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2023 | Book

Sustainable Governance

Concept, Metrics and Contexts

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About this book

The role of governance as a fundamental pillar of sustainability is widely recognized and confirmed by its inclusion in the main ESG issues (environmental social governance). Through the complex role of governance in the context of ESG, research has developed the notion of sustainable corporate governance, i.e., a system based on the integration of shareholder and stakeholder objectives that protects the environment and the broader community.

This book provides a sound theoretical definition, a precise measurement system, and best practice examples for the implementation of sustainable corporate governance. It includes theoretical foundations based on stakeholder and institutional theories from different environments and contexts, such as developed and developing economies, large publicly traded companies and SMEs, and family businesses. In addition to explaining the concept theoretically, it uses practical case studies to address the effective integration of sustainable governance into corporate structures.

The book provides business students and researchers with an in-depth analysis of the emerging concept of sustainable governance and is valuable for academics as well as corporate and financial market participants.

Table of Contents

Frontmatter

Part I

Frontmatter
Chapter 1. Shifts in Corporate Governance Understanding
Abstract
This chapter examines corporate governance, focusing on agency theory. It explores the origins and structure of agency theory governance while critically analyzing its strengths and weaknesses based on scholarly and practical critiques. In response to identified challenges, the chapter introduces stakeholder theory as a potential solution, promoting a more inclusive and balanced governance approach. By bridging these two theories, this chapter aims to enhance understanding and encourage the pursuit of effective and sustainable governance frameworks.
Andrea Cardoni, Evgeniia Kiseleva
Chapter 2. ESG or Sustainability Agenda and Its Influence on the Role of Corporate Governance
Abstract
In the following chapter, we delve into the rising influence of the Environmental, Social, and Governance (ESG) or sustainability agenda in the corporate world. We explore the principles and significance of the sustainability agenda and its transformative impact on businesses. As ESG challenges take center stage, we witness a new perspective emerging on corporate governance, driven by the principles of stakeholder theory. By examining the implications of this shift in governance perception, this chapter provides valuable insights into the evolving sustainable corporate governance paradigms, shaped by the integration of sustainability goals and stakeholder-centric approaches.
Andrea Cardoni, Evgeniia Kiseleva
Chapter 3. Sustainable Governance and Its Components
Abstract
The chapter focuses on sustainable governance and its fundamental components. Firstly, a comprehensive overview of corporate governance is presented, shedding light on its underlying principles. Subsequently, the concept of sustainable corporate governance is explored, highlighting its intricacies and the challenges it poses. The chapter then delves into the varied perspectives found in the literature regarding the components of sustainable governance, addressing ambiguities. To provide clarity and coherence to the field, common blocks that emerge across different research papers on sustainable corporate governance are identified. Lastly, the critical role played by these sustainable governance blocks in driving corporate value generation is thoroughly examined.
Andrea Cardoni, Evgeniia Kiseleva
Chapter 4. Measurement of Sustainable Governance
Abstract
This chapter explores measuring sustainable governance, encompassing academic approaches, standard setters’ contributions, and diverse information sources. It includes examples of EU regulation on sustainable governance interpretation, along with World Economic Forum, SASB, GRI, TCFD, and other frameworks. The chapter highlights the challenge of ESG rating heterogeneity and emphasizes the need for a common theoretical framework for companies, investors, and other stakeholders. By examining various measurement aspects, this chapter provides valuable insights for stakeholders seeking to understand and quantify the impact of sustainable governance practices.
Andrea Cardoni, Evgeniia Kiseleva
Chapter 5. The Role of Sustainable Governance in Value Generation of the Company
Abstract
Chapter 5 investigates the role of sustainable governance in value generation for companies. It examines theoretical propositions, including agency theory, institutional theory, and stakeholder theory, to understand their influence on sustainable governance practices. The chapter emphasizes the significance of a strategic and long-term approach to ESG issues at the business level, elucidating how sustainable governance can enhance overall value creation for companies.
Andrea Cardoni, Evgeniia Kiseleva
Chapter 6. Sustainable Governance in Specific Settings of Listed and Unlisted Companies, SMEs, and Family Businesses
Abstract
The chapter explores the transition from corporate governance to sustainable governance, providing a framework for understanding the changes for large companies, SMEs, and family businesses. It highlights the growing relevance of sustainable governance at the global level, with a focus on unlisted companies and SMEs, outlining the stages of its growth in these enterprises. Additionally, it presents a compelling case study of institutional and regulatory changes in the European context and their impact on sustainable governance practices in SMEs, as well as readiness of SMEs for upcoming regulation.
Andrea Cardoni, Evgeniia Kiseleva

Part II

Frontmatter
Chapter 7. Best Practice in Sustainable Governance Development Worldwide
Abstract
Chapter 7 of this book explores best practices in sustainable governance development on a global scale. It begins by analyzing international data to identify leading and lagging elements of sustainable governance. The chapter introduces a balanced approach to sustainable governance integration, utilizing a Framework based on Asif et al.’s models and a practical PDCA cycle. Additionally, it provides a real-world example of success factors in sustainable governance integration, using an Italian manufacturing company as a case study.
Andrea Cardoni, Evgeniia Kiseleva
Chapter 8. Sustainable Governance in Emerging Economies
Abstract
This chapter focuses on sustainable governance in emerging economies, with a specific emphasis on the role of cultural peculiarities in sustainable governance practices, using the Russian case as an illustrative example. Additionally, it explores sustainable corporate governance practices in China and India, providing descriptive cases of particular companies to shed light on their approaches. By examining these emerging economies, the chapter aims to contribute valuable insights into the unique challenges and opportunities that arise in sustainable governance within diverse cultural and business contexts.
Andrea Cardoni, Evgeniia Kiseleva
Chapter 9. The Dependencies between Sustainable Governance and Market Value
Abstract
Chapter 9 investigates the relationship between sustainable governance and market value. It presents empirical evidence supporting the positive influence of sustainable corporate governance on financial results. The evidence is based on econometric analysis conducted on 110 public companies worldwide with leading Environmental, Social, and Governance (ESG) results. By analyzing the financial impact of sustainable governance, this chapter provides valuable insights into how sustainable practices can contribute to enhancing market value for companies, highlighting the potential benefits of integrating sustainability into corporate governance strategies.
Andrea Cardoni, Evgeniia Kiseleva
Chapter 10. Sustainable Governance and Crises
Abstract
This chapter explores the shifts in corporate governance amid crises such as The Great Depression (1929–1939), corporate scandals in the 2000s, and the 2008 financial crisis. It analyzes the evolutionary process of corporate governance in response to these events and concentrates on recent challenges, including the Covid-19 pandemic and geopolitical crises, underlining their distinctiveness and emerging complexities. The chapter investigates the significance of sustainable governance during critical periods and presents a set of relevant elements that have demonstrated their efficacy in enhancing corporate resilience.
Andrea Cardoni, Evgeniia Kiseleva
Chapter 11. Challenges in Sustainable Corporate Governance Development
Abstract
The concluding chapter of this book delves into the intricacies and challenges of future development in sustainable corporate governance, encompassing both academic and professional realms. It thoroughly examines the “cycle of sustainability” within large companies and analyzes the trends of sustainable governance in developing economies, emphasizing the distinctive challenges they present. Furthermore, the chapter uncovers the specific obstacles faced by SMEs in their journey towards sustainable governance. Addressing the highly discussed challenges of Industry 4.0 and digital transformation, the chapter highlights their influence on sustainable corporate governance, underscoring its dynamic nature. In conclusion, it calls for further conceptual development in sustainable governance to meet the evolving demands of the future.
Andrea Cardoni, Evgeniia Kiseleva
Metadata
Title
Sustainable Governance
Authors
Andrea Cardoni
Evgeniia Kiseleva
Copyright Year
2023
Electronic ISBN
978-3-031-37492-0
Print ISBN
978-3-031-37491-3
DOI
https://doi.org/10.1007/978-3-031-37492-0

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