From “Who Cares” to “What They Care About”: The Impact of Corporate Governance on Environmental and Social Performance in China

Mohammed Zakriya and Nour Chams
Additional contact information
Mohammed Zakriya: LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - ULCO - Université du Littoral Côte d'Opale - Université de Lille - CNRS - Centre National de la Recherche Scientifique
Nour Chams: UAB - Universitat Autònoma de Barcelona = Autonomous University of Barcelona = Universidad Autónoma de Barcelona

Post-Print from HAL

Abstract: Research Question/Issue This study investigates whether and how corporate governance influences environmental and social performance in Chinese firms. Two mechanisms of corporate governance are examined: external (shareholder‐focused) and internal (CSR strategy‐ and management‐focused). Research Findings/Insights The findings reveal a significant positive effect of corporate governance on environmental and social performance in China, mainly driven by firms' CSR strategy‐focused governance practices. State ownership of enterprises significantly moderates how governance affects both environmental and social performance, with positive and negative moderation observed for external and internal governance mechanisms, respectively. Furthermore, an environmental regulation shock accentuates the positive influence of corporate governance on environmental performance but not on social performance. Theoretical/Academic Implications The main theoretical insight reflects a shift in the governance discourse from "conflict of interest" to "differentiation of interest" between shareholders and managers regarding sustainability concerns. The results shed light on the considerable differences between shareholder and manager behaviors toward environmental and/or social practices. Practitioner/Policy Implications This study informs firms and regulators on corporate governance's nonfinancial implications in China. Reforming governance characteristics can be a key factor for firms aiming to improve their environmental and social performance, specifically by re‐envisioning their internal governance mechanisms that are CSR strategy‐oriented. From the government perspective, we provide insights into how, through ownership and regulatory interventions, governance mechanisms tend to balance environmental and social performance in China.

Date: 2025-03-24
References: Add references at CitEc
Citations:

Published in Corporate Governance: An International Review, 2025, 33 (5), pp.1277-1298. ⟨10.1111/corg.12648⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:hal:journl:hal-05379856

DOI: 10.1111/corg.12648

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().