Managing sustainability: a governance perspective
Firms play a paradoxical role in today’s sustainability challenges: they are both key contributors to environmental harm and crucial drivers of potential solutions. Governing this dual role effectively requires internal and external mechanisms that align corporate actions with sustainability objectives. Adopting a governance systems perspective, this dissertation investigates how firms can be steered to reduce their environmental impact while actively contributing to addressing environmental challenges.
Across four empirical studies, it examines sustainability governance at multiple levels and through different actors. Chapter 2 focuses on the regulatory environment, exploring how sanctions for environmental harm influence firms’ pursuit of green innovation. Chapter 3 adopts an ownership perspective, analyzing how institutional investors shape the presence of environmental expertise on supervisory boards. Chapter 4 examines the board of directors, considering how board political ideology affects whether firms allocate unabsorbed slack resources toward green breakthrough innovation. Chapter 5 turns to the CEO as the central strategic decision-maker, studying how a CEO’s regulatory focus relates to the occurrence of corporate environmental misconduct.
Collectively, the dissertation highlights the complexity and contingency of governance in fostering sustainable corporate behavior. It demonstrates that effective governance requires attention to the interplay between multiple actors and levels of authority rather than reliance on single mechanisms. By integrating behavioral, agency, and signaling perspectives, this dissertation offers both theoretical insights and practical guidance for policymakers, managers, and stakeholders seeking to reconcile economic performance with environmental stewardship.