Adopting the United Nations 2030 Agenda for Sustainable Development, governments commit to the 17 goals and 169 associated targets in areas of critical importance for humanity and planet, while companies manifest a growing interest in playing a significant role to SDGs prioritisation. Researchers, policymakers, stakeholders, and analysts are all preoccupied about responsible ways of redesigning the business model to mitigate the growing concerns, such as companies’ failures, global multidimensional crisis, and sustainability-related issues. Under the light of institutional theory, legitimacy theory, stakeholder theory, the aim of this research is to investigate how environmental, social and governance (ESG) policies and practices included in a sustainable business model may respond to the double materiality approach in order to contribute to a balance among divergent interests of managers, investors, and other stakeholders. The financial materiality is conceptualized using ESG data, that mainly targets investor’s needs. Stakeholder materiality, is concerned with external impact of companies, embodied in societal-level outcomes measured as the number of SDGs addressed in corporate reporting. In this study, company-year data are collected from Refinitiv Eikon database, starting with 2015, until current reporting period and analysed using frequency, univariate and correlation analyses. Based on Levene homogeneity, the ANOVA parametric t-test results are validated by Mann-Whitney Wilcoxon and Krushkal Wallis non-parametric tests. Three main research questions are responded. First, the findings examine and discuss the evolution of sustainability reporting measured with ESG scores, decomposed by the three pillars and ten categories, along with the SDGs prioritisation. Second, statistically significant differences in ESG and SDGs variables reported by various groups clustered on industry-related corporate characteristics are discussed. Third, the significant associations between ESG measures and SDGs are analysed from the double materiality perspective. The study contributes to the academic and practical understanding of the evolving business model under normative dimension of institutional theory, incorporating the decision to engage in current sustainability frameworks and policies.

Motivation: This study aims to fill the gap in the corporate governance literature by examining the moderating role of corporate governance on earnings management and financial performance. Idea: The research is conducted in the light of agency and legitimacy theories, looking through how corporate governance practices moderate the relationship between earnings management and financial performance. Data: The database consists of an international sample of non-financial companies, for the time frame between 2020 and 2023. The data are collected from Thomson Reuters Eikon, and the analysed period responds to a thorough approach of the topic under problematic circumstances. In line with prior literature, this analysis includes several corporate governance mechanisms such as number of board meetings, board gender diversity, board size, CEO duality, independent board members, and audit committee independence. Among the control variables could be mentioned firm size, financial leverage, and profit or loss. Corporate governance is examined as a key driver in achieving financial performance, maximising the value created by companies and strengthening their connections with stakeholders. Tools: To test the research hypotheses, investigation is performed through frequency and descriptive statistics, parametric correlations, complemented with panel regression analysis with random effects performed in STATA 18 software. Findings: According to the results, there is strong evidence that financial performance is impacted by earnings management, at the corporate level. Notably, the main findings suggest that board meetings, board size, and board independence may be underlying factors in reducing the adverse effects of earnings management reflected in financial performance. Likewise, corporate governance may contribute to an effective monitoring of earnings management. Muchmore, the findings are in line with the agency theory, which asserts that corporate governance practices lessen managerial resource exploitation necessary for sustainable development and financial performance. Contribution: Relevance of the study resides in grounding a comprehensive overview in the earnings management and sustainability literature, examining corporate governance patterns. This research contributes to the debate of influence exerted by earnings management practices on financial performance extended towards a better understanding of corporate governance outcomes.

This research aims to explore the moderating effects of corporate governance mechanisms on the relationship between earnings management and financial performance. This investigation is conducted considering the background of agency, legitimacy, and upper echelons theories. Using a sample of international non-financial companies, with data available on Thomson Reuters Eikon for the 2018-2023 period, this research employs multiple regression analysis. The discretionary accruals variable is a proxy for earnings management, return on equity measures financial performance, while company activity is reflected by various control variables. Corporate governance mechanisms referring to board independence, board diversity, executive committee diversity, board activity, and CSR strategy are included to identify whether they may significantly interact on the earnings management-financial performance nexus. The exploratory analysis of data (descriptive statistics and correlation analysis) is complemented by a panel random-effects regression modelling performed in STATA18 software, to test the research hypotheses. The main findings indicate strong evidence that financial performance is positively and significantly influenced by earnings management practices. Mixed impacts are found for the corporate governance mechanisms on financial performance. Muchmore, findings emphasize that board independence and executive diversity significantly moderates the impact of discretionary actuals generating an increasing in financial performance, while board diversity and board activity interact with discretionary accrual by decreasing the financial performance. These outcomes imply that corporate governance mechanisms may influence management decisions of using earnings manipulation to financial performance’s window-dressing.

Extensive research on corporate governance has led to a greater focus on disclosure (financial and narrative) in sustainability reporting, with the company’s primary goal of winning over and maintaining the support of stakeholders to gain competitive advantage. Managers could choose to present information using a qualitative approach rather than a quantitative one, manipulate the rhetoric, and influence investors’ perceptions. This study investigates whether corporate governance influences the tendency of companies to use particular textual narratives, as part of impression management techniques, to expose a favourable projection of overall activity. Three specific characteristics measure the propensity to employ impression management in sustainability reporting, while corporate governance is quantified considering board gender diversity. Additionally, company-level control variables are included. Research hypotheses are asserted in line with previous literature and tested based on a sample of non-financial companies from Eastern European countries, for the time frame between 2022 and 2023. Data on narrative tone is collected using textual analysis of sustainability reports, while corporate governance characteristics and control variables are extracted from the Tomson Reuters Eikon database. Descriptive statistics, correlation analysis, and multilevel regression estimation are employed to analyse the panel data. Mixed findings are highlighted, depending on the proxy used to measure impression management. They show that textual characteristics of sustainability reports are impacted by corporate governance. Empirical evidence emphasises that in boards with greater representation of women, the tendency of impression management strategies in the narrative tone of sustainability disclosure decreases. Women directors are associated with more balanced, precise, and clear, but not extensive reports. Results may represent an original and valuable resource for academic and business environments. First, this study adds to the existing literature and contributes to the debate on corporate governance mechanisms from the perspective of impression management, as a basis for present and future research horizons. Second, due to a thorough understanding of the tone of narrative disclosure, business representatives, regulators, and policymakers will be fully aware of potential opportunistic behaviours, as well as corporate governance mechanisms that exert significant influence and could lead to high-quality reporting. Third, impression management measurements as well as sample specifics and methodological insights support the originality of the investigation.