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Board monitoring effectiveness and corporate sustainability performance: do legal system and CEO non-duality matter?

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  • Siew Peng Lee

    (Universiti Tunku Abdul Rahman)

Abstract

Using a cross-sectional dataset comprising 749 firms from 13 countries in Asia Pacific markets, this study examines the effect of board monitoring effectiveness (BME) on corporate sustainability performance (CSP). This study also investigates how BME and the country’s legal system, and BME and CEO non-duality leadership interact to influence CSP. The results reveal that BME positively affects CSP, suggesting that strengthening board monitoring effectiveness will lead to a greater drive towards firms’ sustainable business conduct. This study also finds that firms from countries with civil law system and firms practicing CEO non-duality leadership would enhance the impact of BME on CSP. Additionally, the effect of BME on CSP is more pronounced among non-duality firms operating in countries with civil law regime. The findings are consistent and robust to two different measures of CSP.

Suggested Citation

  • Siew Peng Lee, 2023. "Board monitoring effectiveness and corporate sustainability performance: do legal system and CEO non-duality matter?," Review of Managerial Science, Springer, vol. 17(4), pages 1243-1267, May.
    • Handle: RePEc:spr:rvmgts:v:17:y:2023:i:4:d:10.1007_s11846-022-00559-z
    DOI: 10.1007/s11846-022-00559-z
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    More about this item

    Keywords

    Corporate sustainability performance; Corporate governance; Board monitoring effectiveness; Agency theory; Resource dependence theory; Stakeholder theory;
    All these keywords.

    JEL classification:

    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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