Private firms adopt Enterprise Risk Management (ERM) practices voluntarily. Using results of a survey that involved 78 respondents, we investigate the adoption of ERM practices in Italian private corporations and question whether ERM adoption is affected by the ownership structure of the firm. We find that agency conflicts between controlling and minority shareholders, which arise when ownership dispersion decreases, affect ERM adoption, and that when proprietorship is more dispersed, the firm places more focus on ERM projects. Additionally, we document the different roles of different types of owners. More specifically, in line with the patronage agency theory, the government-controlled enterprises undergo more intense ERM, whereas, in line with behavioral agency theory, individual and family-controlled firms pay less attention to ERM adoption.

Purpose This paper aims to examine whether firms in polluting industries improve their environmental performance to effectively repair their financial reputation in the aftermath of an accounting restatement – a financial reputation-damaging event. Design/methodology/approach The authors test their hypotheses using multiple regression analysis of a sample of firms listed in International Financial Reporting Standards (IFRS)-adopting countries. They use a comparative empirical design in which a sample of firms that underwent a restatement (henceforth, restating firms) are compared with control groups of pair- and multiple-matched firms that did not undergo restatements (non-restating firms). Findings The study finds that restating firms have higher environmental performance in the aftermath of restatement events. Additionally, the authors demonstrate that this environmentally based reputation repair positively influences the financial reputation of the firms, as measured by analyst coverage and recommendations and which previously decreased because of the restatement event. Practical implications Because environmental levers are a substantial contextual factor in polluting industries, shifting the stakeholder debate to firms’ environmental commitment can improve financial stakeholders’ opinions and favour the repair of the multifaceted reputation of the financially damaged firm. Social implications With a worldwide growing attention to environment there is a critical need for understanding how polluting firms integrate sustainability and financial reputation. We demostrate that polluting firms recover from a financial failure pursuing their environmental performance. Originality/value Contributing to the behavioural theory of reputation repair and in line with the legitimacy perspective in environmental disclosure research, this paper shows that polluting firms recover from a loss to their financial reputation by diverting stakeholders’ attention towards the environmental field, thus restoring their financial reputation, as financial analysts value environmental performance improvement – a substantial contextual factor of polluting firms’ reputation repair process.

This paper studies enterprise risk management (ERM) systems within private\ud firms, and examines how firm size influences risk settlement decisions inside\ud micro, small, medium and large unlisted corporations. This paper contributes to the\ud literature with an empirical analysis of whether private firms consider it worth\ud managing risk using formalized organization and procedures, even if this is not\ud imposed by any mandatory rule or by self-regulation. Submitting a questionnaire to\ud a sample of Italian unlisted companies, it is found that 67% of respondents have no\ud risk management department and only 10% are planning to create one. It seems\ud that formalized risk-management systems amongst private entities are not\ud widespread. It is likely that significant opportunities remain, especially for medium\ud and big organizations, to strengthen underlying processes for identifying and\ud assessing the key risks that the entity normally faces

A co-leadership structure at the executive level is characterized by the presence of two co-CEOs exerting mutual influence on each other while working together towards common goals. This study relies on the unity of command and social comparison theories to investigate the relationship between power differences within co-CEO dyads and firm innovation. The results from a sample of US firms led by co-CEOs in the 2000 2016 period indicate an inverted U-shaped relationship, such that: 1) power differences between co-CEOs are positively related to firm innovation when power differences are below a high level; and 2) this positive relationship becomes negative as power differences become very large. This study improves upon Krause, Priem, and Love’s (2015) analysis by arguing that social psychological factors affect collaboration between co-CEOs and advances innovation literature by illustrating that the conditions under which a co-leadership structure promotes innovation are non-linear. These results suggest important implications for scholars and practitioners who are dealing with the strategic framing of the top executive team and aim at pursuing corporate results in terms of innovation.

This article studies the underinvestigated but fascinating issue of the sociological determinants of accounting misbehavior while focusing on an allegedly illicit accounting practice (i.e., restatement) in family- vs. nonfamily-controlled corporations. Under the framework of institutional anomie theory, we examined whether sociological structures (i.e., legal forces and cultural values) influence accounting errors inducing restatements. By applying a multivariate regression analysis to a sample of restating firms listed in 23 countries during the 2006 to 2014 period, we found that legal forces and cultural values significantly moderate the severity of accounting errors. The results of this study suggest that investors, managers, and policymakers should more fully consider the sociological structures of societies when debating the feasibility of corporate misbehaviors, as combining firm-level and country-level analyses could help to predict a firm’s accounting misbehaviors, such as more severe accounting errors.