Corroborating upper echelons theory, this study picks up the notion that narcissistic chief executive officers take advantage of accounting choices to enhance their firms’—and inherently their own—personal track records. Using a set of 15 indicators, reflecting the narcissistic trait of 1126 CEOs for the period 1992 to 2012, we find evidence of highly narcissistic CEOs engaging in accrual-based earnings management. In contrast to prior research, the results show evidence not only for income-increasing but also for income-decreasing ABEM. This indicates that (...) highly narcissistic CEOs not only strive to influence stakeholders’ perception of current performance. We conclude that they also assess their potential to influence perception of current and future earnings. The results imply that highly narcissistic CEOs’ accounting choices are driven by self-serving behavior rather than by the intention to provide additional information to the market. When earnings management techniques are used to derive personal advantage from the presentation of a firm’s earnings, the literature refers to this as a case of low earnings quality reflecting unethical behavior. Accordingly, this study contributes to the field of business ethics by showing that CEO narcissism is related to low earnings quality in that it is associated to discretionarily decreasing accruals. (shrink)

This article addresses the question whether companies benefit from their commitment to corporate social responsibility. The authors argue that firms which score high on CSR activities build investor confidence and find evidence that they benefit from lower information asymmetry. The authors measure information asymmetry by insider trading, which is defined as the trading of a company’s shares by corporate insiders who have an information advantage with the aim to reap gains or avoid losses. Using a sample of U.S. firms listed (...) in the MSCI World Index during the period 2004 to 2013 and the firm- and industry-level CSR rating from Global Engagement Service, the authors show that insider transactions in firms with a high score on CSR activities lead to lower abnormal returns. This investigation extends current literature on the business case for CSR by explaining the influence of CSR activities on asymmetric information. (shrink)

This paper investigates whether relative corporate sustainability as measured by the SAM sustainability ranking and sustainability reporting in terms of Global Reporting Initiative application levels are associated with a higher market valuation. We conduct a value relevance study for the 600 largest European companies with the Feltham and Ohlson valuation model as a reference point. Our results indicate that for the observation period 2001 to 2011, the association between corporate sustainability and market value is positive. The empirical evidence of a (...) positive relationship between GRI reporting and market value is statistically significant in some but not all of the model specifications. We find no evidence of interaction between the value relevance of corporate sustainability and sustainability reporting, nor do we find any positive effect of external assurance on the capital market perception of GRI application levels. Our results support the notion that conducting business in accordance with ethical norms is also a shareholder value-increasing business strategy. However, it is not possible to verify the information given in sustainability reports through external assurance. (shrink)

Using a unique dataset provided by the international rating agency GES®, we investigate the effects of corporate sustainability and industry-related exposure to environmental and social risks on the market value of MSCI World firms. The results show a negative relationship in the earlier years of our sample period. However, the analysis reveals that the capital market perception of sustainability has changed owing to the financial crisis. Looking at the height of the crisis in September 2008, the month in which Lehman (...) Brothers shocked the world’s capital markets by filing for Chapter 11 bankruptcy protection, we find that the previously negative perception of corporate sustainability across its various dimensions was positively affected and offset. In addition, as a moderated regression analysis shows, the crisis led to a positive perception of corporate sustainability in industries that are exposed to higher environmental and social risks. Our study has the practical implication that executives, in particular in industries with high environmental and social risks, should increase their commitment to corporate sustainability due to the changes in the institutional setting triggered by the financial crisis. (shrink)

Zusammenfassung Aus juristischer Perspektive wird die in der Satzung des Deutschen Fußball-Bundes e. V. verankerte ‚50+1‘-Regelung kritisiert, weil sie zu Unterschieden in der Kapitalbeschaffung und zu begrenzter Wettbewerbsfähigkeit gegenüber dem europäischen Ausland führt. Laut europäischem Recht sind jedoch wettbewerbsbeschränkende Maßnahmen verboten und eine Kapital- und Niederlassungsfreiheit vorgeschrieben. In dieser Studie wird ein umfassender Lösungsansatz für eine neuartige Regelung aufgezeigt, die auf die Rechtskonformität abzielt und gleichermaßen ökonomische und gesellschaftliche Aspekte kombiniert, sodass die Integrität des Fußballsports gewahrt und die Verbindung zwischen (...) Breiten- und Spitzensport erhalten bleiben. Basierend auf derzeitig geltenden Regularien der Top 5 Fußballligen in Europa wird herausgestellt, dass die Gesellschaftsform der Kommanditgesellschaft auf Aktien Kapitalinvestitionen in Einklang mit geltendem Europarecht bringt. Um nicht gegen den allgemeinen vereinsrechtlichen Gleichbehandlungsgrundsatz zu verstoßen, sollten allerdings keine weiteren Gesellschaftsformen zugelassen werden. Des Weiteren werden die Notwendigkeit und Umsetzungsmöglichkeit des Verbots von Mehrfachbeteiligungen, einem dezentralen Vermarktungssystem der Fernsehrechte mit anschließender Umverteilung, einer Orientierung an internationalen Rechnungslegungsvorschriften und der Einführung von Gehaltsbegrenzungen erörtert. (shrink)