Relationship between corporate governance and corporate sustainability: a sample of borsa Istanbul, Turkey
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Apr 5, 2016
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Abstract
The papers that corporate governance have been examined are widely available in the literature. However, the studies which investigated the relationship between corporate governance and corporate sustainability is limited. Although corporate governance is reputed to some companies’ scandals such as Enron and Parmalat, corporate governance came into question with certain reports such as Cadbury and Hampel. But corporate sustainability conception spreads throught the World by Brundtland report more. The aim of this study is to explore whether there is relationship between corporate governance and corporate sustainability or not and to investigate the direction and strength of the relationship if there is a link. In this context, BIST XKURY and XUSRD indexes are used and Granger causality test is employed to study relationship between said variables. Results emphasize that there is a positively strong relationship between said variables and the causality relation is in two-way. Consequently, an overview has been demonstrated.
Keywords: Corporate governance, corporate sustainability, shareholder, stakeholder, social responsibility
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Chan, M., Watson, J., & Woodliff, D. (2014). Corporate Governance Quality and CSR Disclosures, J Bus Ethics, 125, 59–73, doi: 10.1007/s10551-013-1887-8.
Christofi, A., Christofi, P., & Sisaye, S. (2012). Corporate sustainability: historical development and reporting practices. Management Research Review, 35(2), 157–172.
Colley, J. L. (2004). What is Corporate Governance?. OH, USA: Mcgraw-Hill Companies, Blacklick.
Cong, Y., & Freedman, M. (2011). Corporate governance and environmental performance and disclosures. Advances in Accounting, incorporating Advances in International Accounting, 27(2011), 223–232, doi:10.1016/j.adiac.2011.05.005.
David, P., Bloom, M., & Hillman, A. J. (2007). Investor activism, managerial responsiveness and corporate social performance. Strategic Management Journal, 28(1), 91–100.
Granger, C. (1969). Investigating Causal Relation by Econometric Models and Cross-Spectral Methods. Econometrica, 37, 424–438.
Janggu, T., Darus, F., Zain, M. M., & Sawani, Y. (2014). Does good corporate governance lead to better sustainability reporting? An analysis using structural equation modeling. Procedia - Social and Behavioral Sciences, 145(2014), 138–145, doi: 10.1016/j.sbspro.2014.06.020.
Jizi, M. I., Salama, A., Dixon, R., & Stratling, R. (2014). Corporate Governance and Corporate Social Responsibility Disclosure: Evidence from the US Banking Sector. J Bus Ethics, 125, 601–615, doi:10.1007/s10551-013-1929-2.
Jo, H., & Harjoto, M. A. (2011). Corporate Governance and Firm Value: The Impact of Corporate Social Responsibility. Journal of Business Ethic, 103(2011), 351–383, doi:10.1007/s10551-011-0869-у.
Kaler, J. (2003). Diffrentiating Stakeholder Theories. Journal of Business Ethics, 46, 71–83.
Kocmanová, A., Hřebíček, J., & Dočekalová, M. (2011). Corporate Governance and Sustainability. Economics and Management, 16, 543–550.
Krechovská, M., & Procházková, P. T. (2014). Sustainability and its Integration into Corporate Governance Focusing on Corporate Performance Management and Reporting. Procedia Engineering, 69(2014), 1144–1151.
Krüger, P. (2014). Corporate goodness and shareholder wealth. Journal of Financial Economics, 115(2015), 304–329,
Kula, V. (2006). Kurumsal Yönetim: Hissedarların Korunması Uygulamaları ve Türkiye Örneği. İstanbul: Papatya Yayıncılık Eğitim.
Lewis, S. (2003). Reputation and corporate responsibility. Journal of Communication Management, 7(4), 356–366,
Michelon, G. Parbonetti, A. İ. (2012). The effect of corporate governance on sustainability disclosure. J Manag Gov, 16, 477–509.
Özsoy, Z. (2011). Kurumsal Yonetim ve Yonetim Kurullari. Ankara: Imge Kitabevi.
Pauly, L.W., & Reich, S. (1997). National Structures and Multinational Corporate Behavior: Enduring Differences in The Age of Globalization. International Organization, Winter 97, 51(1), 1–30.
Sharma, J. P., & Khanna S. (2014). Corporate Social Responsibility. Corporate Governance and Sustainability: Synergies and Inter-relationships, Indian Journal of Corporate Governance, 7(1), 14–18
Schnatterly, K. (2003). Increasing firm value through detection and prevention of white-collar crime. Strategic Management Journal, 24(7), 587–614.
Solomon A., & Solomon J.F. (1999). Empirical Evidence of Long-Termism and Shareholder Activism in UK Unit Trusts. Corporate Governance - An International Review, 7, 288–299.
Stanwick, P. A., & Stanwick, S.D. (2001). CEO compensation: does it pay to be green?. Business, Strategy and the Environment, 10(3), 176–182.
United Parcel Service. (2008). 2008 UPS Corporate Sustainability Report”, http://www.responsibility.ups.com/community/Static%20Files/ sustainability/2008_CSR_PDF_Report.pdf
Walls, J., Berrone, P., & Phan, P.H. (2012). Corporate governance and Environmental Performance: Is There really a Link?. Strategic Management Journal, 33, 885–913
Webb, E. (2004). An examination of socially responsible board structure. Journal of Management and Governance, 8(3), 255–277.
Williams, P. F. (2003). Association for integrity in accounting entertains the business reform. The CPA Journal, 14-15.
Wilson, M. 2003. Corporate sustainability: what is it and where does it come from?. Ivey Business Journal, Mart/Nisan, 1–6.
World Commission on Environment and Development. 1987. Oxford: Our Common Future Oxford University Press.