Board‐level ethics committees in large European firms

Abstract

After the approval of a code of ethics, the creation of a permanent board‐level ethics committee is the next step in the institutionalization of business ethics. This study explores how the board's structure and demographic characteristics explain the decision to form an ethics committee. The analysis is based on the constituents of the Standard and Poor's Europe 350 index. Consistent with our hypotheses, we find that ethics committees are more likely to be found in firms with a lower presence of executive directors and of directors holding MBA degrees. However, we also observe that boards chaired by executive directors seem to favor the creation of an ethics committee. Additionally, as we had anticipated, firms with stronger agency conflicts seem to be more willing to create committees. The analysis conducted with segmented samples reveals that the model has greater explanatory power when applied to firms from common‐law and French civil‐law countries than when applied to firms from the German–Scandinavian civil‐law area. Finally, our results indicate that a firm's country of origin is a more influential factor in explaining the decision to create an ethics committee than the industry to which it belongs or even the magnitude of its agency conflicts.

Do chief sustainability officers and CSR committees influence CSR-related outcomes? A structured literature review based on empirical-quantitative research findings

“…Moreover, in this analysis, we define CSR committees as corporate subcommittees of boards of directors that make social and/or environmental recommendations to the boards and assist board members in their CSR-related functions (Dixon-Fowler et al 2017;Orazalin 2020). Thus, the implementation of CSR committees in an assistant role for boards (Garcia-Blandon et al 2020) should lead to increased CSR-related board efficiency and CSR expertise. In line with our conclusions about CSOs, different labels with varying responsibilities for CSR committees exist in business practice (e.g., ethics committee, sustainable development committee, environmental committee, social committee, health and safety committee or sustainability committee) (Baraibar-Diez and Odriozola 2019).…”

Does female human capital constrain earning management: The case of the United Kingdom

“…(1989) indicate that women are expected to be more ethical in the workplace and less likely to engage in unethical behaviour to gain financial rewards. Likewise, Burgess and Tharenou (2002) assert that the call for gender diversity on board is related to females’ higher propensity for ethical behaviour, social sensitivity, and they appear to be more concerned than male directors about societal matters (Garcia‐Blandon et al., 2020). Post et al.…”