Do CSR ethics dominate weak shareholder protection? The case of corporate insider trading in Europe

PurposeAn effective corporate governance system helps to smoothly run business operations and manage financial matters. To ensure that management behavior is ethical, and their decisions are in the best interest of shareholders, corporate governance plays a vital role. This study aims to examine the impact of corporate governance on the insider trading profitability of listed banks in Pakistan, Bangladesh and India.Design/methodology/approachThe authors take data from the financial statements of 70 listed banks and stock exchanges of the respective countries. The period of the data for our study is from 2010 to 2020. The authors use board independence, the board size, institutional ownership and managerial ownership as measures of corporate governance characteristics. While inside trading profitability is measured with abnormal returns. The authors apply the fixed effect panel regression for hypothesis testing and the two-step dynamic panel system-generalized method of moments (GMM) regression technique for checking the robustness of the findings.FindingsThe authors found that corporate governance has a significant impact on insider trading profitability in Pakistan, Bangladesh and India. Board independence and institutional ownership are negatively related while board size and managerial ownership are positively associated with insider trading profitability.Originality/valueTo the best of our knowledge, this study is the first one to explore the role of corporate governance in limiting insider trading on South Asian banks. It recommends that corporations should follow the code of corporate governance for the protection of shareholders' and other investors' profits.

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Briefing: Will government application of a 10% award value for social initiatives lead a change?

Eadie,

Murphy,

Downey

et al. 2024

Proceedings of the Institution of Civil Engineers - Management,

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Despite dissenting voices across Europe, Northern Ireland (NI) introduced a 10% section of the award for Social Value (SV) in Government Contracts over the financial threshold through “PPN01/21 Scoring Social Value”. The European Union (EU) position is that public authorities may face legal challenges through mandatory application of social and sustainable award criteria. PPN01/21 has become a case study though its mandatory application in NI, and this study has feedback from members of the Association for Consultancy and Engineering (ACE) which represents the Construction and Engineering Profession there. Eighteen out of 19 companies with experience of contracts where PPN01/21 applied responded. The results provide for the first time a way of marking SV with 53% suggesting implementation of a points based system rather than qualitative questions. Also provided is a list of content that should be included in measurement of SV based on empirical data. An interesting finding is that 81% support the EU adopting a similar scheme. In relation to the Award percentage, there is an even split between the award value remaining at 10% or increasing.to 20%. Nobody suggested a decrease and no legal challenges have arisen suggesting that the EU should press ahead with adoption.

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Do CSR ethics dominate weak shareholder protection? The case of corporate insider trading in Europe

Cited by 3 publications

References 77 publications

Large shareholders' stock selling and corporate performance: Evidence from China

Large shareholders' stock selling and corporate performance: Evidence from China

The role of corporate governance towards insider trading profitability

Briefing: Will government application of a 10% award value for social initiatives lead a change?

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