Investigating corporate governance and corporate social responsibility nexus in emerging economy: A structural equation approach

Abstract

The nexus between corporate social responsibility (CSR) and corporate governance (CG) has received negligible attention in emerging economies (Zaman, Jain, Samara, & Jamali, 2022; Jahid, Rashid, Hossain, Haryono, & Jatmiko, 2020). This study examines the relationship between CG and CSR in emerging economies. This study used a survey method to collect data from 220 top executives of selected firms in Ghana using questionnaires. The collected data were analyzed using Amos software. Structural equation modelling (SEM) was used to test the hypothesis. The study employed upper echelons theory to build the theoretical foundation and demonstrated that CG is a predominant predictor of CSR. As a result, the findings of the study show that CG has an important influence in catalyzing or curtailing CSR initiatives. Firms that pursue quality CG systems and practices are more likely to pursue better CSR initiatives. The implication for firms is that they need to carefully constitute CG systems and structures as they significantly enhance CSR implementation. Firms that want a better outcome from CSR programs must prioritize the implementation of CG systems and procedures that promote reciprocal exchanges with stakeholders. This study is among the first to examine the interdependency of CG and CSR in Ghana using the upper echelons theory