The Role of Corporate Governance in Enhancing Environmental, Social, and Governance (ESG) Disclosure

This research investigated the impact of corporate governance mechanisms on the quality and extent of Environmental, Social, and Governance (ESG) disclosure, with a particular emphasis on Legitimacy Theory. A quantitative approach was employed to analyse secondary data sourced from peer-reviewed articles in the SCOPUS database, covering the period from 2020 to 2024. The study utilised specific keywords and Boolean operators to identify relevant literature, applying stringent inclusion and exclusion criteria to ensure high-quality data selection. The findings revealed that corporate governance structures, including board composition, audit committees, and ownership structure, played a pivotal role in shaping ESG disclosure practices. However, an overemphasis on board-level characteristics was noted, leaving a gap in the exploration of other governance elements such as managerial incentives and corporate culture. The research also highlighted significant differences between ESG disclosure practices in Asian and Non-Asian countries, with variations attributed to regulatory frameworks, cultural influences, and levels of economic development. The application of Legitimacy Theory demonstrated that companies often engage in ESG disclosure to enhance their societal legitimacy, particularly in industries subject to public scrutiny. Furthermore, the study underscored the importance of both internal governance mechanisms and external pressures in driving comprehensive and transparent ESG disclosures. In conclusion, the research provided valuable insights into how corporate governance can influence sustainability reporting, suggesting that future studies should incorporate a broader range of variables to develop more robust frameworks for ESG disclosure. The findings offer practical implications for policymakers and corporations aiming to improve transparency and accountability in sustainability reporting.