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Develay, E. 
ORCID: 0000-0003-4396-841X,
2023.
The effects of sustainable corporate governance mechanisms on CEOs’ incentives: evidence from the United States.
PhD, Nottingham Trent University.
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Abstract
Despite regulatory efforts to increase transparency and reduce corporate misconduct, environmental, social, and governance (ESG) failures persist, while society’s demand for more sustainability grows. This situation challenges the traditional role of accounting and corporate governance by pushing corporations to communicate more non-financial information alongside financial information. Accordingly, researchers have called for the development of an integrated corporate governance model to effectively disseminate information to all legitimate stakeholders while advancing sustainability objectives. This thesis seeks to address this pressing issue by examining the components of a corporate governance model that aligns with the principles of sustainability and evaluating the extent to which they influence chief executive officers’ (CEO) incentives. Through three empirical studies, it delves into the effects of three sustainable corporate governance mechanisms (regulation, CEO compensation, and the board of directors). Drawing on the stakeholder-agency theory, this thesis employs quantitative methods to analyse a sample of US listed companies from the Russell 3,000 index over the last decade. Chapter 5 examines the impact of regulation on CEO incentives by examining the mediating role of shareholder say on pay votes in the relationship between CEO-to-worker pay disparities and CEO compensation. Chapter 6 investigates the influence of the type of ESG targets (general or material) in CEO compensation contracts on corporate financial and non-financial performance. Chapter 7 studies the structure and effectiveness of sub-board corporate social responsibility (CSR) committees in shaping the inclusion of ESG targets in CEO compensation contracts. Findings reveal that these mechanisms enhance CEO accountability by ensuring the flow of information to all legitimate stakeholders, fostering relationships that align business models more closely with sustainability principles. However, they also have limitations and potential unintended consequences that require caution. Overall, this thesis demonstrates the importance of sustainable corporate governance in promoting success for all legitimate stakeholders by pushing CEOs to consider the interdependence between corporations, society, and the environment. This thesis contributes to the literature on corporate governance and sustainability by exploring the nuances of sustainable corporate governance and has theoretical and practical implications relevant for academics, practitioners, and regulators.
| Item Type: | Thesis | ||||||||||||
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| Creators: | Develay, E. | ||||||||||||
| Contributors: |
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| Date: | May 2023 | ||||||||||||
| Rights: | This work is the intellectual property of the author. You may copy up to 5% of this work for private study, or personal, non-commercial research. Any re-use of the information contained within this document should be fully referenced, quoting the author, title, university, degree level and pagination. Queries or requests for any other use, or if a more substantial copy is required, should be directed to the owner(s) of the Intellectual Property Rights. | ||||||||||||
| Divisions: | Schools > Nottingham Business School | ||||||||||||
| Record created by: | Jonathan Gallacher | ||||||||||||
| Date Added: | 24 Jan 2024 14:19 | ||||||||||||
| Last Modified: | 24 Jan 2024 14:19 | ||||||||||||
| URI: | https://irep.ntu.ac.uk/id/eprint/50727 |
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