Role of Corporate Governance Internal Mechanism and CSR on Enhancing Firm Performance: Evidence from Pakistan

Abstract

The corporate business faces escalating social and competitive challenges in today's worldwide economy. Literature has revealed the existence of several internal disciplining mechanisms of corporate governance that are hypothesized as factors influencing firm performance. This paper reviews the theoretical and practical research on internal mechanisms of corporate governance, especially dividend payouts, CSR, environmental strategy, transformational leadership and firm performance. The main purpose of this study is to evaluate the role of leadership and environmental strategy in CSR and firm performance. Data were collected from managers of Pakistani financial analysis businesses. The ultimate sample size was 100, and data was collected through a questionnaire. This study found empirical evidence that favors an internal mechanism and CSR affecting firm performance, transformational leadership, and environmental strategy serve as a mediator among firm performance and CSR. Moreover, this research keen analysis on the previous studies related to CSR in emerging economies. Firms, policymakers, and practitioners may make efforts to enhance their CSR practices. Overall, we draw the conclusion that socially responsible corporate enterprise endeavors have a higher chance of success in Pakistan.