Environmental Dimension in Corporate Governance Practices. Empirical Evidence from an International Perspective

Recently, the type and the extent of sustainability information disclosed by organizations to shareholders, potential investors and other stakeholders have produced a relevant positive impact on several internal and external factors and determinants within companies (Cooper and Owen, 2007; Holder-Webb et al., 2009). The development of sustainability reporting as well as the boost of Corporate Social Responsibility (CSR) practices (FEE, 2008; KPMG, 2008, 2013; CR Perspectives 2013. Global CR Reporting Trends and Stakeholder Views, November 2013; Eurosif and ACCA, 2013; ACCA, 2015) should not be seen as a concern isolated from the main organizational performance (Cheng et al., 2015) or as a mere operation of impression management (Hooghiemstra, 2000; Merck-Davies and Brennan, 2007; Melloni, 2015) or an activity of “greenwashing” (Lyon and Mawell, 2011) but as a part of the value-driving initiatives and management processes of organizations (Eccles and Krzus, 2010; Eccles et al., 2014). Recent collapses, corporate frauds and the crisis of investors’ confidence moved toward the development of ethical codes and the companies’ orientation to a more sustainable corporate governance model that is building up all over the world. The 21st Conference of the Parties (COP21) of the United Nations Framework Convention on Climate Change (UNFCCC) achieved an unprecedented agreement on limiting global warming and a key milestone in the global shift towards a better and more comprehensive nonfinancial corporate reporting about companies’ exposure to climate change for investors, credit rating agencies, insurers, and other users of Annual Reports (McInerney, Johannsdottir, 2016). Corporate Governance issues are included in the acronym ESG (Environmental Social and Governance) as the third component of non financial items. This aspect reveals the importance of governance issues in nonfinancial reporting as recent trends in the development of corporate governance codes have shown, especially in emerging countries such as South Africa (Rossouw, 2005; https://integratedreporting.org/news/2018-address-by-judge-professor-mervyn-king-chairman-of-the-council-iirc/). Environmental and ecological dimension of corporate governance structure is becoming a key driver to improve changes in structuring responsibilities of board and the role of auditors (Kolk, 2008; Kock et al., 2012; Glass et al., 2016; Terlaak et al., 2018; Garcia-Sachez et al., 2019; Naciti, 2019). Given these premises, this research aims to investigate the relationships between corporate governance items at different levels (ownership, board and management) on firm environmental performance. The empirical analysis is focused on a sample of listed companies on the major stock markets in a worldwide perspective (Western and Eastern Europe, USA, emerging economies, Australia, etc.) mined from Bloomberg database. The data collection covers the period 2011-2018. This study adopts a multi-theoretical framework through the combination of three theories: legitimacy theory, stakeholder theory and resource-based view (RBV) theory in order to support our research hypotheses.