INTEGRATING CORPORATE GOVERNANCE & STRATEGIC MANAGEMENT: A STAKEHOLDER APPROACH

Abstract

For decades, corporate governance (CG) and strategic management (SM) have remained major research areas among management scholars. However, CG and SM suffer from artificial isolation and are usually examined and practised in seclusion. This artificial isolation is driven by the "silo view" of CG and SM (Capasso and Dagnino, 2014). The silo view of CG and SM, which finds support in academic and practitioners' provinces, has hampered the possibility of an open dialogue between CG and SM (Capasso et al., 2014). This study is a novel attempt to provide valuable insights into the current research on CG and SM relationship and integration of these two significant areas of management based on the stakeholder approach. A systematic literature review method was used to screen 74 articles for researchers' viewpoints on CG and SM from a stakeholder perspective (Singh and Rahman, 2021). Research gaps identified from the literature synthesis laid the foundation for this study. The extant business and management literature have primarily viewed stakeholder engagement (SE) as an activity (e.g., Dögl and Behnam, 2015; Ortas et al., 2019; Rajagopal et al., 2016) and centred on exploring the methods of firm-stakeholder interactions (e.g., Hoffmann and Lutz, 2015; Teresa, 2018). Some scholars have studied SE as a process and examined its components (e.g., Lane and Devin, 2018). However, existing investigations of the antecedents and consequences of SE processes are fragmented and mainly focused on either company or stakeholder context. The first objective of this study pursues the vast body of literature on firmstakeholder engagement and comprehensively examined over 212 research articles to accumulate precursors and outcomes of SE processes. This work consolidates the knowledge of the antecedents and consequences of SE processes to generate a holistic view of the firm-stakeholder relationships. It also investigates theoretical perspectives used to explore SE, types of SE, and business activities and scope of SE. Further, it explores the existence of business practices in instrumental and normative dimensions using the concept of "continuum" to provide deeper insights into the SE processes. United Nations Sustainable Development Goals (SDGs) are based on multi-stakeholder partnerships from inception to execution. Therefore, SDGs can be described as a pragmatic SE model. The outcomes of CG and SM were found as corporate financial, environmental and social iii performances. And this led to the development of a conceptual model that consists of SE as adoption of SDGs and outcomes of CG and SM as corporate financial performance (CFP), corporate environmental performance (CEP) and corporate social performance (CSP). For this study, 89 selected Indian firms out of the NSE 500 that published GRI based nonfinancial disclosures were included as a sample. Data were collected for empirical investigation using content analysis. Multiple linear regression was used to analyse secondary data to establish an empirical relationship between the adoption of SDG and corporate performances. The findings of this study revealed that the adoption of SDGs by firms is significantly and positively associated with their financial, environmental and social performances. The study finds that SE can play a crucial role in organisations concerned with stakeholder interests. In this study, significant research gaps in the extant literature are identified and presented as directions for future research. This study is of great importance to both researchers and practitioners. It contributes to academic knowledge of CG, SM and SE and provides important implications for researchers, practitioners and policymakers.