Corporate governance for sustainable development: A study on mechanism configuration

There is a dearth of configuration analysis on the factors that constitute corporate governance mechanisms within the framework of corporate sustainable goals in existing literature. Specifically, the impact mechanisms related to various combined mechanisms have not been comprehensively defined. This study employs Qualitative Comparative Analysis (QCA) approach to explore the effects of various configurations of corporate governance mechanisms on sustainable development, based on a sample of 2959 Chinese listed companies. Our analysis identifies four distinct pathways that facilitate the achievement of sustainable development goals: 1) enlarging board size, providing managerial incentives, establishing sustainability committees, and enhancing corporate transparency; 2) promoting board diversity, providing managerial incentives, establishing sustainability committees, and enhancing corporate transparency; 3) reducing ownership concentration, providing managerial incentives, establishing sustainability committees, and enhancing corporate transparency; 4) encouraging individual investment, providing managerial incentives, establishing sustainability committees, and enhancing corporate transparency. Additionally, a comparative analysis of different pathways has revealed substitutional relationships between board size and diversity, ownership concentration and investor structure, while highlighting the complementary relationship of managerial incentives, sustainability committees, and corporate transparency. Challenging the erstwhile linear research paradigm, this study contributes to understanding the pathways for achieving sustainable development goals from a configurational perspective and elucidates the relationships between corporate governance mechanisms. It offers novel and comprehensive evidence for examining the intricate nexus between corporate governance mechanisms and sustainable development. Keywords: Stakeholder theory; Sustainable development; Corporate governance mechanisms; Mechanism configurations; fuzzy-set Qualitative Comparative Analysis (fsQCA)