Unlocking carbon performance through governance mechanisms: evidence from the STOXX 600 Europe

The purpose of this research is to examine the association between corporate governance mechanisms (board independence, board gender diversity, Chief Executive Officer (CEO) duality, and environmental, social and governance (ESG) linked compensation) and wastewater recycling as a strategy for managing the flow of microplastics into the aquatic environment. The study analysed an international sample of top companies on the Forbes 500 list over a 15-year period during the millennium development goals (MDGs) and sustainable development goals (SDGs) eras. Multiple regression analysis with fixed effect OLS, two-stage least squares regression, propensity score matching, and logistic regression were applied in the data analysis. The results show that, at the aggregate level, board gender diversity is positively associated with wastewater recycling, whilst CEO duality has a significant negative impact. When disaggregated into industries, board gender diversity is positively associated with wastewater recycling in high-polluting and low-polluting industries. In relation to the MDGs/SDGs eras, the impact of board gender diversity is more significant in the MDGs era than in the SDGs era. At the geographical region level, CEO duality has a significant negative impact on wastewater management in the America and Asia Pacific regions, whilst the effect of CEO duality is significantly positive in the Western Europe region. We also find that a minimum of two female directors is required to improve wastewater management practice. The study concludes that whilst board gender diversity is a notable driver of wastewater management, CEO duality diminishes the commitment of multinational entities (MNEs) to addressing wastewater management issues. Our result is robust to (i) alternative measures of wastewater management, (ii) alternate sample composition, (iii) alternate method of data analysis, and (iv) endogeneity checks. The study contributes to the limited literature on waste management and the circular economy, particularly governance mechanisms’ role in wastewater management in an international context.

Purpose The energy sector is one of the most important sectors with an impact on the environment, and therefore, sustainable performance in this sector is considered a sensitive issue for sustainability. It is, therefore, necessary to know how to address stakeholders’ interest in sustainability through governance mechanisms. The purpose of this study is to look into the role of corporate governance (CG) on sustainable performance disclosure (SPD) in the energy sector. Design/methodology/approach This study uses panel data covering the period 2019–2023 among 12 companies in the energy sector in Jordan. Fixed-effect regression models were estimated for board size, board independence, chief executive officer (CEO) duality, board diligence, board gender diversity, sustainability committee existence and sustainability disclosure. The data analysis tool of choice was a multiple regression approach because it was deemed appropriate. The disclosure index was created using global reporting initiative standards and provides the number and quality of disclosures on key sustainability indicators. Findings The study found a significant and positive relationship between board size, percentage of independent directors, board audit, board gender diversity, existence of sustainability committee and level of SPD. On the other hand, the study establishes that CEO duality has an inverse relationship with SPD. Practical implications The findings of this study have significant implications for managers and corporate decision-makers in the energy sector. The findings affirm that the improved design of CG motivations and realizations conducive to robust measures of SPD necessitates effective CG. Originality/value The value of this applied study stems from the importance of SPD for various categories of stakeholders, and conducting such an applied study is crucial to improving the existing realization of the factors that can have a significant impact on the level of SPD in Jordanian energy sector companies. The results of this paper may be of procedural value to regulatory authorities and decision-makers.

Firms interested in being perceived by all stakeholders and society as drivers of corporate social responsibility (CSR) activities, especially regarding CSR reporting, should have boards of directors that defend not only shareholder interests but also all stakeholders' needs. Thus, we expect that efficient boards, particularly if well‐structured, will impact on CSR disclosure. As a result, in this paper, we examine the effect of board composition, particularly board size, board independence, board gender diversity, chief executive officer (CEO) duality, and CSR board committee, on CSR reporting. Using a sample of international firms, concretely 13,178 observations belonging to 39 countries, we hypothesize that all these attributes positively affect CSR disclosure, except board independence and CEO duality, which are expected to impact negatively. These hypotheses are theoretically supported by the agency and stakeholder perspectives. Our findings support all the hypotheses, except that of CEO duality, and therefore, we conclude that board characteristics such as board size, board gender diversity, and CSR board committees encourage the disclosure of CSR matters, whereas board independence discourages this reporting. Contrary to our predictions, CEO duality has a positive effect on CSR reporting.

In the aftermath of the Asian Financial crisis in 1997/1998, the Malaysia Securities Commission (SC) issued the Malaysian Code on Corporate Governance in 2000 (MCCG 2000). It was subsequently revised in 2007 following the Enron and Transmile debacles. In 2012, the SC issued the latest MCCG 2012 which introduced several new recommendations that are in line with developments in other parts of the world. Hence, the purpose of this study is to investigate the influence of the structure of the board and its activities on firm performance post MCCG 2007. The study also aims to shed light on the effectiveness of the board of directors since the issuance of MCCG 2000 and of MCCG 2007. It also aims to reveal the preparedness of listed firms in Malaysia to embrace MCCG 2012. Using a population of non-finance listed firms for the 2009, 2010 and 2011 financial years, it was found that board independence, chief executive officer (CEO) duality, directors’ busyness, nomination committee independence, the establishment of a risk management committee (RMC) and board meetings are not associated with firm performance, i.e. Tobin’s q. However, the market appears to be in favour of a larger board size. As for return on assets (ROA), it is not associated with board independence, board size, directors’ busyness and nomination committee independence. On the other hand CEO duality and the establishment of a RMC improve ROA, while board meetings are detrimental to ROA. It can therefore be concluded that board independence is not associated with either Tobin’s q or ROA. Hence, any corporate governance reforms should not over-emphasize the representation of independent directors on the board, rather the focus might be shifted to board activities, such as board meetings and the establishment of a RMC. With regard to board size, since the market is in favour of a larger board size, firms should increase the board’s size to enable the appointment of women directors to the board. Finally, combining the CEO and board chairman roles should not be disallowed as the market views this favourably. Hence, the ‘one-hat approach’ does not appear to be applicable in the case of CEO duality.

This paper provides fresh insights into the impact of corporate governance mechanisms on environmental, social and governance (ESG) disclosure practices of state‐owned enterprises (SOEs). To accomplish this study's research objective, we collected ESG and corporate governance data from Refinitiv Eikon's database on a balanced sample of 253 SOEs from 37 worldwide countries over 5 years (2018–2022), obtaining a total of 1265 observations. A battery of fixed and random effects panel regression models has been estimated to test the impact of board characteristics, like board size, board independence, board gender diversity, number of board meetings, Chief Executive Officer (CEO) duality and the presence of a corporate social responsibility (CSR) committee, on overall and individual ESG disclosure scores of sampled SOEs. Results show that while board size and CEO duality negatively affect SOE ESG disclosure, board independence and gender diversity, as well as the number of board meetings and the existence of a CSR committee, exert a positive influence.

Purpose This study aims to explore the moderating role of board gender diversity (BGD) in the relationship between corporate governance mechanisms (i.e. board size, board independence, chief executive officer (CEO) gender, CEO duality and ownership concentration) and firm risk-taking. Design/methodology/approach Using a sample of 192 non-financial publicly traded Italian firms over 2014–2018, this study tests the proposed research hypotheses and assess the moderating effect of BGD. Findings Drawing on agency theory and resource dependence theory, this study finds a significant relationship between corporate governance mechanisms and firm risk-taking, which is significantly moderated by BGD. BGD accentuates the negative effect of board size, independent directors, CEO gender and CEO duality on firm systematic risk and attenuates the positive impact of CEO duality on firm unsystematic risk. The results, which are consistent with the risk-reduction effect of BGD, are robust to the use of alternative measures of firm risk-taking. Practical implications Women’s presence on corporate boards plays a critical role in the board’s involvement in risk-taking. Hence, investors and stakeholders should consider women on corporate boards as a crucial risk-mitigating factor. Originality/value This paper contributes to our knowledge on risk management by demonstrating the moderating role of BGD while relating corporate governance mechanisms and firm risk-taking.

PurposeThis study draws on agency, theory to evaluate the relationship between chief executive officer (CEO) duality and earnings quality, proxied by discretionary accruals. Additionally, this study aims to examine whether board independence moderates the relationship between CEO duality and earnings quality.Design/methodology/approachThis study uses a fixed-effects regression model to examine the effect of CEO duality on earnings quality and to test whether board independence moderates that relationship for a sample of non-financial listed Portuguese firms-year from 2002 to 2016.FindingsConsistent with agency theory, this study suggests that CEO duality decreases earnings quality. Further, the results also suggest that the earnings quality reduction associated with CEO duality is attenuated when the board of directors has a higher proportion of independent directors.Practical implicationsThe findings based on this study provide useful information to investors and regulators in evaluating the impact of CEO duality on earnings quality and the effect of board independence on the role of CEO duality, especially under concentrated ownership.Originality/valueTo the knowledge, this study is the first to investigate the role of board independence on the association between CEO duality and earnings quality. In addition, this paper is the first empirical study to investigate the direct and indirect effect of CEO duality on earnings quality in Portugal.

Many empirical studies have been conducted to test the impact of the characteristics of board of directors on the performance of stock exchange listed companies in developed countries and emerging countries. There are no abundant literature on the impact of independence and Chief Executive Officer (CEO) duality on corporate performance in Cote d'Ivoire. Cote d'Ivoire is a developing country and according the International Monetary Fund (IFM), one of the three biggest economies in West Africa. Analyzes of developed economies are an example for developing economies countries and more a road map for poor countries to the development. However analyzes of the economies of developing or poor countries constitute a diagnostic and motivation to better lead these countries’ economies to the development. The aim of this study is to determine the effect of the board of directors’ characteristics on the performance of non-financial companies in Cote d'Ivoire. In particular, we focused on the analysis of three characteristics: board size, board independence and the duality of the CEO. Our empirical study has been conducted on a sample of 25 non-financial listing companies for a period from 2002 to 2016 using multiple regression analysis. The modeling was carried out after controlling multi-colinearity and correlation test by using the Hausman specific test, heteroskedasticity test. By controlling variables such as firm size, board meeting and leverage, our empirical results show a positive impact of board size on firm’s performance. It is also found that board independence has a negative effect, while CEO duality has a positive effect on financial performance proxied by ROA. However, when performance is measure by ROE, board independence has a positive effect, while CEO duality has a negative effect. Keywords : Board of Directors, Corporate Performance, Board Size, Board Independence, CEO Duality. DOI: 10.7176/JESD/12-12-04 Publication date: June 30 th 2021

The present work aimed to empirically examine the association between corporate governance mechanisms and the extent of corporate social responsibility (CSR) disclosure in European financial institutions. The corporate governance variables, particularly board size, board independence, the proportion of female directors, chief executive officer (CEO) duality, ownership concentration and CEO ownership, were used. The sample of this empirical research consisted of 115 financial institutions belonging to 12 European countries from 2007 to 2017, and panel data regression was used for analysis. The results indicate that board size, board independence, the proportion of female directors and the CEO ownership have positive associations with the extent of CSR disclosure, while CEO duality and ownership concentration have no significant associations with the extent of CSR disclosure. This study is important due to following reasons: First, it focused on the financial sector which is often excluded from CSR studies due to its specific legal regulations and its little environmental impact. Second, this study provides empirical evidence that some governance mechanisms are important determinants of CSR disclosure in the financial sector. Third, it uses the environmental, social and governance score, which has not been widely used in CSR studies, especially in financial institutions. Finally, the research states the crucial implications for the financial sector and regulatory bodies.

Purpose This paper aims to inspect the influence of board characteristics on environmental, social and governance (ESG) performance in the utilities sector. The study investigates the impact of a comprehensive set of board characteristics [i.e. board size, gender diversity, board independence, chief executive officer (CEO) duality and corporate social responsibility (CSR)/sustainability committee] on the ESG performance score. Design/methodology/approach The authors analyzed a sample of 119 listed utility companies for the period 2018–2024 and the authors developed an econometric model applying unbalanced panel data regression with firm fixed effects and controls per year. To test the research hypotheses, the authors measured ESG dimensions by using the ESG score provided by Eikon Refinitiv database. Findings Findings prove that board size, board independence and the presence of a specific CSR/sustainability committee positively impact on ESG performance. Also, the relationship between gender-balanced board of directors (BoDs) and ESG performance is positive and statistically significant, once a critical mass of women is reached on BoD. The study would inspire utility companies to define the internal governance mechanisms thoroughly, giving prime attention to an accurate choice of the BoDs’ members. Research limitations/implications This study has implications for practitioners, policymakers and regulators in designing specific ESG mechanisms for utilities. From a managerial perspective, the study also provides insights on how to improve ESG performance through a comprehensive set of specific board characteristics. Originality/value This paper offers an in-depth examination of the CG practices of utility companies, and it attempts to bridge the gap in prior literature on the determinants of ESG issues in the European utilities industry. To the best of the authors’ knowledge, this is the first study that investigates the relationship between the board diversity and the ESG dimensions measured by the Refinitiv Eikon score.

The objective of this study is to examine the effects of corporate governance mechanisms on Chief Executive Officer (CEO) Duality in the food industry of companies listed in the Tehran Stock Exchange (TSE).There are several aspects and dimensions of corporate governance, which may influence a CEO Duality but this study focused on three aspects namely Ownership Concentration (OWNCON); Institutional Ownership (INOWN) and Board’s Independence (BOIN). This study utilizes a panel data analysis of 47 firms over a four-year period from years 2008 to 2011. In this study, log of total assets (SIZE) and total debt divided by total assets (LEV) are control variables. A logistic regression analysis is used to test the hypotheses. The results show has a positive and significant relationship between Ownership Concentration; Institutional Ownership; Board’s Independence; Leverage and Chief Executive Officer Duality. Also, there is a negative and significant relationship between size and Chief Executive Officer Duality.

PurposeThis study investigates whether and how chief executive officers (CEOs) with personal risk-taking preference (expressed in owning a pilot license) will act differently when they are vested with additional power serving as board chairs.Design/methodology/approachRegressions analyses are performed using a sample of Standard and Poor’s (S&P) 1,500 firms with available data during 1996–2009. CEO's risk-taking outcomes are measured using firms' total risk, idiosyncratic risk and research and development expenditures (R&D) investment.FindingsFirms led by pilot CEOs have greater firm risks, yet CEO duality attenuates the relationship. Further channel tests show that CEO duality suppresses CEO's risk-taking tendencies through managers' reputation concerns.Research limitations/implicationsThe findings highlight the importance of incorporating human factors into consideration of appropriate governance structures for a firm. Future studies can expand the existing data and further explore the relationship between human factors and governance structures on other firm strategies.Practical implicationsRegulators may focus mainly on regulatory setting based on the “best practice” of governance yet overlook human influence in corporate dynamics. For shareholders, hiring managers with distinct styles will change corporate outcomes but different governance mechanisms could be devised to adapt to CEOs with various personalities.Originality/valuePrior studies show that both CEO personal preferences and firms' governance structure affect corporate policies, and this paper complements prior studies by exploring how the two may interact to shape corporate policy and its outcomes. This paper also adds to the literature showing that CEO duality could serve a disciplinary role.

This study focuses on exploring the relationship between chief executive officer (CEO) duality and firm performance. We focus on how the size and corporate social responsibility (CSR) of firms moderate this relationship. In terms of size, business organizations are of two types: small and large firms. This study uses datasets of listed Chinese business firms included in the China Stock Market and Accounting Research database. It employs a generalized method of moment’s technique to explore the connection between CEO duality and the performance of Chinese business firms through double mediation effects. Our empirical analysis showed that CEO duality has a significant negative relationship with firm performance. We also explored the moderating effects of firm size (small and large) and CSR practices on the relationship between CEO duality and improved performance of Chinese firms. Large firms and CSR practices showed significant and positive moderating effects on the relationship between CEO duality and firm performance. Conversely, with CEO duality, small firms showed a negative moderating influence on firm performance. This inclusive model provides valuable insights into how the dual role of the CEO of a firm affected the performance of Chinese firms through the moderating role of CSR practices and firm size for better business performance. The study offers empirical and theoretical contributions to the corporate governance literature. This research framework might help researchers in designing robust strategies to evaluate the effects on firm performance. Researchers may gain helpful insights using this methodology.

CEO duality and corporate social responsibility: A moderation effect of founder CEO

This study aims to explore the mediating effect of R&D intensity (RDI) on the relationships between chief executive officer (CEO) duality, shareholding and firm performance. One hundred twenty-seven companies in the semiconductor industry are included in this study. Statistical approaches on three years of data (2006?2008) are used to examine the theoretical model. It is found that CEO duality and shareholding have positive and significant effects on RDI. On the contrary, CEO duality and shareholding have significant and yet negative effects on firm performance. In addition, RDI mediates the relationships between CEO duality, shareholding and firm performance. It is argued that the effect of RDI on firm performance is not easily predicted in areas of overspill or time lag, due to market competitiveness or time constraint. Suggestions and recommendations for future research are discussed.