Sustainability and Convergence: The Future of Corporate Governance Systems?

Salvioni, Daniela M.; Gennari, Francesca; Bosetti, Luisa

doi:10.3390/su8111203

Cited by 82 publications

(68 citation statements)

References 138 publications

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“…Sustainable companies assign their boards the responsibility to oversee sustainability issues and establish devoted committees committed to sustainability-related tasks (Salvioni et al 2016). Our findings have implications from the governance perspective; it sends out a message to corporate boards to explicitly embrace the proposition that sustainability is a core indicator of CEO's responsibilities and performance.…”

Section: Discussionmentioning

confidence: 80%

CEO Compensation and Sustainability Reporting Assurance: Evidence from the UK

2017

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Companies are expected to monitor sustainable behaviour to help improve performance, enhance reputation and increase chances of survival. This paper examines the relationship between sustainability committees and independent external assurance on the inclusion of sustainability-related targets in CEO compensation contracts. Using a sample of UK FTSE350 companies for 2011-2015 and controlling for governance and firm characteristics, we find both board-level sustainability committees and sustainability reporting assurance have a positive and significant association with the inclusion of sustainability terms in compensation contracts. However, there is no joint impact between the voluntary use of independent external assurance and the role of sustainability committees on CEO compensation contracts. Sustainability-related terms in compensation contracts are more likely to be included, and higher compensation is likely to be paid, when assurance is provided by a Big4 firm and when a company operates in a sustainability-sensitive industry. Our findings highlight the potential of assured sustainability reports in assessing CEO performance in sustainability-related tasks, especially when sustainability metrics are included in CEO compensation contracts. Overall, our results suggest companies that invest in voluntary assurance are more likely to monitor management's behaviour and be concerned about the achievement of sustainability goals.

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Section: Discussionmentioning

confidence: 80%

CEO Compensation and Sustainability Reporting Assurance: Evidence from the UK

2017

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“…However, there are indications that large boards result in the loss of productivity due to increased difficulties in coordinating the efforts of multiple individuals [27]. As such, Salvioni et al [28] believe that sustainability can bring real convergence between outsider and insider corporate governance systems. Another study on the relationship between board committees and corporate performance that utilises publicly-available data of 346 firms of public firms in Hong Kong for the period [2001][2002][2003] indicate that boards are perceived to be efficient and productive if they are comprised of independent non-executive directors [29].…”

Section: Related Literaturementioning

confidence: 99%

Effect of Corporate Governance Structure on the Financial Performance of Johannesburg Stock Exchange (JSE)-Listed Mining Firms

Dzingai

Fakoya

2017

Sustainability

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There have been many corporate collapses and financial crises in recent years linked to a lack of effective corporate governance. The South African King IV Code of Corporate Governance recommends that corporate governing bodies should be comprised of an appropriate balance of knowledge, diversity, and independence for discharging their duties objectively and more efficiently. This study examines the effect of corporate governance structures on firm financial performance. The secondary data of selected Johannesburg Stock Exchange (JSE), Socially Responsible Investment (SRI) Index-listed mining firms' sustainability reports, and integrated annual financial statements are used. Using panel data analysis of the random effects model, we determined the relationship between board independence and board size and the return on equity (ROE) for the period 2010-2015. Results indicate a weak negative correlation between ROE and board size, and a weak, but positive, correlation between ROE and board independence. Additionally, there is a positive, but weak, correlation between ROE and sales growth, but a negative and weak relationship between ROE and firm size. The study suggests that effective corporate governance through a small effective board and monitoring by an independent board result in increased firm financial performance. We recommend that South African companies see compliance with the recommendations of the King IV Code on Corporate Governance not as a liability, but an ethical investment that may likely yield financial benefit in the long-term. Although complying with corporate governance principles does not necessarily translate into a significant economic benefit, firms should, however, continue to adopt corporate governance for ethical reasons to meet stakeholder's social and environmental needs for sustainable development.

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“…For instance, environmental management concepts such as green growth [10,11], green management [7,8], green marketing [12,13], green production [14], green absorptive capacity [15], green innovation [16][17][18], green intellectual capital [2,9], green supply chain management [19,20], green governance [21,22], green human resources [23], and among others are now widely used.…”

Section: Introductionmentioning

confidence: 99%

The Effect of Absorptive Capacity on Green Customer Capital under an Organizational Unlearning Context

et al. 2018

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Environmental management is becoming increasingly important within organizations and forms an essential part of their strategies. As customers are more concerned with the care of the environment, companies are required to be more aware of their actions. Consequently, companies must ignore their historical mindsets and assumptions to be able to adopt green-oriented practices and processes. Our specific research questions are: (i) How can firms become (more) green-oriented? and (ii) how can knowledge-based organizational capabilities drive this shift into greener companies, which may enhance green customer capital? The research model describes how the complementary roles of absorptive capacity (direct effect) and the fostering of an organizational unlearning context (moderating effect) affects green customer capital within the Spanish automotive component manufacturing sector. Empirical results reveal that to create green customer capital, companies should absorb new knowledge and build a context of organizational unlearning. In today's competitive environment, knowledge rapidly becomes obsolete, so companies need to encourage unlearning to make space for new knowledge that meets environmental needs and keeps pace with changing customer preferences. The research hypotheses were tested using partial least squares (PLS) path-modeling.

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Sustainability and Convergence: The Future of Corporate Governance Systems?

Cited by 82 publications

References 138 publications

CEO Compensation and Sustainability Reporting Assurance: Evidence from the UK

CEO Compensation and Sustainability Reporting Assurance: Evidence from the UK

Effect of Corporate Governance Structure on the Financial Performance of Johannesburg Stock Exchange (JSE)-Listed Mining Firms

The Effect of Absorptive Capacity on Green Customer Capital under an Organizational Unlearning Context

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