Sustainability and Corporate Governance: Transparency and Excessive Directors’ Remuneration in Listed Companies during the Global Financial Crisis

Elena Merino, Montserrat Manzaneque-Lizano and Jesus Sanchez-Araque
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Elena Merino: Department of Business Administration, Faculty of Law and Social Science, University of Castilla-La Mancha, 13071 Ciudad Real, Spain
Montserrat Manzaneque-Lizano: Department of Business Administration, Faculty of Social Science, University of Castilla-La Mancha, 16071 Cuenca, Spain
Jesus Sanchez-Araque: Departament of Business Administration, Faculty of Legal and Social Science, University of Castilla-La Mancha, 47051 Toledo, Spain

Sustainability, 2019, vol. 12, issue 1, 1-19

Abstract: This article empirically examines the connection between the board of directors’ characteristics and excesses in remuneration for directors from a sustainability perspective, highlighting the role of information transparency on remuneration control. Using data from 73 listed companies in the period 2007–2012 (the global financial crisis), we find that (1) board size presents a non-linear relationship with excessive total directors’ remuneration during the crisis period; (2) other board characteristics (board independence, duality and directors’ ownership) do not show a significant relationship with excessive directors´ remuneration; and (3) voluntary transparency on directors’ remuneration significantly contributes to controlling excessive total directors’ remuneration, which contributes to the long-term sustainability of the firm. The results of this study provide good reasons to take into account the effect of corporate governance characteristics and transparency on the remuneration excesses committed during the global financial crisis.

Keywords: sustainability; corporate governance; directors’ remuneration; voluntary disclosure index; financial crisis; board of directors (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:12:y:2019:i:1:p:158-:d:301457

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