BUSM3199: How can Organizations and Specifically Organizational Boards be made more Accountable: Ethics & Governance Essay, SUSS, Singapore

How can organizations and specifically organizational boards be made more accountable (Schillemans and Bovens 2019)? From accountability (Schillemans and Bovens 2019) and stakeholder (Freeman 2008; Mitchell et al 1997) perspectives, what are the strengths and weaknesses of the extant governance models?

Drawing on course literature and concepts (for example Psaros 2008; Mitchell et al 1997; Boyd et al 2011; Morck, and Yeung, 2003; Young et al 2008) critically address these questions by interrogating literature on the following alternative governance models and structures.

Corporate Governance and the Environment:

What Type of Governance Creates Greener Companies?

INTRODUCTION
In recent years, firms in polluting industries have seen a significant increase in stakeholder demands for better environmental performance (Bansal, 2005; Sharma and Henriques, 2005), i.e. the extent to which a firm’s economic activity is environmentally sustainable (Hart, 1995). In addition to an emerging consumer preference for ‘green’ products, these pressures include environmental activism from various external stakeholders such as environmental non-governmental organizations (ENGOs) or the media (Kassinis and Vafeas, 2006;

Sharma and Henriques, 2005), as well as increasingly stringent governmental regulations (e.g. Berning, 2000; Epstein, 1996). All along, environmental stakeholders strongly demand managers to adopt ecologically legitimate activities (Bansal, 2005; Bansal and Roth, 2000; Buysse and Verbeke, 2003; Kassinis and Vafeas, 2006).

However, in spite of the fact that all corporate managers in polluting industries are subject to these visible requirements (Berrone and Gomez-Mejia, 2009), it remains unclear why some managers choose to adhere to these demands while others do not (Kassinis and Vafeas, 2002). In this paper, we try to explain this existing heterogeneity and we propose that corporate governance mechanisms explain to some extent whether managers attend to stakeholders’ environmental claims or not.

THEORY AND HYPOTHESES
As indicated above, we build on Hill and Jones’ (1992) stakeholder–agency paradigm to make predictions about the effect of different corporate governance mechanisms on corporate environmental performance. Hill and Jones (1992) have proposed a generalized theory of agency in which the firm can be seen as a nexus of contracts between resource holders.

Their paradigm encompasses the implicit contractual relations between managers and stakeholders in general – and not exclusively shareholders as in the finance version of agency theory (for a similar approach, see Blair, 1998). Hence, there are numerous contracts that could be considered within an agency framework.