Corporate Governance Determinants of Sustainable Manufacturing Practice: The Case of Zero-Defect Manufacturing in Multinational Corporations

Purpose: This study investigates the corporate governance determinants of sustainable manufacturing practice using Zero-Defect Manufacturing (ZDM) from the stakeholder theory and legitimacy theory perspectives. Design/methodology: Using a panel research design, the study analyses empirical data from Global 500 companies covering a 15-year period. Findings: The results show that Board Independence, Meeting Attendance by Board Members, Board Gender Diversity, and Board Skills on Sustainable Manufacturing are positively associated with ZDM Practice, whilst Chief Executive Officer (CEO) Duality of Power has a negative impact. In the millennium development goals (MGDs) period, the foremost drivers of ZDM Practice are Board Independence, Board Gender Diversity, and Board Skills on Sustainable Manufacturing, whilst this shifted to Board Independence and Board Gender Diversity in the sustainable development goals (SDGs) period. Originality/value: The study provides empirical evidence that organisations seeking to improve sustainable manufacturing practice may consider strengthening their corporate governance structures to demonstrate responsible manufacturing in line with stakeholders’ expectations and to preserve corporate legitimacy. The results are robust to alternative proxies, potential endogeneity concerns, and sample selection bias