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Understanding the Role of Corporate Governance in Driving Sustainability in Europe

Author

Listed:
  • Pompei MITITEAN

    (Bucharest University of Economic Studies)

  • Mihai-Alexandru GHIGIU

    (National University of Political Studies and Public Administration (SNSPA), Bucharest, Romania)

Abstract

The present study analyzes the impact that the structure of the board of directors and its organization have on sustainability, especially on social and environmental pillar scores, in the European country in the period 2018-2022. The Refinitiv Eikon database is the main source, accumulating a number of 15,575 observations for the analyzed period. In order to analyze the structure of the board of directors and its way of organization, five independent variables were taken into account, represented by the number of directors in boards, how many of them are independent members and how many women are in board, the duality of the CEO and the total number of meetings in a year. Sustainability was analyzed using data collected for social and environmental performance and represented the dependent variables of the study. Using SPSS software, data were extracted from Refinitiv Eikon for 3,115 companies using econometric methods (multiple linear regression), as well as correlation matrix and descriptive statistics. The results indicate that boards with an increased proportion of independent and female directors, accompanied by a dual-role CEO, contribute to improved sustainability. Positive social and environmental performance effects associated with board size, degree of independence, gender diversity, and CEO duality were also observed. In contrast to previous hypotheses, no relationship was identified between the frequency of board meetings and social and environmental performance.

Suggested Citation

  • Pompei MITITEAN & Mihai-Alexandru GHIGIU, 2024. "Understanding the Role of Corporate Governance in Driving Sustainability in Europe," CECCAR Business Review, Body of Expert and Licensed Accountants of Romania (CECCAR), vol. 5(3), pages 62-73, March.
    • Handle: RePEc:ahd:journl:v:5:y:2024:i:3:p:62-73
    DOI: 10.37945/cbr.2024.03.07
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    More about this item

    Keywords

    board size; board gender diversity; board independence; CEO duality; board meetings; social performance; environmental performance; European overview;
    All these keywords.

    JEL classification:

    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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