The influence of corporate governance on corporate sustainability: new evidence using panel data in the Iberian macroeconomic environment

Abstract

Purpose In the macroeconomic environment of the Iberian Peninsula, this paper aims to examine the influence of corporate governance characteristics on corporate sustainability performance. The purpose of this paper is to address corporate practices while determining which corporate governance characteristics can improve corporate sustainability, considering, for this purpose, three dimensions of sustainability: economic, environmental and social. Design/methodology/approach This sample comprises 99 non-financial companies of the Iberian Peninsula, during the 2013–2017 period. The authors have used the panel data methodology, specifically the generalized method of moments (GMM) estimation method proposed by Arellano and Bover (1995) and Blundell and Bond (1998) to test the hypotheses formulated. Findings The results obtained have shown that corporate sustainability performance is affected differently depending on the sustainability dimension that is considered. Specifically, the economic dimension is determined by public debt, the board size, board diversity and the existence of an audit committee. Regarding the environmental dimension, the board size and the presence of the audit committee, as well the corporate social responsibility committee, are the most important determinants. Finally, the social dimension was influenced by the board size, audit committee and the control variable of capital structure, which means that in this dimension, the sources of financing used by the company also help in determining its levels of social concern. Originality/value To the best of the authors’ knowledge, this is the first time that a study has been carried out in the Iberian Peninsula on the corporate sustainability using GMM-system model for three dimensions of sustainability. Corporate sustainability depends on external and internal factors of companies. Therefore, regulators and managers should realize that they will have to be more effective in their statements.

Boardroom gender diversity and corporate environmental performance: a multi-theoretical perspective in the MENA region

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Resilience Meets Sustainable and Spiritual Background Into an Initial Review for the New Normal After the COVID-19 Pandemic

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Building a hierarchical framework of corporate sustainability transition challenges using the qualitative information approach

“…CST is considered a strategy to achieve economic prosperity, environmental quality and social equality (Koho et al, 2015;Chang et al, 2018). Corporations have started to engage with CST to find the solution by creating economic value while reducing the social and environmental issues associated with the organization's daily operation (Cancela et al, 2020). CST emerges because corporations realized the benefits; for instance, it increases competitiveness and reduces costs and risk (Dhanda and Shrotryia, 2020).…”

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