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The Impact of Corporate Governance on Sustainability Disclosures: A Comparison from the Perspective of Financial and Non-Financial Firms

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  • Asuman Erben Yavuz

    (Vocational School of Social Sciences, Baskent University, 06490 Ankara, Türkiye)

  • Bade Ekim Kocaman

    (International Finance and Banking, Baskent University, 06490 Ankara, Türkiye)

  • Mesut Doğan

    (Banking and Insurance, Bilecik Seyh Edebali University, 11230 Bilecik, Türkiye)

  • Adalet Hazar

    (International Finance and Banking, Baskent University, 06490 Ankara, Türkiye)

  • Şenol Babuşcu

    (International Finance and Banking, Baskent University, 06490 Ankara, Türkiye)

  • Raikhan Sutbayeva

    (Department Management, Yessenov University, 130000 Aktau, Kazakhstan)

Abstract

This study explores the impact of corporate governance on firms’ environmental, social, and governance (ESG) performance, with a focus on board characteristics and ownership structures. Using a panel dataset of 6 financial and 16 non-financial firms listed on the Borsa Istanbul (BIST) from 2013 to 2021, the study investigates how ownership (blockholder, foreign, or institutional) and board composition (size, gender diversity, and foreign directors) influence ESG disclosures. The analysis distinguishes between financial and non-financial firms, revealing that corporate governance mechanisms affect ESG performance differently across sectors. Foreign ownership and the presence of foreign and female board members are positively associated with higher ESG disclosures, while ownership concentration is negatively correlated with ESG performance. These findings suggest caution when comparing firms across sectors based solely on ESG disclosures, as governance factors influence outcomes differently in financial and non-financial contexts. This study provides a detailed analysis of effective corporate governance mechanisms in Türkiye, emphasizing the crucial roles of ownership structure and board composition in enhancing ESG transparency. The results offer valuable insights for regulators and investors, contributing to a nuanced understanding of how governance structures shape ESG performance in both financial and non-financial firms in Türkiye.

Suggested Citation

  • Asuman Erben Yavuz & Bade Ekim Kocaman & Mesut Doğan & Adalet Hazar & Şenol Babuşcu & Raikhan Sutbayeva, 2024. "The Impact of Corporate Governance on Sustainability Disclosures: A Comparison from the Perspective of Financial and Non-Financial Firms," Sustainability, MDPI, vol. 16(19), pages 1-21, September.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:19:p:8400-:d:1486932
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