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Corporate governance and financial performance for engaging socially and environmentally responsible practices

Corporate governance and financial performance for engaging socially and environmentally... This paper aims to reconcile the conflicting understanding on the nexus between corporate governance (CG), corporate financial performance (CFP) and corporate social responsibility (CSR) by investigating how companies engage with CSR practices.Design/methodology/approachThe study carries out a multivariate linear regression analysis on a sample of 361 listed companies from five countries in Europe: France, Germany, Italy, Spain and the UK.FindingsCG mechanisms and CFP have an impact on CSR because they affect social and environmental practices strongly and significantly. Furthermore, the findings describe the capacity of CSR to influence both the CG structure and the CFP.Research limitations/implicationsThe present research limits the analysis on the social and environmental performance of companies that communicate their commitment to stakeholders without distinguishing between “greenwashing” companies that implement CSR to improve corporate reputation and those companies that pursue effective societal benefits, taking care of stakeholder relationships.Practical implicationsThe CSR approach can drive the CG structure and improve CFP if managers perceive the implementation of sustainable practices as an integrated process rather than a mere outcome.Originality/valueThis paper seeks to disentangle the nexus between CG, CFP and CSR, not yet precisely defined by scholars in the context of five countries in Europe. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Social Responsibility Journal Emerald Publishing

Corporate governance and financial performance for engaging socially and environmentally responsible practices

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References (64)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1747-1117
DOI
10.1108/srj-12-2017-0276
Publisher site
See Article on Publisher Site

Abstract

This paper aims to reconcile the conflicting understanding on the nexus between corporate governance (CG), corporate financial performance (CFP) and corporate social responsibility (CSR) by investigating how companies engage with CSR practices.Design/methodology/approachThe study carries out a multivariate linear regression analysis on a sample of 361 listed companies from five countries in Europe: France, Germany, Italy, Spain and the UK.FindingsCG mechanisms and CFP have an impact on CSR because they affect social and environmental practices strongly and significantly. Furthermore, the findings describe the capacity of CSR to influence both the CG structure and the CFP.Research limitations/implicationsThe present research limits the analysis on the social and environmental performance of companies that communicate their commitment to stakeholders without distinguishing between “greenwashing” companies that implement CSR to improve corporate reputation and those companies that pursue effective societal benefits, taking care of stakeholder relationships.Practical implicationsThe CSR approach can drive the CG structure and improve CFP if managers perceive the implementation of sustainable practices as an integrated process rather than a mere outcome.Originality/valueThis paper seeks to disentangle the nexus between CG, CFP and CSR, not yet precisely defined by scholars in the context of five countries in Europe.

Journal

Social Responsibility Journal – Emerald Publishing

Published: Mar 22, 2019

Keywords: Corporate social responsibility; CSR; Europe; Sustainability; Corporate financial performance; Corporate governance

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