The Corporate Governance of Environmental Sustainability: A Review and Proposal for More Integrated Research

Abstract

As corporations’ environmental impact comes under greater scrutiny by global financial, regulatory, and societal stakeholders, management scholars have increasingly focused on the role of corporate governance as a tool for driving environmental initiatives. Still, we lack a comprehensive and systematic understanding of this emergent body of inquiry and a holistic agenda for future research. To address this gap, our integrative framework relates the key corporate governance actors to environmental sustainability outcomes from the extant literature and highlights its main methodological approaches and theoretical arguments. Our framework provides a critical analysis of what we know and points to the knowledge gaps around owners, boards of directors, CEOs, top management teams, and employees as corporate governance actors. We then highlight limitations in the existing literature as significant opportunities for further research to resolve ambiguous conceptualizations of environmental sustainability constructs, various methodological and theoretical challenges, its incomplete engagement with the global dimension of environmental sustainability, and its limited analysis of how corporate governance actors may interact to shape environmental sustainability outcomes. We conclude by proposing novel approaches for addressing these issues, which we believe could generate a better way forward on studying the corporate governance of environmental sustainability.