Abstract
PurposeLately, sustainability issues are increasingly affecting all sectors, even if oil and gas industry is highly required to improve its social performance because of the societal pressure to environmental protection and social welfare. Sustainability concerns and corporate governance features and practices are more and more connected because sustainability has been perceived as a crucial topic by owners and managers. In this perspective, the empirical analysis aims to explore whether and to what extent, sustainability-oriented corporate governance model is linked with social performance.Design/methodology/approachBy adopting a multi-theoretical framework that includes the legitimacy theory, the stakeholder theory and the resource-based view theory, this analysis used a sample of 42 large European-listed companies belonging to the oil and gas industry. The authors run fixed effects regression models by using a dependent variable, i.e. the social score, available in ASSET4 Thomson Reuters, and some independent variables focused on sustainable corporate governance models, stakeholder engagement, firm profitability, market value and corporate risk level.FindingsDrawing upon the investigation of a moderating effect, findings display that stakeholder engagement is positively associated with corporate social performance and it can be considered an important internal driver able to shape a corporate culture and most likely to address corporate social responsibility issues.Research limitations/implicationsThis study confirms the need to develop an organizational and holistic approach to corporate governance practices by analyzing internal and external governance mechanisms. From the managerial perspective, managers should opt for a sustainable corporate governance model, as it is positively correlated with corporate social performance.Originality/valueThere is an urgent need to investigate sustainability issues and their potential association with firm internal mechanisms, particularly in the oil and gas industry. This paper can extend the current body of knowledge by pointing out a positive relationship between stakeholder engagement and firm social performance.
Highlights
Several researchers, top managers and advisors recognized corporate social responsibility (CSR) as a crucial role for firm’s survival, in accordance with last reports published by the European Commission [1], which enhanced the movement toward sustainability concerns in most of the large-sized companies, in several European countries
The main purpose of this paper regard the examination of the relationships between CSRoriented corporate governance model and corporate sustainability performance (CSP)
The empirical research is centered on a sample of large European-listed companies belonging to the oil and gas industry
Summary
Several researchers, top managers and advisors recognized corporate social responsibility (CSR) as a crucial role for firm’s survival, in accordance with last reports published by the European Commission [1], which enhanced the movement toward sustainability concerns in most of the large-sized companies, in several European countries. The drawing up of a highlevel quality sustainability report is a unique opportunity for companies to be more careful with respect to CSR, to improve strategic decision-making processes and minimize its reputational risk (Bebbington et al, 2008; Morales-Raya et al, 2019), both directly through relationships with their stakeholders and indirectly via interactions with other firms (Wensen et al, 2011) Several factors, such as the growing complexity of businesses and the 2008 global financial crisis (Rossouw, 2012), lead organizations to embed the concept of sustainability in their corporate governance mechanisms (Galbreath, 2010; Michelon and Parbonetti, 2012; Peters and Romi, 2015; Haque and Ntim, 2018) and to pursue sustainability goals (Clarkson et al, 2008).
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