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Douglas Adu

Supervisors:

Dr Antoinette FlynnDr Colette Grey

Working Title of Thesis:

Sustainability, executive compensation, corporate governance, financial performance and market value

Abstract

Global efforts to reduce global warming and the call for firms to accept greater responsibility for sustainable business practices (SBPs) have been intensified since the adoption of the sustainable development goals in 2015. Such goals may be achieved through the design and implementation of SBPs by firms. This study examines the interrelationships among executive compensation (EC), corporate governance (CG), sustainability, financial performance and market value (MV). It will be based on FTSE 350 from 2009 to 2018. In the process, the study will address three questions, in the form of research articles. The first article will examine the interrelationship among EC, gender and sustainability. It will investigate the crucial question of whether the relationship between EC and sustainability is contingent on gender. It will draw on critical mass theory that suggests that women are more effective at a critical mass of 30% of board membership. The second article will explore whether CG structures drive firms to more SBPs. Bloomberg’s ESG score will be used as measure of sustainability. Insights will be drawn from stakeholder theory which highlights the role stakeholders play in ensuring firms adopt SBPs, and resource dependence theory, which suggests that firms can attract unique resources and competencies by implementing SBPs. Finally, the third article will examine the interrelationship among sustainability, CG, FP and MV. It will investigate how sustainability influences performance, and ascertain whether CG can moderate this relationship. It will seek to find evidence in support of neo-institutional theory, which suggests that the market tends to reward firms with SBPs. The three articles seek to jointly identify key drivers of sustainability, hence engaging in an integrated and multi-dimensional analysis that captures direct and indirect relationships will influence SBPs policy.