integrating human and relational capital theory, this study contributes by revealing the influence of individual-level factors on CEO structural power, an influence that is gender-dependent. We show that CEOs with elite education, longer work experience, political ties, and more outside directorships are more likely to gain structural power. The positive relationship between outside directorships and CEO structural power is stronger for females, whereas the relationship between political ties and CEO structural power is stronger for males. Our results extend the literature on the connections between relational capital and CEO structural power in China, and advance the knowledge on female CEOs and leadership. We explore deeper to investigate gender inequality in terms of structural power in a fast emerging economy. We show that although female CEOs are growing in number in Chinese firms, it remains difficult for them to gain the same structural power as their male counterparts and that they need to leverage different human and relational capital attributes compared to males.
Wenxi Yan; Eduardo Schiehll; Maureen I. Muller-Kahle. Human and Relational Capital behind the Structural Power of Female CEOs in China. Academy of Management Proceedings 2018, 2018, 1 .
AMA StyleWenxi Yan, Eduardo Schiehll, Maureen I. Muller-Kahle. Human and Relational Capital behind the Structural Power of Female CEOs in China. Academy of Management Proceedings. 2018; 2018 (1):1.
Chicago/Turabian StyleWenxi Yan; Eduardo Schiehll; Maureen I. Muller-Kahle. 2018. "Human and Relational Capital behind the Structural Power of Female CEOs in China." Academy of Management Proceedings 2018, no. 1: 1.
This study examines how governance configurations comprised of board capital, CEO power and the presence of large shareholders are associated with innovation commitment in organizations. We take a configurational perspective, proposing that organizational innovation commitment is contingent upon how interdependent governance attributes associated with monitoring and resource provisioning can either enhance or constrain management’s discretion to invest in research and development (R&D). Using fuzzy-set qualitative comparative analysis (fsQCA), we identify complementarities which lead to three board archetypes that foster firm innovation commitment. ‘Pilot boards’ have both board capital breadth and depth allowing for active and close participation in innovation decision-making. ‘Pivot boards’ possess the depth of industry-specific expertise and linkages required for providing resources and oversight of powerful CEOs. And ‘advisory boards’ have less power but have outside directors who have breadth of expertise and relational capital that complements the oversight provided by powerful family owners so as to effectively advise management on innovation decisions. Our findings underscore that governance mechanisms work in tandem, not in isolation, to explain significant organizational outcomes, specifically those associated with innovation commitment.
Eduardo Schiehll; Krista B. Lewellyn; Maureen I. Muller-Kahle. Pilot, Pivot and Advisory Boards: The Role of Governance Configurations in Innovation Commitment. Organization Studies 2017, 39, 1449 -1472.
AMA StyleEduardo Schiehll, Krista B. Lewellyn, Maureen I. Muller-Kahle. Pilot, Pivot and Advisory Boards: The Role of Governance Configurations in Innovation Commitment. Organization Studies. 2017; 39 (10):1449-1472.
Chicago/Turabian StyleEduardo Schiehll; Krista B. Lewellyn; Maureen I. Muller-Kahle. 2017. "Pilot, Pivot and Advisory Boards: The Role of Governance Configurations in Innovation Commitment." Organization Studies 39, no. 10: 1449-1472.
Manuscript typeEmpiricalResearch Question/IssueThis study investigates the interplay between country-level governance quality and the capital structure choice at the firm level in Brazil and Chile. We examine the association between a firm's ownership concentration and its debt maturity structure and whether country-level governance quality influences this association.Research Findings/InsightsUsing a large firm-level dataset from Brazil and Chile for the period 2008–2013, we find a positive association between low ownership concentration and debt maturity. However, this association becomes negative when the largest shareholder has high ownership concentration. This result suggests that long-term debt and ownership concentration act as substitute monitoring mechanisms. Moreover, debt maturity is inversely related to our aggregated index of country-level governance quality, suggesting that in countries with governance systems that effectively protect debt holders, firms with high benefits of control (high ownership concentration) will use debt with shorter repayment periods in order to benefit from frequent monitoring by debt holders. Overall, our results support the view that financial markets tend to pressure firms with high benefits of control or greater agency conflict to make a tradeoff between the benefits of control and the cost and maturity structure of debt financing.Theoretical/Academic ImplicationsThis study contributes to the research on comparative corporate governance and capital structure. We also respond to recent calls to bridge the gap between under- and over-socialized views of corporate governance by examining the interplay between firm- and country-level governance variables. Our findings suggest a substitution effect between monitoring by equity holders and by debt holders, and that country-level governance quality exerts a disciplinary influence over a firm's choice of debt maturity structure.Practitioner/Policy ImplicationsInvestors seeking to enter emerging markets such as Brazil and Chile can benefit from considering national governance factors that enhance debt holders’ external monitoring effectiveness. Because our findings show the importance of considering and improving the quality of country-level governance, they are also useful for policy makers aiming to reform corporate governance practices in emerging markets.
Henrique Castro Martins; Eduardo Schiehll; Paulo Terra. Country-level governance quality, ownership concentration, and debt maturity: A comparative study of Brazil and Chile. Corporate Governance: An International Review 2017, 25, 236 -254.
AMA StyleHenrique Castro Martins, Eduardo Schiehll, Paulo Terra. Country-level governance quality, ownership concentration, and debt maturity: A comparative study of Brazil and Chile. Corporate Governance: An International Review. 2017; 25 (4):236-254.
Chicago/Turabian StyleHenrique Castro Martins; Eduardo Schiehll; Paulo Terra. 2017. "Country-level governance quality, ownership concentration, and debt maturity: A comparative study of Brazil and Chile." Corporate Governance: An International Review 25, no. 4: 236-254.
Eduardo Schiehll; Henrique Castro Martins. Cross-National Governance Research: A Systematic Review and Assessment. Corporate Governance: An International Review 2016, 24, 181 -199.
AMA StyleEduardo Schiehll, Henrique Castro Martins. Cross-National Governance Research: A Systematic Review and Assessment. Corporate Governance: An International Review. 2016; 24 (3):181-199.
Chicago/Turabian StyleEduardo Schiehll; Henrique Castro Martins. 2016. "Cross-National Governance Research: A Systematic Review and Assessment." Corporate Governance: An International Review 24, no. 3: 181-199.
We examine whether country-level governance mechanisms influence the substitutability between internal funds and external financing in a firm’s investment behavior. We argue that a firm’s investment-cash flow sensitivity depends on country-level governance mechanisms that facilitate external monitoring and enforcement of financial contracts, and that such effect is different depending on a country’s level of shareholder protection and creditor rights. Using a sample of 8,573 listed firms from 41 countries over the period 2005-2014, we find that creditor rights and shareholder protection reduces the investment-cash flow sensitivity. Although both country-level governance mechanisms lessens the reliance of firms’ to internal funds by improving information transparency and disclosure as well as mitigating agency conflicts, their effect are even stronger when jointly considered. Our study contributes to the literature by providing evidence on the role of country- level governance on firm-level decision-making. Our findings also contribute to the ongoing discussion about whether firm- and country-level governance mechanisms substitute or complement each other.
Luiz Ricardo Kabbach De Castro; Henrique Castro Martins; Eduardo Schiehll; Paulo Renato Soares Terra. Corporate Governance Institutions and Investment-Cash Flow Sensitivity. Academy of Management Proceedings 2016, 2016, 18284 .
AMA StyleLuiz Ricardo Kabbach De Castro, Henrique Castro Martins, Eduardo Schiehll, Paulo Renato Soares Terra. Corporate Governance Institutions and Investment-Cash Flow Sensitivity. Academy of Management Proceedings. 2016; 2016 (1):18284.
Chicago/Turabian StyleLuiz Ricardo Kabbach De Castro; Henrique Castro Martins; Eduardo Schiehll; Paulo Renato Soares Terra. 2016. "Corporate Governance Institutions and Investment-Cash Flow Sensitivity." Academy of Management Proceedings 2016, no. 1: 18284.
This study examines whether national governance factors distinguishing between shareholder protection and creditor rights interfere on the association between firm’s ownership concentration and debt maturity. Using a cross- sectional data set (2013) from 41 countries we found support for our hypotheses. Our results suggest that concentrated shareholder, on average, prefer short-term debt. We found support to the hypothesis of substitution between Board and Creditors monitoring. Finally, we found support to the hypothesis that great disparity between control and cash flow rights leads to creditors expropriation (especially by family members).
Henrique Castro Martins; Eduardo Schiehll; Paulo Renato Soares Terra. Debt maturity and ownership: Distinctive effects of Shareholder protection and Creditor rights. Academy of Management Proceedings 2015, 2015, 17737 -17737.
AMA StyleHenrique Castro Martins, Eduardo Schiehll, Paulo Renato Soares Terra. Debt maturity and ownership: Distinctive effects of Shareholder protection and Creditor rights. Academy of Management Proceedings. 2015; 2015 (1):17737-17737.
Chicago/Turabian StyleHenrique Castro Martins; Eduardo Schiehll; Paulo Renato Soares Terra. 2015. "Debt maturity and ownership: Distinctive effects of Shareholder protection and Creditor rights." Academy of Management Proceedings 2015, no. 1: 17737-17737.
Eduardo Schiehll; Suzanne Landry. Percepção de Controlabilidade e Equidade da Avaliação de Desempenho. Review of Business Management 2014, 16, 484 -503.
AMA StyleEduardo Schiehll, Suzanne Landry. Percepção de Controlabilidade e Equidade da Avaliação de Desempenho. Review of Business Management. 2014; 16 (52):484-503.
Chicago/Turabian StyleEduardo Schiehll; Suzanne Landry. 2014. "Percepção de Controlabilidade e Equidade da Avaliação de Desempenho." Review of Business Management 16, no. 52: 484-503.
The primary subject matter of this case study is board composition and the governance roles of the board of directors in publicly traded companies. It is designed to supplement a text chapter or other material on the monitoring and advisory roles of directors and how board structure and composition impact these roles. The case is also designed to allow students to identify and assess governance issues related to firm ownership structures, family-owned or controlled companies, ethical conduct of the board of directors and conflicts between majority and minority shareholders. The case is sufficiently detailed to allow discussing the multidimensional aspects of board composition (or board diversity), including gender, ethnicity, expertise, experience and prestige. It is structured as a chronological description of the controversy generated by a proposed related party transaction (a buyout transaction) designed to dismantle a dual-share capital structure that allowed the Stronach family to control the company (Magna International Inc.) with just a fraction of its equity. The case can serve as the basis for both short case assignments and class discussions. It is appropriate for undergraduate and graduate courses in strategic management, leadership, corporate governance and financial accounting. The topic is relevant and current, as it can be related to the ongoing reforms of Canadian corporate governance practices for controlling shareholders and related party transactions.
Eduardo Schiehll; Gokhan Turgut; Elise Demers. Board Composition and Governance Dilemma at Magna International. South Asian Journal of Business and Management Cases 2014, 3, 207 -220.
AMA StyleEduardo Schiehll, Gokhan Turgut, Elise Demers. Board Composition and Governance Dilemma at Magna International. South Asian Journal of Business and Management Cases. 2014; 3 (2):207-220.
Chicago/Turabian StyleEduardo Schiehll; Gokhan Turgut; Elise Demers. 2014. "Board Composition and Governance Dilemma at Magna International." South Asian Journal of Business and Management Cases 3, no. 2: 207-220.
The primary subject matter of this case study is board composition and the governance roles of the board of directors in publicly traded companies. It is des
Eduardo Schiehll; Gokhan Turgut; Elise Demers. Board Composition and Governance Dilemma at Magna International. Board Composition and Governance Dilemma at Magna International 2014, 1 .
AMA StyleEduardo Schiehll, Gokhan Turgut, Elise Demers. Board Composition and Governance Dilemma at Magna International. Board Composition and Governance Dilemma at Magna International. 2014; ():1.
Chicago/Turabian StyleEduardo Schiehll; Gokhan Turgut; Elise Demers. 2014. "Board Composition and Governance Dilemma at Magna International." Board Composition and Governance Dilemma at Magna International , no. : 1.
Using archival data, the authors explored whether female CEOs possess as much structural power as male CEOs and what demographic characteristics are essential for female CEOs to have in order to increase their structural power in their firms. The authors use status characteristics and human capital theories to develop hypotheses. Findings show that female CEOs do not possess as much structural power as male CEOs as proxied by attaining a dual CEO/Chair role in the firm. Instead of dual CEO and Chair roles, female CEOs are more likely to be given the less powerful role of CEO and President. Moreover, female CEOs are more likely to gain structural power if they are entrepreneurs, work in large companies, or possess an elite education.
Maureen I. Muller-Kahle; Eduardo Schiehll. Gaining the ultimate power edge: Women in the dual role of CEO and Chair. The Leadership Quarterly 2013, 24, 666 -679.
AMA StyleMaureen I. Muller-Kahle, Eduardo Schiehll. Gaining the ultimate power edge: Women in the dual role of CEO and Chair. The Leadership Quarterly. 2013; 24 (5):666-679.
Chicago/Turabian StyleMaureen I. Muller-Kahle; Eduardo Schiehll. 2013. "Gaining the ultimate power edge: Women in the dual role of CEO and Chair." The Leadership Quarterly 24, no. 5: 666-679.
This study investigates the effect of subjectivity in performance evaluation on managerial perceptions of procedural justice. Using survey data from a sample of 317 managers, we examine two forms of subjectivity: use and weight of subjective performance measures and ex post flexibility in the weighting of multiple performance measures. We also examine the interaction effects of two contextual factors, superior–manager relationship quality and voice opportunity, on the association between subjectivity and perceived procedural justice. The results suggest that only the superior's use of ex post flexibility in weighting multiple performance measures adversely affects managers' perceptions of procedural justice. Moreover, superior–manager relationship quality reduces the negative effects of ex post flexibility in weighting multiple performance measures on procedural justice, whereas voice opportunity amplifies this negative effect. These findings have practical and theoretical implications, as they shed new light on the trade-off between the informative benefits and perceived unfairness of incorporating subjectivity into performance evaluation.
François Bellavance; Suzanne Landry; Eduardo Schiehll. Procedural justice in managerial performance evaluation: Effects of subjectivity, relationship quality, and voice opportunity. The British Accounting Review 2013, 45, 149 -166.
AMA StyleFrançois Bellavance, Suzanne Landry, Eduardo Schiehll. Procedural justice in managerial performance evaluation: Effects of subjectivity, relationship quality, and voice opportunity. The British Accounting Review. 2013; 45 (3):149-166.
Chicago/Turabian StyleFrançois Bellavance; Suzanne Landry; Eduardo Schiehll. 2013. "Procedural justice in managerial performance evaluation: Effects of subjectivity, relationship quality, and voice opportunity." The British Accounting Review 45, no. 3: 149-166.
This study investigates whether the governance attributes of Brazilian companies are associated with voluntary executive stock option (ESO) disclosure. Results show that Brazilian companies voluntarily disclose very little about their ESO plans, and that board size, presence of a compensation committee, and auditing by a Big 4 firm are significantly related to the degree of voluntary ESO disclosure. We also show that family-controlled companies in Brazil are associated with low voluntary ESO disclosure. Results are robust to a number of specification tests, dependent and explanatory variable measurements, and sample composition. This study has professional and regulatory implications for Brazil and other emerging capital markets. The results underscore the need for stricter rules for executive compensation reporting in Brazil, and they invite policy makers and regulators in emerging markets to consider the effects of company-level governance factors on disclosure incentives.
Eduardo Schiehll; Paulo Renato Soares Terra; Fernanda Gomes Victor. Determinants of voluntary executive stock option disclosure in Brazil. Journal of Management and Governance 2011, 17, 331 -361.
AMA StyleEduardo Schiehll, Paulo Renato Soares Terra, Fernanda Gomes Victor. Determinants of voluntary executive stock option disclosure in Brazil. Journal of Management and Governance. 2011; 17 (2):331-361.
Chicago/Turabian StyleEduardo Schiehll; Paulo Renato Soares Terra; Fernanda Gomes Victor. 2011. "Determinants of voluntary executive stock option disclosure in Brazil." Journal of Management and Governance 17, no. 2: 331-361.
This study investigates whether the governance attributes of Brazilian companies are associated with voluntary executive stock option (ESO) disclosure. Results show that Brazilian companies voluntarily disclose very little about their ESO plans, and that board size, presence of a compensation committee, and auditing by a Big 4 firm are significantly related to the degree of voluntary ESO disclosure. We also show that family-controlled companies in Brazil are associated with low voluntary ESO disclosure. Results are robust to a number of specification tests, dependent and explanatory variable measurements, and sample composition. This study has professional and regulatory implications for Brazil and other emerging capital markets. The results underscore the need for stricter rules for executive compensation reporting in Brazil, and they invite policy makers and regulators in emerging markets to consider the effects of company-level governance factors on disclosure incentives.
Eduardo Schiehll; Paulo R. S. Terra; Fernanda Gomes Victor. Determinants of Voluntary Executive Stock Option Disclosure in Brazil. SSRN Electronic Journal 2011, 1 .
AMA StyleEduardo Schiehll, Paulo R. S. Terra, Fernanda Gomes Victor. Determinants of Voluntary Executive Stock Option Disclosure in Brazil. SSRN Electronic Journal. 2011; ():1.
Chicago/Turabian StyleEduardo Schiehll; Paulo R. S. Terra; Fernanda Gomes Victor. 2011. "Determinants of Voluntary Executive Stock Option Disclosure in Brazil." SSRN Electronic Journal , no. : 1.
Manuscript Type: Empirical Research Question/Issue: This study examines the associations between the board of director's choice to integrate non‐financial performance measures into the CEO bonus plan and two other governance mechanisms – board independence and CEO ownership – in a sample of publicly traded Canadian firms. Research Findings/Results: The results provide evidence that the use of non‐financial performance measures in the CEO bonus plan varies predictably. Growth opportunities are positively associated with the firm's choice to integrate non‐financial information into the CEO bonus plan. The results are also sensitive to our proxy for board independence and CEO ownership in firms with high growth opportunities. Theoretical Implications: Agency theory states that any costless performance measure providing incremental information about the agent's effort will improve the efficiency of the contract with the agent. In contrast with most of the literature in this area, which investigates pay‐performance sensitivity and governance structure, we examine an important component of pay‐for‐performance plans used to align and compensate executive actions that might not be reflected in traditional financial performance measures. Practical Implications: This study documents that boards choose performance measures that best reflect the CEO's contribution to firm value, taking into account the firm's monitoring environment. This study therefore has policy implications regarding the need for enhanced disclosure of CEO compensation to improve investor understanding of the alignment between executive pay and firm performance.
Eduardo Schiehll; François Bellavance. Boards of Directors, CEO Ownership, and the Use of Non-Financial Performance Measures in the CEO Bonus Plan. Corporate Governance: An International Review 2009, 17, 90 -106.
AMA StyleEduardo Schiehll, François Bellavance. Boards of Directors, CEO Ownership, and the Use of Non-Financial Performance Measures in the CEO Bonus Plan. Corporate Governance: An International Review. 2009; 17 (1):90-106.
Chicago/Turabian StyleEduardo Schiehll; François Bellavance. 2009. "Boards of Directors, CEO Ownership, and the Use of Non-Financial Performance Measures in the CEO Bonus Plan." Corporate Governance: An International Review 17, no. 1: 90-106.