Addressing a gap in the literature, the analysis explores how ESG score relate to systematic risk over time, with particular attention to the Environmental, Social, and Governance components, which have received limited attention to date. Therefore, this study examines whether the relationship between ESG score and systematic risk has evolved over time in the broader context of the transition toward a sustainability-oriented economy, employing a market model based on the Capital Asset Pricing Model (CAPM) framework developed by Sharpe. Using a panel dataset of financial and non-financial firms included in the STOXX Europe 600 Index between 1 January 2008 and 31 December 2022, we present empirical evidence of a decline in systematic risk following the adoption of the United Nations’ 2030 Agenda in September 2015. This reduction is more pronounced among companies with higher ESG scores. Similar patterns are observed across the individual E, S, and G dimensions. The implications of these findings are twofold. Theoretically, they reinforce the expanding literature suggesting a negative correlation between ESG performance and systematic risk. Practically, they offer relevant insights for policymakers and regulators, highlighting the value of integrating ESG considerations into risk assessment, monitoring, and management frameworks to support more effective systemic risk mitigation strategies. This study contributes to the body of research analysing the relationship between ESG factors and systematic risk, which is currently not fully explored and with conflicting results. Extending previous studies, we investigate the effect of overall ESG scores together with their distinct components (E, S, and G).
In parallel with the growing emphasis on corporate social responsibility (CSR), management scholars have increasingly explored the factors that drive CSR engagement. While most previous research has concentrated on institutional and organizational drivers in developed economies, this study aims to broaden our knowledge by examining whether individual factors, i.e., CEOs’ characteristics, can directly or indirectly promote CSR engagement in emerging economies. Specifically, based on agency theory, we argue that dominant-owner CEOs will have a negative influence on CSR engagement, and based on the upper echelons theory, we argue that dominant-owner CEOs’ expertise and education may influence CSR engagement in emerging economies. We tested our hypotheses using a longitudinal sample of the 500 largest Indian firms listed on the Bombay Stock Exchange (BSE) between 2015 and 2019. Our results support our theoretical predictions and make three key contributions to the literature: (i) deepen our understanding of individual drivers of CSR in emerging economies, (ii) advances agency theory by showing the negative impact of dominant-owner CEOs on CSR engagement, and (iii) extends the upper echelons theory by highlighting the moderating role of CEOs’ financial expertise and education on the baseline relationship.
The language CEOs use in their communications, i.e., CEO-speak, is a complex phenomenon, likely to be influenced by the need to provide information and the strategic intention of managing the impressions of the firm’s audience. This work is the first to specifically address CEO-speak regarding firms’ commitment to SDGs. It investigates whether and how sustainability performance and national culture influence such disclosure. Drawing on legitimacy theory and employing a Poisson regression, we examine the content of 443 CEO-signed texts of European listed firms. The results indicate that sustainability performance and certain Hofstede’s cultural dimensions influence SDG-related sentences within CEO-speak. These are more prevalent in sustainable firms situated in countries characterised by effective management of social inequalities, a tendency to avoid unknown or ambiguous situations, a strong focus on future prospects, and a high restriction on human duties. Our work shows that CEOs express their commitment to sustainable development, aligning with stakeholders’ values while converging with firms’ performance.
The corporate political activity literature suggests that business executives’ personal service in government creates bureaucratic capital which can be deployed in ways that favour private firms. We investigate whether there are firm-specific benefits for UK companies with executives simultaneously serving as non-executive directors (NEDs) on the corporate governance boards responsible for the oversight of UK government agencies. We also explore whether these benefits are greater for firms that have “insider” status – FTSE100 companies. To estimate potential firm-specific benefits from executives’ service on government boards, we employ a novel database of the NEDs sitting on the departmental and agency boards in UK central government for the period 2008-21. Information on these NEDs is supplemented with data on market and financial performance, and tax liabilities for a large sample of UK-registered companies. Our statistical results indicate that firms with executives simultaneously serving as NEDs on government boards have higher market capitalization, higher turnover and lower taxation. Further analysis indicates that the benefits of executive board service in government are particularly strong for FTSE100 companies, but that for these companies such service may be associated with weaker profitability.
The nonprofit organizational studies have extensively examined the factors influencing commitment in the formal governance. However, there has been limited exploration of the mechanisms facilitating inclusion within the day-to-day management of such organizations, particularly with regards to the most vulnerable individuals. This article endeavors to address this research gap by investigating these mechanisms within a specific nonprofit organization, namely the Accorderies, which has prioritized inclusion as a fundamental aspect of its associative project. The role of day-to-day management in inclusion and diversity is rarely considered, even though governance combines formal and informal aspects. However, given the debates on diversity in management, this day-to-day management could shed new light on the inclusion process. For practitioners, it could be a valuable lever for overcoming certain pitfalls linked with the process of inclusion in governance. Our analysis adopts a mixed-method research approach, employing a combination of quantitative and qualitative analyses, involving focus group discussions conducted with six distinct autonomous Accorderies. The findings of our analysis reveal how: (1) diversity can serve as a catalyst for promoting inclusion, and fostering a sense of belonging and recognition of uniqueness of all each individual, and (2) the exchanges and rules that underpin this nonprofit organization encourage people to be committed. These empirical findings lead us to emphasize the benefits of day-to-day management as a lever for inclusion of the most vulnerable, based on specific institutional rules and resources.
