This paper aims to evaluate alternative theories about how perceived innovativeness and perceived relational skills interact with gender to explain evaluations by managers of scientists and engineers' promotability into management. Design/methodology/approach - A cross-sectional design is used. The sample (n = 2,278) is drawn from 24 large US corporations. Separate surveys are administered in each corporation to scientists and engineers and to managers evaluating them: Findings - Managers rate men and women equally promotable. Furthermore, women whom managers perceived to be especially innovative receive higher evaluations of promotability than similarly accomplished men. And, among those perceived to have' low relational skills, women and men are evaluated similarly. Research limitations/implications - More research is needed to evaluate how ambivalent stereotypes and pressures from organizations to suppress categorical thinking might combine to affect evaluation and selection processes in diverse work settings. Practical implications - Companies should be concerned about the potential tendency for managers to reward a few individuals when they exceed stereotypical expectations. Employees should be aware of and actively manage the impressions that managers have of them with regard to innovativeness and relational skills. Originality/value - This paper calls attention to the role of ambivalence and legitimacy theories that predict that women will receive higher evaluations when they exceed stereotypical expectations of innovativeness and that when women do not meet stereotypical expectations of relational skills, managers will temper their harshness in evaluating them. In developing this analysis, it seeks to contribute to the understanding of evaluation processes by considering the context in which evaluations take place.

In response to the enactment of the Sarbanes-Oxley Act 2002 and of the release of the Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 5, this study develops a risk-based evidential reasoning approach for assessing the effectiveness of internal controls over financial reporting (ICoFR). This approach provides a structured methodology for assessing the effectiveness of ICoFR by considering relevant factors and their interrelationships. The Dempster-Shafer theory of belief functions is utilized for representing risk. First, we develop a generic ICoFR assessment model based upon a Big 4 audit firm''s approach and apply it to a real-world example. Then, based on this model, we develop a quantitative representation of various levels of ICoFR effectiveness and related risk-assessment as defined by the PCAOB and contrast these representations with levels implied by Auditing Standard No. 5. In doing so, we demonstrate the potential value of formal risk assessment models in both facilitating the assessment of risks in an individual engagement and in assessing the effects of different regulations.

The authors quantify the impact of social interactions and peer effects in the context of physicians' prescription choices. Using detailed individual-level prescription data, along with self-reported social network information, the authors document that physician prescription behavior is significantly influenced by the behavior of research-active specialists, or 'opinion leaders,' in the physician's reference group. The authors leverage a natural experiment in the category: New guidelines released about the therapeutic nature of the focal drug generated conditions in which physicians were more likely to be influenced by the behavior of specialist physicians in their network. The authors (1) find important, statistically significant peer effects that are robust across model specifications; (2) document asymmetries in response to marketing activity across nominators and opinion leaders; (3) measure the incremental value to firms of directing targeted sales force activity to these opinion leaders; and (4) present estimates of the social multiplier of detailing in this category.

This study seeks to understand how business group affiliation, within firm governance and external governance environment affect firm performance in emerging economies. We examine two aspects of within firm governance – ownership concentration and board independence. Research Findings/Insights: Using archival data on the top 500 Indian and Chinese firms from multiple data sources for 2007, we found that group affiliated firms performed worse than unaffiliated firms, and the negative relationship was stronger in the case of Indian firms than for Chinese firms. We also found that ownership concentration had a positive effect on firm performance, while board independence had a negative effect on firm performance. Further, we found that group affiliation – firm performance relationship in a given country context was moderated by ownership concentration. Theoretical/Academic Implications: This study utilizes an integration of agency theory with an institutional perspective, providing a more comprehensive framework to analyze the CG problems, particularly in the emerging economy firms. Empirically, our findings support, as well as contradict, some of the conventional wisdom, and suggest useful avenues for future research. Practitioner/Policy Implications: This study shows that reforms in general and CG reforms in particular are effective in emerging economies, which is an encouraging sign for policy makers. However, our research also suggests that it may be time for India and China to stop the encouragement for the empire building through group formation in the corporate world. For practioners, our findings suggest that firms need to balance the need for oversight with the need for advice, while selecting independent directors

This article explores the plausibility of some intuitions and counter intuitions about the anti-corruption efforts of MDBs and international organizations leveraging the power of the private sector. Regulation of a sizable percentage of global private sector actors now falls into a new area of international governance with innovative institutions, standards, and programs. We wrestle with the role and value of private sector partnerships and available informal and formal social controls. Crafting proportional informal controls (e.g., monitoring, evaluations, and sanctions) and proper incentives to cooperative games across networks are the lynchpins of successful collective action programs. Ambivalence with informal social controls or effective incentives, we argue, risks far too much deference to private sector interests.

Corporate community responsiveness relates to business activities that are integral parts of a firm’s operations and are designed to benefit the firm through benefiting the local communities. Using data from commercial banks in the United States between 1997 and 2000, the authors measured banks’ corporate community responsiveness by their Community Reinvestment Act (CRA) lending activities and their performance ratings by CRA examiners. The authors developed and tested eight hypotheses on the influence of contextual (community income, minority population, and competition) and organizational (age, profitability, risk, institutional ownership, and mergers and acquisitions) factors on the two measures of corporate community responsiveness. The authors found a negative effect for minority population; a positive effect for banks’ profitability; and partial support for community income, competition, and risk factors. The results show no effects for institutional ownership or mergers and acquisitions. The implications of these results for the instrumental aspect of stakeholder theory are discussed.

We conceptualize threats to auditor independence as conflicts of social identity rather than interest and hypothesize that the greater the saliency of the professional identity among auditors, the more likely the auditor will engage in independent decision-making. Furthermore, we assert that saliency of non-professional identities and weakness of the professional image threaten independence. We hypothesize that a return to the traditional will relate positively to the saliency of the professional identity among auditors and ultimately, to independent decision-making. Actions for re-establishing the external image of the profession are drawn from historical references to the traditional image.

We find that the likelihood and severity of financial misreporting is positively related to aggregate institutional ownership and this effect can be largely attributed to ownership by institutions with short investment horizons — those with little incentive to engage in costly monitoring of firm activities and precisely those that sell at the announcement of a restatement. We also find that the concentration of holdings by these institutions offsets this effect, which suggests concentrated ownership induces greater monitoring and mitigates the incentives for firms to misreport. Our results suggest that any link between myopic firm decision making and institutional ownership may be related to the nature of institutional monitoring.

An important issue that firms consider when designing convertible debt is to specify security features such as conversion ratio, maturity date and call period. Following Lewis et al. [Lewis, M., Rogalski, R., Seward, J., 2003. Industry conditions, growth opportunities and market reactions to convertible debt financing decisions. Journal of Banking and Finance 27, 153–181], we employ a single measure that simultaneously considers all of these features: the expected probability (measured at issue date) that the convertible will be converted to equity at maturity. We find that firms in countries with stronger shareholder rights issue convertible debt with a higher expected probability of converting to equity. The positive association between the expected probability of conversion and shareholder rights is less pronounced in firms for which ownership structures create potentially high managerial agency costs. Specifically, in countries with stronger shareholder rights, firms with higher separation of control rights and cash flow rights tend to issue convertibles with lower probability of conversion. Furthermore, we find that large non-management block ownership strengthens the likelihood of issuing convertible debt with higher probability of conversion in countries with stronger shareholder rights. In contrast, firms in countries with stronger creditor rights issue convertibles with lower probability of conversion. We also document that the negative association between creditor rights and probability of conversion is more pronounced in firms with higher separation of control rights and cash flow rights.