Do Directors Drive Corporate Sustainability?

Iliev, Peter; Roth, Lukas

doi:10.2139/ssrn.3575501

Cited by 19 publications

(13 citation statements)

References 36 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…(2016) corroborated these findings, proving the existence of a positive relationship between ESG scores and Tobin's Q. Finally, Iliev and Roth (2021) found that higher ESG practices are able to improve firm operating performance. In contrast, Di Giuli and Kostovetsky (2014) found a negative relationship between ESG score and change in firms' operating performance (ROA) and stock returns measured across three years.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 69%

Can sustainable practices protect investors during financial market instability? A multi-sector analysis during the COVID-19 pandemic

Nirino

Petruzzella

Alam

et al. 2022

View full text Add to dashboard Cite

PurposeThe aim of this study is to analyse the relationship between firms' sustainable practices and corporate financial performance during the COVID-19 pandemic. Specifically, this study aims to analyse the effect of sustainable practices on firms' stock returns during and after the first COVID-19 pandemic emergency.Design/methodology/approachA quantitative study was conducted to determine the impact of sustainable practices on firms' stock returns, using a sample of 1,418 European listed firms. In particular, we tested the effect of environmental (E) and social (S) scores, providing a multi-sectoral analysis in order to consider sector specificities.FindingsThe empirical outcomes indicate the existence of a negative (weak) or null relationship between sustainable practices and stock returns, failing to provide evidence that these practices are able to protect shareholders value during times of crisis.Practical implicationsThe results obtained made it possible to highlight significant implications for investors and practitioners. They may have particular attention in evaluating firm's sustainable practices trying to understand more precisely the value that such practices can have for the company and its shareholders.Originality/valueThis article is part of the stream of studies that analysed the impact of sustainable practices on stock returns during a period of crisis in order to contribute to filling the gap due to the lack of consensus and the mixed results in the literature.

show abstract

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 69%

Can sustainable practices protect investors during financial market instability? A multi-sector analysis during the COVID-19 pandemic

Nirino

Petruzzella

Alam

et al. 2022

View full text Add to dashboard Cite

show abstract

“…Owners, boards of directors, top management teams and employees are important corporate governance actors in achieving environmental sustainability outcomes [36]. Firstly, U.S. directors who serve on the boards of international firms are exposed to changes in environmental and social regulations and reporting requirements [37]. Firms with these directors exposed to the changes in regulations and reporting requirements experience an increase in ESG/CSR performance.…”

Section: Corporate Governance Hypothesismentioning

confidence: 99%

Application of Machine Learning Models for Predictions on Cross-Border Merger and Acquisition Decisions with ESG Characteristics from an Ecosystem and Sustainable Development Perspective

et al. 2022

View full text Add to dashboard Cite

From an ecosystem perspective, mergers and acquisitions (M&A) are one of the key paths for firms to foster complementary sectors and gain complementary assets. From the perspective of sustainable development, M&A can reallocate resources from target to asset to achieve better synergy and prolong the operation of a merged firm. However, M&A activities are characterized by high risk due to the high cost and uncertainty. Thus, a prediction model of M&A decisions is valuable for firms’ strategy design from an ecosystem and sustainable development perspective. By adopting a machine learning technique, this study measured the cross-border M&A decisions by analyzing firm-level cross-sectional data of the global financial marketplace under ecosystem mapping for the application of various country, deal and firm-level indicators related to sustainable development. Our paper can support the hypotheses of corporate governance, ecosystem stakeholder theory, ecosystem risk and institution theory in explaining that firms can increase their success rate of M&A to achieve sustainable development. Methodologically, we used AdaBoost to train several weak classifiers (decision trees) to achieve a strong decision-making model with a large financial transaction database of 215,160 deal activities. Results achieved 80.1% prediction accuracy by using the AdaBoost model through 10-fold cross validation. We found that differences exist on prediction features of M&A with different characteristics of sustainable development. For a robustness check, comparable results were obtained with a support vector machine (SVM) model. By analyses of the features during the cross-border M&A decision-making processing, this study is expected to contribute to the utilization of machine learning in ecosystem studies.

show abstract

“…As for market characteristics, many studies have provided evidence that a country's economic development (Cai et al, 2016), industry (Borghesi et al, 2014), political leanings of the state's citizens (Liang and Renneboog, 2013), the social capital of the county (Jha and Cox, 2015) affect ESG performance. Firm leadership characteristics include multinational board members (Iliev and Roth, 2020), women leaders (McGuinness et al, 2017), married CEOs (Hegde andMishra, 2017), CEO confidence (McCarthy et al, 2017), and CEO pay (Ikram et al, 2019). Other studies argue that firms' ESG performance is associated with the size of institutional ownership (Chen et al, 2016), family ownership (El Ghoul et al, 2016), and state ownership (Boubakri et al, 2016).…”

Section: Factors Influencing Esg Performancementioning

confidence: 99%

Can directors’ and officers’ liability insurance improve corporate ESG performance?

Zhao

2022

Front. Environ. Sci.

View full text Add to dashboard Cite

Directors’ and Officers’ liability insurance (abbreviated as “D&O insurance”) was born in the United States in the 1930s and has been widely used in Western countries. In contrast, China introduced D&O insurance in 2002, and its development has been relatively slow. With the revision and improvement of Chinese regulatory laws and regulations, such as the new Securities Law in March 2020, which further regulates the obligations and responsibilities of corporate management, and increases the penalties for information disclosure violations of listed companies, the risk to directors and executives performing their duties is promoted. This makes D&O insurance the focus of China’s capital market, with huge potential for future development. Therefore, it is of urgent practical importance to study the impact of director liability insurance on corporate governance in China. At the same time, D&O insurance, as an effective risk management mechanism, has not yet reached a unified conclusion in the academic circles on its corporate governance effectiveness. On the one hand, D&O insurance may encourage directors and senior executives to be proactive to enhance the company’s market value by taking risks, and on the other hand, it may induce opportunistic behavior of managers and reduce the company’s value. Under the new development form, analyzing and researching the governance effect of D&O insurance from different angles will help to provide a theoretical basis for its further development and popularization in China’s capital market. Thus, using a sample of Chinese A-share listed companies from 2011 to 2020, this study investigates the impact of D&O insurance on corporate ESG performance. The results show that D&O insurance significantly improves corporate ESG performance. Additional analysis suggests that the contribution of D&O insurance to ESG performance is achieved by improving independent director function-performing effectiveness and increasing corporate risk-taking. The findings of this paper have policy implications for a better understanding of the governance role of D&O insurance, encouraging companies to improve corporate ESG performance.

show abstract

Do Directors Drive Corporate Sustainability?

Cited by 19 publications

References 36 publications

Can sustainable practices protect investors during financial market instability? A multi-sector analysis during the COVID-19 pandemic

Can sustainable practices protect investors during financial market instability? A multi-sector analysis during the COVID-19 pandemic

Application of Machine Learning Models for Predictions on Cross-Border Merger and Acquisition Decisions with ESG Characteristics from an Ecosystem and Sustainable Development Perspective

Can directors’ and officers’ liability insurance improve corporate ESG performance?

Contact Info

Product

Resources

About