The effect of corporate governance on environmental and social performance: Evidence from emerging economy
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Md Abdur Rouf 1 * , Mohammad Sharif Hossain 2 , Md Mohedul Islam 3 , Md Anisuzzaman 4 , Md Akhtaruddin 5
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1 Department of Business Administration, Daffodil International University, BANGLADESH2 Department of Business Administration, Uttara University, BANGLADESH3 Department of Business Administration, University of Pikeville, USA4 Research Assistant, Georgia State University, USA5 Department of Business Administration, Ahsania Mission University of Science & Technology, BANGLADESH* Corresponding Author

Abstract

This study aims to investigate the effect of corporate governance (CG) on environmental and social performance (ESP) by determining the moderating effect of insider ownership (IO) within the context of the Bangladeshi textile industry. Employing a quantitative approach, this research analyzes data from 255 annual reports of 51 textile firms listed on the Dhaka Stock Exchange over five years (2020-2024). Content analysis was utilized to assess ESP levels, while regression models investigated the relationships between CG variables (female directors, board leadership structure, board size) and ESP, considering the moderating role of IO. The results show that CG variables positively affect ESP, with significant effects coming from female directors, board leadership structure, and board size. While IO exhibits a negative moderation with IO, natural conflicts between majority and minority shareholders may hamper ESP efforts. This study offers several significant contributions to the literature on CG and ESP. It provides novel insights by focusing on an emerging economy, Bangladesh, and introduces IO as a moderating variable in the CG-ESP relationship. The findings suggest that while CG mechanisms enhance ESP, IO poses challenges that need addressing to optimize ESP outcomes. Furthermore, this study increased the length of the study period, leading to more complete data, and more broadly generalized results. Additional research is needed on other determinants and contexts, such as cross-country studies and different kinds of datasets, to explore corporate ESP behavior in a more comprehensive way.

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This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Article Type: Research Article

EUR J SUSTAIN DEV RES, Volume 10, Issue 3, 2026, Article No: em0403

https://doi.org/10.29333/ejosdr/18524

Publication date: 01 Jul 2026

Online publication date: 05 May 2026

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Article Downloads: 13

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