1638 Review of Economics and Finance, 2023, 21, 1638-1646

Towards Sustainable Governance Excellence: Perspectives from Malaysian

Public-listed Companies

Nur Syuhada Jasni*, Haslinda Yusoff and Wiwi Idawati

Faculty of Accountancy, Universiti Teknologi MARA, Cawangan Selangor, Kampus Puncak Alam, Selangor, Malaysia, Indonesia
Business School, Indonesia.

Abstract: Sustainable governance has been extensively criticized, raising concerns about its interpretation within the
corporate community as well as its practical application in diverse businesses and sectors. The urgent question
among these uncertainties is how companies can effectively respond to the challenges of implementing sustainable
governance strategies. The purpose of this study, which employs the Resource-Based View (RBV) paradigm, is to
provide guidance by highlighting key aspects of successful sustainable governance practices. This study investigates
sustainable governance practices in the corporate setting and finds critical success factors through semi-structured
interviews with selected Malaysian public-listed companies (PLCs). The findings emphasize the necessity of strong
management quality, including internal communications and ethical leadership, as well as the construction of a
strong data governance structure to support long-term business goals. The study recommends that organizations
should develop ongoing strategies for the continuous improvement of sustainable governance practices.
Keywords: Sustainable Governance, Resource-Based View, Public-Listed Companies, Inernal Communications, Data Govern-
ance.
INTRODUCTION plays a vital role in disciplining and advising management
on making the most appropriate decisions (Naciti, Cesaroni,
The complexity of sustainable governance issues has long
& Pulejo, 2021). Effective governance plays a crucial role in
been acknowledged, evidence of the need for a more proac- guiding and monitoring managerial decision-making, facili-
tive response is scarce. In the corporate context, strategic tating relevant incentives, and creating tools for monitoring
sustainable governance focuses on sustainable profit with
and controlling managers.
growth opportunities. Consequently, the concept of sustaina-
ble governance has three meta-characteristics: (i) it is tridi- A growing body of literature acknowledges that companies
mensional, integrating economic, environmental and social need to establish an appropriate framework for internal and
dimensions in a triple bottom line (Fernando, 2012; Montiel external controls to ensure compliance with existing laws
& Delgado-Ceballos, 2014); (ii) it deals with short-term and and regulations set by government and local authorities (X.
long-term conditions (Bansal & DesJardine, 2014; Dyllick & Li et al., 2018; Klomp & Clear, 2018). This involves striking
Hockerts, 2002); and (iii) it employs incomes while main- a balance between the pressures exerted on the company by
taining the economic, environmental, and social capital base these governing bodies. Accordingly, proper governance
(Dyllick & Hockerts, 2002). The current study seeks to pro- measures and practices attempt to prevent corporate judg-
vide evidence that sustainable governance issues align with ments and damage shareholders’ perceptions (Husted 2017;
proactive sustainable governance practices, emphasizing the Campbell, 2007). Besides, good governance potentially re-
importance of internal and external resources and capabilities duces future misconduct that leads to lawsuits (e.g., fraud),
(Husted & Sousa-Filho, 2017). especially for complex companies (Christensen, 2016) and
thus contributing to the company’s resilience (Nollet et al.,
Recent evidence suggests that governance lies between busi-
2016).
ness ownership and shareholders’ ability to compensate and
put managers in control (Habib & Hasan, 2016; Rodriguez- Companies also have progressively focused on their suppli-
Fernandez, 2016; Servaes & Tamayo, 2013). There are two ers and customers’ obligation and concerned with their inter-
categories of sustainable governance mechanisms: internal nal operational functions (Krause, Vachon, & Klassen,
mechanism (such as board size, board independence, and 2009). Du Rietz (2018) and Aras and Crowther (2008) dis-
board of directors) and external mechanism (such as compet- covered that the integration of governance with environmen-
itive market conditions, the market for managerial labour, tal and social practices is fundamental and considered ac-
and talent and market for corporate control). Governance countability components for sustainable governance. Thus,
consistent with sustainable governance supporting beyond
damage control or public relations ideas (Gardner & Paulin,
*Address correspondence to this author at the Faculty of Accountancy,
Universiti Teknologi MARA, Cawangan Selangor, Kampus Puncak Alam,
2018). Apart from that, sustainable governance encompasses
Selangor, Malaysia, Indonesia Business School, Indonesia; the guidelines, policies, practices, and projects that can meet
E-mail: nursy168@[Link] the identified requirements for social good (Matten & Moon,
Towards Sustainable Governance Excellence Review of Economics and Finance, 2023, Vol. 21, No. 1 1639

2008). These can reduce capital cost, increase the company’s considers the availability of companies’ internal resources
value, improve operational performance that supports better and capabilities. Both companies’ resources and capabilities
management and resource allocation, enhance risk manage- are also used to justify the proactive behaviours of compa-
ment, and improve relationships with stakeholders, namely nies (Grewatsch & Kleindienst, 2017; Naciti et al., 2021;
employees, customers, and suppliers (Beryl & Watson, Wijethilake & Ekanayake, 2018), which distinguishes be-
2015). tween proactive companies and compliance-oriented compa-
This study intended to explore how companies’ resources nies (Russo & Fouts, 1997). The difference between re-
sources and capabilities is capabilities are ingrained in the
and capabilities can effectively enhance sustainable govern-
ance practices, ultimately contributing to the company's suc- dynamic interactions of multiple knowledge sources and are
cess. The goals of the study include: 1) to understand sus- more specific and less transferable (Peng et al., 2008); that
is, competencies or skills are acquired by employees. Be-
tainable governance practices in the corporate context and 2)
to identify the critical elements of effective sustainable gov- sides interactions development, the cognitive frame, which
ernance. By providing preliminary evidence that integrates initially forms the individual-level concept (Biesenthal,
Gudergan, & Ambrosini, 2019; Parmentier-Cajaiba, Lazaric,
internal business factors, resources, and capabilities, this
study aims to contribute to sustainable governance at the & Cajaiba-Santana, 2020), may be formed through individu-
corporate level. als, namely the company's top management (Kaplan, 2008;
Lee & Rhee, 2007).
LITERATURE REVIEW Many argued how the company’s capabilities were cogni-
tively generated. Evidence suggests that the cognitive frame
There is a growing body of literature that acknowledges the
is rooted in a dominant collective cognition about the com-
importance of resource optimization and capability devel- pany's objectives, strategy, values, and everyday activities
opment in the context of sustainable governance. The Re- that cultivate how employees’ think and act (Hahn, Rudiger,
source-Based View (RBV) theory asserts that a company's
Lulfs, 2014; Rerup & Feldman, 2011; Van der Byl &
success relies on effectively utilizing and leveraging its re- Slawinski, 2015). According to the RBV, strategic sustaina-
sources, including tangible and intangible assets, and devel- ble governance can overcome company inefficiencies be-
oping unique capabilities (Corbett & Claridge, 2002). This
cause the company is focusing on optimising resources and
approach emphasizes the strategic alignment of resources capabilities, which are relevant to the know-how and corpo-
and capabilities with the company's objectives, strategy, and rate culture (Guillamon-Saorin et al., 2018). In fact, sustain-
values. RBV emphasizes the proactive adoption of environ-
able governance will enhance resources productivity (Amit
mental strategies and the cultivation of sustainability dynam- & Schoemaker, 1993), it is solution-orientated, and create
ic capabilities to respond to sustainable governance pres- excellent opportunities for the company (Orsato, Garcia,
sures. Companies that allocate resources to environmental
Mendes-Da-Silva, Simonetti, & Monzoni, 2015), add capital
activities can generate valuable capabilities and gain compet- access and talent quality (Guillamon-Saorin et al., 2018).
itive advantages (Peteraf, 1993; Yu, Chavez, Jacobs, & Feng, Although there are many criticisms on the company’s capa-
2018). However, while RBV provides insights into the im-
bilities to evolve and change over time, RBV suggests that
portance of resources and capabilities, there are challenges in companies’ survival depends on resource exploitation, build
identifying and effectively leveraging these resources to upon existing capabilities, and unique capabilities (Peteraf,
drive strategy and performance.
1993; Yu, Chavez, Jacobs, & Feng, 2018).
In this theory, resources refer to the internal resources owned Furthermore, following the RBV of companies, Hart (1995)
and controlled by the company, which include tangible and
argued that companies might implement proactive sustaina-
intangible resources of the company that drives business bility strategies and sustainability dynamic capabilities (e.g.,
strategy and performance (Ray, Barney, & Muhanna, 2004). sustainability innovation capabilities) in response to sustain-
For instance, financial, technology, information, and
able governance pressures. In fact, the importance of re-
knowledge (Galbreath, 2005; Russo & Fouts, 1997). Mean- sources in shaping business strategy in response to environ-
while, capabilities are defined as a company’s core compe- mental issues has been empirically validated (Bansal, 2005;
tencies through resource utilisation that allows them to out-
Russo & Fouts, 1997; Sharma & Vredenburg, 1998). Be-
perform competitors and create competitive barriers sides, companies with proactive environmental strategies
(Galbreath, 2005; Guillamon-Saorin, Kapelko, & Stefanou, generate valuable capabilities that may lead to competitive
2018). Utilising its resources for the best outcomes and pro-
benefits (Hart, 1995; Sharma & Vredenburg, 1998). Compa-
duced incomparable products will lead to the improvement nies allocate more resources to environmental activities to
of resource efficiency (Amit & Schoemaker, 1993). Capa- create and sustain competitive advantage (Amran, Ooi,
bilities are the integration of many resources owned by com-
Wong, & Hashim, 2016; Roberts & Dowling, 2002).
panies; therefore, they are company-specific and less trans-
ferable, beneficial to companies (Peng, Wang, Jiang, & The studies by Aragón-Correa and Sharma (2003), Lueg and
Peng, 2008). Capability includes people who undertake the Radlach (2016), and Engert, Rauter, and Baumgartner (2016)
fundamental quests of the company, leading to the advance- provide valuable insights into the relationship between re-
ment and realisation of the company’s goals (Collis, 1994). sources, sustainable governance, and competitive advantage.
Aragón-Correa and Sharma (2003) argued that companies
The central of RBV is pursuing sustainable governance to- should identify resources that generate proactive strategies,
wards strategic agenda and superior performance, which
1640 Review of Economics and Finance, 2023, Vol. 21, No. 1 Jasni et al.

they do not provide clear guidelines on how to identify and socially, its role is more about employees’ welfare and prod-
leverage these resources effectively. Merely acknowledging ucts’ health and safety. Therefore, the measurement should
the importance of resources does not provide a comprehen- improve the practice and considers the procurement regula-
sive understanding of the mechanisms through which they tions and policies in the presence of complex processes (Lu,
drive strategy. Ye, Chau, & Flanagan, 2018).
Lueg and Radlach (2016) suggested that RBV focuses on the Besides, the accounting system should provide a rigorous
strategic way of utilising assets to improve performance and environmental accounting system with better methodologies,
create opportunities. Although this is a valid perspective, identified key parameters, transparent reporting systems for
their analysis primarily focuses on the strategic dimension, customers with input-output techniques to quantify and map
neglecting other crucial aspects such as operational efficien- the different scopes of supply chain resources (Koh, Gun-
cy and organizational capabilities. A more holistic approach asekaran, Morris, Obayi, & Ebrahimi, 2017). It also tracks
that considers all facets of resource utilization would en- key environmental metrics and fair third-party audits (Klas-
hance the applicability of the RBV (Bansal, 2005). However, sen & Vachon, 2011). Meanwhile, multinational companies,
it is challenging to address sustainable governance issues such as Unilever, showed exemplary conduct in its green
while fulfilling multiple stakeholders’ expectations (IE supply chain in its entire tea business, and Nike, in improv-
School of Communication and Global Alliance, 2010). ing its practice following the accusations about its violations
Companies that possess bigger resources are more likely to of human rights.
gain competitive advantages in the marketplace (Dangelico The role of ethical leadership specifically involved the board
& Pontrandolfo, 2015; Runyan, Huddleston, & Swinney, of directors and top management. Companies could appoint
2007). Likewise, companies that have implemented good a dedicated sustainable governance committee to engage in
sustainable governance strategies may potentially gain com- more impactful social and environmental activities and
petitive advantages. RBV provides proper means to analyse communicate their social engagements more effectively
how specific governance mechanisms reduce costs (Hart, (Arayssi et al., 2020). In terms of sustainable governance, the
1995). Nevertheless, other findings indicated that they were inclusion of directors in the environmental expert team or the
costly (Knight, Megicks, Agarwal, & Leenders, 2018; Yusof, establishment of board committees dedicated to environmen-
Awang, & Iranmanesh, 2017). In contrast, Ehrenfeld and tal and social issues are examples of internal initiatives that
Hoffman (2013) explained the performance measurement affect sustainable governance practice (Walls et al., 2012).
concept of eco-efficiency, which is cost-effective while re- Surprisingly, Velte (2016) found CSR expertise did not have
ducing environmental impact. The concept also provides a a significant impact on sustainable governance. Thus, it
logical explanation that businesses with fewer resources are would be interesting to examine whether the implementation
more likely to utilise their resources more efficiently to of a CSR committee has a positive and significant link with
achieve goals. This study applied Resource-Based View sustainable governance performance.
(RBV) theory to explore the optimisation of internal business
Meanwhile, Husted (2017) suggested that companies need to
factors, such as resources and capabilities, for achieving have a sustainable governance strategy relating to internal
maximum social benefits (Formentini & Taticchi, 2016; Qiu, communication. Transparent communication, disseminated
Shaukat, & Tharyan, 2016) for gaining sustainable competi-
in a top-down manner, is seen as crucial for supporting the
tive advantage (Bansal, 2005; Zhao, Fisher, Lounsbury, & development of sustainable governance initiatives. While
Miller, 2017). Langwell and Heaton (2016) and DuBois and DuBois (2012)
The current literature on sustainability governance places provide some support for this perspective, the specific strate-
significant emphasis on several key aspects. Engert, Rauter, gies and mechanisms for effective internal communication
and Baumgartner's (2016) study identifies various factors remain unclear. Further research is needed to identify and
that influence the integration of sustainability into strategic evaluate the alternatives for reinforcing sustainable govern-
management. However, questions arise regarding the specif- ance within organizations. The top-bottom direction must be
ic mechanisms through which resources influence environ- transparent and disseminated to support the development of
mental behavior, as strong brands and financial resources sustainable governance initiatives (e.g., Langwell & Heaton,
were found to have no significant impact on sustainable gov- 2016; DuBois & DuBois, 2012).
ernance efforts. Further investigation is needed to gain a
Many alternatives could be used to reinforce sustainable
deeper understanding of these relationships. governance (Macke & Genari, 2019), for instance, to have an
The role of the supply chain in supporting stakeholder rela- ongoing dialogue with employees (Haugh & Talwar, 2010).
tionships and sustainable governance is acknowledged by Additionally, the reliance on informal communication chan-
Ardakani and Soltanmohammadi (2019) and Mollenkopf et nels like emails and messaging apps to enhance employees'
al. (2010). However, the specific strategies and practices understanding of company processes and goals, as proposed
through which the supply chain can contribute to sustainable by the (World Business Council For Sustainable
governance require further investigation. Additionally, the Development, 2011), raises questions about the adequacy
social and environmental dimensions of management within and reliability of these channels for conveying important
the supply chain should be equally emphasized, as they play information.
critical roles in achieving sustainability goals. Environmen- Gloet (2006) and Langwell & Heaton (2016) highlight the
tally, management assists in the internal processes, while
importance of knowledge and information exchange for
Towards Sustainable Governance Excellence Review of Economics and Finance, 2023, Vol. 21, No. 1 1641

developing support and commitment to sustainable govern- ecutives. The research question guiding these interviews
ance. While this notion seems logical, the extent to which aimed to identify the essential components of sustainable
knowledge exchange directly translates into improved gov- governance practices.
ernance outcomes is not well-established. Further research To enhance data credibility, in-depth semi-structured inter-
should explore the causal relationships between knowledge
views were conducted one week after receiving the partici-
exchange, support for sustainable governance, and organiza- pants' written accounts. The structure and content of the in-
tional outcomes. terviews were informed by the written accounts. Prior to the
The suggestion to monitor managers' actions in the interest interviews, the main topics of the interview questions were
of shareholders (Giannarakis, Zafeiriou, Arabatzis, & shared with the participants to capture their enthusiasm and
Partalidou, 2018) implies the need for accountability and emotional responses. The participants willingly consented to
alignment with shareholder expectations. However, the link participate in the study by signing a consent form provided
between monitoring and sustainable governance outcomes by the university.
requires more empirical investigation. Additionally, the as-
Thematic analysis was chosen as the methodology to analyze
sertion that ethical leadership and coordinated decision- the findings due to its suitability for exploring qualitative
making lead to improved financial performance lacks con- data (Ali & Johl, 2022). Ensuring the reliability of the com-
crete evidence and warrants careful examination.
panies and the credibility of the participants was crucial to
The alignment of companies' objectives with sustainable establish the validity of the study. By identifying commonal-
governance, as emphasized by Barbosa, Francato, & Barbosa ities in the challenges faced by the companies, the study
(2019), is believed to have a positive effect on accounting aimed to project broader implications and enhance external
performance measures (Y. Li, Gong, Zhang, & Koh, 2018; validity.
Tian, Liu, & Fan, 2015). However, the impact on stock pric-
es, as indicated by Brooks and Oikonomou (2018), is less FINDINGS & DISCUSSION
significant. These findings suggest that the relationship be-
tween sustainable governance and financial outcomes is Key Finding 1: Quality of top management - Internal com-
munications
complex and may vary across different performance
measures. Further research should delve deeper into the un- In this study, participants were asked about the critical ele-
derlying mechanisms and contextual factors that influence ments of effective sustainable governance practice. Interest-
these relationships. ingly, the responses varied among the companies. P1, P2,
While the evidence points towards the importance of a bal- and P3 emphasized the importance of clear internal commu-
nications and direct top-bottom access to top management.
anced internal and external mechanism, the role of the sup-
ply chain, and ethical leadership as contributing factors to They mentioned activities such as quarterly ethics and sus-
sustainable governance and company success, it is essential tainability forums, monthly meetings with unit leaders, and
regular reporting to the top management. One participant
to critically evaluate the existing studies and address the gaps
and limitations in current understanding. Future research stated,
should provide more rigorous empirical evidence, explore "I have regular access to the top management because I re-
the mechanisms through which these factors operate, and port directly to the Chief Corporate Officer."
consider the contextual nuances that may influence the rela- Similarly, P2 mentioned,
tionships between sustainable governance and organizational
outcomes. "The ethics forum and sustainability forum comprised the
management team, and we report to the board of directors."
RESEARCH METHODOLOGY P3 also highlighted their internal application called 'Flow,'
This study focused on exploring prominent Malaysian pub- similar to WhatsApp, which they used for communication
licly listed companies with extensive experience in corporate and updates.
sustainability. The companies were selected using opportun- On the other hand, P5 had a different approach, where the
istic sampling, targeting participants who demonstrated in- interviewee mentioned preparing reports directly to the top
terest in the topic. To maintain consistency, semi-structured management using applications like 'Mensui' growing mech-
interviews were employed as the data collection method. anism. They stated,
These interviews were audio-recorded and later transcribed
for qualitative analysis, following established methodologies “We have the 'Mensui' growing mechanism, where ground-
(Jasni & Yusoff, 2020; B. Lee & Humphrey, 2006). This level people can report directly to specific contacts."
approach allowed for a comprehensive exploration of the All companies appreciated communication channels to dis-
complexities and diverse perspectives related to sustainable seminate information, with P3 specifically mentioning the
governance. use of their internal application, 'Flow,' for weekly newslet-
The study involved five participants representing different ters and updates. P4 highlighted their digitalization efforts,
sectors: P1 (homebuilders and developers), P2 and P3 (tele- including the use of their website for publishing news and
communications), P4 (power generation), and P5 (agribusi- creating interconnectivity among staff.
ness and commodity business). Each interview lasted be- These findings suggest that communication channels play a
tween 20 and 30 minutes and involved one-on-one discus- crucial role in sustainable governance practices. Internal and
sions with the head of the sustainability department and ex- external communication is used to reinforce the importance
1642 Review of Economics and Finance, 2023, Vol. 21, No. 1 Jasni et al.

of sustainability and to ensure that employees understand the Therefore, the study highlights the need for ethical leader-
processes and goals. Effective communication fosters ship to guide sustainable governance efforts and navigate
knowledge exchange and support for sustainability initia- complex regulatory and certification requirements. By adher-
tives. Additionally, it can help ensure that managers act in ing to legal authority, enforcing codes of conduct, and ad-
the best interest of shareholders. dressing environmental and social concerns, companies can
Therefore, the study underscores the significance of strong demonstrate their commitment to sustainable practices.
internal communications, including regular access to top However, the challenges involved in managing and monitor-
ing multiple policies should be carefully considered to en-
management, forums for discussions, internal applications,
and digitalization efforts. These elements contribute to effec- sure effective implementation.
tive sustainable governance practices and facilitate better
KEY FINDING 3: DATA GOVERNANCE
alignment and understanding within the organization. The
findings provide groundwork evidence that communication Interestingly, P4 and P5 highlighted the importance of data
channels are used as a tool of communication. Internal and governance, which was not prominently emphasized by
external communication reinforced the importance of sus- companies in the medium-risk sector. These companies em-
tainable governance using everyday language to helps em- phasized the significance of reliable measurement systems
ployees understand the processes and goals (World Business and achieving targets. They argued that by effectively cap-
Council for Sustainable Development, 2011). The deeper the turing and quantifying various aspects of resource capital in
intensity of knowledge and information exchange, the better the supply chain, such as emissions, materials, energy, and
the chance of developing support for sustainability (Gloet, social capital, companies can optimize production and make
2006; Langwell & Heaton, 2016), and to ensure that manag- informed decisions:
ers act only in shareholders’ interest (Giannarakis et al.,
2018). “So, when you talk about data governance, we take it seri-
ously because we believe in what has been measured. They
KEY FINDING 2: QUALITY OF TOP MANAGE- have their guidelines. They have their way of working, so
MENT - THE ROLE OF ETHICAL LEADERSHIP their system has to be reliable” (P4).
“Data, for instance… When we talk about greenhouse gas,
The study highlighted that the role of ethical leadership is we have the policy as well. Greenhouse gas and the goals we
crucial in sustainable governance. P2 emphasized the im- want to achieve, such as to reduce carbon in 2020 by 40%;
portance of abiding by regulations, government legislation,
when we have these things, then we start to think about our
and working policies. The interviewee mentioned the need to plan, such as building a biogas plant to reduce GHG” (P5)
enforce legal authority and comply with requests from dif-
ferent government or political parties, which can involve The interviewees expressed the seriousness with which they
blocking certain activities. Additionally, the interviewee approach data governance and the belief in the accuracy of
mentioned the significance of staff's code of conduct and their measurements. They emphasized the need for reliable
how it influences their work: systems and guidelines to ensure the credibility of the data.
Furthermore, they discussed specific goals related to green-
“Again, staff’s code of conduct is how you work” (P2) house gas reduction and how data governance plays a role in
Furthermore, P5, as an oil palm plantation company, dis- planning and implementing strategies to achieve those goals.
cussed the government's requirement to comply with the This finding aligns with previous studies that have highlight-
MSPO certification, which signifies sustainable production
ed the importance of balanced internal and external mecha-
and adds value to the company. However, the interviewee nisms and the role of ethical leadership in sustainable gov-
from P5 also acknowledged the challenges of strict monitor- ernance (Li et al., 2018; Klomp & Clear, 2018; Velte, 2016;
ing and overseeing 16 company policies that cover areas
Walls et al., 2012). It also introduces an unexpected finding
such as gender, carbon, and the environment: that data governance is a contributing factor to effective sus-
“From the smallest company to big companies, every com- tainable governance practices and overall company success.
pany must have MPSO. So if an oil palm plantation has These findings suggest that organizations should prioritize
MSPO certification, it means they are producing sustaina- both the quality of top management and improved data gov-
bly” (P5)
ernance when considering the critical elements of effective
The interviewee noted that managing these policies can be sustainable governance practices. By ensuring reliable meas-
difficult and costly: “It is quite difficult and challenging to urement systems and effectively managing data related to
control. So sometimes it could be costly” (P5) various aspects of sustainability, companies can enhance
These findings demonstrate that ethical leadership plays a their decision-making processes and optimize resource allo-
cation.
critical role in ensuring compliance with regulations and
working policies. It also highlights the importance of align- Thus, this study emphasizes the importance of data govern-
ing with sustainability certifications and implementing poli- ance in sustainable governance and adds to the existing un-
cies that address various aspects of sustainability. However, derstanding of the key factors influencing sustainable gov-
the challenges associated with monitoring and implementing ernance practices. By integrating data governance into their
these policies should be acknowledged, as they can require sustainability strategies, companies can further enhance their
significant resources. performance and contribute to long-term success.
Towards Sustainable Governance Excellence Review of Economics and Finance, 2023, Vol. 21, No. 1 1643

Table 1. Qualitative Results of Critical Elements of Effective information systems and technology, human resources, and
Sustainable Governance Practice. internal and external capabilities. To effectively disseminate
sustainability information and engage the workforce, it is
RQ Codes Categorizing Final Theme imperative to strengthen internal communications through
Top-bottom/ information systems and technology resources. Ethical lead-
bottom-up ap- ership plays a crucial role in enhancing business values and
proaches, a growth, particularly in partnership with strategic stakehold-
Internal commu- ers like government agencies. Additionally, skilled human
Communication
nications resources and advanced technology can efficiently assess
channel to dis-
How to seminate infor- output and performance through data governance, an essen-
Quality of top
achieve effec- mation tial internal capability.
management
tive sustaina- The study highlights that successful sustainable governance
Align with gov-
ble govern- practices demand top management quality and improved data
ernment move-
ance practice? Beyond compli- governance. Participants in the study utilised their resources,
ment/ require-
ance commitment including information systems and technology, human re-
ment, Working
sources, and stakeholder integration and engagement, to
policies
achieve sustainability objectives. These findings align with
Effective supply Data govern- the resource-based perspective, which considers internal
Input-output
chain ance business factors as performance measures (Guillamon-Saorin
et al., 2018; Qiu, Shaukat, & Tharyan, 2016).
Table 2. Comparative Analysis of Critical Elements Of Effec-
tive Sustainable Governance Practice Between Participants. Overall, the study stresses the importance of balancing inter-
nal and external mechanisms, ethical leadership, effective
Resources Capabilities Participants supply chain management, and data governance in achieving
(Interviewees) successful sustainable governance practices. By leveraging
H F T I E these critical elements, organizations can enhance their fi-
Quality of top man- P1
nancial performance and align with sustainability objectives.
H T I
agement – internal
communications H T I P2 CONCLUSION

H T I P3 This study aimed to contribute to the existing literature by

exploring ways to integrate sustainable governance into
H T I P4 companies' strategic plans and decision-making processes. It
focused on identifying internal business factors, such as re-
H T P5
sources and capabilities, that can enhance sustainable gov-
Quality of top man- H P1 ernance practices. The study specifically examined the im-
agement – the role of pact of various resources (financial, human capital, technol-
ethical leadership H I E P2 ogy, and innovation) and identified the capabilities necessary
for effective sustainable governance. Consequently, this
P3 study contributes to the understanding of how companies can
H P4 integrate sustainable governance into their operations. It
highlights the importance of key factors such as communica-
H F I E P5 tion, ethical leadership, and data governance, while also ac-
knowledging the need for future research to delve deeper
Data governance P1 into these areas and address any existing gaps. The findings
P2
of the study suggest that companies should prioritize effec-
tive communication and ethical leadership at the top man-
P3 agement level. Additionally, having robust data governance
systems is crucial for promoting long-term sustainability.
H T P4 However, it's important to note that the conclusions drawn
P5
from this study are based solely on the perspectives of the
H F T I
interviewed sustainability managers and executives. The
Note: H-Human, F-Financial, I-Information Systems and Technology, I- sample size was limited due to time constraints, and further
Internal, E-External. research is needed to explore more proactive actions, oppor-
tunities, and solutions, as well as to examine communication
The results of the study emphasise the importance of effi- both within and outside the company.
cient top-level management and better data governance in
promoting effective and sustainable governance practises. ACKNOWLEDGEMENTS
The study showed that the participants were skilled in utilis-
ing various resources such as human resources, information This research project received funding from the Faculty of
systems and technology, and financial resources (with a fo- Accountancy at Universiti Teknologi MARA, Malaysia, un-
cus on P5). The study clearly demonstrates that a company's der Grant No. 600-TNCPI 5/3/DDF (AKAUN) (002/2022).
financial success depends on a variety of elements, including
1644 Review of Economics and Finance, 2023, Vol. 21, No. 1 Jasni et al.

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Received: July 20, 2023 Revised: July 26, 2023 Accepted: Nov 19, 2023

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