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Corporate Governance and Sustainability – Cases & Methods

Today, firms are expected not only to maximize their value and provide relevant financial information about their ongoing operations, but also to address environmental and social concerns as part of their management processes. Such activities are typically communicated to stakeholders through supplementary “corporate social responsibility” reporting that utilizes (inter)national frameworks, which in recent years have not only garnered increasing attention in owner-oriented “exit” corporate governance systems but are also of particular importance in the bank-based insider systems that prevail in continental Europe and Asia.  

The relationship between corporate governance frameworks and corporate social responsibility (CSR) is complex and ambiguous. CSR is associated with potential benefits for the company, though these are long-term and uncertain. Whether the costs associated with CSR outweigh the benefits, therefore, depends crucially on the time horizon and on the impact of certain governance mechanisms (i.e., corporate characteristics) on corporate success. Against this backdrop, the course begins with a thorough introduction to the fundamentals of corporate governance (as an economic interpretation of corporate law with a focus on organizational and strategic characteristics as well as financial aspects) and continues with a review of existing empirical evidence regarding the relevance of firm-specific corporate governance attributes for decision-making regarding CSR activities and related reporting (disclosure). Participants then apply the conceptual knowledge acquired about fundamental relationships and effects in case studies that compare CSR reporting practices across firms from various countries. Finally, the empirical foundation enables a detailed discussion of the findings and implications.

The course is offered in English as a combination of lectures and seminars for undergraduate students, tailored to their needs, with the aim of raising young students’ awareness of the fundamental principles of sustainable business at an early stage and familiarizing them with the basics.