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Lookup NU author(s): Dr Yousry AhmedORCiD
This work is licensed under a Creative Commons Attribution 4.0 International License (CC BY 4.0).
© 2026 The Author(s). Business Strategy and the Environment published by ERP Environment and John Wiley & Sons Ltd. This study examines the relationship between internationalization and environmental, social, and governance (ESG) controversies, focusing on whether foreign directors on corporate boards influence this relationship. Drawing on resource dependence theory, we argue that internationalization increases ESG controversies due to the complexity of managing diverse regulatory environments and stakeholder expectations. Although foreign directors may contribute valuable global expertise and networks, they can either mitigate or exacerbate these controversies depending on their advising and monitoring capabilities. Using a sample of 5834 firm-year observations from US companies, we find a positive association between internationalization and ESG controversies. Additionally, foreign directors significantly exacerbate the effect of internationalization on ESG controversies. Our results, which underscore the adverse impact of internationalization and culturally diverse boards on ESG controversies, remain consistent after a battery of sensitivity tests and the addressing of potential endogeneity concerns. Our results are also robust to external shocks, such as the global financial crisis and the COVID-19 pandemic. This research advances the literature on corporate governance and sustainability, offering practical insights for policymakers and firms on the importance of strategic board composition and effective governance structures for managing ESG risks across global operations.
Author(s): Elsayed M, Gerged A, Ahmed Y, Uyar A, Karaman A
Publication type: Article
Publication status: Published
Journal: Business Strategy and the Environment
Year: 2026
Pages: Epub ahead of print
Online publication date: 20/04/2026
Acceptance date: 16/03/2026
Date deposited: 26/03/2026
ISSN (print): 0964-4733
ISSN (electronic): 1099-0836
Publisher: John Wiley and Sons Ltd
URL: https://doi.org/10.1002/bse.70833
DOI: 10.1002/bse.70833
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