Environmental responsibility drives board structure and financial and governance performance: A cause and effect model with qualitative information

This study contributes to determining the corporate environment, society and governance cause-effect model with qualitative information. The increase in environment, social, and governance responsibilities indicates that there has been a growth in corporate sustainability. The responsibilities involved in corporate performance remain unclear because prior studies fail to address these responsibilities in conjunction with corporate board structure and financial performance. In addition, prior studies fail to address the cause-effect interrelationships among the proposed attributes. The responsibilities are usually measured with qualitative information and linguistic preferences. The Delphi method addresses the attributes’ reliability and validity and uses fuzzy set theory to transform qualitative information and linguistic preferences into crisp values. The decision-making trial and evaluation method aims to determine the interrelationships among the attributes. The results indicate that environmental responsibility drives corporate board structure and financial and governance performance. The improvement in corporate sustainability showed that waste management and reduction, reuse and recycling policy, return on asset improvements, financial contributions to the community, and energy conservation are the top priorities. The theoretical and practical implications are discussed. •Prior studies lack to address on corporate ESG responsibilities and financial performance.•This study uses fuzzy set theory to transform linguistic preferences into crisp values.•This study applies the DEMATEL to analyze the interrelationships among the attributes.•The results indicate that environmental responsibility drives board structure, financial and governance performance.