IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v15y2023i13p10666-d1188144.html
   My bibliography  Save this article

A Grounded Theory Examination of Supervisory Boards’ Governance Capability Indicators in Publicly Traded Firms: A Sustainability Perspective

Author

Listed:
  • Baorong Guo

    (School of Business Administration, Northeastern University, Shenyang 110167, China)

  • Xinan Zhao

    (School of Business Administration, Northeastern University, Shenyang 110167, China)

  • Lizhi Hu

    (Sujiatun District Tax Bureau, Shenyang 110101, China)

Abstract

Embedded within the sustainable development framework, our research leverages proceduralized grounded theory to refine and universalize supervisory governance capabilities, thereby aiming to assess the theoretical saturation of the resultant model and to devise a comprehensive, sustainability-inclusive index of supervisory board governance competence. Focusing on five publicly traded Chinese companies, the research employs a tripartite coding process integral to grounded theory methodologies. By methodically refining case studies, it identifies sustainability-oriented governance capacity indicators. Data are conceptualized and compartmentalized via open coding, then divided into five primary clusters via axial coding, resulting in sustainability-focused governance capacity indicators for supervisory boards. Using selective coding strategies, the study uncovers forty-two competency indicators pertinent to sustainable corporate governance, organized into three domains across eight sustainability-related dimensions. These include individual characteristics, sustainability value judgment, experiential wisdom, collaborative communication for sustainable practices, resource integration, general employment prerequisites, professional application in sustainability, and sustainable business acumen. The findings enhance supervisory board member selection and performance assessment processes, promoting sustainable corporate governance. They also clarify supervisory roles in sustainability, offering a holistic view of supervisory board internal governance mechanisms. By maintaining the objectivity of these indicators, the study advances the field.

Suggested Citation

  • Baorong Guo & Xinan Zhao & Lizhi Hu, 2023. "A Grounded Theory Examination of Supervisory Boards’ Governance Capability Indicators in Publicly Traded Firms: A Sustainability Perspective," Sustainability, MDPI, vol. 15(13), pages 1-17, July.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:13:p:10666-:d:1188144
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/15/13/10666/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/15/13/10666/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Xiaobao Song & Wun-Hong Su & Yuqing Liu, 2019. "The Impact of the Supervisory Board Supervision on Firm Performance: Evidence from Chinese Listed Firms," Review of Economics & Finance, Better Advances Press, Canada, vol. 16, pages 47-58, May.
    2. Jay Dahya & Yusuf Karbhari & Jason Zezong Xiao & Mei Yang, 2003. "The Usefulness of the Supervisory Board Report in China," Corporate Governance: An International Review, Wiley Blackwell, vol. 11(4), pages 308-321, October.
    3. Chung-Ming Lau & David K Tse & Nan Zhou, 2002. "Institutional Forces and Organizational Culture in China: Effects on Change Schemas, Firm Commitment and Job Satisfaction," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 33(3), pages 533-550, September.
    4. Michael N. Young & Mike W. Peng & David Ahlstrom & Garry D. Bruton & Yi Jiang, 2008. "Corporate Governance in Emerging Economies: A Review of the Principal–Principal Perspective," Journal of Management Studies, Wiley Blackwell, vol. 45(1), pages 196-220, January.
    5. Fama, Eugene F, 1980. "Agency Problems and the Theory of the Firm," Journal of Political Economy, University of Chicago Press, vol. 88(2), pages 288-307, April.
    6. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    7. repec:eme:mfppss:v:34:y:2008:i:12:p:934-952 is not listed on IDEAS
    8. Canan C. Mutlu & Marc van Essen & Mike W. Peng & Sabrina F. Saleh & Patricio Duran, 2018. "Corporate Governance in China : A Meta-Analysis," Post-Print hal-02312124, HAL.
    9. Mohammad Jizi & Aly Salama & Robert Dixon & Rebecca Stratling, 2014. "Corporate Governance and Corporate Social Responsibility Disclosure: Evidence from the US Banking Sector," Journal of Business Ethics, Springer, vol. 125(4), pages 601-615, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ali Meftah Gerged, 2021. "Factors affecting corporate environmental disclosure in emerging markets: The role of corporate governance structures," Business Strategy and the Environment, Wiley Blackwell, vol. 30(1), pages 609-629, January.
    2. Cheng Guping & Muhammad Safdar Sial & Peng Wan & Alina Badulescu & Daniel Badulescu & Talles Vianna Brugni, 2020. "Do Board Gender Diversity and Non-Executive Directors Affect CSR Reporting? Insight from Agency Theory Perspective," Sustainability, MDPI, vol. 12(20), pages 1-25, October.
    3. Al-Najjar, Basil & Salama, Aly, 2022. "Mind the gap: Are female directors and executives more sensitive to the environment in high-tech us firms?," Technological Forecasting and Social Change, Elsevier, vol. 184(C).
    4. Yusuf, Fatima & Yousaf, Amna & Saeed, Abubakr, 2018. "Rethinking agency theory in developing countries: A case study of Pakistan," Accounting forum, Elsevier, vol. 42(4), pages 281-292.
    5. Marc Essen & J. Oosterhout & Michael Carney, 2012. "Corporate boards and the performance of Asian firms: A meta-analysis," Asia Pacific Journal of Management, Springer, vol. 29(4), pages 873-905, December.
    6. Nguyen, Thi Tuyet Mai, 2017. "An examination of independent directors in Vietnam," OSF Preprints ay6dv, Center for Open Science.
    7. He, Yan & Chiu, Yung-ho & Zhang, Bin, 2015. "The impact of corporate governance on state-owned and non-state-owned firms efficiency in China," The North American Journal of Economics and Finance, Elsevier, vol. 33(C), pages 252-277.
    8. Mohammad Jizi, 2017. "The Influence of Board Composition on Sustainable Development Disclosure," Business Strategy and the Environment, Wiley Blackwell, vol. 26(5), pages 640-655, July.
    9. Paul McGuinness & Kevin Lam & João Vieito, 2015. "Gender and other major board characteristics in China: Explaining corporate dividend policy and governance," Asia Pacific Journal of Management, Springer, vol. 32(4), pages 989-1038, December.
    10. Shan, Yuan George & Troshani, Indrit & Tarca, Ann, 2019. "Managerial ownership, audit firm size, and audit fees: Australian evidence," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 35(C), pages 18-36.
    11. Henrique Castro Martins & Cristiano Machado Costa, 2020. "Does control concentration affect board busyness? International evidence," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 24(3), pages 821-850, September.
    12. Stutz, Adrian & Schell, Sabrina & Hack, Andreas, 2022. "In family firms we trust – Experimental evidence on the credibility of sustainability reporting: A replication study with extension," Journal of Family Business Strategy, Elsevier, vol. 13(4).
    13. Michael Carney & Marc Van Essen & Eric R. Gedajlovic & Pursey P.M.A.R. Heugens, 2015. "What do we know about Private Family Firms? A Meta–Analytical Review," Entrepreneurship Theory and Practice, , vol. 39(3), pages 513-544, May.
    14. Sunny Sun & Xia Zhao & Haibin Yang, 2010. "Executive compensation in Asia: A critical review and outlook," Asia Pacific Journal of Management, Springer, vol. 27(4), pages 775-802, December.
    15. Ajab Khan & H. Kent Baker, 2022. "How board diversity and ownership structure shape sustainable corporate performance," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(8), pages 3751-3770, December.
    16. Khosa,Amrinder & Ahmed,Kamran & Henry,Darren, 2019. "Ownership Structure, Related Party Transactions, and Firm Valuation," Cambridge Books, Cambridge University Press, number 9781108492195.
    17. Zhu, JianJun (John) & Tse, Caleb H. & Li, Xu, 2019. "Unfolding China’s state-owned corporate empires and mitigating agency hazards: Effects of foreign investments and innovativeness," Journal of World Business, Elsevier, vol. 54(3), pages 191-212.
    18. Weiwen Li & Ryan Krause & Xin Qin & Junsheng Zhang & Hang Zhu & Shanshan Lin & Yuehua Xu, 2018. "Under the microscope: An experimental look at board transparency and director monitoring behavior," Strategic Management Journal, Wiley Blackwell, vol. 39(4), pages 1216-1236, April.
    19. Marc van Essen & J. (Hans) van Oosterhout & Pursey P. M. A. R. Heugens, 2013. "Competition and Cooperation in Corporate Governance: The Effects of Labor Institutions on Blockholder Effectiveness in 23 European Countries," Organization Science, INFORMS, vol. 24(2), pages 530-551, April.
    20. Yuan George Shan & Lei Xu, 2012. "Bad debt provisions of financial institutions," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 8(4), pages 344-364, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:15:y:2023:i:13:p:10666-:d:1188144. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.