Corporate Governance as a Key Driver of Corporate Sustainability in France: The Role of Board Members and Investor Relations

Patricia Crifo, Elena Escrig-Olmedo () and Nicolas Mottis
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Elena Escrig-Olmedo: University Jaume I

Journal of Business Ethics, 2019, vol. 159, issue 4, No 11, 1127-1146

Abstract: Abstract This paper examines the relationships between corporate governance and corporate sustainability by focusing on two main components of companies’ governance structure: boards of directors (BoDs) and investor relations officers (IROs). We propose an original empirical strategy based on the 120 biggest French capitalizations for the year 2013, allowing us to measure boards of directors’ independence and expertise, as well as investor relations officers’ convictions and communication on corporate sustainability. Our results show that corporate governance has an ambiguous impact on corporate sustainability because of opposing forces: internal, external and intermediate forces. On the one hand, the higher the proportion of inside directors, the higher the company’s environmental and governance performance, while the higher the proportion of general experts in the board room, the lower the company’s governance performance. On the other hand, investor relations officers’ beliefs that corporate sustainability is primarily driven by investors’ ethical values appear negatively related to companies’ governance performance. In sum, corporate sustainability appears positively related to internal forces (inside directors) and negatively related to external forces (general expert directors and investor activist engagement). The results of this study demonstrate the need to carry out efforts to train BoDs (specifically inside directors) and IROs to respond to corporate sustainability and to take more of a leadership role in this area.

Keywords: Investor relations officers (IROs); Board of directors (BoDs); Environmental Social and governance (ESG) criteria; Socially responsible investment (SRI); Corporate sustainability and corporate social responsibility (CSR); France (search for similar items in EconPapers)
JEL-codes: G30 M14 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (22)

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DOI: 10.1007/s10551-018-3866-6

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