Research Handbook of Finance and Sustainability
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Research Handbook of Finance and Sustainability

Edited by Sabri Boubaker, Douglas Cumming and Duc K. Nguyen

The severe consequences of the global financial crisis 2008-2009 and numerous accounting frauds and financial scandals over the last fifteen years have let to calls for more ethical and responsible actions in all economic activities including consumption, investing, governance and regulation. Despite the fact that ethics in business and corporate social responsibility rules have been adopted in various countries, more efforts have to be devoted to motivate and empower more actors to integrate ethical behavior and rules in making business and managerial decisions. The Research Handbook of Finance and Sustainability will provide the readers but particularly investors, managers, and policymakers with comprehensive coverage of the issues at the crossroads of finance, ethics and sustainable development as well as proposed solutions, while focusing on three different levels: corporations, investment funds, and financial markets.
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Chapter 31: How to foster responsible corporate governance? Voluntary versus legislative approaches

Antoine Rebérioux and Gwenaël Roudaut

Abstract

Corporate governance, in particular, board of directors’ composition, is regulated in most jurisdictions by voluntary and legislative instruments, as a way to foster good practices, responsible behavior and firm performance. Understanding the relative costs and benefits of the two approaches is therefore an important question. This chapter proposes a first step in this direction, by investigating and comparing how French listed companies (SBF 120) comply with the AFEP-MEDEF code of corporate governance regarding independence on one side and the mandatory board gender quota on the other. The chapter reviews the literature on board composition and firm performance, and related soft and hard regulations. It reports that independent and female directors have specific individual characteristics that may influence the overall impact of the regulation (soft or hard). Furthermore, it shows that while independent directors have become key players inside the boardroom through committee assignment, women still face an indirect inner glass ceiling that may jeopardize the efficiency of the quota.

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