Title: The Role of Employee Diversity, Inclusion and Development for Socially Responsible Management Strategies and Financial Performance of European Companies
Abstract: This research examines the financial performance of European companies under the shaping factors of human capital features, namely employee diversity, inclusion and development. Further, the research configures several aggregated pillars and management strategies that need to be accounted by companies to enhance environmental, social and governance (ESG) achievements with benefit spillovers on the financial performance and firm profitability. The research endeavor relies on a complex dataset extracted from the Thomson Reuters database comprising a sample of 1722 firms with the company headquarters in Europe and new data for the last fiscal year (2019). Four basic ESG pillars (gender diversity, inclusion, people development and controversies) are the core elements used in our research. The methodology combines structural equation modelling (processed through the maximum likelihood estimator) with network analysis (configured based on partial correlations). Main results bring to the fore that human capital is essential for company financial performance, employee and executive management gender diversity and people development (training hours, training allocations/costs, employee satisfaction) being the main dimensions that have proved to reduce the financial risk and enhance firm profitability. Moreover, ESG diversity, inclusion and people development credentials have positive effects on firm outputs, while ESG controversies pillar induces an unfavorable impact.
Publication Year: 2021
Publication Date: 2021-01-01
Language: en
Type: book-chapter
Indexed In: ['crossref']
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Cited By Count: 4
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