Corporate Governance for Sustainable Finance
A special issue of Sustainability (ISSN 2071-1050). This special issue belongs to the section "Economic and Business Aspects of Sustainability".
Deadline for manuscript submissions: closed (29 February 2024) | Viewed by 25192
Special Issue Editors
Interests: corporate governance; board gender diversity; asset pricing; effect of the economic environment on financial decisions
Interests: corporate governance; board gender diversity; corporate social responsibility reporting; environmental reporting; audit
Special Issues, Collections and Topics in MDPI journals
Special Issue Information
Dear Colleagues,
In 2015, the United Nations (UN) approved the 2030 Agenda with 17 Sustainable Development Goals (SDGs) and established a plan to achieve these goals within 15 years. However, the interest in companies’ environmental, ethical, and social performance began some years before, thereby displacing the interests of economic issues and highlighting the disclosure of non-financial company information. In this sense, companies with stronger corporate governance mechanisms will more likely guarantee transparency and ethics while continuing to generate earnings, while companies with weak corporate mechanisms may suffer pressure from stakeholders due to opportunistic managers on their board of directors, who can strategically exploit sustainable issues and information for their personal benefit. For this reason, companies demand internal and external mechanisms that may decrease the conflicts between agents and principals by minimizing information asymmetries between them and improving the transparency and quality of reporting.
Financial scandals and the international financial crisis have led to questions about the quality of financial information, Corporate Social Responsibility (CSR) policies, and company transparency. The lack of market confidence and investors has led to a substantial change in the corporate governance bodies of companies, whose efforts have shifted to improving CSR policies, corporate governance, sustainability, and the Sustainable Development Goals (SDGs).
Thus, sustainability has acquired a relevant role in wealth creation and long-term sustainable value without depleting resources, causing damage to the environment, or compromising the well-being of future generations (Weber, 2005). Sustainable finance is considered one of the most critical mechanisms encouraging the financial system to make positive changes. To do this, reference is made to issues related to the preservation of the natural environment, social aspects, and governance (ESG principles) when making investment decisions. On the one hand, the Sustainable Development Goals (SDGs) play a relevant role, being a means to establish a framework of international commitment to develop long-term policies and approaches involving different social and economic agents.
On the other hand, empirical research based on corporate goverance emphasizes the role of the Board of Directors (BD). In particular, the agency theory postulates that the separation between ownership and control generates information asymmetries because the company owners tend to delegate responsibilities to managers, generating agency problems (Jensen and Meckling, 1976). In this sense, firms have increased internal and external controls in order to reduce information asymmetries and agency costs and improve the transparency of financial and non-financial information. In this line, the composition of the BD is an important mechanism in mitigating or eliminating agency costs and aligning the interests of principals and agents (Kang et al., 2007). Following this approach, the inclusion of female directors on the BD could strengthen the existing control mechanisms over managers and executives, since gender diversity on the board increases the board's independence given the different leadership style of executive women (Carter et al., 2010), who are often more risk-averse (Byrnes et al. 1999), allowing them to more quickly detect opportunistic behavior (Khazanchi, 1995; Ruegger and King, 1992); they also have a tendency to behave more ethically than their male counterparts. In this sense, the previous literature shows that gender diversity influences the best corporate governance practices (Burgess and Tharenou, 2002) and the quality of financial information (Qi and Tian, 2012), among others. Thus, the presence of women in ACs can act as a control mechanism (Adams and Ferreira, 2009), which can reduce agency costs (Hillman and Dalziel, 2003) and consequently increase value creation.
We are pleased to invite you to contribute to this Special Issue, entitled “Transparency, Social Responsibility and Corporate Governance for Sustainable Development”, which aims to contribute to the current body of research with high-quality articles related to transparency, disclosure of information on sustainability, good corporate governance practices, sustainable development, etc. Papers can address various fields of interest, including, among others:
- Corporate governance;
- Corporate governance recommendations;
- Transparency of financial and non-financial information;
- Agency theory;
- Stewardship theory;
- Institutional theory;
- Board of Directors;
- Board gender diversity;
- Board subcommittes;
- Sustainable finance;
- Sustainable development;
- Sustainable Development Goals;
- Environment, Social, and Governance Principles (ESGs);
- Investment Sustainable Principles.
References:
Adams, R. B., & Ferreira, D. (2009). Women in the boardroom and their impact on governance and performance. Journal of Financial Economics, 94(2), 291-309.
Burgess, Z., & Tharenou, P. (2002). Women board directors: Characteristics of the few. Journal of Business Ethics, 37(1), 39-49.
Byrnes, J., Miller, D., & Schafer, W. (1999). Gender differences in risk taking: A meta-analysis. Psychological Bulletin, 125(3), 367–383.
Carter, et al. (2010). The Gender and Ethnic Diversity of US Boards and Board Committees and Firm Financial Performance. Corporate Governance: An International Review, 18(5), 396-414.
Hillman, A. J., & Dalziel, T. (2003). Boards of directors and firm performance: Integrating agency and resource dependence perspectives. Academy of Management Review, 28(3), 383-396.
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305-360.
Kang, H., Cheng, M., & Gray, S. J. (2007). Corporate governance and board composition: Diversity and independence of Australian boards. Corporate Governance: An International Review, 15(2), 194-207.
Khazanchi, D. (1995). Unethical behavior in information systems: The gender factor. Journal of Business Ethics, 14(9), 741-749.
Qi, B., & Tian, G. (2012). The impact of audit committees personal characteristics on earnings management: Evidence from China. Journal of Applied Business Research, 28(6), 1331-1344.
Ruegger, D., & King, E. W. (1992). A study of the effect of age and gender upon student business ethics. Journal of Business Ethics, 11(3), 179-186.
Weber, O. (2015). Finance and Sustainability. In Sustainability Science: An Introduction, edited by Heinrichs, H., Martens, P., Michelsen, G., and Wiek, A., 119–129. New York: Springer.
Prof. Dr. Alfredo Juan Grau Grau
Prof. Dr. Inmaculada Bel Oms
Guest Editors
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Keywords
- corporate governance
- gender diversity
- sustainable finance
- Sustainable Development Goals
- 2030 Agenda
- Corporate Social Responsibility
- transparency
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