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Sustainable Corporate Governance, Strategy, and Risk Management

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 (31 December 2021) | Viewed by 28599

Special Issue Editor


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Guest Editor
School of Business Administration, Chung-Ang University, Seoul 06974, Korea
Interests: corporate governance; board of directors; CEO; shareholders; institutional investors; sustainable corporate strategy

Special Issue Information

Dear Colleagues,

Sustainability plays a key role in the development of new policies and regulations for financial markets. Investors, regulators, and private companies must work together to improve corporate transparency in financial markets and account for comparability measures across different markets. As a result, it is critical to further study sustainable corporate finance to properly model corporate financial decisions, develop innovative and effective financial instruments for investors, and create artificially intelligent agents in a firm.

In particular, a sound corporate governance environment is important not only for firms but also for society. Decent corporate governance improves the public’s faith and confidence in its corporate leaders. Legislative processes are designed to protect societies from known threats and prevent problems from occurring or reoccurring. Recent corporate scandals have shed light on corporations’ effect on social responsibility. This new focus on corporate social responsibility increases corporations’ responsibility and accountability to their stakeholders. Hence, firms have increasingly pressured themselves to improve best practices for corporate governance with the goal of enhancing their relationships with stakeholders.

As firms recognize their impacts on society, they create a sense of sustainability and accountability. Because sustainability strongly considers the future, sustainable operations are at the core of corporate social responsibility, as firms and society observe evidence of present and future changes. The recent global financial crisis, in which stakeholders experienced agency problems requiring sustainable corporate decisions, highlights the importance of corporate governance mechanisms that benefit key stakeholders in the long run. 

The aim of this Special Issue is to advance the understanding of the role of corporate governance and investment practices in establishing a firm’s sustainable internal and external environments. Specifically, this Special Issue is devoted to empirical and theoretical studies of these and other relevant positive and normative issues. Although submissions from a wide range of perspectives are welcome, this Special Issue will focus on some of the following topics: 

  • Sustainable corporate governance;
  • Sustainable board of directors;
  • Sustainable executive compensation;
  • Institutional investors and sustainability;
  • Sustainable corporate strategy;
  • Corporate financial decisions and sustainability;
  • Artificial intelligence and corporate finance;
  • Corporate social responsibility;
  • Controlling and minority shareholders;
  • Fiduciary duties and shareholder activism;
  • Socially responsible investing;
  • Sustainable investment and risk management;
  • Social entrepreneurship;
  • Strategic responses to social and environmental demands;
  • Sustainable accounting practices;
  • Regulatory authorities;
  • Business ethics.

Prof. Dr. Chune Young Chung
Guest Editor

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Sustainability is an international peer-reviewed open access semimonthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 2400 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • Corporate governance
  • Board of directors
  • Corporate executives
  • Shareholder activism
  • Institutional investors
  • Sustainable corporate strategy
  • Corporate social responsibility

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Published Papers (4 papers)

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Research

17 pages, 506 KiB  
Article
The Relationship between CFO Compensation and Corporate Sustainability: An Empirical Examination of German Listed Firms
by Mirko Profitlich, Yassin Denis Bouzzine and Rainer Lueg
Sustainability 2021, 13(21), 12299; https://doi.org/10.3390/su132112299 - 8 Nov 2021
Cited by 13 | Viewed by 4489
Abstract
In this paper, we analyze the relationship between Chief Financial Officer (CFO) compensation and Corporate Sustainability (CS) by relying on stakeholder-agent theory and institutional theory. Taking a closer look at the German DAX30 and MDAX firms for the business years 2014–2018 (313 firm-year [...] Read more.
In this paper, we analyze the relationship between Chief Financial Officer (CFO) compensation and Corporate Sustainability (CS) by relying on stakeholder-agent theory and institutional theory. Taking a closer look at the German DAX30 and MDAX firms for the business years 2014–2018 (313 firm-year observations), we perform regression and correlation analyses to determine if the different CFO compensation components are related to CS. Our analyses use the environmental, social, governance (ESG) performance as a proxy for CS, determined by the Asset Four database of Thomson Reuters and the CFO compensation data from the Beck et al. (2020) database, and reveal a positive relationship between CS and CFO compensation for pension and stock compensation. Based on our knowledge, this study is the first empirical study that takes a closer look at the relationship between the different CFO compensation components and CS for the German DAX30 and MDAX firms. This result comes with important implications concerning the design of CFO compensation and for future research. Full article
(This article belongs to the Special Issue Sustainable Corporate Governance, Strategy, and Risk Management)
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24 pages, 346 KiB  
Article
Diversity Matters: A Study on the Relationship between Board Career Diversity and Firm Performance
by Daniel Sungyeon Kim and Hong Kee Sul
Sustainability 2021, 13(17), 9674; https://doi.org/10.3390/su13179674 - 27 Aug 2021
Cited by 1 | Viewed by 3290
Abstract
Are shareholders better off hiring directors with in-depth specialties in the company’s core business or hiring directors with broader perspectives? This study addresses the question by investigating the relationship between directors’ career diversity and firm performance. It employs Tobin’s Q, total shareholder return, [...] Read more.
Are shareholders better off hiring directors with in-depth specialties in the company’s core business or hiring directors with broader perspectives? This study addresses the question by investigating the relationship between directors’ career diversity and firm performance. It employs Tobin’s Q, total shareholder return, and return on equity as measures of firm performance. Accordingly, board career diversity has a significant and positive effect on firm performance. Moreover, we find that board directors with diverse industry experiences create value for firms via advisory (e.g., R&D and capital expenditures) and monitoring (e.g., equity compensation) roles. Given that diversity in career matters, corporations can seriously consider board composition and promote career diversity among board members. Full article
(This article belongs to the Special Issue Sustainable Corporate Governance, Strategy, and Risk Management)
37 pages, 860 KiB  
Article
Factors Affecting Organizations’ Resistance to the Adoption of Blockchain Technology in Supply Networks
by Daeheon Choi, Chune Young Chung, Thou Seyha and Jason Young
Sustainability 2020, 12(21), 8882; https://doi.org/10.3390/su12218882 - 26 Oct 2020
Cited by 98 | Viewed by 17050
Abstract
From a supply chain perspective, new technologies such as blockchain can improve the efficiency and competitiveness of logistics and increase customer satisfaction. Although blockchain technology has been lauded as a way for firms to build sustainable supply chain networks, the rate of acceptance [...] Read more.
From a supply chain perspective, new technologies such as blockchain can improve the efficiency and competitiveness of logistics and increase customer satisfaction. Although blockchain technology has been lauded as a way for firms to build sustainable supply chain networks, the rate of acceptance of this technology remains low. Therefore, this study seeks to identify the factors that discourage firms from merging blockchain with the supply chain. Instead of providing further reasons for adopting blockchain technology, we try to understand what deters firms from adding blockchain to their operations. Following the deductive approach, a confirmatory factor analysis is conducted on pre-test questionnaires to test, improve, and verify the constructs (questions) to measure the hypothesized factors. A theoretical model is proposed based on the hypotheses, and structural equation modeling is applied. The results are estimated using the partial least squares approach and a sample of 83 respondents. Our findings based on our empirical data support most of our hypotheses. We find that various factors impede the adoption of blockchain technologies, including technological barriers, constraints rooted in organizations and the environment, and system-related governmental barriers. In addition, various factors are critical determinants of resistance to blockchain in the technological, organizational, and environmental dimensions. Full article
(This article belongs to the Special Issue Sustainable Corporate Governance, Strategy, and Risk Management)
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28 pages, 354 KiB  
Article
Disclosure Frequency, Information Environment, and Cost of Capital under Regulation Fair Disclosure in the Korean Market
by Hoshik Shim
Sustainability 2020, 12(14), 5856; https://doi.org/10.3390/su12145856 - 21 Jul 2020
Cited by 1 | Viewed by 2614
Abstract
Disclosure policy contributes to improve sustainable corporate information environment by mitigating information asymmetry surrounding companies. Economic theories generally support that more disclosures reduce the level of information asymmetry, increase stock liquidity, and thus decrease the costs of equity capital. However, the effect of [...] Read more.
Disclosure policy contributes to improve sustainable corporate information environment by mitigating information asymmetry surrounding companies. Economic theories generally support that more disclosures reduce the level of information asymmetry, increase stock liquidity, and thus decrease the costs of equity capital. However, the effect of corporate disclosure in emerging markets is not clearly predictable because of the potential information leakage prior to disclosure. Considering this issue, this study focuses on the Regulation Fair Disclosure which prohibits selective disclosure. Using the earnings-to-price ratio as a proxy of the costs of equity, the study finds that disclosure frequency is negatively related to the cost of equity capital. However, I do not find evidence that disclosure is negatively related to the implied costs of equity capital (ICOE). The results of the quintile analysis suggest that this inconsistency is attributable to the better information environment of the ICOE sample. The findings of this study have implications for disclosure regulations in emerging markets, given that the existing literature casts doubt on the effectiveness of corporate disclosure in such markets. Full article
(This article belongs to the Special Issue Sustainable Corporate Governance, Strategy, and Risk Management)
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