Purpose This study aims to examine how governance mechanisms and corporate strategy jointly influence corporate goodness in an emerging market characterized by concentrated ownership and mandatory corporate social responsibility regulations. Design/methodology/approach Using a panel of 397 listed firms from an emerging market (India) between 2010 and 2023, this study analyzes the impact of governance mechanisms (ownership, boards and management) and strategic investments on corporate goodness, specifically evaluating the complex interactions among these internal governance structures. Findings Advancing the governance-environment, social and governance (ESG) literature on principal-principal conflicts, the authors find promoter-dominated ownership negatively influences corporate goodness. However, strong board and management governance actively drives corporate goodness, interactively offsetting these negative ownership impacts. Furthermore, aligning with compliance-cost perspectives, corporate goodness acts primarily as a regulatory burden without complementary strategic investments. Practical implications This study reframes corporate goodness as a strategic resource, dynamically shaped by the interactions among internal governance mechanisms rather than mere regulatory compliance. It demonstrates that the interdependent relationship among ownership, boards and management serves as a vital substitute for weak investor oversight in emerging markets. Originality/value This study reframes ESG as a strategic resource shaped by internal governance rather than mere regulatory compliance, demonstrating that governance acts as a vital substitute for weak external enforcement in concentrated-ownership environments.
Purpose This study aims to investigate whether board gender diversity moderates the relationship between environmental, social and governance (ESG) performance and firm value in the French context, characterised by mandatory corporate social responsibility (CSR) reporting and gender equality legislation. Design/methodology/approach The authors apply a two-step dynamic system generalised method of moments (GMM) estimator to a sample of French non-financial companies listed on the SBF 120 index over the period 2011–2022. Findings The findings indicate that board gender diversity positively moderates the ESG performance–firm value relationship, highlighting the governance role of female directors in the specific French regulatory context. Research limitations/implications The findings are limited to the characteristics of the sample. Future research could extend this study by including firms from the financial sector and examining the ESG–firm performance relationship while considering other governance mechanisms, such as ownership structure. Practical implications The study highlights the relevance of board gender diversity as a corporate governance mechanism. For policymakers, it may be pertinent to give greater consideration to gender equality when developing the CSR regulatory framework. Originality/value This study contributes to the debate on the CSR performance–firm value relationship by providing additional evidence from the French regulatory setting on the important role of female directors in strengthening the effectiveness of ESG practices and thereby improving corporate performance.
Purpose The 2030 Agenda has increased attention toward the role of organizations in advancing sustainable development through the achievement of the sustainable development goals (SDGs). Within this context, the banking industry plays a crucial role given its ability to influence economic, social and environmental outcomes through financing and investment decisions. This study aims to examine the influence of board characteristics on banks’ SDG performance, addressing the limited evidence on the governance determinants of banks’ contribution to the SDGs. Design/methodology/approach Drawing on stakeholder-agency theory, this study investigates the effects of board size and board gender diversity on the SDG performance of 646 banks operating across 60 countries over the period 2018–2023. To address potential endogeneity concerns, the analysis uses a difference Generalized Method of Moments (GMM) estimator. Findings The results reveal that both board size and board gender diversity exert a positive and significant influence on banks’ SDG performance. The findings suggest that board composition represents an important governance mechanism through which banks can strengthen their contribution to sustainable development. Originality/value This study contributes to the literature by moving beyond SDG disclosure and examining the governance factors associated with banks’ SDG performance. Furthermore, it extends corporate governance research by identifying board size and board gender diversity as important determinants of SDG performance and provides additional support for stakeholder-agency theory in explaining how board characteristics facilitate the alignment of managerial decisions with broader stakeholder interests.
Purpose The purpose of this study is to investigate the impact of integrated reporting (IR) on agency costs and to examine the role of board gender diversity in the context of an emerging economy. Design/methodology/approach Using a sample of Bangladeshi manufacturing firms and underpinning the agency theory, the study hypothesizes that IR decreases agency costs by reducing information asymmetry and board gender diversity strengthens this relationship. Both static and dynamic panel data analysis have been used to test the hypothesis. Findings The findings show a growing trend of IR adoption by sample firms from 2018 to 2023. The multivariate analysis shows that IR has a negative and significant impact on agency costs. The role of IR in reducing such costs is more prominent in the presence of greater gender diversity in the boards. The results further show that the influence of IR in mitigating agency costs is more pronounced in high IR practicing firms compared to the low ones. Practical implications The findings suggest that firms can reduce agency costs by adopting IR practices, especially when supported by greater board gender diversity. This highlights the importance for policymakers and corporations to promote gender-inclusive boards for enhanced corporate transparency and accountability. Originality/value To the best of the authors’ knowledge, this study is the first to examine the moderating role of board gender diversity on the relationship between IR and agency costs in the context of Bangladesh. It offers unique insights into how diverse boards enhance the effectiveness of IR in mitigating agency costs and contribute to the IR literature in the context emerging economy.
Purpose In the face of pressure to invest responsibly, pension fund managers must decide whether to remain passive investors, engage or divest their fossil fuel holdings. Factors affecting this decision are not yet fully understood. This study aims to explore the perceptions of pension fund managers of active ownership engagement within fossil fuel investments. Design/methodology/approach The authors use a qualitative and inductive approach by conducting semi-structured interviews with decision-makers from pension funds in Denmark that collectively represent approximately 80% of market capitalization. These interviews are complemented by interviews with a global investor network representative, a non-governmental organization and an engagement service provider. These were then transcribed and coded to identify core themes, contingency variables and engagement strategies. Findings Interviewees reported that despite external pressure to divest, pension funds in the sample strive to influence fossil fuel companies through active ownership and engagement strategies. They believe that active ownership can create a sustainable impact, assist the pension sector in fulfilling fiduciary obligations and provide financial value by guiding companies towards more sustainable business models. From the interviews, the authors identify four separate active ownership strategies: direct private engagement, direct public engagement, intermediary engagement and coalition engagement. The authors furthermore suggest contingency factors that lead active owners to favour each strategy. Originality/value This study contributes to the literature with an inductively derived pension fund engagement model that complements and augments existing models in this area. The model identifies strategic choices and contingency factors that influence the perception of engagement of these funds.
