A governance approach to stakeholder engagement in sustainable enterprises—Evidence from B Corps

Chaoyuan She and Giovanna Michelon

Business Strategy and the Environment, 2023, vol. 32, issue 8, 5487-5505

Abstract: Sustainable enterprises face a risk for which the pressure over financial sustainability “crowds out” their impact mission. Corporate governance mechanisms can play an important role in managing the tensions between the two objectives, by steering and driving stakeholder engagement processes. At the same time, the rise of social media has provided firms with a platform for undertaking stakeholder engagement on a large scale. Therefore, the aim of this study is to examine how the governance mechanisms of sustainable enterprises affect engagement with stakeholders on social media. Specifically, we identify three distinctive mechanisms for a governance approach to stakeholder engagement in sustainable enterprises: The legal purpose beyond profit maximization, directors' commitment to purpose, and the adoption of purpose‐specific accountability mechanisms. We argue that each of them matters for the extent to which sustainable enterprises engage with stakeholders on social media, as well as the quality of this engagement. By scraping and classifying nonfinancial tweets posted by 1074 U.S. B Corps between 2014 and 2018 and those posted by stakeholders towards the firm, we find that the legal and ethical mechanisms are positively related to the quality of engagement while the accountability mechanism is related to both the extent and quality of engagement. Our study sheds light on the implications of governance mechanisms in steering social media stakeholder engagement in sustainable enterprises.

Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1002/bse.3432

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:bstrat:v:32:y:2023:i:8:p:5487-5505

Ordering information: This journal article can be ordered from
http://onlinelibrary ... 1002/(ISSN)1099-0836

Access Statistics for this article

Business Strategy and the Environment is currently edited by Richard Welford

More articles in Business Strategy and the Environment from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().