Focusing on independent directors (IDs) with multiple directorships, this paper examines how ID attention allocation is associated with corporate ESG performance, and highlights the role of reputation-driven attention allocation as a micro-level governance mechanism.
By using ordinary least squares regression (OLS), this study mainly uses data on A-share listed companies from 2009 to 2022 on Shanghai and Shenzhen as the research sample to empirically analyse the relationship and influence mechanism between ID attention and corporate ESG performance.
We discover that the higher ID attention is associated with better corporate ESG performance. Additional analysis suggests that ID attention enhances corporate ESG performance by increasing green perception and green innovation (E), promoting corporate philanthropy (S), and improving information disclosure quality and internal control quality (G). Heterogeneity analysis finds that the positive correlation between ID attention and ESG performance is more significant in high-polluting companies, highly competitive product markets, and high media attention.
This paper analyses the impact of IDs holding multiple directorships under reputation incentives on the unequal attention allocation in firms, extending this effect to corporate ESG performance. It provides empirical evidence for firms' sustainability in emerging markets. Additionally, our study enriches the existing research on ID attention allocation, and provides an optimisation path for improving corporate governance mechanisms in the emerging capital market, especially in ID selection, recruitment system, and enhancing the effectiveness of performance duties.
