The present study aimed to explore and map the views of Portuguese laypersons regarding the legitimacy of bonuses for senior executives. Two hundred eight participants, with various levels of training in economics, were presented with a number of concrete scenarios depicting the circumstances in which senior executives have received bonuses of variable amounts, and they were asked to indicate the extent to which such bonuses may be considered as legitimate. The scenarios were created by varying four factors likely to have (...) an impact on people’s views: the extent to which the objectives fixed by the company have been met or not, the global economic context in which the company has performed, the availability of experienced senior executives in the sector under consideration, and the amount of money that has been awarded, in terms of both the euros and multiples of the average worker’s pay. Five qualitatively different personal positions were found. The most common positions were that executive bonuses were either never legitimate or not very legitimate. People without any background in economics were more likely to hold these views than people with a background in economics. The remaining 45 % of the participants supported the awarding of bonus, but their support was conditional, and the main condition was the extent to which the company’s objectives were met. Thus for most participants, the practice of awarding extra pay to senior executives was either never legitimate, or legitimate only when the company’s objectives have been attained, or legitimate only when, even in a time of economic crisis, the company’s objectives have been surpassed. (shrink)

Although a large number of studies have explored the main causes of gender inequality in academia, less attention has been given to the processes underlying the failure of gender equality initiatives to enhance gender representation, especially at the professorial level. We offer a critical discourse analysis of recently promulgated gender policy documents of the five Flemish universities, and demonstrate that defensive institutional work is a fundamental process underlying resistance to gender equality in the academic profession. That is, powerful organizational actors (...) resist gender change by intentionally deploying a combination of discursive strategies that legitimate what we describe as non–time-bound gender equality initiatives: The expected outcomes are undetermined in time, and they delegitimate concrete, time-bound measures that define specific outcomes against well-defined deadlines. By explicitly bringing a temporal dimension into our analysis, we argue that defensive institutional work deflects questions regarding what ought to be achieved when, and contributes to the slow pace of gender change in academia. (shrink)

The say-on-pay regulation in the Dodd-Frank Act requires publicly-traded U.S. firms to hold a nonbinding, advisory shareholder vote on executive compensation. Advocates claim that SOP voting gives shareholders a mechanism to hold managers and boards more accountable. Critics contend that SOP votes may simplistically reflect shareholders’ reactions to the overall value of CEO compensation or the firm’s net income. However, based on prior research, we contend that market participants’ SOP votes are likely to consider current income attributes. For example, the (...) market punishes firms that do not meet or beat benchmarks such as analyst earnings expectations, and that shareholders scrutinize the quality of the income sources of firms that consistently meet/beat analyst expectations. We thus expect that more shareholders will provide ‘agree’ SOP votes for a firm that consistently meets/beats analyst forecasts and does so when net income does not include nonrecurring gains. Further, we consider whether perceptions about the fairness of CEO compensation play a mediating role in the relationship between the interaction of these two current income attributes and SOP votes. Results from an experiment using evening MBA students as participants indicates that the two current income attributes significantly interact with respect to the percentage of agree SOP votes, and that compensation fairness perceptions fully mediate this relationship. Further, the mediating effect of compensation fairness perceptions is robust to including CEO-level and other determinants found in prior research. We conclude with a discussion of our findings and their implications for public policy and research. (shrink)

This paper examines the support for diversity from a moral perspective. Combining business ethics theory with a lens of critical discourse analysis, it reconstructs the debates on the ethicality of three disability inclusion practices—positive discrimination, job adaptations, and voluntary disclosure—drawn from multi-stakeholder interviews in disability-friendly organizations. Discursive resistance to disability inclusion practices, otherwise known to work, arises out of moral beliefs characteristic of an ethic of justice, whereas support is more often informed by an ethic of care. This study contributes (...) to the literature by laying bare how ethics fuel ‘resistance to’ rather than ‘support for’ diversity and inclusion. Like prior studies, it links such resistance to the myth of individual merit, noting that some re-appropriation of an ethic of justice becomes possible when legal awareness around issues of disability is raised in the context of work. In addition, it identifies an ethic of care as holding the greatest potential for fostering workplace inclusion yet cautions for two adverse side effects that may arise when promoting corporate care: the potential of paternalism and the inclination to individualise inherent to wellbeing initiatives. (shrink)

We applied a technique borrowed from the field of bioethics to test whether justice-related factors influence laypersons’ decisions concerning business ethics. In the first experiment, participants judged the acceptability of remuneration policies and in the second that of executive bonuses. In each study, participants judged a set of 36 situations. To create the scenarios, we varied retributive justice—the amount of remuneration; procedural justice—the clarity of the procedure that determined the remuneration; distributive justice—the extent of the distribution of bonus payments amongst (...) employees; and restorative justice—a special compensation for hazardous working conditions or accidents at work. K-means clustering of all 36 judgments revealed four different personal positions in both experiments. One group of people readily accepted all situations. The other three groups’ judgments were mainly a function of distributive justice modulated in different ways by the context determined by the other variables. Furthermore, people conceive of distributive justice as categorical: Acceptability judgments only increase if companies give bonuses to all employees. Granting bonuses to a subset does not increase acceptability. Our results are useful for policy makers and provide business ethics researchers with a novel technique. (shrink)

AbstractBoardroom backscratching, or cronyism, is an unethical practice where CEOs conspire with directors to receive remuneration beyond performance- and market-related factors. Premised on the theory of planned behavior, this study investigates whether CEO generalist experience magnifies the likelihood of boardroom backscratching. Using 9482 firm-year observations spanning 1999–2018, our analysis shows that firms with greater CEO generalist managerial experience are more likely to engage in boardroom backscratching, via both cash- and equity-based compensation. We provide further evidence that backscratching firms with CEOs (...) that possess greater generalist experience tend to overinvest, particularly via non-capital expenditure, as a channel for empire building and private rent extraction. We also find that a higher portion of female independent directors sitting on the board and the compensation committee mitigates the positive relationship between CEO generalist managerial experience and boardroom backscratching, which we attribute to greater ethicality of, and increased monitoring exercised by, female independent directors. (shrink)

The paper analyses the behaviour of French corporate executives towards the adoption of Internet voting at shareholders’ general meetings. The research extends the studies of legitimation strategies and institutional theory to a new topic and a new instrument of corporate governance. Taking a qualitative approach, the paper examines the particular case of a technology that is adopted by a company for the benefit of its shareholders. It contributes theoretically by showing how executives respond to institutional pressures when responding could affect (...) their own interests. The findings illustrate the nature and extent of six legitimation strategies used by executives when confronted by Internet shareholder voting. Interestingly, the results highlight the prevalence of manipulation and coalition-building strategies. A typology of adoption behaviours is also proposed. Interestingly, the results show how executives worry about the risk that Internet voting may lead to a loss of control. Overall, the paper argues that the relationship between shareholders and executives with regard to corporate governance is partially reversed by the adoption of Internet voting. Some theoretical and managerial implications of the paper for the literature on corporate governance and business ethics are discussed. (shrink)

A question facing nearly all private firms is whether they may keep employee pay secret. Many think it is obvious that firms are obligated to disclose a good deal of pay information once we properly appreciate the severity of pay discrimination in our economy and the autonomy-related interests that would be served by pay disclosure. This article puts forth a dissenting voice against the vast majority of recent commentary. It exploits a fissure between reasons we have to support certain coercive (...) regulations and reasons firms have to act in the absence of such regulation. While acknowledging that we may need transparency regulations for firms that fail to act morally, it argues that otherwise moral firms need not disclose pay on the surveyed grounds. (shrink)

This experimental study examines individuals’ legitimacy judgments. We develop a model that demonstrates the role of attributed motives and corporate credibility for the evaluation of organizational legitimacy and test this model with an experimental vignette study. Our results show that when a corporate activity creates benefits for the firm—in addition to social benefits—individuals attribute more extrinsic motives. Extrinsic motives are ascribed when a corporation is perceived as being driven by external rewards as opposed to an altruistic commitment to a social (...) cause. Extrinsic motives negatively affect corporate credibility and organizational legitimacy judgments. This article contributes to a better understanding of the complex process of organizational legitimacy judgment by shedding light on the individual’s perspective and expounding the relationship between attributed motives, corporate credibility, and organizational legitimacy. (shrink)