Do ethical firms create value?

Karim, Khondkar E.; Suh, Sang-Hyun; Tang, Jiali

doi:10.1108/srj-09-2014-0127

Cited by 31 publications

(38 citation statements)

References 60 publications

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“…Companies that exhibit ethical conduct in operations also receive financial benefits (Abidin, Hashim & Ariff, 2017;Karim, Suh & Tang, 2016;Berrone, Surocca & Tribo, 2007;Donker Poff, & Zahir, 2008). This is because ethical practices will attract more shareholders, thus enhancing the company's value (Graves & Waddock, 1994).…”

Section: Ethical Commitmentmentioning

confidence: 99%

Ethical Practice Disclosure of Malaysian Public Listed Companies

Abidin

Hashim

Salleh

et al. 2019

KSS

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The Malaysian corporate environment has been shocked by corporate scandals and poor performance among government-related companies, such as 1Malaysia Development Berhad (1MDB), Lembaga Tabung Haji (LTH), Felda Global Ventures (FGV) and Khazanah Nasional Berhad (KHAZANAH). Despite having strong corporate governance and being strengthened through Malaysia Code of Corporate Governance (MCCG), unethical practices and a lack of transparency remain a problem among Malaysian companies. The purpose of this paper is to examine the level of disclosure of ethical practices among Malaysian public listed companies. Ethical practice disclosure is measured using the modified Ethical Commitment Index (ECI) with six themes derived from the literature; notably, corporate ethical values, action to promote ethics, whistle-blowing policy, code of ethics, sustainability practices, and ethics committee. Through content analysis of the annual reports of 1,115 companies and five years’ observation (2012-2016), this study found there is a need to improve several aspects of ethical practice disclosure. The findings implied that companies supported the MCCG, with most of the companies complying with the recommendations of MCCG 2012 to uphold a high standard of ethical practice. However, supplementary practices, such as disciplinary action, programmes to support a code of ethics, whistle-blowers’ protection, and establishing an ethics committee, are still weak. The findings indicate that the level of ethical practice disclosure among Malaysian public listed companies remains low and raises concern that requires action by regulators. This paper contributes by providing insights into the disclosure of ethical practice among Malaysian public companies.

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Section: Ethical Commitmentmentioning

confidence: 99%

Ethical Practice Disclosure of Malaysian Public Listed Companies

Abidin

Hashim

Salleh

et al. 2019

KSS

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“…This study is related to the stakeholder theory by focusing on a firm's commitment towards ethics that can provide financial benefits towards firms. In theory, firms that well-managed their stakeholders' interest, reducing cost at the same time, help the firms' financial positions (Karim, Suh, & Tang, 2016).…”

Section: Stakeholder Theorymentioning

confidence: 99%

Ethical Commitments and Financial Performance: Evidence From Publicly Listed Companies in Malaysia

Abidin¹,

Hashim²,

Ariff³

2017

AAMJ

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“…Banks in India have increased their CSR activities, which also have a positive impact on the performance of the business, apart from improving their image and goodwill. The positive effect can be disseminated as an advantage to the corporate sector and enhance their value (Bihari and Pradhan, 2011;Karim et al, 2016) and brand loyalty (Pratihari and Uzma, 2018a). Therefore, being one of the significant stakeholders in the process of designing and delivering different CSR initiatives, the role of senior and middle-level bankers are prominent.…”

Section: Build Corporate Reputationmentioning

confidence: 99%

“…creating value for both the company and the society (Porter and Kramer, 2011;Lodsgard and Aagaard, 2017). In light of the value creation, CSR initiatives are well incorporated into the national and international banking community (Yeomans, 2005;Karim et al, 2016). The corresponding progress in Indian banking sector, CSR has been predominantly aimed at addressing the financial exclusion problem by providing financial services to the unbanked or untapped banking areas of the country (Narwal, 2007;Bihari and Pradhan, 2011).…”

Section: Introductionmentioning

confidence: 99%

A survey on bankers’ perception of corporate social responsibility in India

Pratihari

Uzma

2019

SRJ

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Purpose The purpose of this paper is to understand the perception of the bankers towards an integrated approach to corporate social responsibility (CSR) initiatives in a strategic way of achieving sustainable growth of the banking sector. The paper additionally provides insights into different CSR initiatives and their implementation process in the context of scheduled commercial banks (SCB) of India. Design/methodology/approach The study is exploratory and endorses the qualitative approach of primary research methodology by adopting a non-random stratified sampling method. The localist approach of the face-to-face interview has been applied to collect the data from 26 elite class respondents from 13 SCBs. The interview method was semi-structured and open-ended. The conformity, trustworthiness, credibility, transferability, dependability test of the study have ensured the quality of the data. Findings The study reveals that the bankers perceive CSR as a moral obligation for the benefit of the society, beyond the regular banking operations. Further, the study comprehends that the CSR initiatives play a vital role in establishing the bank's image, brand and reputation, as well as, building a strong bond of trust among the employees and the bank management. Besides, CSR activities facilitate to cultivate a better culture by improvising in the quality of customer service for achieving competitive advantages. Research limitations/implications The findings of the study represent a significant contribution to CSR theory from the interface of banking and society. Significantly, the results confirm that CSR initiatives play a vital role in building trust and minimise the gap between the employees and the management of the bank. The banks can increase its acceptance in the society and achieve competitive advantage by integrating CSR objectives with the business objectives to strengthen the corporate personality and brand. Practical implications The study will help practitioners to develop the social identity of their firm to achieve competitive advantages in long-run. The bankers can channelise their limited resources while planning, designing and the implementation of different CSR activities with the overall goal of the bank in a cost-effective way. The study is confined only to public and private SCBs and limited to the geographical scope of one state in India. Therefore, further exploration may be carried out by considering other banks and geographic regions in India and different cross-cultural settings. Originality/value The originality of the study lies with the in-depth analysis and quality check of the data. The results can contribute significant value to the qualitative method of conducting research.

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Do ethical firms create value?

Cited by 31 publications

References 60 publications

Ethical Practice Disclosure of Malaysian Public Listed Companies

Ethical Practice Disclosure of Malaysian Public Listed Companies

Ethical Commitments and Financial Performance: Evidence From Publicly Listed Companies in Malaysia

A survey on bankers’ perception of corporate social responsibility in India

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