Corporate sustainability performance and board attributes: Cross-country analysis on infrastructure and real estate companies from ASEAN countries

Abstract

Businesses have encompassed their stakeholders’ interests into a set of reporting which reflects all of their ESG related activities. Sustainability reporting is considered to bring value to firms not only concerning profitability but also the long-term sustainability. Settled amid country-level development, we purposely consider the impact of real estate and infrastructure industries and select ASEAN countries to investigate the relationship between firms’ sustainability performance and board independence, board diversity, number of meetings, and the total compensation paid. This paper strives to investigate how these board characteristics play a role in decision making to contribute to the quality of sustainability performance reflected in the reporting. We find how our dependent variable acts differently from each explanatory. First, we find that board independence dictates the quality of sustainability performance which is emphasized by how they bring key issues related to stakeholders. Second, women’s composition on the board structure does not evidently reflect the caliber of sustainability performance. Third, we find that the frequency of board meetings may include useful discussion regarding ESG matters as it positively aligns with sustainability performance. Furthermore, the compensation may not be the vital driver of directors’ ESG- related goals since the compensation may include miscellaneous objectives.