Government-to-boardroom transition: implications for ESG in corporate leadership
摘要
This study investigates the influence of former government employees transitioning to boardroom positions on the disclosure of environmental, social, and governance (ESG) factors, both individually and collectively, within private companies. The study sample included 81 non-financial companies listed on the Amman Stock Exchange from 2012 to 2021, and the data was collected manually from publicly available annual reports. The main findings uncover compelling insights, which showed a significant positive association between former government employees on corporate boards and enhanced disclosure within the environmental, social, and overall ESG dimensions. However, the relationship with governance disclosure remains weak and statistically non-significant, indicating that this area is still a topic of ongoing discussion and debate, particularly regarding the extent to which former government employees can influence governance practices. This discovery underscores the significant influence of these individuals in fostering responsible corporate behavior, aligning with the theoretical underpinnings of corporate governance and sustainability theories. Imprint theory suggests that historical experiences shape long-term corporate behavior, and stakeholder theory emphasizes the importance of considering the interests of diverse stakeholders. This study’s contribution lies in shedding light on this interplay and providing valuable insights for stakeholders such as policymakers, investors, corporate leaders, shareholders, and communities. Policymakers can leverage these findings to encourage the integration of government expertise into corporate governance structures, fostering sustainable and ethical practices. Corporate leaders can diversify their boards by appointing government-experienced individuals to enhance governance and sustainability. This study constitutes one of the pioneering investigations into the relationship between government-to-boardroom transitions and ESG disclosure within companies.