Stakeholder theory is widely accepted but elementary aspects remain indeterminate as the term ‘stakeholder’ is an essentially contested concept, being variously describable, internally complex and open in character. Such contestability is highly problematic for theory development and empirical testing. The extent of essential contestability, previously unknown, is demonstrated in this paper through a bounded systematic review of 593 different stakeholder theory definitions. As an essentially contested concept, the solution does not lie in a universal stakeholder definition, but in debating the (...) boundaries of stakeholder identification. To this end, this paper presents the first major attempt at sorting, filtering and ordering stakeholder theory and stakeholder definitions to produce a comprehensive, multi-dimensional classification of stakeholder theory. The constructs of the classification model juxtapose existing stakeholder theories and contributions from across the multi-contextual applications of stakeholder theory, thereby providing an invaluable overview of what we know about stakeholder theory in one model. The classification model is then tested with positive results. The paper concludes with a comprehensive discussion of the implications of classification stakeholder theory definitions, which has for future research. (shrink)

ABSTRACT:Corporate governance scholarship focuses on executive malfeasance, specifically its antecedents and consequences. Academic efforts primarily focus on prevention while practitioners are often left to hold firms and executives (including directors) accountable through a variety of sanctions. Even so, executive malfeasance still occurs even in the face of the vast resources used to monitor, control, and penalize firms and executives. In this paper, we posit equity markets do not adequately penalize firms for inaccurate earnings reports. Using a sample of 129 firms (...) identified by the U.S. General Accounting Office for reporting fraudulent earnings in 10K filings, we found support for our assertion. Consequently, the one party who may benefit but escape accountability is firm shareholders. Moreover, we find little empirical evidence that the subset of firms sanctioned by the SEC is penalized more heavily than the full sample by markets at the time they report and correct their 10K filings. Our results raise serious questions whether such managerial opportunism can be eradicated given the apparent lack of consequences in equity markets for investors. We also question whether the SEC is able to discern between fraud and error in financial reporting and its implications. (shrink)

ABSTRACT:Corporate governance scholarship focuses on executive malfeasance, specifically its antecedents and consequences. Academic efforts primarily focus on prevention while practitioners are often left to hold firms and executives (including directors) accountable through a variety of sanctions. Even so, executive malfeasance still occurs even in the face of the vast resources used to monitor, control, and penalize firms and executives. In this paper, we posit equity markets do not adequately penalize firms for inaccurate earnings reports. Using a sample of 129 firms (...) identified by the U.S. General Accounting Office for reporting fraudulent earnings in 10K filings, we found support for our assertion. Consequently, the one party who may benefit but escape accountability is firm shareholders. Moreover, we find little empirical evidence that the subset of firms sanctioned by the SEC is penalized more heavily than the full sample by markets at the time they report and correct their 10K filings. Our results raise serious questions whether such managerial opportunism can be eradicated given the apparent lack of consequences in equity markets for investors. We also question whether the SEC is able to discern between fraud and error in financial reporting and its implications. (shrink)