Corporate Governance Research Articles

Environmental, Social and Corporate Governance (ESG)

The results indicated that the majority of article publications occurred in 2023, with three authors per publication, and 65% of these studies provide evidence supporting the relationship between ESG practices and companies' market value. Additionally, 25% of the analyzed articles suggest that there is a relationship, but with certain conditions. Lastly, in 10% of the studies considered, no evidence was found to support the influence of ESG practices on companies' market value.

A Study on Evaluating Determinants of Factors Influencing Environmental Social and Governance (ESG) Investments

Investments that take social responsibility, environmental sustainability, and corporate governance into account are referred to as ESG investments. It supports businesses that put sustainability and moral behavior first to foster long-term success. Financial gains can be obtained through ESG investments while ensuring beneficial social benefits and risk management. The increasing recognition of ESG investments as an essential aspect of sustainable finance, that emphasise the significance of grasping the variables influencing investor choices in this field. The purpose of the study was to evaluate determinants of Factors influencing ESG investments. The technique used in the current study is the Structural Equation Model. The findings of the study indicated that there is a significant impact of attitude, Environmental concern, perceived behavioral control, and subjective norms on behavioural intention towards ESG investments.

Frontier AI developers need an internal audit function.

This article argues that frontier artificial intelligence (AI) developers need an internal audit function. First, it describes the role of internal audit in corporate governance: internal audit evaluates the adequacy and effectiveness of a company's risk management, control, and governance processes. It is organizationally independent from senior management and reports directly to the board of directors, typically its audit committee. In the Institute of Internal Auditors' Three Lines Model, internal audit serves as the third line and is responsible for providing assurance to the board, whereas the combined assurance framework highlights the need to coordinate the activities of internal and external assurance providers. Next, the article provides an overview of key governance challenges in frontier AI development: Dangerous capabilities can arise unpredictably and undetected; it is difficult to prevent a deployed model from causing harm; frontier models can proliferate rapidly; it is inherently difficult to assess frontier AI risks; and frontier AI developers do not seem to follow best practices in risk governance. Finally, the article discusses how an internal audit function could address some of these challenges: Internal audit could identify ineffective risk management practices; it could ensure that the board of directors has a more accurate understanding of the current level of risk and the adequacy of the developer's risk management practices; and it could serve as a contact point for whistleblowers. But frontier AI developers should also be aware of key limitations: Internal audit adds friction; it can be captured by senior management; and the benefits depend on the ability of individuals to identify ineffective practices. In light of rapid progress in AI research and development, frontier AI developers need to strengthen their risk governance. Instead of reinventing the wheel, they should follow existing best practices. Although this might not be sufficient, they should not skip this obvious first step.

The Interaction Effects of Board Independence and Digital Transformation on Environmental, Social, and Governance Performance: Complementary or Substitutive?

Both board independence (BI) and digital transformation (DT) play important roles in promoting Environmental, Social, and Governance (ESG) performance. However, few studies have focused on their interaction effects on ESG performance (ESGP). The study selected Chinese A-share listed companies from 2013 to 2023 as the research sample and used a moderating effect model to test the complementary or substitutive relationship between the two. The empirical results show that there is a substitutive effect, rather than a complementary one. Further analysis of the individual ESG pillars revealed that the substitutive effect of BI and DT is primarily reflected in corporate governance. Moreover, this substitutive effect is more pronounced in state-owned enterprises and non-manufacturing enterprises, and digital supervision mechanisms may have a stronger substitutive role than traditional independent director oversight mechanisms. These findings uncover the complex relationship between the two governance mechanisms and corporate ESGP, offering important insights for managers; companies need to strike a balance between “human governance” and “digital governance” to maximize ESGP.

Environmental, Social and Corporate Governance (ESG)

Os resultados obtidos indicaram que a maioria da publicação dos artigos ocorreu no ano de 2023, apresentou três autores e 65% dessas publicações apresentam evidências que comprovam que há relação entre as práticas ESG e o valor de mercado das companhias. Além disso, 25% dos artigos analisados indicam que há relação, mas com alguma condição e, por fim, em 10% dos estudos considerados, não se identificou evidências de influência das práticas de ESG no valor de mercado das empresas.

GOVERNABILIDADE EMPRESARIAL PELA PERSPECTIVA FINANCEIRA ESTRATÉGICA

every company is made up of several sectors, all of unique importance. There is, however, one that stands out for reflecting a more specific nucleus, whose collection of information has an impact on the business decision-making process, that is, the financial one. The movement and administration of the measured capital are the most challenging tasks for the financial manager, so that it goes beyond mere mathematical calculations. It involves the organizational structure in its systemic view, the mapping of the market with its needs and expectations, the determination of objective criteria, regardless of the unpredictable risk factors. These are able to change the decision chain to the point of transforming business strategic planning and its corresponding way of managing. Then the administrator or the financial manager emerges as the protagonist of the corporation's leverage or setback, insofar as the manipulation of the information obtained, some of which are privileged, may assist in the exact allocation of the funds raised, the results of which may give the company notoriety. Corporate governance thus takes a macro perspective, so that financial strategies will be fundamental to mitigate eventual failures in the business endeavor.

How does green manufacturing enhance corporate ESG performance? — Empirical evidence from machine learning and text analysis

Green manufacturing, widely recognized as a crucial avenue for companies to achieve sustainable competitive advantages, exerts significant spillover effects on both environmental protection and social responsibility. Accordingly, this can significantly enhance corporate Environmental, Social, and Governance (ESG) practices and enhance overall ESG performance. This study focuses on Chinese A-share listed firms between 2009 and 2022, characterizing their ESG performance. Employing quasi-natural experimental methods, this research evaluates the causal relationships and specific channels through which green manufacturing enhances corporate ESG performance. The findings demonstrate that green manufacturing significantly empowers companies to strengthen their ESG performance. Channel analysis indicates that enhanced green innovation capabilities and the reduction of financing constraints constitute two critical channels through which green manufacturing facilitates ESG performance improvement. Further analysis indicates that all three subsystems in the green manufacturing system significantly empower companies to enhance ESG performance to varying degrees, with the most significant empowerment effect observed in the environmental dimension of ESG performance. The analysis below indicates that the enhancement of corporate ESG performance yields dual benefits, reflected in both economic gains and reputational enhancements.

The Influence Of Good Corporate Governance On Firm Value With Financial Performance As A Moderation

The aim of this research is to determine the effect of good corporate governance on firm value in food and beverage companies on the Indonesia Stock Exchange with financial performance as a moderating variable. This research is quantitative research. The number of companies in the food and beverages subsector consists of 30 (thirty) companies. The sample in this research consisted of 13 companies over 5 years. Data collection is carried out through financial reports. This research data was analyzed using a moderation test. The findings of this research indicate that 1) There is an influence of financial performance on firm value. 2) There is an influence of Independent Commissioners on firm value. 3) There is an influence of Independent Directors on firm value. 4) There is an influence of Independent Audit on firm value. 5) There is a moderating influence of the Independent Commissioner's financial performance on firm value. 6) There is a moderating influence of independent directors' financial performance on firm value. 7) There is a moderating influence of financial performance on Independent Audit on firm value in Food and Beverage Companies on the Indonesian Stock Exchange.

Government green procurement and corporate ESG performance

This study utilizes data from China's A-share listed companies from 2009 to 2022 and manually collects government green procurement lists published on the Chinese government procurement website. By matching this data with listed companies, we employ a multi-period Difference-in-Differences (DID) model to examine the impact of a firm's inclusion in government green procurement lists on its Environmental, Social, and Governance (ESG) performance. We find that government green procurement significantly improves firms' ESG performance. In the mechanism analysis, we find that executive green perceptions and media and analyst attention amplify the positive impact of government green procurement on firms' ESG performance. Through the heterogeneity analysis, we find that government green procurement promotes ESG performance more significantly when the listed company is a state-owned enterprise, and this promotion is more obvious in central state-owned enterprises. In addition, we find that government green procurement enhances ESG performance more significantly when the company is located in a region with higher levels of market integration. Further research find that government green procurement effectively inhibit “greenwashing” behavior and reduce the probability of negative events. Our findings provide important micro-empirical evidence for understanding the effects of market-based policy instruments on corporate ESG performance and contribute positively to the practice of improving corporate governance capabilities.

A IMPORTÂNCIA DA GOVERNANÇA CORPORATIVA PARA A GESTÃO FINANCEIRA DAS ORGANIZAÇÕES EMPRESARIAIS: UMA IDEIA REVOLUCIONÁRIA PARA ALCANÇAR O SUCESSO

This study analyzed the relationship between Financial Management and Corporate Governance of Micro and Small Companies and their financial performance. To know the reasons that lead a micro and small company to close. By not carrying out an investment plan, spending more than what is actually invoiced and the difficulty of controlling accounts is something that many entrepreneurs suffer. With the world economy and international trade increasingly integrated and diffuse. Micro and small companies are in a competitive rivalry between competitors, and having good quantitative and qualitative methods for analyzing decisions are some performance indicators (KPIs). From small organizations to large multinationals in the world, they continually seek a predictable and profitable future scenario. So that they can control or anticipate any eventualities through financial governance. In the financial market, there is a growing search by organizations for more information and data to assist in their decision-making arrangements. Financial Management has been increasing its area of expertise in terms of needs: cash; planning; capital expenditure research and decisions. Financial management as a refined tool becomes a privilege in the organization's decision making, envisioning future scenarios, which if used correctly leverages profits.

A GOVERNANÇA CORPORATIVA E SUAS CONTRIBUIÇÕES PARA AS FINANÇAS EMPRESARIAIS: A IMPORTÂNCIA DA GOVERNANÇA CORPORATIVA E DO CHIEF FINANCIAL OFFICER (CFO) PARA AS FINANÇAS EMPRESARIAIS

This article introduce a study about the diferents teories of Corporate Governance, Business Finance Management and Administration and the boss role of Chief Financial Officer (CFO) in strategic processes that contribute to financial resourse planning in organizations. It was a literature review of qualitative way, with the objective of identify the principals concepts about the subject of course taken and its applicability to proposed work. The study provided a conceptual analysis about Global Finance, allowing to identify the tools and metods used and it practical applicability to projects that envolve investment analysis and return to companies. Report about the principals responsabilities of financial manager and administrator represented for Chief Financial Officer (CFO), and his collaboration in strategic plan of organizations. The search it was made of exploratory form provided to get importants results that evidence generated changes in finance area through of Corporate Governance.

Moderating Role of Corporate Governance on the Effect of Innovation Investment to the Financial Performance among Publicly-listed Software Outsourcing Companies in China

This study examines the relationship between innovation investment, corporate governance, and financial performance among publicly listed software outsourcing companies in China. Utilizing a mixed methods approach, the research integrates quantitative analysis of financial and governance data with qualitative insights from structured interviews with Chief Financial Officers (CFOs). The study explores how various corporate governance factors, such as board size, independence, meeting frequency, CEO duality, and compensation, influence the effectiveness of innovation investments in enhancing company performance. Findings indicate that while there is a positive correlation between innovation investment and financial performance, the relationship is not statistically significant. Moreover, corporate governance factors, except for board size, do not significantly moderate this relationship. The results suggest that aligning innovation strategies with strong corporate governance practices is essential but not sufficient to ensure enhanced financial outcomes. The study's findings have practical implications for industry practitioners, policymakers, and investors, emphasizing the need for optimized governance structures to support sustainable growth in the software outsourcing sector. However, limitations regarding data reliance, sample size, and sectoral focus are acknowledged, with recommendations for future research to address these constraints and explore additional variables influencing the innovation-performance link.

The Impact of COVID-19 on Corporate Governance Practices and Legal Requirements

The COVID-19 pandemic has had an unprecedented effect on businesses worldwide, exposing vulnerabilities in corporate governance and challenging existing legal frameworks. This research paper examines the impact of the pandemic on corporate governance practices, focusing on the adaptations made by businesses to maintain operational integrity, ensure compliance, and protect stakeholder interests. It also explores the legal requirements and reforms that have been implemented to accommodate new challenges, including virtual board meetings, increased disclosure obligations, and enhanced attention to environmental, social, and governance (ESG) factors. The paper concludes with an analysis of the long-term implications of these changes, arguing that COVID-19 has accelerated trends toward greater transparency, flexibility, and stakeholder engagement in corporate governance.

The Entrepreneurial Impact of the European Directive on Corporate Sustainability Due Diligence

The European Commission’s Directive on Corporate Sustainability Due Diligence, adopted in 2022 and approved in 2024, mandates that companies identify, prevent, and mitigate hostile human rights and environmental impacts across their operations and supply chains, integrating sustainability into corporate governance. This article examines the directive’s influence on European entrepreneurial activity, ecosystems, and innovation using a qualitative descriptive literature analysis, comparative frameworks, impact assessments, policy recommendations, and case studies. Findings suggest that while the directive imposes compliance challenges and costs, particularly for startups and small and medium-sized enterprises, it offers significant long-term benefits, such as improved risk management, enhanced reputation, and market differentiation. The directive promotes accountability and ethical practices, harmonizing due diligence across the EU and fostering a culture of sustainability. It concludes that companies addressing these impacts can gain a competitive edge and attract sustainability-focused investors, necessitating support mechanisms for startups and small and medium-sized enterprises to mitigate burdens and encourage compliance.

Enhancing tourism and hospitality organizations’ ESG via transformational leadership and employee pro-environmental behavior: The effect of organizational culture

Existing literature on environmental, social, and corporate governance (ESG) primarily focuses on outcomes, neglecting strategies to enhance its predictors. Drawing upon the competing values framework (CVF) and self-determination theory (SDT), this study investigates the interactive impact of transformational leadership (TFL) and two types of external-focused organizational cultures (OCs) on employee pro-environmental behaviors (PEBs) and subsequently ESG performance in the context of tourism and hospitality industry. By employing a time-lagged field investigation involving 57 Chinese hospitality organizations, this multilevel study draws several findings. First, TFL promotes PEBs among hospitality employees, which in turn contributes to enhanced ESG performance. Second, the adoption of an adhocracy culture in hospitality organizations can further enhance the positive impact of TFL on employee PEBs. Finally, this study also reveals the serial mediating roles of intrinsic and extrinsic motivation, that is, psychological empowerment (PE) and perceived insider status (PIS), in the relationship between TFL and employee PEBs.

Shaping ESG commitment through organizational psychological capital: The role of CEO power

AbstractThis study investigates the influence of organizational psychological capital (OPC) on corporate environmental, social, and governance (ESG) practices, highlighting a relatively overlooked aspect in existing studies, and examines the moderating effect of chief executive officer (CEO) power on this relationship. Using a dataset of 1659 firm‐year observations from FTSE 350 firms across the years 2012–2021 and applying natural language processing (NLP) techniques, our findings reveal that higher levels of OPC are linked to a stronger commitment to ESG initiatives. However, this positive association is tempered by CEO power, which negatively moderates the relationship. Furthermore, our analysis shows that OPC not only enhances ESG performance but also positively influences financial performance and the core ESG pillars. These results, validated through rigorous robustness checks, offer significant insights for stakeholders and policymakers in the realm of corporate governance.

Effect Of Profitability and Good Corporate Governance On Firm Value With Corporate Social Responsibility As An Intervening Variable

The company was founded with a goal, one of which is to improve the welfare of its shareholders. By increasing the company's share price, the company's value in the eyes of investors will also increase. The value of a company can be seen from the Tobin'Q ratio. Companies registered in LQ 45 have quite high company value. The aim of this research is to analyze the influence of profitability and GCG on company value through CSR as an intervening variable. This research is a type of associative research with a quantitative approach. The object of this research is the LQ 45 company listed on the IDX for the 2018–2022 period. Sampling in this study used a purposive sampling method and 20 companies were found that met the sample criteria. This research uses secondary data in the form of Sustainability reports and company annual reports. This research uses the path analysis method using SPSS as an analysis tool. The results of this research show that: (1) Profitability has a positive and significant influence on company value. (2) GCG has a positive and insignificant influence on company value. (3) CSR has a significant positive influence on company value. (4) Profitability has a positive and significant influence on company value throught CSR. (5) GCG has negative and insignificant influence on company value throught CSR.

The Influence of Financial Distress, Earnings Management, and Financial Performance on Firm Value with Good Corporate Governance as a Moderating Variable

This study examines the influence of financial distress, earnings management, and profitability on firm value, with good corporate governance (institutional ownership) as a moderating variable. Focusing on infrastructure sector companies listed on the Indonesia Stock Exchange from 2019 to 2023, this research employs Tobin's Q to measure firm value, the Altman Z-Score for financial distress, the modified Jones model for earnings management, and Return on Assets (ROA) for profitability. The findings reveal that profitability positively and significantly affects firm value, while financial distress and earnings management show no significant impact. Additionally, institutional ownership does not moderate the effects of financial distress and earnings management on firm value, though it successfully moderates the relationship between profitability and firm value. These results underscore the importance of profitability and good corporate governance in enhancing firm value, with implications for investor decision-making and corporate strategy in Indonesia’s infrastructure sector.

Does Corporate Governance Explain the Catering Theory of Dividend MENA Region?

Our analysis has several policy implications that are particularly relevant, allowing the passivity to better understand the implication of catering for dividends by examining the moderating role played by certain institutional variables. This idea has not been taken into account in previous studies, neither theoretically or empirically, but our results corroborate a way in which investors value dividends depends on the internal and external characteristics of the company and corporate governance mechanisms. In fact, our study further verifies which institutional variables moderate the payment of the dividend to managers' management actions. We trace firm characteristics and level corporate governance practices in six countries from Mena zone context, and in our empirical tests, we find that firms internal and external environment play an important role on the investor decision to demand or not dividend from firms. Our evidence also provides empirical support that external and internal mechanisms are important to force firms to disgorge cash and force the presence of a more general phenomenon of the catering. Moreover, our empirically estimation indicates a different result from our countries.

Corporate governance and accounting conservatism: evidence from STOXX EUROPE 600 companies

Corporate governance and accounting conservatism: evidence from STOXX EUROPE 600 companies