Antecedents of corporate sustainability performance in Turkey: The effects of ownership structure and board attributes on non-financial companies Mine Aksoy a, * , Mustafa K. Yilmaz b , Ekrem Tatoglu b , Merve Basar a a Yalova University, Faculty of Economics and Administrative Sciences, Yalova Üniversitesi Merkez Yerles ¸ kesi, Çınarcık Yolu Üzeri, 77200, Yalova, Turkey b Ibn Haldun University, School of Business, Ulubatli Hasan Cad., No: 2 Basaksehir, 34494, Istanbul, Turkey article info Article history: Received 28 February 2020 Received in revised form 3 July 2020 Accepted 15 September 2020 Available online 17 September 2020 Handling Editor. Zhifu Mi Keywords: Borsa Istanbul sustainability index Board diversity Corporate sustainability performance Ownership structure Stakeholder theory abstract The discourse of corporate sustainability performance (CSP) has created an increasing motivation for companies to improve their competitive advantage. This study examines the drivers leading to a high level of CSP within non-financial Turkish companies listed in the Borsa Istanbul Sustainability Index. Drawing on both stakeholder and agency theories, we formulate a set of hypotheses that link CSP with ownership structure, board diversity, and firm-specific characteristics. Based on logit and probit models, the empirical results tend to confirm the positive influence of foreign and institutional ownerships in shaping CSP and indicate that CSP is positively linked with board size and the proportion of independent board members. Further, the findings show that companies with a leading level of CSP have a lower return than companies with mediocre CSP based on a market-based measure, Tobin’s Q. © 2020 Elsevier Ltd. All rights reserved. 1. Introduction Sustainability is acknowledged as a long-term vision that shapes socially and environmentally conscious companies. Corporate sustainability (CS) is a dynamic business strategy that employs the necessary sustainability practices to meet shareholders’ goals and energize stakeholders. This necessitates the challenging task of providing competitive outcomes while embracing environmental, social, and governance (ESG) metrics to positively influence firm value and ensure a good public reputation. Moreover, the growing size of the impact investing and the ESG-conscious approach of global wealth management firms and other stakeholders drive companies to exhibit more accountability for sustainability (Braam et al., 2016). A 2014 global survey of over 3800 senior executives jointly undertaken by the Boston Consulting Group, the UN Global Compact, and the MIT Sloan Management Review noted that approximately 65% of companies identified sustainability as one of the key items in their management agenda. The stakeholder theory (Freeman, 1983) has provided the foundation of corporate sustainability performance (CSP), which helps to build and solidify trusting relationships with stakeholders. Stakeholders require transparency and efficiency to increase their benefits and ensure the firm’s future sustainability. Thus, they de- mand that environmental and social policies are integrated into corporate performance (Pava and Krausz, 1996). Agency theory, on the other hand, draws attention to how a board monitors man- agement in the best interests of the shareholders (Fama and Jensen, 1983). Therefore, an effective board should have the right combi- nation of capabilities and experience to evaluate business strategies and their impact on sustainability policies. In this frame, the determinants of CS and their measurement become vital in explicitly proving companies’ dedication to sustainability-related issues. Searcy and Elkhawas (2012) underline that companies should define and measure their CSP to create value. The sustainability indices linked to financial markets aim to provide investors with further insight into CSP. According to the Sustainable Stock Exchanges Initiative (2018), 40 stock exchanges, with a total of USD 81 trillion market capitalization, have a sus- tainability index. Besides these stock exchanges, several companies, * Corresponding author. E-mail addresses: maksoy@yalova.edu.tr (M. Aksoy), mustafa.yilmaz@ihu.edu.tr (M.K. Yilmaz), ekrem.tatoglu@ihu.edu.tr (E. Tatoglu), merve.basarr90@gmail.com (M. Basar). Contents lists available at ScienceDirect Journal of Cleaner Production journal homepage: www.elsevier.com/locate/jclepro https://doi.org/10.1016/j.jclepro.2020.124284 0959-6526/© 2020 Elsevier Ltd. All rights reserved. Journal of Cleaner Production 276 (2020) 124284