Governance and Sustainability: An Investigation into the Relationship between Corporate Governance and Corporate Sustainability

Abstract

Corporate governance is fundamental to the continuing operating of any corporation; hence much attention has been paid to the procedures of such governance. Similarly sustainability is fundamental to the continuing operating of any corporation, and is arguably the fashionable concept of the moment. While it is clear what is generally meant by corporate governance it is much less clear what is meant by sustainability and we start by investigating this concept.

Design/methodology/approach: For two such fundamental concepts however it would seem that there should be a relationship between the two, although little work has been undertaken on exploring this relationship. The central part of this paper is therefore based upon an exploration of the relationship between governance and sustainability. We do this by investigating the FTSE100 companies and their corporate governance policies.

Findings: In doing this analysis we find some strengths - and hence cause for optimism - and some weaknesses - and hence cause for concern. We conclude by suggesting where further work is needed.

Research limitations/implications: The paper has implications in enhancing the understanding of the necessary components of corporate governance, although it is necessarily limited by the size of the sample.

Originality/value of the paper: This paper increases the understanding of the relationship between corporate governance, sustainability and sustainable development.

Keywords: corporate governance, sustainability, financial performance, social and environmental performance, sustainable distribution

JEL Classification: G34, M14