The Effect of Environmental and Social Corporate Governance on the Financial Performance with Special Focus on the Egyptian Private Sector Companies within Egx30

Mohamed A Elshawarby

doi:10.4172/2168-9601.1000269

Abstract

Egyptian private sector companies are face increasing pressure on two fronts-requiring greater transparency and disclosure and the need to apply good Environmental and Social Corporate Governance (ESCG) practices. The main objective of this research paper is to examine the relation between Environmental and Social Corporate Governance practices and financial performance (FP) of Egyptian private sector companies included in the official share index of the Egyptian stock change. EGX 30 index the index includes 30 largest firms where liquidity and action. The EGX 30 is weighted at market value and adjusted by free float. The adjusted market value of the listed company is the number of its shares multiplied by the closing price of that company multiplied by the percentage of shares offered freely. This study provides important evidence on the impact of ESCG performance on Corporate Financial Performance (CFP). “This is particularly important given this sustainability and ESCG performance to identify key business activities of listed companies in Egypt. The study concluded that there is a strong correlation between social governance with its four dimensions (board responsibilities, disclosure, and transparency and investor rights protection) and the financial performance of Egyptian private sector companies within EGX30.

Highlights

In light of the global changes taking place in the business world today, especially with the development of societies that have put pressure on the institution to adjust its policy towards stakeholders, economic institutions cannot use discrimination in the process of creating value for certain parties at the expense of others because they are not important In her view, today’s business world forces institutions to be more responsive than in the past in their social performance
The paper raises the following questions: 1. What is meant by the Environmental and Social Corporate Governance Practices (ESCG) of the Egyptian private sector companies?
The results indicate that the company involved in governance ESCG activities is a positive financial performance, confirming the view that governance ESCG is the primary activity used by companies to support their financial activities

Summary

Introduction

In light of the global changes taking place in the business world today, especially with the development of societies that have put pressure on the institution to adjust its policy towards stakeholders, economic institutions cannot use discrimination in the process of creating value for certain parties at the expense of others because they are not important In her view, today’s business world forces institutions to be more responsive than in the past in their social performance. There is still enough ambiguity and knowledge on the part of individuals, corporations and society as a whole on the concept of ESCG of the Egyptian private sector companies, their dimensions and their development, as well as their effectiveness, development and use. What is meant by the Environmental and Social Corporate Governance Practices (ESCG) of the Egyptian private sector companies?. What are the lessons learned from international experiences in the field of ESCG of the Egyptian private sector companies?

Objectives

Methods

Results

Conclusion