Impact of board characteristics on firm green, sustainability and competitiveness performances

Abstract

This explores the association between corporate governance mechanisms and firm green, sustainability and competitiveness performances in the Philippines. To evaluate the association between board characteristics and firm green, sustainability and competitiveness performances, a two-step system generalized method of moments (GMM) was utilized. Board size, board independence, CEO duality, management shareholding, and multiple directorships are the characteristics examined. Firm green, sustainability and competitiveness performances is measured using indicators such as return on assets (ROA) and Tobin’s Q ratio. Outcomes denote that board size, multiple directorships, and leverage have negative statistical relationships with firm green, sustainability and competitiveness performances using ROA as a financial measure. Moreover, firm size has a positive statistical relationship with ROA. This accords with the recent literature on corporate governance mechanisms. Enigmatically firm size has negative and statistical relation with firm green, sustainability and competitiveness performances using Tobin’s Q ratio as a measure of financial performance. Leverage has also been found to be positively related to firm performance. The consequence of this study clamps significant implications for practitioners and policymakers in developing countries, specifically in the Philippines. This will postulate insights into the crucial role of corporate governance practices in improving the green, sustainability and competitiveness performances of firms and accentuate the necessity to establish and enforce strong corporate governance mechanisms and regulations.