The impact of corporate governance attributes on environmental and social performance: The case of European region excluding companies from the Eurozone

Abstract

This study provides an empirical investigation of the impact of Corporate Governance (CG) attributes on the environmental and social aspects of Corporate Social Responsibility (CSR). The dependent variables considered for the description of the environmental and social aspects of CSR were determined using the Refinitiv approach, and through the lens of agency, stakeholder, and resource dependency theories. The independent variables were selected based on the literature and involve eight CG attributes, namely: CSR committee, CEO duality, board meeting attendance, board meetings frequency, non‐executive board members, board gender diversity, board specific skills, and board experience.The employed methodology was evaluated through a sample of dependent and independent variable data of 313 companies across the European region excluding companies from the Eurozone for the period of 2006–2020. A suite of machine learning models was employed for capturing the most important determinants of the environmental and social aspects of CSR.The results reveal that three main corporate governance attributes may have a significant impact on a company's environmental and social performance. These attributes involve more female directors and directors with low board experience in board positions, and finally, the existence of CSR committees. The derived findings provide significant implications for corporate directors, socially responsible investors, policymakers, and regulators that intend to promote CSR initiatives and strategies.

Evolution and assessment of corporate social performance through the lens of top category journals: a theoretical structural analysis

“…For example, CSP has been viewed as a measure of a firm’s performance (Kölbel et al ., 2017; Aftab et al ., 2022) in various ways: by including its positive relationship with financial performance using agency theory and institutional theory (Govindan et al. , 2021; Giannarakis et al ., 2022). Further, Shankar et al .…”

“…Later, various studies extended the concept by evaluating various dimensions of the Wood model of CSP by discussing the social duties of firms and managers (Tran and Adomako, 2021; Campopiano et al ., 2023), stakeholders’ engagement and involvement (Hsu, 2018), social issues management (Lim et al ., 2022) and outcomes on people, environment and society (Khan et al ., 2023). In this regard, many studies explained the consequences of CSP constructs on various stakeholders (Godfroid et al ., 2022) and triple bottom line (Hsu and Chen, 2015; Henao and Sarache, 2022) by using theoretical perspectives such as stakeholder theory, institutional theory, isomorphism theory, social exchange theory and so on (Giannarakis et al ., 2022). Tran and Adomako (2021) explained the drivers and behavioural outcomes of stakeholders and integrated them as a mediator to explain the relationship on the CSP.…”

“…Studies used the concept as an independent agenda (Alghababsheh et al, 2020) or integrated it with one or other related concepts or theories. For example, CSP has been viewed as a measure of a firm's performance (K€ olbel et al, 2017;Aftab et al, 2022) in various ways: by including its positive relationship with financial performance using agency theory and institutional theory (Govindan et al, 2021;Giannarakis et al, 2022). Further, Shankar et al (2018) identified 16 critical success factors related to a traceability-based food logistics system using stakeholder theory to ensure food safety and quality.…”

“…Tran and Adomako (2021) explained the drivers and behavioural outcomes of stakeholders and integrated them as a mediator to explain the relationship on the CSP. Giannarakis et al (2022) investigated the impact of eight corporate governance attributes on social aspects of CSR and revealed the high significance of female directors, board positions and the CSR committee on social performance. Similarly, a study by Jiang et al (2023) observed high levels of negligence from non-family board members towards firms' social actions or philanthropy.…”

Chief Executive Officer (CEO) and corporate environmental sustainability: A systematic literature review and avenues for future research

“…The connection between CEOs and environmental sustainability has received limited attention, resulting in a growing body of research on the relationship between corporate governance, the board of directors and the CEO regarding environmental performance and reporting (Christensen et al, 2021; Shahab et al, 2020). Previous studies have explored various aspects, including CEO compensation, CEO attributes' impact on environmental performance and environmental disclosure (Adu et al, 2022b; Al‐Shaer & Zaman, 2019; Elsayih et al, 2020; Giannarakis et al, 2022; Gómez‐Bezares et al, 2019; Oware & Awunyo‐Vitor, 2021; Razali et al, 2016; Shahab et al, 2022; Sumarta et al, 2021; Ullah et al, 2022; Winschel, 2021). However, a comprehensive understanding of the CEO–environmental sustainability engagement literature is still lacking.…”