Search

This paper investigates the impact of management responsibility in corporate shock events on shareholders' wealth and the types and frequency of repair actions taken to mitigate reputational losses. Information theory and market psychology suggest that shock events resulting from management faults signal ineffective firm management that reduces market participants' trust in a firm's operations. We utilize a sample of corporate shock events with attributed-firm responsibility ranging from weak to strong and test the above-stated objectives. Our results show that attributed-firm responsibility in shock events has a significant negative effect on shareholders' value. The results also highlight positive relationships between firms' levels of responsibility for events and both the number of types and repair actions that firms pursue. In addition, firms announcing reputation-repair actions were able to rebound a significant portion (41%) of their reputational losses. These findings extend academic research into the cause and consequences of shock events and the repair actions pursued by firms. For practitioners, the results signal the significant negative consequences of shock events and suggest that management should strengthen controls to avoid shock events; but if one was to occur, management should pursue reputation-repair actions to rebuild market participants' trust and rebound shareholders' losses. [ABSTRACT FROM AUTHOR]

This article presents a theoretical framework for the analysis of stability and change in national flood risk policies. Based on thorough scrutiny of existing theories on stability and change in the literature, we want to offer guidance for empirical studies on flood risk governance. On one hand, we elaborate theories of path dependency and institutional stability. On the other hand, we focus on the role of policy entrepreneurs and actor coalitions bringing in new ideas on how policies should be adjusted. We translate both angles to the realm of flood risks. Furthermore, we consider the role of trends and shock events. By integrating these perspectives into one comprehensive theoretical framework, we aim to offer guidance to empirical researchers searching for forces of stability and change in flood risk governance. [ABSTRACT FROM AUTHOR]