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Determinants of the impact of ESG policy and corporate governance on employee rights

Author

Listed:
  • Chiao-Ming Li

    (Soochow University)

  • Joe-Ming Lee

    (Fo Guang University)

Abstract

To comply with international development trends in recent years, Taiwanese government agencies have formulated environmental, social, and governance (ESG) legal policies and strengthened publicity for listed firms to prepare sustainability reports. Government agencies are trying to use ESG legal policies to gradually guide firms to take environmental, social, and governance measures and move toward sustainable operations. However, employee rights were easier for firms to ignore in the past, so paying attention to the correlation between employee rights and organizational governance is necessary. This paper aims to analyze the relationship between the organizational governance and employee turnover rate of Taiwanese food firms in the ten years from 2011 to 2021 through a panel regression model. The results show that there is a U-shaped relationship between board size and employee turnover. There is an inverted U-shaped relationship between the development of major shareholders’ shareholding and the strength of human resources. The research results show that organizational governance is significantly related to employee turnover. Finally, this paper believes that paying attention to human resources will contribute to the sustainable development of enterprises. Therefore, in terms of organizational governance policies, although government agencies have formulated relevant reference standards, firms should have functions more conducive to developing human resource measures. These functions include utilizing the guiding energy of the board of directors functions, and shareholding structure design, which will further help the stable development of human resources. Firms need high-quality human resources to make breakthroughs in technology or the market. Therefore, when firms cultivate high-quality human resources, they not only rely on employee welfare conditions but consider long-term organizational governance and human resource development as necessary planning conditions. These factors will drive firms to have the ability to break through the status quo, value all stakeholders, and create an attitude toward sustainable business development.

Suggested Citation

  • Chiao-Ming Li & Joe-Ming Lee, 2024. "Determinants of the impact of ESG policy and corporate governance on employee rights," E&M Economics and Management, Technical University of Liberec, Faculty of Economics, vol. 27(1), pages 108-120, March.
    • Handle: RePEc:bbl:journl:v:27:y:2024:i:1:p:108-120
    DOI: 10.15240/tul/001/2024-1-007
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    References listed on IDEAS

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    1. Benjamin A. Campbell & Martin Ganco & April M. Franco & Rajshree Agarwal, 2012. "Who leaves, where to, and why worry? employee mobility, entrepreneurship and effects on source firm performance," Strategic Management Journal, Wiley Blackwell, vol. 33(1), pages 65-87, January.
    2. Charlotte Villiers, 2021. "Corporate Governance, Employee Voice and the Interests of Employees: The Broken Promise of a ‘World Leading Package of Corporate Reforms’," Industrial Law Journal, Industrial Law Society, vol. 50(2), pages 159-195.
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    More about this item

    Keywords

    Organizational finance; board size; R&D intensity; sustainable;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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