Changing Corporate Governance in Response to Negative Media Reports

Okhmatovskiy, Ilya; Shin, Dong-Hoon

doi:10.1111/1467-8551.12308

Cited by 23 publications

(11 citation statements)

References 89 publications

(173 reference statements)

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“…an early/late dichotomy would be useful to further examine if reputational effects are more intense for events close to the survey window and largely forgotten later on (Mena, Rintamäki, Fleming and Spicer, 2016). Finally, in line with prior reputation and irresponsibility studies (De Cremer, van Dick, Tenbrunsel, Pillutla and Murnighan, 2011;Okhmatovskiy and Shin, 2018;West, Hillenbrand, Money, Ghobadian and Ireland, 2016), we point to the importance of examining the context in which social evaluations take place. Future research should consider other contextual factors which may inform social evaluations, such as the celebrity status of the firm or the management responses to reputation threats.…”

Section: Limitations and Future Research Directionssupporting

confidence: 61%

Shame on Who? The Effects of Corporate Irresponsibility and Social Performance on Organizational Reputation

Nardella

Brammer

Surdu

2019

British J of Management

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This study examines the relationship between corporate irresponsibility, corporate social performance and changes in organizational reputation. By combining attribution theory with expectancy violations theory, we provide the first systematic analysis of how organizational reputations are influenced by attributions of corporate irresponsibility in the context of social expectations. Drawing on a comprehensive and unique corporate irresponsibility dataset, this study reveals that firms previously believed to be most socially responsible are penalized by evaluators when corporate culpability is verified by a court of law. Conversely, firms perceived as least socially responsible were more likely to suffer reputation penalties when accused of irresponsibility, without their culpability established through litigation. Overall, the results of our study suggest that organizational reputations are mostly stable in light of irresponsibility, in that evaluators only penalize certain firms, in certain circumstances.Specifically, reputation penalties occur when highly responsible firms are perceived hypocritical and least responsible firms were not found culpable by a court of law. Upon reflection of these findings, our study reveals that the mechanisms of social sanction previously assumed to regulate irresponsibility are weaker than currently understood.Theoretical and policy implications of this study are discussed, along with directions for future research on social evaluations. (Margolis and Walsh, 2003). In doing so, organizations may achieve enhanced corporate social performance (CSP) and be perceived favourably (Barnett and Salomon, 2012;Brammer and Millington, 2004). Yet these same organizations are often observed behaving irresponsibly.Corporate irresponsibility (CI hereafter) may generate substantial unwanted stakeholder attention on firms (Campbell, 2007;Deephouse and Heugens, 2009) because when revealed, CI -organizational behaviors which are perceived to be egregious by observers (Lange and Washburn, 2012) -can damage organizational reputations (Karpoff and Lott 1993;Mishina, Block and Mannor, 2012).Thus far, CI research lacks consensus vis-à-vis the effects of irresponsibility on organizational reputation, with one strand of research arguing that irresponsibility is generally detrimental to stakeholder evaluations of the firm (He,

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Section: Limitations and Future Research Directionssupporting

confidence: 61%

Shame on Who? The Effects of Corporate Irresponsibility and Social Performance on Organizational Reputation

Nardella

Brammer

Surdu

2019

British J of Management

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“…Our study demonstrates the positive relationships between the desire for power and the inclination to accept ID roles, and between job satisfaction and the inclination to accept ID roles. It extends the corporate governance literature as ID can influence organisational performance (Core et al, 1999), possibly as IDs contribute to trust in corporate governance (Okhmatovskiy and Shin, 2019). This finding shows that those academics inclined to take ID roles are likely to be competent within their academic jobs and willing to exert power in the potential ID role, which supports the literature on the positive role of academic directors in general (Francis et al, 2015;White et al, 2014).…”

Section: Contribution To the Literaturesupporting

confidence: 80%

Academic independent directors in China: factors influencing career decision-making

Dai

Baruch

et al. 2022

CDI

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PurposeThe board independence norm has shaped corporate governance globally, but research on the supply of independent directors (IDs) is limited. “New careers” studies suggest that dynamic non-conventional career paths are evolving, but empirical evidence is mostly limited to Western societies. The authors studied reasons for academics to consider taking on an ID role in firms in China.Design/methodology/approachEmploying a quantitative methodology, data were collected via a survey targeting 1,500 academics, representing a quarter of business-linked academics in China's National Key Universities. The response rate was 55% and, after eliminating irrelevant responses, the sample used comprised 581 academics, 111 of whom have taken on an ID role.FindingsCareer orientation and work attitudes play significant roles in decision-making around career success. Becoming an ID can be a rewarding and positive career path for academics who look for additional responsibility, income and impact. This new academic career path manifests in how career actors interact with each other to reach a state of equilibrium in a wider career ecosystem. Appointing academics with relevant knowledge and willingness to create impact can help organisations – both firms and academic institutions.Practical implicationsBecoming an ID can increase future collaborations and success in terms of research and corporate governance, and offer individuals another route to career success.Originality/valueThe results contribute to research on career studies and corporate governance, revealing a new source of talent for firms and a new career path for academics.

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“…Many organizations employ leader replacement as a strategy especially after integritybased transgressions, such as organizational corruption, take place in the organization (Eberl et al, 2015;Okhmatovskiy & Shin, 2019). This was evident right after the 2008 global financial crisis hit when many heads of various key institutions of the financial system, such as banks, government regulation, and rating agencies, were pressured to step down and make way for new leaders with better reputation .…”

Section: Behavioral Repair Tacticsmentioning

confidence: 99%

How Can It Be Made Right Again? A Review of Trust Repair Research

Sharma

Schoorman

Ballinger

2022

Journal of Management

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We review research on the topic of trust repair, which has proceeded over the past four decades using three different philosophical mechanisms that provide the bases through which trust is restored by multiple repair tactics. We base our definition of trust repair on the view that trust is “a psychological state comprising the intention to accept vulnerability based on the positive expectations of the intentions or behaviors of another.” We define trust repair as any increase in trust above the post-transgression level and complete repair as an increase in trust to the pre-transgression level. We provide an overview of the research designs incorporated in the trust-repair literature and make recommendations and cautions in measuring trust repair. We then summarize the emergence of the different mechanisms behind trust repair, namely, attributional, social equilibrium, and structural mechanisms, and review literature on the related verbal and behavioral repair tactics that can be employed after a transgression. We also provide a review on the process of trust repair, that is, the different stages that unfold to repair trust. We conclude by suggesting that future research should explore trust repair not only from an isolated tactics perspective but also from a broader pathway perspective. Finally, as trust repair occurs over time, future research should also explore the role of differing perceptions of time in the trust-repair process.

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Changing Corporate Governance in Response to Negative Media Reports

Cited by 23 publications

References 89 publications

Shame on Who? The Effects of Corporate Irresponsibility and Social Performance on Organizational Reputation

Shame on Who? The Effects of Corporate Irresponsibility and Social Performance on Organizational Reputation

Academic independent directors in China: factors influencing career decision-making

How Can It Be Made Right Again? A Review of Trust Repair Research

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