Corporate Sustainability and Financial Performance : The influence of board diversity in a Swedish context

Abstract

Purpose: The aim of this thesis is to analyse the relationship between corporate sustainability performance and financial performance in a new contextual setting, i.e. Sweden. Furthermore, the thesis contributes by creating a sustainability index as well as investigating the impact of board diversity on the relationship. Theoretical framework and hypotheses: With support from instrumental stakeholder theory and previous empirical findings, a positive relationship between sustainability performance and financial performance is hypothesised. Furthermore, with support from previous studies on the effect of board diversity on sustainability and financial performance, the second and final hypothesis predicts a positive impact of board diversity components on the relationship between the two components. Methodology: This thesis takes on a deductive approach in which a multivariate regression method is used. The final sample constitutes of 1,015 observations of firms listed on the NASDAQ OMX Stockholm during 2009-2013. Findings: The results indicate a positive relationship between corporate sustainability and financial performance. However, the findings of a robustness test suggest a more complex relationship. Instead of a complete positive relationship, there are indications that the positive relationship is only true for low and moderate sustainability performers. Lastly, only educational board diversity was found to have an impact on the relationship between sustainability and firm profitability.