Corporate Governance and Sustainability Performance: Triple Bottom Line Approach for the Indian Listed Firms

ABSTRACT This paper examines the impact of M&A activities on Indian firms' sustainability performance, considering the triple bottom line approach grounded in Agency Theory and Resource‐Based View (RBV). To achieve this objective, the large panel data of 342 NSE‐listed M&A firms from the period 2014 to 2023 is considered, with the event window of (−1, +3). The empirical results provide evidence that corporate governance variables and the ESG score of M&A firms are positively correlated; however, some variation exists. Promoter ownership, institutional ownership, and FII positively impact performance post‐M&A, with FII showing improved sustainability performance, especially when considering overall ESG. Board size and CEO duality negatively affect ESG post‐M&A, while board diversity, especially female representation, has a stronger positive impact on sustainability performance after M&A. However, when each of the three components of sustainability, that is, E (environmental), S (social), and G (governance), is examined, it is found that different ESG parameters are affected differently. The research explores a new subject, which links Mergers and Acquisitions to sustainability, to expand knowledge in these two fields. The research draws its theoretical foundation from Agency Theory and Resource‐Based View (RBV) to show that corporate governance systems function as valuable, rare, and inimitable resources, which lead to better sustainable performance for firms. The research applies theoretical frameworks to establish relationships between post‐acquisition governance systems and ESG performance, which enables a better understanding of governance integration approaches that lead to sustainable long‐term results in Indian emerging markets.