BOARD GOVERNANCE, EARNINGS MANAGEMENT, AND FIRM FINANCIAL SUSTAINABILITY: A CONCEPTUAL OVERVIEW FROM THE PERSPECTIVES OF EMERGING ECONOMIES

Abstract

The attainment of financial sustainability is of paramount importance for firms since it guarantees their enduring viability and achievement. It enables organisations to navigate periods of economic decline, allocate resources towards expansion prospects, and fulfill their commitments to employees and stakeholders. By focusing on Sustainable Development Goals (SDGs), this study aims to draw a conceptual framework for how board governance affects firm financial sustainability with the mediating effects of earnings management. This study expects board governance to be the significant determinant of firm financial sustainability, and earnings management will act as a key player in the relationship. To the best of our knowledge, this is a unique study that considers the mediating effects of earnings management in the association between board governance and firm financial sustainability. The result of this study will be useful for the regulators in enhancing the board governance issues to deter earnings management and to improve firm financial sustainability. The study will also add value as a battery for future research and studies, particularly in the context of board governance and financial sustainability relationships in emerging as well as developing economies with similar economic perspectives.