Social value relevance corporate governance and organizational outcome

We utilize unbalanced panel data from Refinitiv Eikon covering 9,960 global firms from 2002 to 2022. We conduct a panel regression analysis to find out the association between independent and dependent variables. In addition, we estimate entropy balancing estimation, the two-step system generalised method of moments (GMM) and the generalised estimating equation (GEE) to address endogeneity issues. In the current study, we investigate four models. The aim of our first model is to investigate the association between board demographic, structural, and capital diversity, and corporate carbon performance (CPP). The results from the first model indicate that board demographic diversity (including tenure, gender, and cultural diversity), structural diversity (such as board independence, board size, CEO-chairperson duality, board meetings, and board compensation), and capital diversity (comprising board member affiliation and specific skills) all have a positive and significant association with CCP. Additionally, our findings reveal that corporate sustainable resource use fully mediates the relationship between board demographic diversity and CCP and partially mediates the relationship between board structural diversity, board capital diversity, and CCP. The aim of our second model is to investigate the association between board capital and values diversity, audit committee diversity, and CCP. The results from the second model indicate that board capital diversity (e.g., board-specific skills, and member affiliations), board values diversity (e.g., board independence and female directors), and audit committee diversity (e.g., independence and financial expertise) have a positive relationship with CCP. Additionally, the corporate sustainability committee demonstrates a partial mediating effect between board capital diversity, board values diversity, audit committee diversity, and CCP. The aim of our third model is to investigate the association between policy board independence, the interactive effect of stakeholder engagement with policy board independence and corporate environmental, social and governance (ESG) performance. Our third model reveals that policy board independence is a strategic policy, with a focus on board independence with an adequate number of independent directors, their integrity, and their freedom in decision-making. Our investigation shows that policy board independence and the interactive effect of stakeholder engagement with policy board independence is positively and significantly associated with ESG performance. Additionally, our results emphasize that boards with strictly independent members and those with over 25 percent of independent members are significantly associated with improved corporate ESG performance. Our study also reveals that the interactive effect of isomorphic pressures from government effectiveness and political stability with policy board independence influence corporate ESG performance. Our channel analysis also reports that policy board independence is positively and significantly associated with corporate sustainable resource use performance, corporate carbon performance, and eco-innovation performance. Further, our quasi-experimental analysis reports that the UN’s sustainable development goals (SDGs) framework has a positive and significant impact on corporate ESG performance across the world. The aim of our fourth model is to investigate the association between corporate independent governance mechanism, ex-CEO as chairperson, and corporate ESG performance. Our fourth model reveals that strict board independence, and autonomous audit, compensation, and nomination committees have a positive and significant association with corporate ESG performance. Conversely, our findings reveal a negative correlation between former CEOs serving as chairperson and ESG performance. However, this relationship becomes positive when considering the moderating effects of sustainability compensation incentives and the sustainability committee. Our study findings have greater policy implications for corporate governance mechanisms through the multiple theoretical frameworks and the construction of sustainability resilient economies globally.