Corporate governance and shareholders' confidence in cooperatives: a systematic literature review

Background

The confidence of Bottom 40 (B40) shareholders is crucial for cooperative's sustenance within wider corporate governance. An in-depth study on cooperatives is needed, as they play a crucial role in the Malaysian economic system and contribute greatly to the country's social development. However, in the current landscape, confidence among shareholders is at stake. This study aims to identify the research gap into corporate governance for cooperativess in relation to B40 shareholder confidence, as well as identify current study challenges and develop a conceptual framework for future research.

Methods

We conducted a systematic literature review, with the use of agency theory to assess shareholders' confidence. Emerald, ProQuest, InderScience, Scopus and Science Direct were the online databases used in this study to search five keyword phrases: corporate governance, confidence, cooperative, agency theory and Bottom 40% (B40) household. Tranfield's five stages were used to conduct the systematic review.

Results

Only 5 of the 324 studies assess shareholders' confidence in cooperatives, as well as one paper on B40 and two papers on agency theory. Our review presents three major findings. First, research in the context of B40 shareholder's confidence in cooperatives is scarce. Second, the challenges related to shareholders' confidence in B40 are major issues in the context. Third, research on agency theory in the context of shareholders' confidence within cooperatives and corporate governance is still scant.

Conclusions

This review urges the research community to conduct more studies based on the highlighted research gaps.

Executive Board Chairs: Examining the Performance Consequences of a Corporate Governance Hybrid

Traditional agency theory views the proper role of the board chair exclusively as providing independent oversight to monitor and control the CEO. Recently, firms have introduced innovations in board leadership that have confounded these theoretical expectations. One notable innovation is the executive board chair, a corporate governance hybrid responsible for both oversight and strategic decision-making, challenging agency theory's prescription that the two activities remain separate. In this study, we argue that an executive board chair position can resolve the trade-off between independent oversight and involvement in strategy and therefore generate a performance advantage. We also predict that, owing to the blurring of lines between the CEO and board chair roles that the executive board chair position creates, the relationship will be stronger the greater the need to monitor and control the CEO but weaker when organizational complexity and board leadership demands are greater. Analysis of S&P 1500 firms from 2003 to 2017 provides general support for our arguments.

Pharmacists and Pharmacy Technicians' Perceptions of Scopes of Practice Employing Agency Theory in the Management of Minor Ailments in Central Indonesian Community Pharmacies: A Qualitative Study

Community pharmacy staff assist in the management of minor ailments. Agency Theory underpins relationships between health professionals and patients. This study explores pharmacists' and pharmacy technicians' perceived scopes of practice of minor ailment services in community pharmacies. Twelve one-on-one semi-structured interviews used an open-ended interview guide for each cohort of community pharmacists and pharmacy technicians, between June and July 2021. Purposive sampling selected a diversity of pharmacists and pharmacy technicians. Interviews were transcribed verbatim, thematically analysed assisted by NVivo version 20. Agency Theory aided the interpretation. Three main themes emerged: (1) inconsistencies in practice, (2) the lack of understanding of the scopes of practice of pharmacists and pharmacy technicians, and (3) provision of prescription-only medicines for some minor ailments or to fulfil patient requests. Several sub-themes included pharmacy staff involvement, education and training, provision of prescription-only medicines, and weak regulatory enforcement. Agency Theory indicated pharmacy patients (principals) delegated authority to pharmacists and pharmacy technicians (agents), which was confused by partial pharmacist absence. The lack of defined scopes of practice for pharmacists and pharmacy technicians disrupted established professional relationships. The scopes of practice and roles of the pharmacist and pharmacy technicians should be clearly defined, assisted by practice guidelines.

Do financial performance and firm's value affect the quality of corporate social responsibility disclosure: Moderating role of chief executive officer's power in China

This paper investigates the correlation between the quality of corporate social responsibility disclosure (CSRD) and financial performance (FP). It also investigates the moderating role of chief executive officer power (CEOP) in the relationship between the quality of CSR disclosure and firm value (FV) in Chinese listed companies. The evidential research used the up-to-date sample (3, 248) of unbalanced findings for the period of 2014-2020, from the registered Chinese firms in the Shenzhen and Shanghai Stock Exchanges as samples for the study. As a starting point technique, the STATA 15 has been used to test pooled ordinary least squares (OLS) regression on a sample of Chinese listed companies. We use 1-year lagged regression and two SLS regressions to monitor the potential endogeneity problem. The imbalanced data set was received from the China Stock Market and Accounting Research (CSMAR) web page, which is the most significant source of information for Chinese publicly listed firms. Data on CSR information items and media reporting are compiled manually. The findings of the study revealed that there are positive FP consequences for the companies engaged in the quality of CSR disclosure. We also report that higher CEO power negatively enhances the quality of CSR disclosure effect on the FP of FV. The research investigates the impact of CSR disclosure and FP by presenting evidence of the moderating role of CEO power. Therefore, it is suggested that a higher law for CSR engagement and disclosure be implemented in China, and robust measures for the implementation of CEO power, although there are financial advantages to be gained. A key relevance to the empirical quality of CSR disclosure research can be recognized as the moderating role of CEO power in the quality of CSR disclosure, FP, and FV in the context of Chinese study. The findings are robust with the use of an instrumental variable method.

Does Margin Call Pressure Affect the M&A Decision of Controlling Shareholders With Equity Pledges: Evidence From Chinese Listed Company

The equity pledge has become a universal practice in the world. Taking Chinese listed companies from 2007 to 2020 as a sample, this paper investigates the influence of controlling shareholders’ equity pledges on M&A behavior. It is found that the probability of M&A of listed companies is greater when the controlling shareholder has an equity pledge (or the proportion of equity pledge of controlling shareholder is higher). M&A activities can raise the stock price and play the role of market value management. Controlling shareholders with margin call pressure have stronger motivation to use M&A to increase their share price. Investors seem to be aware of this behavior and underestimate the potential benefits of M&A under this pressure. Propensity score matching (PSM) and difference in difference (DID) were used to test endogeneity and the results were still robust. Overall, our results reveal the impact of equity pledges by controlling shareholders on M&A. Furthermore, margin call pressure, this organizational psychology promotes this possibility.

The Impact of Consumers' Dynamic Browsing Modes on the Effect of In-Feed Native Advertising

As an emerging form of online display advertising, in-feed native advertising is increasingly employed in online news feed platforms. While many advertisers have largely embraced this new advertising format, the current research is full of controversy on whether the more native, the better the effect of in-feed native advertising. Based on recent studies on this emerging topic, the authors explore the effective in-feed native advertising persuasion strategies based on consumers’ dynamic online browsing modes. In study 1, the authors conducted an archived-data analysis (in co-operation with Baidu company). Results show that the match between in-feed native advertising persuasion style (implicit vs. explicit) and consumers’ real-time news feed browsing modes (convergent vs. divergent) can improve ad performance. In study 2, the authors further explained why consumers under different browsing modes respond differently (the mediation effect of self-agency vs. external agency) to specific in-feed native advertising persuasion. Our work explores the boundaries of agency theory from a dynamic perspective and helps advertisers conduct real-time and effective targeting strategies.

Investigating the Relationships Between Public Health Literacy and Public Trust in Physicians in China's Control of COVID-19: A Cross-Sectional Study

Objective: Public trust in physicians and public health literacy (HL) are important factors that ensure the effectiveness of health-care delivery, particularly that provided during the SARS-CoV-2 pandemic. This study investigates HL as a predictor of public trust in physicians in China's ongoing efforts to control COVID-19. Methods: Data were gathered in February 2020 during the peak of the disease in China. Based on Nutbeam's conceptualization of HL, we measure HL vis-à-vis COVID-19 by using a six-item scale that includes two items each for functional, interactive, and critical HL. Trust in physicians was measured by assessing physicians' capability to diagnose COVID-19. A rank-sum test and ordinal logit regression modeling were used to analyze the data. Results: Two key findings: (a) trust in physician handling of treatment for COVID-19 is reported by about 74% of respondents; and (b) five of the six HL measures are positive predictors of public trust in physician treatment of the disease, with functional HL1 having the highest level of such association (coefficient 0.285, odds ratio 1.33%, p < 0.01). Conclusions: Improving public HL is important for better public-physician relationships, as well as for nations' efforts to contain the pandemic, serving as a possible behavioral, non-clinical antidote to COVID-19. Being confronted with the unprecedented virus, humans need trust. Health education and risk communication can improve public compliance with physicians' requirements and build a solid foundation for collective responses.

Reorienting Locus of Control in Individuals Who Have Offended Through Strengths-Based Interventions: Personal Agency and the Good Lives Model

Having an external locus of control has been associated with a range of well-supported risk correlates of offending behavior. Further, individuals with an internal locus of control orientation are suggested to be more open to engaging in treatment and are also considered more likely to have successful treatment outcomes. In forensic settings, where individuals are subject to external controls and have little personal autonomy, it is important to consider what treatment approaches might be most successful in reorienting individuals’ locus of control. The Good Lives Model (GLM) proposes a strengths-based approach to the rehabilitation of individuals who have offended. Within the GLM, an external locus of control is suggested to be associated with a deficit in the primary good of agency. In this article, we will provide a brief overview of the literature on locus of control and its hypothesized role in offending behavior. We will discuss how an external locus of control orientation is related to personal agency and how strengths-based models, such as the GLM, may assist with reorienting locus of control in individuals who have offended through promoting personal agency.

Inferential Integrity and Attention

How should we define inferential reasoning in high-level cognition? Can non-conscious representations guide or even determine high-level cognition? If so, what are the properties of such non-conscious representations? Two contemporary debates on high-level cognition center on these issues. The first concerns the possibility of cognitive penetration, or the degree and extent to which high-level cognition influences or determines low-level cognition. The second focuses on the epistemic status of conscious cognition, and on whether or not non-conscious cognition could play a similar, albeit not as fundamental, justificatory role as conscious cognition. This latter issue is at the heart of the question concerning the epistemic status of conscious awareness. This paper focuses on the epistemic standard required for inference, or inferential reasoning, to count as justificatory. The debates on the epistemic status of consciousness and cognitive penetration typically assume such a standard because high-level cognition is associated with rationality, inferentially structured thought, and the epistemic responsibility one has for the conclusions drawn through one’s inferences. The paper proposes an account of inferential-attention that explains how cognitive penetration of non-phenomenally conscious cognition and perception is possible, and why there are unconscious processes that should be considered as essential components of high-level cognition. Sections “Defining Inference” and “Accuracy Constraints: The Agency-First Account of Inference” provide a theoretical framework for understanding the multiple criteria that an adequate account of inference and rational thought must satisfy. Sections “Attention: High- and Low-Level Inferential Cognition in Various Domains” and “Advantages Concerning Rule-Following and Rationality: Not Necessarily-Phenomenal Inferential Reasoning” articulate the inferential-attention account and explain how it meets the descriptive and normative criteria for epistemic responsibility and rationality. In particular, section “Attention: High- and Low-Level Inferential Cognition in Various Domains” defends an agential interpretation of inferential-attention, which offers a resolution of the tension between conservative or consciousness-based approaches to inference and liberal approaches that allow for types of unconscious or subdoxastic processes. An agency condition on inference explains how inference is a psychological process under the control of the agent, and at the same time, it satisfies the normative condition that an inference should be responsive to reasons or evidence by being cognitively available for personal level assessment and evaluation. The key is to identify this kind of epistemic agency with attention. Section “Advantages Concerning Rule-Following and Rationality: Not Necessarily-Phenomenal Inferential Reasoning” compares this inferential-attention account with an influential agential account of inference based on conscious intuition, and it argues that the former account is preferable. This section also demonstrates the significance of inferential-attention in higher cognition, even when it is non-phenomenally conscious.

Trust, but verify: social media models for disaster management

A lack of trust in the information exchanged via social media may significantly hinder decisionmaking by community members and emergency services during disasters. The need for timely information at such times, though, challenges traditional ways of establishing trust. This paper, building on a multi-year research project that combined social media data analysis and participant observation within an emergency management organisation and in-depth engagement with stakeholders across the sector, pinpoints and examines assumptions governing trust and trusting relationships in social media disaster management. It assesses three models for using social media in disaster management-information gathering, quasi-journalistic verification, and crowdsourcing-in relation to the guardianship of trust to highlight the verification process for content and source and to identify the role of power and responsibilities. The conclusions contain important implications for emergency management organisations seeking to enhance their mechanisms for incorporating user-generated information from social media sources in their disaster response efforts.

The Theory of Value-Based Payment Incentives and Their Application to Health Care

Objectives

To present the implications of agency theory in microeconomics, augmented by behavioral economics, for different methods of value‐based payment in health care; and to derive a set of future research questions and policy recommendations based on that conceptual analysis.

Data Sources

Original literature of agency theory, and secondarily behavioral economics, combined with applied research and empirical evidence on the application of those principles to value‐based payment.

Study Design

Conceptual analysis and targeted review of theoretical research and empirical literature relevant to value‐based payment in health care.

Principal Findings

Agency theory and secondarily behavioral economics have powerful implications for design of value‐based payment in health care. To achieve improved value—better patient experience, clinical quality, health outcomes, and lower costs of care—high‐powered incentives should directly target improved care processes, enhanced patient experience, and create achievable benchmarks for improved outcomes. Differing forms of value‐based payment (e.g., shared savings and risk, reference pricing, capitation, and bundled payment), coupled with adjunct incentives for quality and efficiency, can be tailored to different market conditions and organizational settings.

Conclusions

Payment contracts that are “incentive compatible”—which directly encourage better care and reduced cost, mitigate gaming, and selectively induce clinically efficient providers to participate—will focus differentially on evidence‐based care processes, will right‐size and structure incentives to avoid crowd‐out of providers’ intrinsic motivation, and will align patient incentives with value. Future research should address the details of putting these and related principles into practice; further, by deploying these insights in payment design, policy makers will improve health care value for patients and purchasers.

Exploring corruption in the South African health sector

Recent scholarly attention has focused on weak governance and the negative effects of corruption on the provision of health services. Employing agency theory, this article discusses corruption in the South African health sector. We used a combination of research methods and triangulated data from three sources: Auditor-General of South Africa reports for each province covering a 9-year period; 13 semi-structured interviews with health sector key informants and a content analysis of print media reports covering a 3-year period. Findings from the Auditor-General reports showed a worsening trend in audit outcomes with marked variation across the nine provinces. Key-informants indicated that corruption has a negative effect on patient care and the morale of healthcare workers. The majority of the print media reports on corruption concerned the public health sector (63%) and involved provincial health departments (45%). Characteristics and complexity of the public health sector may increase its vulnerability to corruption, but the private-public binary constitutes a false dichotomy as corruption often involves agents from both sectors. Notwithstanding the lack of global validated indicators to measure corruption, our findings suggest that corruption is a problem in the South African healthcare sector. Corruption is influenced by adverse agent selection, lack of mechanisms to detect corruption and a failure to sanction those involved in corrupt activities. We conclude that appropriate legislation is a necessary, but not sufficient intervention to reduce corruption. We propose that mechanisms to reduce corruption must include the political will to run corruption-free health services, effective government to enforce laws, appropriate systems, and citizen involvement and advocacy to hold public officials accountable. Importantly, the institutionalization of a functional bureaucracy and public servants with the right skills, competencies, ethics and value systems and whose interests are aligned with health system goals are critical interventions in the fight against corruption.

How to govern physician-hospital exchanges: contractual and relational issues in Belgian hospitals

OBJECTIVE

Our aim was to investigate contractual mechanisms in physician-hospital exchanges. The concepts of risk-sharing and the nature of physician-hospital exchanges - transactional versus relational - were studied.

METHODS

Two qualitative case studies were performed in Belgium. Hospital executives and physicians were interviewed to develop an in-depth understanding of contractual and relational issues that shape physician-hospital contracting in acute care hospitals. The underlying theoretical concepts of agency theory and social exchange theory were used to analyse the data.

RESULTS

Our study found that physician-hospital contracting is highly complex. The contract is far more than an economic instrument governing financial aspects. The effect of the contract on the nature of exchange - whether transactional or relational - also needs to be considered. While it can be argued that contractual governance methods are increasingly necessary to overcome the difficulties that arise from the fragmented payment framework by aligning incentives and sharing financial risk, they undermine the necessary relational governance. Relational qualities such as mutual trust and an integrative view on physician-hospital exchanges are threatened, and may be difficult to sustain, given the current fragmentary payment framework.

CONCLUSIONS

Since health care policy makers are increasing the financial risk borne by health care providers, it can be argued that this also increases the need to share financial risk and to align incentives between physician and hospital. However, our study demonstrates that while economic alignment is important in determining physician-hospital contracts, the corresponding impact on working relationships should also be considered. Moreover, it is important to avoid a relationship between hospital and physician predominantly characterized by transactional exchanges thereby fostering an unhealthy us-and-them divide and mentality. Relational exchange is a valuable alternative to contractual exchange, stimulating an integrated hospital-physician relationship. Unfortunately, the fragmented payment framework characterized by unaligned incentives is perceived as an obstacle to realize effective collaboration.

Governance mechanisms in the physician-patient relationship: a literature review and conceptual framework

BACKGROUND

The physician-patient relationship is a critical component of the integrated approach to excellence in health-care delivery. Although commonly modelled within the boundaries of the agency theory and regarded as synonymous to an agent-principal interaction, there exists only a sparse understanding about the most effective ways of governing it.

OBJECTIVE

This article undertakes a selective review of the growing body of research on the governance of the physician-patient relationship to discuss the current state of the knowledge in the field and suggest promising avenues for further exploration.

FINDINGS

On the basis of an extensive analysis of the relevant literature, we identify two emerging streams of inquiry on the trust-based (i.e. trust and ethical oversight) and distrust-based (i.e. patient information-empowerment and decision-making authority) governance mechanisms of the physician-patient relationship and discuss the key findings within each stream.

DISCUSSION

To conciliate the on-going scholarly debate concerning the efficacy of trust- and distrust-based mechanisms, we draw the foundations of a conceptual framework which might serve as a guide for more integrative research endeavours on the governance of the physician-patient relationship.