| dc.description.abstract | As global attention to issues in corporate sustainability heightens, board structure and R&D expenditure have become focal points of corporate governance and performance. In recent years, governments across the world required firms to establish boards of diversity, particularly emphasizing on board independence and gender diversity. A diversified board of directors can effectively provide objective supervision and advice, bringing in different perspectives and experiences, thereby raising corporate governance standards and performance in aspects of Environmental, Social, and Governance (ESG). Additionally, companies are increasingly focusing on R&D expenditure, especially in environmental protection, green innovation, and product development. This not only reduces the environmental impact of corporate operations in compliance with increasingly stringent regulations, but also enhances their performance in social responsibility.
This study aims to explore the impact of board structure and R&D expenditure on TESG scores, using data from the Taiwan Economic Journal (TEJ pro) database on Taiwanese listed companies from 2016 to 2022. The research focuses on the impact of the proportion of independent directors, the proportion of female directors, and R&D expenditure on corporate TESG performance. Using fixed effects model, our empirical analysis found that the proportion of independent directors has a significant positive impact on TESG scores, while the proportion of female directors does not have a significant impact. Additionally, increasing corporate R&D expenditure also positively impacts TESG scores. Robustness tests further show that firms complying with the Financial Supervisory Commission′s (FSC) requirements on the number of independent directors, deliver a significant positive impact on TESG scores, while the effects of the presence of female directors in the board of directors remains insignificant.
The research results indicate that in the pursuit of sustainable development, the diversification of board structure and the investment in R&D expenditure can effectively improve ESG scores. Therefore, this paper suggests that as regulations on diversity become increasingly sophisticated, the government should further mandate diverse backgrounds of independent directors in policy formulation, in seeking an overhaul in the overall capabilities of the board and avoiding blind spots in the decision-making process arisen from over-concentration in the hands of a few directors who only specialize in certain areas. Furthermore, green innovation has become a major trend in R&D expenditure, so through green innovation, firms can not only reduce ecological damages but also achieve transformation goals and enhance corporate competitiveness, aligning with global economic and environmental sustainability trends. | en_US |