Corporate Governance and Corporate Social and Environmental Performance: Does financial slack have a moderating role? Evidence from the food industry

Extra-financial information concerning how firms deal with environmental, social and governance (ESG) issues is becoming every day more relevant. Financial information, indeed, lacks to provide adequate knowledge about some significant corporate dimension that may lead, in the long run, to firm’s competitive advantage and that is embedded in its citizenship and community legitimacy (Cucari et al., 2018). There is a wide body of literature analyzing these three pillars of sustainable investing (Elkington, 2006), particularly with reference to how these CSR pillars affect firms’ performance (Kong, 2012). The relation between CG and CSR engagement has also been widely investigated (Jo & Harioto, 2012); however, there is a lack in previous studies concerning how the mentioned pillars influence each in the food industry.This empirical research has therefore the purpose to shed more light on the relation between ESG pillars in this specific setting. In particular, the aim of the study is twofold. On one side, according to Jamali et al. (2008), we hypothesize that effective corporate governance (CG) may lead to corporate social and environmental performance (CSEP). On the other side, we investigate if this relation can be moderated by financial slack.