Board Governance Quality and Firm Sustainability: The Moderating role of Sustainability Committee
(2026) BUSN79 20261Department of Business Administration
- Abstract
- The basic purpose of this study is to observe the association between firm sustainability and board quality, along with examining the moderating effect of the sustainability committee. Agency theory, resource dependence theory, stakeholder theory, legitimacy theory, and upper echelons theory are used as the theoretical bases of this study. Agency theory describes the supervising role of directors, and resource dependence theory describes the board as a source of obtainability of resources and expertise. Stakeholder theory clarifies why businesses respond to broader social and environmental demands. Legitimacy explains a firm's response to external expectations, while upper-echelon theory explains how board members’ characteristics may... (More)
- The basic purpose of this study is to observe the association between firm sustainability and board quality, along with examining the moderating effect of the sustainability committee. Agency theory, resource dependence theory, stakeholder theory, legitimacy theory, and upper echelons theory are used as the theoretical bases of this study. Agency theory describes the supervising role of directors, and resource dependence theory describes the board as a source of obtainability of resources and expertise. Stakeholder theory clarifies why businesses respond to broader social and environmental demands. Legitimacy explains a firm's response to external expectations, while upper-echelon theory explains how board members’ characteristics may impact sustainability-related decisions. The sample comprises Scandinavian non-financial firms from Sweden, Denmark, Finland, and Norway for the period 2015–2025. Data are collected from Bloomberg and Capital IQ Pro. The final sample consists of 1190 firm-year observations. Based on the results of the Hausman test, a fixed-effects model is used for the analysis of panel data in this study. Diagnostic tests for multicollinearity, heteroskedasticity, autocorrelation, and cross-sectional dependence are also applied. To address heteroskedasticity and autocorrelation, firm-clustered errors are used. PSM and GMM are also applied as robustness checks. The study finds that board quality is positively and statistically significantly associated with firm sustainability. In contrast, the interaction term between board quality and the sustainability committee is insignificant, suggesting the presence of the sustainability committee does not strengthen this relationship. It shows that the mere presence of a sustainability committee may not be sufficient, and its effectiveness may depend upon some other factors that can be discussed in future research. (Less)
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/student-papers/record/9236295
- author
- Kalsoom, Amna LU and Jelvehgar, Yasaman LU
- supervisor
-
- Diem Nguyen LU
- organization
- course
- BUSN79 20261
- year
- 2026
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- Board Governance Quality, ESG Performance, Sustainability Committee, Corporate Governance, Board Composition
- language
- English
- id
- 9236295
- date added to LUP
- 2026-07-01 12:40:56
- date last changed
- 2026-07-01 12:40:56
@misc{9236295,
abstract = {{The basic purpose of this study is to observe the association between firm sustainability and board quality, along with examining the moderating effect of the sustainability committee. Agency theory, resource dependence theory, stakeholder theory, legitimacy theory, and upper echelons theory are used as the theoretical bases of this study. Agency theory describes the supervising role of directors, and resource dependence theory describes the board as a source of obtainability of resources and expertise. Stakeholder theory clarifies why businesses respond to broader social and environmental demands. Legitimacy explains a firm's response to external expectations, while upper-echelon theory explains how board members’ characteristics may impact sustainability-related decisions. The sample comprises Scandinavian non-financial firms from Sweden, Denmark, Finland, and Norway for the period 2015–2025. Data are collected from Bloomberg and Capital IQ Pro. The final sample consists of 1190 firm-year observations. Based on the results of the Hausman test, a fixed-effects model is used for the analysis of panel data in this study. Diagnostic tests for multicollinearity, heteroskedasticity, autocorrelation, and cross-sectional dependence are also applied. To address heteroskedasticity and autocorrelation, firm-clustered errors are used. PSM and GMM are also applied as robustness checks. The study finds that board quality is positively and statistically significantly associated with firm sustainability. In contrast, the interaction term between board quality and the sustainability committee is insignificant, suggesting the presence of the sustainability committee does not strengthen this relationship. It shows that the mere presence of a sustainability committee may not be sufficient, and its effectiveness may depend upon some other factors that can be discussed in future research.}},
author = {{Kalsoom, Amna and Jelvehgar, Yasaman}},
language = {{eng}},
note = {{Student Paper}},
title = {{Board Governance Quality and Firm Sustainability: The Moderating role of Sustainability Committee}},
year = {{2026}},
}