Linkage Corporate Governance to Sustainability Performance: The Mediating Role of Gender Equality in Emerging Economies

Purpose

The purpose of this study is to investigate the impact of corporate governance (CG) on sustainability performance (SP) as well as the mediating role of gender equality (GE) in emerging economies especially Pakistan. Pakistan's economy facing some problems such as unemployment, poverty, pollution, deforestation, and access to clean water related to Sustainable Development Goals (SDGs).

Design/Methodology/approach

Critical mass theory (CMT) and Social role theory (SRT) are used in this study. Secondary data was collected from the annual reports of 88 non-financial firms listed on the Pakistan Stock Exchange (PSX) between 2016 and 2022. SP was measured using the Global Reporting Initiative (GRI) standards, formulated by the United Nations' SDGs for 2030. The generalized method of moments (GMM) model is used to check the relationship between these variables. For robustness, the Blau index method is used to calculate the GE.

Findings

The results show that GE fully mediates the link between CG and SP, with significant positive impacts revealed for board size (BS), board meeting frequency (BM), audit committee size (ACS), audit committee meeting frequency (ACM), and audit quality (AQ). Robustness tests confirm these findings, confirming the stability and reliability of GE's mediating role in increasing CG's influence on SP.

Originality/value

According to researchers' knowledge, this is the pioneer study that investigates the mediating role of GE between CG and SP. The study also used CMT and SRT which is most important for gender management (GM) and used the Shannon index to calculate GE on board.