Transforming Corporate Governance

Abstract

The integration of ESG criteria in the energy sector is crucial for sustainable business practices. This analysis uses LSEG ESG ratings to examine the governance practices of Alpha and Beta through stakeholder, agency, and resource dependence theories. Results show Alpha outperformed Beta in governance structure, board effectiveness, ESG reporting transparency, and stakeholder engagement. Alpha's proactive strategies, such as a dedicated ESG committee and integrated CSR initiatives, contributed to its higher governance score, demonstrating a more transparent governance framework than Beta's. While Alpha's strong governance leads to effective ESG outcomes, Beta faces challenges in stakeholder engagement and sustainability integration. The study underscores the importance of robust governance, comprehensive sustainability reporting, aligning management incentives with ESG objectives, and strategic resource management to strengthen governance and ensure sustainable growth.