Social Outcomes of Corporate Governance: Evidence from the Food Industry of Pakistan

Social and environmental problems are becoming strategic concerns for the managers in the current business scenario because it is challenging their sustainability. Here the need arises to respond to this changing phenomenon accordingly. In this regard social impact of corporate governance has not yet been explored where it can play a role of driver of excellence in terms of social performance and it is required to be studied. To check the existing situation, this study has been conducted where the social impact of corporate governance has been explored in the food Industry of Pakistan. Questionnaires have been filled from 176 managers working in six food producing firms listed in Pakistan Stock Exchange (PSX). Structural Equation Modeling based partial least square (PLS) has been used where Smart PLS has been used for model estimation Results are supporting the stakeholder theory as Nestle Pakistan and Engro Foods are driving social excellence through corporate governance practices, where the corporations are showing strong positive relationships of corporate governance practices with stakeholders management, environmental integrity and protection, social cohesion and equity while insignificant relationship exists between strategic proactivity and corporate governance practices as people are resistant to change and innovation. The relationships can be explored in other industries like Oil and gas, Chemicals and Construction etc.