Corporate Governance Quality, Stakeholders’ Pressure, and Sustainable Development: An Integrated Approach

Akeel Almagtome,Maithm Khaghaany,Saime Önce

doi:10.33889/ijmems.2020.5.6.082

Abstract

The goal of this paper is to explore the interrelated relationships between the quality of corporate governance, Stakeholder’s pressure, and Sustainability Reporting. We claim that sustainable development strategies are the result of the interaction of two variables: the standard of corporate governance and the pressure of stakeholders rather than the outcome of a single variable. The results indicate that the company size and corporate governance rating are positively correlated with sustainability reporting Scores disclosed by the Turkish companies. The analysis of 125 firm-year data suggest that the company provides more SRS if it has a better corporate governance rating; or larger total assets. The paper also reveals that social, environmental and economic indicators, as pillars of sustainable development, are not the result of corporate governance practices or of stakeholder pressure alone, but represent a holistic reflection of the accumulated effects of various factors related to both corporate governance practices and stakeholder theory. This paper extends the work of Taşkirmaz, and Gamze (2017) which examined the relationship between corporate governance and corporate social responsibility. Our results increase understanding of sustainable practices of the circular economy in Turkish industrial companies and indicate future trends for these applications. This research will help managers of manufacturing companies in formulating their plans to maximize the use of available resources and improve efficiency in the context of the circular economy.

Highlights

The words "circular economy" and "sustainability" are widely appealing to academia, business and policy makers, but the similarities and distinctions between the two definitions remain ambiguous (Geissdoerfer et al, 2017)
This paper suggests an integrated approach to examine the relationship between quality of corporate governance, stakeholder pressure and sustainable development activities
The internal factors are the components of the corporate governance index, and the external factors represent stakeholder pressures

Summary

Introduction

The words "circular economy" and "sustainability" are widely appealing to academia, business and policy makers, but the similarities and distinctions between the two definitions remain ambiguous (Geissdoerfer et al, 2017). Sustainability literature focusses primarily on environmental issues, while the Circular Economy was presented as one of the most recent proposals for solving both environmental and economic problems. The sustainability issues start to get a special attention by a firm’s management and board of directors to draw the firm’s plans and strategies. In this regard, the implementation of a sustainable development approach requires the adoption of an appropriate corporate governance system in line with the spreading of corporate governance values and principles

Objectives

Results

Conclusion