Managerial ability and ESG performance in ASEAN 5 banking: the moderating role of sustainability committees

Authors

  • Inayah Risqi Alisa Department of Accounting, Faculty of Economics and Business, Universitas Gadjah Mada, Indonesia
  • Nissa Baizurah Department of Accounting, Faculty of Economics and Business, Universitas Gadjah Mada, Indonesia

Keywords:

Sustainability, Managerial Ability, ESG Performance

Abstract

Study’s aims: This study aims to examine the effect of managerial ability on ESG performance and whether sustainability committees strengthen this relationship in ASEAN-5 banking institutions. Design/Methodology/Approach: Drawing on Upper Echelons Theory and Resource Dependence Theory, this study proposes that capable managers enhance sustainability outcomes and that formal governance structures reinforce this effect. The sample consists of 274 firm-year observations of publicly listed banks in Indonesia, Malaysia, the Philippines, Singapore and Thailand from 2017 to 2023. ESG performance data were obtained from the LSEG database. Panel data regression analysis is employed to test the direct and moderating relationships. Findings: The results indicate that managerial ability has a significant positive effect on ESG performance. Moreover, sustainability committees significantly strengthen this relationship, suggesting that specialized governance mechanisms enhance the capacity of capable managers to address increasing stakeholder and regulatory sustainability demands. Theoretical contribution/Originality: This study contributes to the literature by applying Upper Echelons Theory in the ESG context and by using Resource Dependence Theory to explain the role of sustainability committees in strengthening the relationship between managerial ability and sustainability performance. Practitioner/Policy implication: The findings highlight the importance of combining managerial capability with structured sustainability oversight to improve ESG outcomes in the banking sector.

References

Abdesslem, R. B., Chkir, I., & Dabbou, H. (2022). Is managerial ability a moderator? The effect of credit risk and liquidity risk on the likelihood of bank default. International Review of Financial Analysis, 80, 102044. https://doi.org/10.1016/j.irfa.2022.102044

ASEAN Exchanges. (2025). ASEAN Capital Markets–2024 Recap and 2025 Outlook.

ASEAN Taxonomy Board. (2021). ASEAN Taxonomy for Sustainable Finance - Version 1.

Association of Southeast Asian Nations. (2020). ASEAN Comprehensive Recovery Framework.

Baraibar-Diez, E., & D. Odriozola, M. (2019). CSR committees and their effect on ESG performance in UK, France, Germany, and Spain. Sustainability, 11(18), 5077. https://doi.org/10.3390/su11185077

Cao, R. Q., Zhou, S. B., & Gu, V. C. (2025). Exploring the relationship between managerial ability and ESG performance: a stochastic data envelopment analysis approach. Annals of Operations Research, 1-21. https://doi.org/10.1007/s10479-025-06569-w

Chen, R., & Zhang, T. (2025). Artificial intelligence applications implication for ESG performance: can digital transformation of enterprises promote sustainable development?. Chinese Management Studies, 19(3), 676-701. https://doi.org/10.1108/CMS-11-2023-0653

Clarkson, P. M., Li, Y., Richardson, G. D., & Vasvari, F. P. (2011). Does it really pay to be green? Determinants and consequences of proactive environmental strategies. Journal of accounting and public policy, 30(2), 122-144. https://doi.org/10.1016/j.jaccpubpol.2010.09.013

El Khoury, R., Nasrallah, N., & Alareeni, B. (2023). The determinants of ESG in the banking sector of MENA region: a trend or necessity?. Competitiveness Review: An International Business Journal, 33(1), 7-29. https://doi.org/10.1108/CR-09-2021-0118

Feng, H., Zhang, Z., Wang, Q., & Yang, L. (2024). Does a company’s position within the interlocking director network influence its ESG performance?—Empirical evidence from Chinese listed companies. Sustainability, 16(10), 4190. https://doi.org/10.3390/su16104190

Fiorillo, P., Gangi, F., Meles, A., Mustilli, M., & Salerno, D. (2023). The impact of equity analysts on ESG performance: Evidence from an exogenous shock. Global business review, 09721509231168252. https://doi.org/10.1177/09721509231168252

Guo, X., Cheng, P., & Choi, B. (2024). Impact of corporate environmental uncertainty on environmental, social, and governance performance: The role of government, investors, and geopolitical risk. Plos one, 19(8), e0309559. https://doi.org/10.1371/journal.pone.0309559

Gurol, B., & Lagasio, V. (2023). Women board members’ impact on ESG disclosure with environment and social dimensions: evidence from the European banking sector. Social Responsibility Journal, 19(1), 211-228. https://doi.org/10.1108/SRJ-08-2020-0308

Hambrick, D. C., & Mason, P. A. (1984). Upper echelons: The organization as a reflection of its top managers. Academy of management review, 9(2), 193-206. https://doi.org/10.5465/amr.1984.4277628

He, F., Guo, X., & Yue, P. (2024). Media coverage and corporate ESG performance: Evidence from China. International Review of Financial Analysis, 91, 103003. https://doi.org/10.1016/j.irfa.2023.103003

Hou, D., Yan, J., Sun, Q., & Chen, Y. (2025). Short-selling and corporate ESG performance: evidence from China. Sustainability Accounting, Management and Policy Journal, 16(2), 443-483. https://doi.org/10.1108/SAMPJ-09-2023-0712

Huang, Q., Xiong, M., & Xiao, M. (2022). Does managerial ability affect corporate financial constraints? Evidence from China. Economic research-Ekonomska istraživanja, 35(1), 3731-3753. https://doi.org/10.1080/1331677X.2021.2004186

Ioannidis, F., Kosmidou, K., & Zopounidis, C. (2025). The effect of national culture and social capital on banking ESG performance (No. IKEEART-2025-577). Aristotle University of Thessaloniki. https://doi.org/10.1016/j.irfa.2025.104084

Kateb, I., & Alahdal, W. M. (2025). Tracing the path to sustainable governance: CSR committees as mediators of board impact on ESG performance in the MENA region. Corporate Governance: The international journal of business in society, 25(6), 1272-1300. https://doi.org/10.1108/CG-03-2024-0147

Menicucci, E., & Paolucci, G. (2024). Board gender equality and ESG performance. Evidence from European banking sector. Corporate Governance: The International Journal of Business in Society, 24(8), 147-174. https://doi.org/10.1108/CG-04-2023-0146

Monteiro, A. P., Cepêda, C., Borges, A. P., & Vieira, E. (2024). Does CSR committee presence, stakeholder engagement, gender equality (SDG 5) and firm value influence ESG performance reporting? An EU pre and during Covid-19 analysis. Measuring Business Excellence. https://doi.org/10.1108/MBE-03-2024-0034

Nie, C., Luo, W., Chen, Z., & Feng, Y. (2025). Intellectual property protection and corporate ESG performance: evidence from a quasi-natural experiment in China. Business Process Management Journal, 31(1), 245-266. https://doi.org/10.1108/BPMJ-01-2024-0041

Niţescu, D. C., Ciobanu, R., Calin, A. E., Rusu, A. G., & Vierescu, E. M. (2025). From cost to opportunity: the role of ESG in banking. Amfiteatru Economic, 27(68), 235-252. https://www.ceeol.com/search/article-detail?id=1331671.

Paolone, F., Bitbol-Saba, N., Gasbarro, D., & Nicolò, G. (2025). Female leadership and environmental, social and governance performance. Empirical evidence from France. Social Responsibility Journal, 21(4), 689-703. https://doi.org/10.1108/SRJ-06-2024-0379

Rabbani, M. R., Kiran, M., Bhuiyan, A. B., & Al-Hiyari, A. (2024). Does diversity in top management and boards affect ESG performance? Evidence from Islamic and conventional banks in the MENA region. International Journal of Islamic and Middle Eastern Finance and Management, 17(6), 1244-1266. https://doi.org/10.1108/IMEFM-06-2024-0281

Shakil, M. H., Tasnia, M., & Mostafiz, M. I. (2021). Board gender diversity and environmental, social and governance performance of US banks: moderating role of environmental, social and corporate governance controversies. International Journal of Bank Marketing, 39(4), 661-677. https://doi.org/10.1108/IJBM-04-2020-0210

Shu, H., & Tan, W. (2023). Does carbon control policy risk affect corporate ESG performance?. Economic Modelling, 120, 106148. https://doi.org/10.1016/j.econmod.2022.106148

Srairi, S. (2025). The impact of risk and Fintech on ESG performance: evidence from gulf cooperation council (GCC) banks. Journal of Chinese Economic and Business Studies, 23(3), 363-404. https://doi.org/10.1080/14765284.2024.2428240

Tumewang, Y. K., Almarayeh, T., & Alharasis, E. (2025). Sustainability committee, external assurance, and ESG performance: empirical evidence from banking industry in emerging economies. Corporate social responsibility and environmental management, 32(2), 2728-2745. https://doi.org/10.1002/csr.3095

Wang, W., Sun, Z., Wang, W., Hua, Q., & Wu, F. (2023). The impact of environmental uncertainty on ESG performance: Emotional vs. rational. Journal of Cleaner Production, 397, 136528. https://doi.org/10.1016/j.jclepro.2023.136528

Yung, K., & Chen, C. (2018). Managerial ability and firm risk-taking behavior. Review of quantitative finance and accounting, 51(4), 1005-1032. https://doi.org/10.1007/s11156-017-0695-0

Zhao, F., Han, Z., & Wang, L. (2024). Digitization path to improve ESG performance: A study on organizational perspectives. PloS one, 19(12), e0313686. https://doi.org/10.1371/journal.pone.0313686

Downloads

Published

2026-03-31

How to Cite

Alisa, I. R., & Baizurah, N. (2026). Managerial ability and ESG performance in ASEAN 5 banking: the moderating role of sustainability committees. Journal of Ethics and ESG, 1(1), 59–72. Retrieved from https://journal.ets-institute.com/index.php/JEE/article/view/10

Issue

Vol. 1 No. 1 (2026): Journal of Ethics and ESG (in progress)

Section

Articles

License

Copyright (c) 2026 Inayah Risqi Alisa, Nissa Baizurah

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.