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Corporate governance pillars and business sustainability: does stakeholder engagement matter?

Corporate governance pillars and business sustainability: does stakeholder engagement matter?
Corporate governance pillars and business sustainability: does stakeholder engagement matter?

This study extends the existing work on corporate governance and business sustainability by exploring corporate governance pillars comprising board functions, structure, strategy, compensation and shareholder rights utilizing data from listed S&P 500 firms. Using panel fixed effects and two-step GMM, we discovered that environmental, social and financial sustainability dimensions of the business sustainability are impacted positively by board functions and board structure. Our findings further reveal that low stakeholder engagement adversely impacts companies’ bottom-line performance. The results are robust to outliers, model specifications, statistical estimations and alternative measures of performance. Most importantly, the inferences from the moderating result suggest stakeholder engagement as a strategic approach to improve performance. The study is relevant for business sustainability practitioners and policy makers in advancing principles of corporate governance to promote enhanced performance.

Board functions, Board structure, Business sustainability, Corporate governance, Stakeholder engagement
269-289
Konadu, Renata
0b73ef3a-f741-417c-80b0-842c6466e6e0
Ahinful, Gabriel Sam
71b72c98-0416-4db8-b5ec-a35f7e4f6057
Owusu-Agyei, Samuel
89f0abc2-0756-480e-962d-a4b01d7c04dc
Konadu, Renata
0b73ef3a-f741-417c-80b0-842c6466e6e0
Ahinful, Gabriel Sam
71b72c98-0416-4db8-b5ec-a35f7e4f6057
Owusu-Agyei, Samuel
89f0abc2-0756-480e-962d-a4b01d7c04dc

Konadu, Renata, Ahinful, Gabriel Sam and Owusu-Agyei, Samuel (2021) Corporate governance pillars and business sustainability: does stakeholder engagement matter? International Journal of Disclosure and Governance, 18 (3), 269-289. (doi:10.1057/s41310-021-00115-3).

Record type: Article

Abstract

This study extends the existing work on corporate governance and business sustainability by exploring corporate governance pillars comprising board functions, structure, strategy, compensation and shareholder rights utilizing data from listed S&P 500 firms. Using panel fixed effects and two-step GMM, we discovered that environmental, social and financial sustainability dimensions of the business sustainability are impacted positively by board functions and board structure. Our findings further reveal that low stakeholder engagement adversely impacts companies’ bottom-line performance. The results are robust to outliers, model specifications, statistical estimations and alternative measures of performance. Most importantly, the inferences from the moderating result suggest stakeholder engagement as a strategic approach to improve performance. The study is relevant for business sustainability practitioners and policy makers in advancing principles of corporate governance to promote enhanced performance.

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Accepted/In Press date: 27 January 2021
e-pub ahead of print date: 22 February 2021
Published date: September 2021
Keywords: Board functions, Board structure, Business sustainability, Corporate governance, Stakeholder engagement

Identifiers

Local EPrints ID: 452112
URI: http://eprints.soton.ac.uk/id/eprint/452112
PURE UUID: bfb617ac-7ade-4411-9375-1a8fdbbb2be4

Catalogue record

Date deposited: 11 Nov 2021 17:38
Last modified: 09 Jan 2022 03:06

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Contributors

Author: Renata Konadu
Author: Gabriel Sam Ahinful
Author: Samuel Owusu-Agyei

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