"A literature review on corporate governance and ESG research: Emerging trends and future directions"

Authors:
Bruno Buchetti (dSEA Unipd)
Francesca Romana Arduino (LUISS University)
Salvatore Perdichizzi (dSEA Unipd)

This paper, published in the International Review of Financial Analysis, explores how corporate governance (CG)—the way companies are managed—impacts environmental, social, and governance (ESG) outcomes. The authors conducted a review of 91 academic articles published across 41 journals from 2010 to 2023, uncovering key factors that influence ESG performance.

The study found that certain elements contribute positively to ESG outcomes. These include having female directors, institutional investors, independent directors, CEO characteristics, executive compensation, and sustainability committees. On the other hand, family ownership appears to have a negative impact on ESG performance.

However, there are gaps in the research, such as the limited focus on directors' ESG expertise in specific sectors and the impact of CEO tenure. Most existing studies focus on financial firms and primarily rely on statistical methods. The authors suggest that future research should explore non-financial firms, especially in Europe, and consider alternative approaches, such as qualitative or mixed methods.

A deeper understanding of how corporate governance influences ESG performance is crucial for businesses, as it can help them improve sustainability and better address future challenges.

Read the full paper here