A Fuzzy-Set Qualitative Comparative Analysis for Understanding the Interactive Effects of Good Governance Practices and CEO Profiles on ESG Performance

Abstract

The impact of corporate governance mechanisms has been examined directly and independently, considering that such characteristics compete to explain environmental, social, and governance (ESG) performance. However, the nexus may be more complex than that suggested by most scholars, and more research is needed. This study applied a fuzzy-set qualitative comparative analysis to a sample of Spanish-listed companies in 2018–2020 to explore how good governance practices interact with CEO profiles to promote corporate sustainability practices. Our analysis discovered the importance of establishing sustainability committees and identified five pathways shaping governance practice bundles. Specifically, listed companies with a high code of good governance (GGC) compliance and a sustainability committee improve high ESG performance globally and for each ESG dimension. Furthermore, the effect is more relevant than the effect of the CEO profile, requiring either CEO duality (pathway 1) or extended CEO tenure (pathway 2). Concurrently, findings indicate three CEO profile configurations for GGC-neutral firms, providing companies with more flexibility in CEO selection. Two suggest that younger CEOs with longer tenure tend to be more motivated to engage in the G and S pillars (pathways 3 and 5). The third indicates that CEOs of older age and early tenure improve the E pillar (pathway 4).

1. Introduction

Sustainability is becoming increasingly important for companies, investors, policymakers, academics, and society. Indeed, environment, social, and governance (ESG) performance and corporate social responsibility (CSR) have become important standards for measuring corporate sustainability [1]. Stakeholders are increasingly pressurizing companies to act responsibly in addition to pursuing financial objectives [2]. Concurrently, regulatory efforts related to ESG practices and disclosures are also increasing.

Consequently, different regulations and recommendations have emerged, such as the Principles of Corporate Governance by the Organisation for Economic Co-operation and Development [3], which aims to strengthen the disclosure and qualification of ESG criteria. Moreover, the European Parliament [4] has adopted the Corporate Sustainability Reporting Directive to raise the quantity and quality requirements of companies’ non-financial reporting.

Spain is no stranger to this trend, and notable progress has been made in corporate governance (CG). For instance, the “Unified Good Governance Code of Listed Companies” was approved in 2006 by the Comisión Nacional del Mercado de Valores (CNMV, National Securities Market Commission) to guarantee the proper functioning of the management bodies of listed Spanish companies and lead them to the highest levels of competitiveness [5]. The most recent version, named “Good Governance Code of Listed Companies” (GGC), aims to raise national standards to the highest level of compliance with international principles of good governance and incorporate specific recommendations on CSR [6].

In this context, the board of directors (BoD) plays a vital role in implementing socially responsible behavior in an organization. From an academic perspective, research interest in CG has also increased in recent decades. Based on statistical significance, previous studies have investigated the net effect of each board characteristic, neglecting how they interact with each other [7]. Thus, evidence of their impact on ESG performance still needs to be conclusive [8]. In contrast, multiple combinations of internal CG mechanisms may achieve high ESG performance [9]. However, there remains a significant gap in the availability of effective tools with which to articulate the impacts of multiple variables [10]. In this regard, the configurational perspective can help uncover interdependent relationships between CG practices. The same attribute can exert a positive, negative, or even no effect on achieving high ESG scores depending on the presence or absence of others [11].

To shed light on the nexus between board characteristics and ESG performance and follow the scholars’ recommendations [12,13], we apply the fuzzy-set qualitative comparative analysis (fsQCA) methodology to answer the following research question: How do good governance practices interact with the presence of a CSR Committee and heterogeneous CEO profiles to achieve high ESG scores?

Specifically, in this study, we identify the configurations of CEO features (age, tenure, and duality) and governance practices (board size, independence, activity, and gender diversity), together with a CSR Committee, to promote ESG performance. We use a sample of Spanish-listed companies over the 2018–2020 period. We document the complementary and substitution effects between good governance attributes and CEO profiles and show the relative importance of each. Generally, listed companies with a CSR Committee and high GGC compliance improve ESG performance. However, this result is only observed in combination with other CEO attributes, allowing us to map alternative “bundles” of CG practices [14]. There is no single path to improving the overall ESG score or individual scores for each E, S, or G pillar.

This study contributes to the CG and ESG literature in several ways. First, we add to research recommending the analysis of the possible interrelationship between board attributes and their joint influence on ESG performance (e.g., [15]). Second, we contribute to the growing literature on the CSR Committee [16]. Third, we extend the research on CEO profiles as a set of attributes rather than as a single characteristic [7]. Fourth, we consider the multidimensional nature of ESG [2,8] and look for different configurations for each specific dimension.

The remainder of this article is structured as follows. First, we review the literature and develop our hypotheses. Second, we describe the data and fsQCA methodology. Subsequently, we present the results and their discussion. Finally, we outline the conclusions, limitations, and future research directions.

2. Literature Review

Research has mainly relied on three theoretical frameworks to explore the influence of BoD on ESG performance. First, following agency theory [17], scholars posit that the BoD’s monitoring function helps align interests between ownership and management, reducing managerial opportunism and the separation costs of agents and principals. In this regard, previous studies have considered oversight to be the main function of the BoD [18]. Second, the resource dependence theory [19] argues that the BoD provides diverse business-critical resources—knowledge, experience, and personal characteristics—that favor sustainable practices [20]. Third, according to stakeholder theory [21], greater transparency is key for meeting the demands of different stakeholders, such as employees, customers, suppliers, government, and society [22]. However, although these three theoretical frameworks have been the most cited in the academic literature, other theories have emerged to enrich the understanding of the influence of BoD on ESG performance, for instance, the critical mass [23] or upper echelons [24]. No single theory can fully explain the BoD–ESG relationship [25].

Drawing on these theories, scholars have examined the impact of board attributes directly and independently on ESG performance, considering that such characteristics compete to explain CSR engagement [7]. However, the nexus may be more complex than that suggested by most studies [15], and more research on how board characteristics interact is needed [8,26]. Indeed, many researchers have begun considering the interaction between board attributes and ESG performance [10,16,27]. On the one hand, studies consider the combination of board characteristics shaping a “bundle of governance mechanisms” [14], for which their effects differ from those of each attribute. On the other hand, it has been argued that CEO characteristics can combine and shape different profiles that drive ESG practices [7]. Complex relationships between CEO profiles and board attributes affect CSR [12,28]. In addition, the CSR Committee interacts with CEO attributes and board characteristics [16]. Following this line of thought and building on complexity theory, we use a more holistic framework to analyze the interdependent relationships between CG practices, CEO attributes, and the presence of a CSR Committee from a configurational perspective. This approach is promising in the CG field [29]. From our view, ESG decisions depend on different combinations of such characteristics rather than on individual attributes.

2.1. Attributes Included in the GGC and ESG Performance

Numerous initiatives related to CG best practices have emerged in recent years, driven by the conviction that the proper and transparent management of listed companies is essential in generating value and enhancing investor confidence. For example, the OECD revised the Principles of Corporate Governance [3] to strengthen CG policies related to sustainability, disclosure, and the rating of ESG criteria. To follow international standards of good governance, and particularly the European Commission’s recommendations, the “Good Governance Code” (GGC) has been published in Spain [6]. The GGC includes more than 60 recommendations for all listed companies regardless of their size and level of capitalization. Although voluntary, companies are obliged to disclose—in their annual CG reports—the extent to which they follow or, if applicable, do not follow them—and explain why they do not follow them. According to Ponomareva et al. [29], we suggest that compliance with governance standards results in multiple board design strategies. We focus on recommendations that refer to the attributes most studied in the literature and for which there is no consensus regarding their influence on ESG performance [28]: board size, independence, activity, and gender diversity.

From the resource dependence theory perspective, a larger board size implies diverse experience and knowledge [30,31] and a network of external links that favors advice on ESG-related issues [32]. In contrast, agency theory suggests that a larger board size can lead to increased conflicts of interest and coordination and supervision problems, as opposed to a smaller board [18]. The GGC recommends a range between five and fifteen members (recommendation 13) [6].

Independent directors are more transparent in disclosing non-financial information to reduce conflicts of interest between stakeholders [33]. However, they may focus more on financial results than sustainability issues [34]. Following the GGC, “the number of independent directors should be at least half of the total number of directors” (recommendation 17) [6].

Regarding board activity, most studies find that increasing the number of board meetings favors interest in ESG practices [18]. The GGC states that “the board should meet eight times a year at least” (recommendation 26) [6].

Board gender is one of the most popular board characteristics analyzed by scholars [28]. Based on the resource dependence theory, women possess personal characteristics and management styles [20] that favor promoting ESG practices [33]. However, a “critical mass” of at least three women is required to exert significant influence [1]. According to GGC, “the number of female directors should account for at least 40% of the members of the board of directors before the end of 2022 and thereafter, and not less than 30% prior to that” (recommendation 15) [6].

Finally, by the same theory, longer tenure provides greater knowledge of the company’s activities and policies, which improves ESG practices [35]. However, some authors speak of a tenure limit of approximately ten years, as additional years may be detrimental to the quality of BoD oversight [36]. The Commission of the European Communities [37] recommends that the directors of listed companies should serve on the board for no more than three terms or, alternatively, more than 12 years.

Based on the above arguments, we propose our first hypothesis as follows:

Hypothesis 1 (H1).

Compliance with GGC recommendations is sufficient to achieve high ESG scores.

2.2. CSR Committee and ESG Performance

Relatively fewer studies analyze the effect of the CSR Committee on the BoD-ESG link. Moreover, they provide contradictory results [28]. From a stakeholder perspective, the CSR Committee assists directors in conducting sustainable activities and is a way to institutionalize CSR in a company [38]. Their presence formally recognizes the accountability of specific individuals to stakeholder groups [2]. They can be called upon to justify their actions, thereby enhancing accountability [39]. Consistent with these ideas, several studies find that the CSR Committee favors ESG performance [40]. In contrast, some researchers find a negative [41] or even non-significant relationship, arguing that the presence of these committees is considered more of a symbolic initiative than an effective one [42,43].

Given the lack of consensus, Endrikat et al. [8] and Baraibar-Diez and Odriozola [39] recommend investigating the role of the CSR Committee and its interactions with other CG structures to improve corporate sustainability. Indeed, Bolourian et al. [16] demonstrate that the CSR Committee interacts with director and CEO characteristics in a sample of listed FTSE 350 and S&P 500 companies.

2.3. CEO Profile and ESG Performance

According to upper echelon theory, the CEO’s personal profile and degree of empowerment in the company can be decisive in promoting ESG-related activities [44]. CEOs explain approximately 30% of the total variance in CSR [45]. In this paper, we focus on three CEO features with extensive research: age, tenure [7], and duality [46,47].

Academic research suggests that young CEOs are more willing to invest in ESG activities because of a greater concern for environmental issues [48]. They are more inclined to embrace change and adapt to current requirements [49]. However, this variable has a negative influence in many cases, mainly because young CEOs need to generate short-term value by discarding investments that do not generate short-term financial returns. Thus, financial and ESG objectives may compete with each other [50]. Moreover, the decision-making process of CEOs is related to their time horizon. Younger CEOs have longer career horizons, which may imply a greater predisposition to invest in socially responsible projects [51]. Therefore, some studies show a positive relationship between CEO age and ESG score [52], while others report a negative effect [48,49]. As a result, the CEO’s age does not seem to be a determining factor, probably because of the incidence of other factors [50,53].

The literature also provides contradictory results on the nexus between CEO duality and ESG performance. Following the resource dependence theory, having more positions provides leadership, reduces information costs, and enables quick decision-making [54]. A powerful CEO uses CSR disclosures as a tool to improve their image [1,20], be more successful, and increase their tenure [18]. However, based on agency theory, the concentration of power in the same person implies a loss of objectivity and independence between the BoD and management [25]. This results in ineffective governance that undermines ESG [46]. Other studies observe a moderating effect on other board attributes [47]. Finally, academics also show a positive relationship between CEO duality and ESG [42], probably because only CEO duality is considered when applying net effect methodologies [15].

Similarly, CEO tenure also has opposing effects on CSR performance, and research is relatively limited [26]. Miller [55] highlighted that longer tenure results in a lack of adaptation to the environment and greater difficulty in meeting stakeholder demands (the fixed paradigm problem) [56]. Therefore, the link between CEO tenure and CSR will be negative [50]. In contrast, the human capital view theory [57] suggests that a longer tenure generates a greater accumulation of knowledge, experience, and skills favoring ESG practices [26]. In the same manner, Kim and Kim [58] suggest that long tenure is a driver of CSR, as it is detached from the personal need for tenure and can address controversial issues such as environmental investments. However, it is also feasible to assume that CEOs with shorter tenure are more likely to invest in ESG activities because of greater professional concerns [51].

This lack of consensus may be because CEO attributes interact and should combine to form different profiles, some of which are more suitable for driving CSR strategies than others [7]. Hence, Jain and Jamali [12] argue that the complexities of CEO–BoD relationships and their impact on CSR should be investigated more. To the best of our knowledge, no study has yet examined the impact of CEO age and tenure on ESG in the context of Spain. In this regard, we propose our second hypothesis as follows:

Hypothesis 2 (H2).

The GGC, CSR Committee, and CEO profiles interact, shaping a “bundle of governance mechanisms” to achieve the same level of ESG performance.

Considering this, we apply a configurational analysis [59] to examine how good governance practices interact with different CEO profiles and the presence of a CSR Committee (antecedent conditions) to shape BoD configurations (or bundles) in order to achieve high ESG scores (outcome) (Figure 1). To the best of our knowledge, a combinatorial analysis of these variables in Spanish-listed companies has not been conducted.

3. Materials and Methods

3.1. Data

We used an initial sample of 231 Spanish-listed non-financial companies from 2018 to 2020. After excluding companies with ESG scores that were unavailable for at least three consecutive years, the final dataset consisted of 56 companies and 168 company-year observations. The sample is relevant for three main reasons. First, the pressure to integrate ESG aspects into companies’ business models is more significant in listed companies [60]. Second, these companies provide greater and more homogeneous information about their CG practices and have a greater impact on society through their volume and activity than unlisted companies. Third, 2020 saw the latest update of the GGC of Spanish companies [6]. Data were available for the first time in 2018.

Information regarding ESG score, GGC, and CSR Committee was extracted from the Refinitiv Datastream, while CEO attributes were compiled from the NRG metrics database and hand-collected from the companies’ websites.

3.2. Variables

The variable “outcome” (overall ESG score and their three-dimensional E-S-G scores) provides a percentage score (1–100) regarding a firm’s ESG performance. Among “antecedent conditions”, we consider the following: (a) five GGC recommendations (board size, gender diversity, board independence, board tenure, and board meetings); (b) three characteristics related to the CEO’s profile as the person most responsible for the effective functioning of the BoD (age, duality, and tenure); and (c) CSR Committee (see

Table 1. Antecedent conditions.

Categories	Conditions	Definition	References
Good Governance Code recommendatios	Board Size	The total number of board members	[2,27,35,61]
	Board Independence	Percentage of independent board members	[27,35,61]
	Board Meeting	Dummy variable = 1 if boards of directors meet at least eight times a year, 0 otherwise	[2,35,61]
	Board Gender Diversity	Percentage of females on the board	[27,42,61]
	Board Tenure	The average number of years each board member has been on the board	[2,16,35,36]
CEO attributes	CEO age	The age of the CEO	[7,15,42,49,52]
	CEO duality	Dummy variable equals 1 if the position of CEO and chairperson of the board is held by the same person, 0 otherwise	[16,26,27,39,42,61]
	CEO tenure	The number of years since a CEO has been in position	[7,15,16,26,51,58]
Corporate Social Responsibility Committee	CSR Committee	Dummy variable equals 1 if the company has a CSR Committee, 0 otherwise	[2,8,16,40,42]

).

3.3. Methodology

As discussed above, conventional empirical research analyzes the statistical significance of interrelationships between key independent variables and the dependent variable [52] rather than a combination of variables [62]. In this manuscript, we apply the fsQCA methodology proposed by Ragin [63] to identify patterns of association or causal configurations that validate the presence of outcome variables [64,65]. fsQCA, a variant of the qualitative comparative analysis (QCA) method, defines the conditions that lead to configurations resulting in the outcome of interest. This methodology is suitable for examining the interconnections between good governance practices and CEO profiles (antecedent conditions), grouped as bundles (configurations), that drive ESG performance (outcome) [9], considering that only one dimension is insufficient for creating an effective governance mechanism.

fsQCA integrates the fuzzy set theory proposed by Zadeh [66] with the principles of Boolean logic to identify and test combinations of conditions to determine which are necessary or sufficient to cause an outcome of interest [59]. The fsQCA steps are summarized in Figure 2.

As discussed in previous sections, the first step involves designing the configurational model and selecting the sample. In this step, a counterfactual analysis is recommended to detect possible asymmetric associations contrary to those represented by the regression models, which confirms the need for a configurational analysis [67].

Second, the original data (outcome and conditions) must be treated as fuzzy sets, and the membership functions for all of them must be determined (calibrating the fuzzy sets). Calibration is a critical step because its results are used in the rest of fsQCA. The direct method is the most used and recommended calibration method [68]. In this method, the fsQCA practitioners specify three breakpoints that structure the fuzzy membership scores: fully in $\left(x_3\right)$ or fully out $\left(x_1\right)$ of the set and the point of maximum ambiguity (crossover point, $x_2$) [69]. The use of these three breakpoints results in the following S-shaped membership function, $\mu (x)$ (see Figure 3):

$$\mu \left(x\right)=\{\begin{array}{cc}0& ifx\le x_1\\ {\displaystyle \frac{x-x_1}{2\left(x_2-x_1\right)}}& if{x}_1<x\le x_2\\ {\displaystyle \frac{1}{2}}+{\displaystyle \frac{x-x_1}{2\left(x_2-x_1\right)}}& if{x}_2<x<x_3\\ 1& if{x}_3\le x\end{array}$$

(1)

Ragin [68] estimates the S-shaped membership function via the log-odds:

$$\log -odds(x)=\log \left({\displaystyle \frac{\mu (x)}{1-\mu (x)}}\right)$$

(2)

where $\mu (x)$ is the membership function of a fuzzy set. The odds of membership are the ratio of the membership of being in a fuzzy set over the membership of not being in one: $odds-\mu (x)={\displaystyle \frac{\mu (x)}{1-\mu (x)}}$. Working with the log-odds metric has advantages because it is a symmetric metric centered around 0 and has no upper or lower boundary (see

Table 2. Mathematical translations of verbal labels.

Verbal Label	$\mathit{\mu }$	$\mathit{o}\mathit{d}\mathit{d}\mathit{s}-\mathit{\mu }$	$\mathbf{l}\mathbf{o}\mathbf{g}-\mathit{o}\mathit{d}\mathit{d}\mathit{s}$
Full membership	0.993	141.86	5
Threshold of full membership	0.953	20.28	3
Crossover point	0.5	1.00	0
Threshold of full nonmembership	0.047	0.05	−3
Full nonmembership	0.007	0.01	−5

Note: We round the values of column four. For operational reasons, the membership scores 1.0 and 0.0 cannot be considered in the full membership and full non-membership verbal labels. These two membership scores would correspond to positive and negative infinity, respectively, for the log-odds. Source: Ragin [68].

).

Observe that when the Ragin logistic function is used, the breakpoints $x_1$ (the threshold for full non-membership) and $x_3$ (the threshold for full membership) are located at membership grades of 0.05 and 0.95, respectively, and the membership of the crossover point is 0.5. Once these three important breakpoints have been selected, it is possible to calibrate the degree of membership in the outcome or conditions using the following formula (see Figure 4):

$$\mu \left(x\right)=\{\begin{array}{cc}{\displaystyle \frac{\exp \left(\frac{-\left(\log -odds\left(x_1\right)\right)\left(x-x_2\right)}{x_2-x_1}\right)}{1+\exp \left(\frac{-\left(\log -odds\left(x_1\right)\right)\left(x-x_2\right)}{x_2-x_1}\right)}}& ifx<x_2\\ {\displaystyle \frac{\exp \left(\frac{\log -odds\left(x_3\right)\left(x-x_2\right)}{x_3-x_1}\right)}{1+\exp \left(\frac{\log -odds\left(x_3\right)\left(x-x_2\right)}{x_3-x_1}\right)}}& ifx\ge x_2\end{array}$$

(3)

Although we have chosen to calibrate all values following the logistic function of Ragin [68] in this study, it should be noted that other linear and non-linear membership functions can be used [70].

The best practice for establishing the three cut-off points is to rely on theory whenever possible [11,71]; otherwise, we should rely on the sampling distribution [72].

We rely on the recommendations of the GGC [6] regarding the following board attributes: size (BS), independence (BI), meetings (BM), gender diversity (BG), and tenure (BT). Therefore, the calibration process is performed according to these guidelines, for which their values have been discussed above. Using the calibrated values, we create our GGC variable, which reflects the degree of compliance with these recommendations, as follows:

$$\mathrm{GGC}=fuzzyand\left(\mathrm{BS},\mathrm{BI},\mathrm{BM},\mathrm{BG},\mathrm{BT}\right)$$

(4)

Then, the degree of membership for this GGC variable is obtained as follows:

$${\mu }_{\mathrm{GGC}}(x)=\min \left({\mu }_{\mathrm{BS}}(x),{\mu }_{\mathrm{BI}}(x),{\mu }_{\mathrm{BM}}(x),{\mu }_{\mathrm{BG}}(x),{\mu }_{\mathrm{BT}}(x)\right)$$

(5)

Without a theoretical basis, the antecedent conditions of CEO age, CEO tenure, and the outcome variable (ESG) are calibrated following the direct method [65,67]. Specifically, the 95th (full member), 50th (crossover point), and 5th (not full member) percentiles are set as the three cut-off points [7,27]. Crisp sets (1 completely in and 0 completely out) are applied to calibrate CEO duality and the presence of the CSR Committee.

Table 3. Calibration thresholds.

		Fully In	Cross-Over	Fully Out
ESG		87	65	32
Good Governance Code	Board size	15	12	5
	Board independence	66%	50%	33%
	Board meetings	≥8
	Board gender diversity	30	25	16
	Board tenure			>12
CEO attributes	CEO age	70	56	46
	CEO tenure	23	7	1
	CEO duality	1		0
CSR Committee	CSR Committee	1		0

shows the thresholds used for the membership of all variables.

Third, with the calibrated data, a Boolean truth table with $2^k$ rows (k represents the number of causal conditions) is constructed. This truth table shows the possible configurations or combinations of antecedent conditions. The different observations or cases are sorted into the rows of this table based on their scores on the variables. For each observation score $x^j$ and for each variable i, only two possible values are assigned:

$${\mu }_i^{*}\left(x^j\right)=\{\begin{array}{cc}1& {\mu }_i(x^j)\ge 0.5\\ 0& {\mu }_i(x^j)<0.5\end{array}$$

(6)

Ragin [68] recommends avoiding using an exact membership score of 0.5 for causal conditions, as these cases are difficult to analyze. Therefore, following Fiss [70], we add 0.001 to all calibrated variables.

The truth table is reduced using the Quine–McCluskey Boolean minimization algorithm [69]. We set a consistency threshold of 0.80 to avoid including infrequent rare configurations and a proportional reduction in inconsistency scores (PRI) of 0.7 to avoid having simultaneous subset relations [73].

The fourth step is to obtain the solutions (or paths) that lead to the results. The analysis is conducted with the software fsQCA 4.0, developed by Ragin and Davey [74], which generates three solutions: complex, parsimonious, and intermediate. A complex solution includes all combinations of conditions when applying traditional logical operations. The parsimonious solution is based on simplifying assumptions and includes only the core conditions. The intermediate solution uses only a subset of these simplifying assumptions and, therefore, is the solution that is the most explanatory of the outcome. We construct the result table by combining intermediate and parsimonious solutions to show the core (appearing in both solutions) and peripheral (appearing only in the intermediate solution) conditions [11,67]. The former relates to the desired outcome based on strong evidence, whereas peripheral conditions are based on weaker evidence [65].

The goodness-of-fit of the solutions explaining the outcome scores is determined by the consistency and coverage indices. The former reflects the extent to which a causal configuration leads to a given outcome and is obtained via the following expression:

$$Consistency\left(X_i\le Y_i\right)={\displaystyle \frac{{\displaystyle \sum \left(\min \left(X_i,Y_i\right)\right)}}{{\displaystyle \sum X_i}}}$$

(7)

where $X_i$ is the membership score for a combination of conditions, and $Y_i$ is the membership score for the outcome. Coverage refers to the extent to which an outcome is explained by a given causal configuration [15], and it is calculated as follows:

$$Coverage\left(X_i\le Y_i\right)={\displaystyle \frac{{\displaystyle \sum \left(\min \left(X_i,Y_i\right)\right)}}{{\displaystyle \sum Y_i}}}$$

(8)

Once the minimum frequency and consistency thresholds are established, cases that do not meet them are removed from the analysis.

Finally, in the fifth step, a robustness test of the fsQCA findings is performed as a recommended complement.

4. Results

4.1. Descriptive Statistics and Correlation Analysis

Table 4. Descriptive statistics and the correlation analysis.

		Average	SD	Min	Max	1	2	3	4	5	6	7	8	9	10
1	ESG	63.05	17.55	10.81	90.20	1
2	Board size	11.49	2.88	5	18	0.295 **	1
3	Board independence	48.13	14.64	14.29	80	0.371 **	−0.059	1
4	Board meetings	10.90	4.02	3	28	−0.041	0.029	−0.049	1
5	Board gender	23.65	10.08	0	46.15	0.097	0.114	0.199 **	0.104	1
6	Board tenure	7.29	3.64	1.11	17.78	0.006	−0.025	−0.157 *	−0.292 **	0.102	1
7	CSR Committee	0.77	0.42	0	1	0.330 **	−0.082	0.066	−0.159 *	0.041	0.065	1
8	CEO age	56.05	6.99	40	75	0.101	0.105	−0.043	0.155 *	0.053	0.252 **	−0.113	1
9	CEO tenure	0.48	0.50	0	1	0.185 *	−0.044	0.082	0.485 **	−0.15	0.212 **	−0.064	0.297 **	1
10	CEO duality	9.12	7.34	1	35	0.137	0.189 *	0.078	0.068	−0.036	0.163 *	−0.083	0.186 *	0.104	1

Note: * p 0.05; ** p 0.01.

shows the descriptive statistics of the variables considered in this paper. The average ESG score is 63.05, which corresponds to a “B” grade, according to Refinitv. A “B” score indicates good relative ESG performance and an above-average degree of transparency in reporting material ESG data publicly. The minimum value corresponds to 10.81, which would be a “D” score, i.e., poor relative ESG performance and insufficient degree of transparency in reporting material ESG data publicly. A maximum of 90.20 is an “A” score, which corresponds to an excellent relative ESG performance and a high degree of transparency in reporting material ESG data publicly.

According to Woodside [62], the correlation analysis suggests asymmetrical relationships contrary to those represented via correlation and multiple regression analysis, justifying the need to implement a configurational analysis. The same antecedent condition may contribute to a positive, negative, or even null form of achieving high ESG scores depending on the presence or absence of others. The same suggestion is obtained in the following section on the analysis of contrary cases.

4.2. Contrarian Case Analysis

As a preliminary step to the fsQCA, a contrarian case analysis is often recommended [75,76] to detect the number of cases in the sample that are not explained by the main effects. Following Pappas and Woodside [67], we create quintiles for all variables, except for dichotomous variables, and perform cross-tabulations. The results are shown in Appendix A (Figure A1). Each antecedent condition may contribute to high and low ESG scores, suggesting asymmetric associations contrary to those represented by regression models [62], justifying the need to implement a configurational analysis. For example, considering the GGC recommendations, 27.98% of the sample consisted of the opposite cases: 13.69% (23 companies) that do not follow the GGC guidelines (quintiles 1 and 2) achieve high or very high ESG scores (quintiles 4 and 5), and 14.29% of those that follow it (24 companies) obtain low or very low ESG scores. We observe the same results for the remaining antecedent conditions.

4.3. Analysis of Necessary Conditions

A condition is considered necessary if it must always be present each time an outcome occurs [77].

Table 5. Necessary conditions analysis.

Conditions	High ESG Performance		Low ESG Performance
	Consistency	Coverage	Consistency	Coverage
Good Governance Code	0.26	0.89	0.18	0.60
~Good Governance Code	0.88	0.53	0.97	0.55
CSR Committee	0.85	0.56	0.69	0.44
~CSR Committee	0.14	0.33	0.31	0.67
CEO age	0.64	0.70	0.60	0.63
~CEO age	0.66	0.63	0.72	0.65
CEO duality	0.52	0.56	0.43	0.44
~CEO duality	0.48	0.46	0.57	0.54
CEO tenure	0.65	0.71	0.55	0.58
~CEO tenure	0.61	0.59	0.72	0.67

Note: The symbol (~) represents the negation of the antecedent condition.

presents the results. A consistency of greater than 0.90 [69] and coverage of greater than 0.60 [78] are simultaneously required for a condition to be considered necessary. Thus, it can be inferred that no single mechanism can serve as a necessary condition for the outcome (high or non-high ESG score).

4.4. Sufficiency Analysis for High ESG Performance

Based on our proposed model (Figure 2),

Table 6. fsQCA findings for the model ESG = f (GGC, CSR Committee, CEOA, CEOD, CEOT).

		ESG		E			S			G
Configurations	C1	C2	C3	C1	C2	C4	C1	C2	C5	C1	C2	C3
Good Governance Code	●	●		●	●		●	●		●	●
CSR Committee	●	●	●	●	●	●	●	●	●	●	●	●
CEO age			⊗			●			⊗			⊗
CEO duality	●		●	●		●	●			●		●
CEO tenure		●	●		●	⊗		●	●		●	●
Raw coverage	0.15	0.20	0.18	0.16	0.19	0.16	0.39	0.14	0.19	0.14	0.20	0.18
Consistency	0.95	0.99	0.89	0.97	0.97	0.86	0.90	0.94	0.97	0.88	0.94	0.90
Solution coverage:			0.31			0.29			0.45			0.30
Solution consistency:			0.92			0.91			0.89			0.88

Note: ● indicate high presence of a condition; ⊗ indicate negation of a condition (high non-membership in the condition); large circles indicate a core-necessary condition of presence or absence; small circles indicate a peripheral (not necessary) condition; blank spaces indicate the condition can be either present or absent (“don’t care”).

shows four groups of sufficient conditional configurations. The first represents three distinct pathways to achieve high ESG scores, whereas the others show the configurations for each ESG dimension. Notably, a CSR Committee is present in all configurations. A solution is considered informative or valid if the consistency is above 0.74 and the coverage is between 0.25 and 0.65 [62]. The overall solution consistency for all sets is above 0.87, and coverage is between 0.29 and 0.44, indicating that they meet the recommended thresholds.

Contrasting with the generalized results of previous studies, the configurational analysis shows that one particular CG mechanism may have a positive, negative, or neutral effect on ESG performance. For instance, high GGC compliance appears in 2 of 5 pathways predicting high ESG scores globally and for each E, S, and G level, with positive effects in configurations C1 and C2 and no effect in configurations C3, C4, and C5. Similarly, the presence of CEO duality (i.e., configurations C1, C3, and C4) and its absence (i.e., configurations C2 and C5) contributes positively to high ESG performance globally and for each E, S, and G level. Early or later CEO tenure and a younger and older CEO can both contribute positively to high E-S-G disclosure levels. Finally, a CSR Committee is present in all configurations, emphasizing the importance of board-level sustainability committees as an effective mechanism for achieving ESG performance.

The first pathway (C1) suggests that firms following GGC recommendations, establishing a CSR Committee, and having a dual CEO profile will result in high ESG performance globally and for each specific dimension.

The C2 configuration offers an alternative pathway: companies that follow GGC recommendations, establish a CSR Committee, and have a long-tenured CEO achieve high ESG scores globally and for each E, S, and G level.

The C3 pathway shows companies possessing a CSR Committee, with a younger CEO chairing the board and with a longer tenure, promoting the G dimension.

The C4 configuration suggests that a CSR Committee is required in addition to an older and dual CEO profile with a shorter tenure to achieve high scores relative to the E dimension.

Lastly, the C5 pathway indicates an alternative configuration focused on establishing a CSR Committee and having a younger CEO profile but with a longer tenure to yield high scores in the S dimension.

Notably, CEO duality is either present in all configurations or does not matter, indicating that duality is not always a bad attribute [27].

The fsQCA analysis conducted in this study demonstrates that complying with GGC is not sufficient for achieving high ESG scores; the ultimate effect depends on how it interacts with heterogeneous CEO profiles and the presence of a CSR Committee. These findings allow us to reject Hypothesis H1 and confirm Hypothesis H2. Moreover, the configurations obtained differ depending on whether the firm wants to achieve high ESG scores overall or within a particular pillar.

4.5. Bundles of Corporate Governance Practices

Based on the configurations’ common and divergent aspects, we draw two bundles of CG practices based on two dimensions: (1) whether the company follows the GGC recommendations [6] and (2) CEO characteristics (

Table 7. CEO profiles based on the Good Governance Code.

		CEO Duality	CEO Tenure	CEO Duality and Tenure
Bundle 1	CSR Committee	ESG	ESG
	High GGC Compliance	E, S, and G	E, S, and G
		(C1)	(C2)
Bundle 2	CSR Committee	E	S	G
	GGC Neutral	(C4)	(C5)	(C3)
		Older CEO	Younger CEO	Younger CEO

Note: C1–C5 are the configurations in Table 6.

). Following Aguilera et al. [14], multiple CG mechanisms interact with each other, shaping a “bundle of governance mechanisms”. Similarly, Misangyi and Acharya [71] identified complementarity and substitution effects between board mechanisms. For companies with high GGC compliance and a CSR Committee (Bundle 1), we identify two CEO attributes (CEO duality in C1 or CEO with extended tenure in C2) as drivers of ESG practices or any of its dimensions. In contrast, when the company has a CSR Committee but following the GGC recommendations does not matter, the CEO’s profile becomes a key antecedent as a combination of several attributes (Bundle 2). Our analysis reveals three distinct CEO profiles within Bundle 2 that improve the scores of each E, S, and G pillar. The first is configured by a dual, younger, and extended-tenure CEO (C3) to improve G pillar scores. The second CEO profile refers to an older, dual CEO with a shorter tenure (C4) to yield high scores on the E dimension. Finally, the C5 profile refers to a younger CEO with extended tenure, regardless of whether they are the chairman, in relation to the S pillar. The joint effect of the CEO attributes provides significant results under the concept of a profile [7].

4.6. Sufficiency Analysis for Non-High ESG Performance

A standard of good practice in fsQCA studies is to separately analyze the configurations for the presence and absence of an outcome [73]. The fsQCA methodology is in Boolean algebra; therefore, it assumes that the occurrence of an outcome will be caused by conditions other than those that produce the absence of the outcome. The results (

Table 8. fsQCA findings for the negation of outcome ~ESG = f (GGC, CSR Committee, CEOA, CEOD, CEOT).

	~ESG			~E			~S			~G
Configurations	s1	s2	s3	s1	s2	s3	s1	s2	s3	s3	s4	s5	s6
Good Governance Code	⊗	⊗	●	⊗	⊗	●	⊗	⊗	●	●	⊗	⊗	⊗
CSR Committee	⊗	⊗	⊗	⊗	⊗	⊗	⊗	⊗	⊗	⊗	⊗	⊗	⊗
CEO age	⊗		●	⊗	⊗	●	⊗		●	●		●	⊗
CEO duality		⊗	●		⊗	●		⊗	●	●	⊗
CEO tenure		⊗	●		⊗	●		⊗	●	●		⊗	●
Raw coverage	0.19	0.10	0.03	0.20	0.09	0.03	0.20	0.10	0.03	0.03	0.14	0.13	0.12
Consistency	0.92	0.93	1	0.93	0.88	0.96	0.91	0.89	1	1	0.75	0.91	0.92
Solution coverage:			0.22			0.22			0.23				0.24
Solution consistency:			0.90			0.89			0.88				0.79

Note: ● indicate high presence of a condition; ⊗ indicate negation of a condition (high non-membership in the condition); large circles indicate a core-necessary condition of presence or absence; small circles indicate a peripheral (not necessary) condition; blank spaces indicate the condition can be either present or absent (“don’t care”).

) show that the configurations obtained differ from those found for high ESG scores, confirming causal asymmetry. The absence of a CSR Committee in all configurations is noteworthy. In each configuration, we also observe the heterogeneous profiles of the CEO and the presence or absence of GGC compliance.

4.7. Robustness Analysis for Sufficiency

We perform several robustness tests to verify the validity of the proposed model. First, a paradoxical relationship may occur if a causal configuration is sufficient for either the outcome (ESG, Table 6) or its negation (~ESG) [79]. Therefore, an algorithm must be implemented to negate the outcomes [80]. The results (

Table 9. Analysis of sufficient conditions for the negation of the outcome (~ESG).

Negation ESG	2018–2020
	Coverage	Consistency
Configuration C1 (Good Governance Code * CSR Committee * CEO duality)	0.07	0.44
Configuration C2 (Good Governance Code * CSR Committee * CEO tenure)	0.11	0.53
Configuration C3 (CSR Committee * ~CEO age * CEO duality * CEO tenure)	0.12	0.59

Note: (*) represents the logical ‘and’ condition, (~) represents the negation of the outcome, underlined conditions indicate a core condition, and non-underlined conditions indicate peripherical conditions.

) show that the three causal configurations for high ESG lack sufficient consistency or coverage for non-high ESG.

Second, the association of sufficiency between the casual configuration and outcome may be as robust as the association of sufficiency between the negation of the casual configuration and outcome [80]. The results (

Table 10. Analysis of sufficiency for the negation of the causal condition.

ESG	2018–2020
	Coverage	Consistency
Negation configuration C1 ~(Good Governance Code * CSR Committee * CEO duality)	0.05	0.28
Negation configuration C2 ~(Good Governance Code * CSR Committee * CEO tenure)	0.08	0.38
Negation configuration C3 ~(CSR Committee * ~CEO age * CEO duality * CEO tenure)	0.03	0.51

Note: (*) represents the logical ‘and’ condition, (~) represents the negation of the outcome, underlined conditions indicate a core condition, and non-underlined conditions indicate peripherical conditions.

) are outside the recommended ranges of consistency and coverage, which rules out conflicts.

Finally, we test robustness by changing the anchor point of the calibration data [73] using the 80-50-20 percentiles. The results (

Table 11. Robustness test: Sufficiency analysis for high ESG performance.

	ESG			E			S		G
Configurations	s1	s2	s3	s1	s2	s3	s1	s3	s1	s2	s3
Good Governance Code	●	●		●	●		●		●	●
CSR Committee	●	●	●	●	●	●	●	●	●	●	●
CEO age			⊗			⊗		⊗			⊗
CEO duality	●		●	●		●	●	●	●		●
CEO tenure		●	●		●	●		●		●	●
Raw coverage	0.19	0.31	0.20	0.18	0.29	0.19	0.19	0.20	0.18	0.29	0.20
Consistency	0.95	0.98	0.90	0.95	0.94	0.87	0.95	0.92	0.92	0.95	0.92
Solution coverage:			0.39			0.37		0.25			0.37
Solution consistency:			0.92			0.90		0.91			0.91

Note: ● indicate high presence of a condition; ⊗ indicate negation of a condition (high non-membership in the condition); large circles indicate a core-necessary condition of presence or absence; small circles indicate a peripheral (not necessary) condition; blank spaces indicate the condition can be either present or absent (“don’t care”).

) indicate no significant differences with respect to the 95-50-5 percentiles.

5. Discussion

To achieve high ESG scores, a substitutive relationship among the C1, C2, C3, C4, and C5 pathways shapes different bundles of governance practices. This suggests that following GGC recommendations, forming a CSR Committee and a particular CEO characteristic does not necessarily need to coexist simultaneously to improve ESG performance. This finding shows that firms within their own national governance environment have different CG practices [81], supporting the theory of corporate heterogeneity and confirming that the “one size fits all” principle is utopian [82].

5.1. CSR Committee as the Critical Component

When examining the common factors across C1 to C5 pathways (Table 6), the CSR Committee is present in all configurations and is a core condition. Therefore, this component can be considered the key to high ESG performance over time. In line with previous work [10,39], companies with a CSR Committee are more sustainable than those without such a committee. Conversely, Villalba-Ríos et al. [7] suggest that the presence of a sustainability committee had no impact on high CSR. Moreover, Burke et al. [2] found that the committee should focus on a particular stakeholder group’s interest (i.e., social or environmental). In contrast, our findings reveal that a CSR Committee is linked to high ESG both globally and for each E, S, and G dimension.

5.2. The Complementary Relationship between the Creation of a CSR Committee and High GGC Compliance

Despite the critical role of the CSR Committee in ESG performance, it does not lead to the outcome on its own. The ultimate effect stems from the combination of other conditions. More specifically, we find a previously unidentified complementary relationship between the GGC and CSR Committee (coexist in C1 and C2 configuration). This suggests that high GGC compliance, joined with a CSR Committee, synergizes in achieving high ESG performance globally and for each E, S, and G dimension. This conclusion is consistent with the study by Yang et al. [10]. They propose that certain CG mechanisms work together to promote corporate sustainability practices. According to Jamali et al. [22], following good governance practices has become a fundamental tool for CSR. Additionally, Radu and Smaili [38] or Chen et al. [83] suggest that a CSR Committee facilitates reviewing compliance with sustainable practices.

5.3. The Substituted Relationship between CEO Duality and CEO Tenure

In addition to the complementary relationship between GGC and the CSR Committee, we found that the ultimate effect depends on CEO features. Our results align with those of other studies that suggested that a CSR Committee interacts with CEO attributes [16]. According to the upper echelons theory, CEO characteristics are central to strategic decisions and influence CSR engagement [15]. Furthermore, our configurational analysis reveals a substitutional relationship between CEO duality and CEO tenure (C1 and C2 pathways, respectively). This suggests that the relative power of the expert CEO resulting from a long tenure may compensate for a lack of formal structural power (CEO duality). A powerful CEO tends to use CSR as a tool to improve their image and become more successful [1,20]. From a resource-based perspective, a longer CEO mandate contributes to a better understanding of the company and helps develop ESG practices more efficiently [26]. Our findings show that the CEO’s power (formal or informal) reinforces companies with CSR committees and high-quality CG practices.

5.4. The Relative Importance of Antecedent Conditions Configuring Corporate Governance Bundles to Improve E-S-G Practices

Our analysis also reveals the relative importance of the antecedent conditions. In this regard, CEO attributes become peripheral or trivial when high GGC compliance is complemented by the presence of a CSR Committee. This corporate mechanism (Bundle 1) demonstrates that when the CSR Committee and GGC complement each other, the effect on ESG is more relevant than the effect of CEO profile, requiring either (a) CEO duality or (b) extended CEO tenure. Both attributes are considered substitutes, and it is unnecessary to design CEO profiles as a combination of several CEO features. Our findings confirm that the complex relationships between CEO attributes and board characteristics affect CSR [12,28] and differ from those of Villalba-Ríos et al. [7], who argue that the CEO profile is always simultaneously configured around several attributes to achieve high CSR performance.

Conversely, a CEO profile becomes more important (is a core condition) for companies complying with good governance recommendations neutrally (indifference). Thus, a CEO profile can compensate for non-compliance with the GGC. Furthermore, the fsQCA analysis reveals a substitution effect between GGC and CEO profiles to achieve ESG globally and for each ESG pillar for companies with a CSR Committee (Bundle 2). Specifically, the CEO profile is the same for achieving high global ESG scores and in the G dimension, in line with the literature claiming that CG variables are directly included in calculating the G pillar [84]. This CEO profile is dual, younger, and with extended tenure (pathway C3). According to Pathan [85], later tenure and duality give the CEO greater power. In contrast, Güngör and Şeker [46] find that CEO duality has a negative and significant relationship with ESG, S, and G performance for listed companies. Hussain et al. [49] state that young CEOs are more likely to invest in sustainable activities. Currently, pathway C5 illustrates that the CEO profile is configured as a younger CEO with extended tenure regardless of whether they are the chairman. This suggests that career horizon could not be problematic to organizations to young top managers with long tenure.

Observing dimension E, the CEO profile is configured as an older individual with a shorter tenure and dual (C4 configuration). Shahab et al. [52] suggest that older CEOs are less pressured by their career goals and are more willing to contribute to society. In contrast to Oh et al. [86], older CEOs with shorter career horizons are not less motivated to engage in CSR. The reason for this is that CEOs’ managerial discretionary powers could be fueled by duality and age to engage in ESG, specifically in the E pillar, which requires high operating costs [87].

Contrasting with the generalized results of previous studies is not a test of whether the results provide support for experience-based human capital vs. fixed paradigm view [26] or for the career concern hypothesis vs. the career horizon hypothesis [83] for achieving sustainable development. The interactions and interdependencies among CEO attributes and various CG mechanisms contribute to a synergistic system in practice [10].

In summary, ESG performance is best explained by collective profile configurations that combine CEO profiles and board attributes, resulting in multiple board design strategies [7]. The relevance of heterogeneous CEO profiles in promoting sustainable practices shows that the individual analysis of CEO attributes may be incomplete, highlighting the need to consider their interdependence [12].

5.5. Contributions and Implications

This study contributes to the literature on CG and ESG in several ways. First, we join the growing literature that suggests an analysis of the possible interrelation of board attributes and their joint influence on ESG performance (see, e.g., [8,15]). According to Bolourian et al. [16], the configurational analysis allows us to corroborate the principles on which the theory of complexity is based: (i) Complexity is verified as the final effect (positive, negative, or neutral) on the ESG score and its ESG dimensions depends on how CG practices CSRC and how CEO profiles interact with each other; that is, it differs on their simultaneous presence or absence; (ii) the same ESG score, overall and in each dimension, can be achieved through different configurations, which confirms the principle of equifinality; (iii) following the same CG practices and the CEO profile can contribute to both high and low ESG scores overall and for each ESG dimension, corroborating the asymmetry principle; (iv) the configurations associated with high ESG scores at the global level and for each dimension are not the mirror opposite of those associated with low scores, as established by the principle of causal asymmetry. Our holistic perspective, rather than an isolated analysis of each CG practice, provides a more comprehensive analysis. Previous research considered the idea of governance bundles on financial performance [88], onboard remuneration [29], or onboard attention structures [89]. We bridge the research gaps identified in previous studies in the field with respect to the impact on ESG performance.

Second, we contribute to the literature on the CSR Committee by investigating the understudied aspects of considering their interactive effects with other board attributes [16]. Third, we advance the research on CEO profiles as a set of attributes rather than as a single CEO characteristic [7,15]. The fsQCA methodology allows us to confirm the CG bundling hypothesis [14,73,88] and is in line with the idea that “one-size-fits-all” board governance is not the best approach [82]. These findings support the theory of firm heterogeneity, which posits that firms within a national governance environment follow different CG practices [81]. Finally, in line with scholars who recognize the multidimensional nature of ESG [2,8], we present different configurations depending on the specific ESG dimensions examined.

From a practical perspective, identifying alternative bundles of CG practices helps companies understand how these attributes interact. Managers may select among the five pathways identified in this study, considering corporate governance attributes and CEO profile interactions and interdependencies. There are complementary relationships between sustainability committees and good governance compliance and substitutional relationships between CEO age and CEO tenure for GGC-neutral firms. Specifically, a younger CEO may compensate for the lack of higher tenure flexibility and improve the S dimension, and they must also chair a board if they want the G pillar to increase. This suggests that young and long-tenured CEOs will promote the G and S dimensions more actively. However, improving the E pillar requires a more flexible (short tenure), older, and dual CEO profile.

Our results also provide guidance to policymakers on improving companies’ ESG practices. This research underscores the idea that “one-size-fits-all” board governance is not the best approach, allowing for greater flexibility in establishing differentiated and adaptable policies to improve corporate governance mechanisms. We emphasized the importance of regulatory efforts in developing good governance recommendations and encouraging companies to create a CSR Committee at the board level to promote ESG performance.

5.6. Limitations and Future Directions

This study has some limitations. First, due to legislative connotations, it focuses on Spanish-listed companies. Hence, the results can only be generalized to that environment, as we used the CNMV’s recommendations to calibrate the study’s variables. Nonetheless, we believe that the study methodology can be applied to other countries by adapting each case to specific legislation. Next, the data are limited to those obtained from the databases used. An interesting future research area is to compare data from these sources, especially regarding ESG scores, to those from alternative agencies. This can help enrich and validate our results. Finally, the fsQCA methodology only analyzes a limited number of antecedent conditions [69]. Considering the additional attributes of the CEO, such as education, gender, internal or external origin of the CEO, or experience on other boards, may provide more insight into the CEO profile. Similarly, incorporating other factors that reveal more information about the CSR Committee, such as its composition, size, objectives, or number of meetings, could provide meaningful insights.

6. Conclusions

Recently, scholars have begun to analyze how corporate governance mechanisms can interact with each other, working together to improve ESG performance. This study adds to the line of research by offering unique findings of good CG practices, establishing a CSR Committee, and identifying CEO characteristics in ESG. Applying fsQCA, we demonstrate that these studied attributes cannot be analyzed separately, as more than one combination or configuration can result in high or low ESG performance. The same attribute can exert a positive, negative, or even irrelevant effect on achieving high ESG scores depending on the presence or absence of others. We discovered the importance of a CSR Committee and alternative CG bundles. Specifically, high GGC compliance, joined with a CSR Committee, synergizes with achieving high ESG performance globally and for each E-S-G dimension. Concurrently, alternative CEO profiles may compensate for a lack of GGC following, providing companies with more flexibility in CEO selection. The findings indicate three CEO profile configurations for GGC-neutral firms. Two of them indicate that younger CEOs with longer tenure tend to be more motivated to engage in G and S pillars. The third profile indicates that CEOs of an older age and early tenure should improve the E pillar.

We hope that our paper inspires future researchers to consider the synergistic potential of corporate governance mechanisms with respect to more effective sustainability practices.