A developmental agenda for sustainability governance in banking an emerging markets context : an exploratory study of the integration of corporate governance with corporate sustainability performance in South Africa’s banking sector

Abstract

This qualitative exploration aimed to identify the role of corporate governance in enabling sustainability performance in South Africa's banks. Through semi-structured interviews with banking professionals and sustainability experts, the study examined the intricate relationship between corporate governance and corporate sustainability performance. The findings revealed several key insights. Firstly, the study highlighted the critical role that management practices play in shaping a strong corporate governance culture within the banks. The ethical conduct and leadership of senior management were shown to influence perceptions, responses, and adherence to governance standards directly. Secondly, the concept of integrated thinking emerged as significant, demonstrating the banks' recognition of the interdependence among various organisational aspects and their ecosystem. Unexpectedly, the study identified diversity of mindset as a crucial aspect of effective decision-making and strategy implementation in the banks. This finding expands existing literature on diversity in corporate governance by emphasizing the importance of cognitive diversity beyond just physical and demographic traits. Furthermore, the research provided valuable insights into how external factors, such as reputation, the risk of greenwashing, and the broader country context, —impact the banks' sustainability practices and disclosures. The study also underscored the necessity of appropriate resources and capabilities for integrating effective corporate sustainability strategies. Lastly, the central role of corporate purpose in merging corporate governance and corporate sustainability practices was emphasized. The study discovered that the banks' commitment to creating mutually beneficial value for all stakeholders, as guided by their corporate purpose, played a crucial role in shaping their decision-making and strategies. These findings contribute to the literature on corporate governance and corporate sustainability performance, particularly within the context of South Africa's banking sector. The study offers a nuanced understanding of the complex interrelationships between various internal and external governance mechanisms, as well as the roles of leadership, resources, capabilities, and corporate purpose in driving sustainable practices within banks.