Pitan Sanpakdee, Pathompong Kookkaew
ABSTRACT
This study investigates the influence of board characteristics, executive compensation, and environmental, social, and governance (ESG) practices on the firm value of companies listed on the Stock Exchange of Thailand. Specifically, it examines the direct effects of board attributes, the direct impact of executive compensation and ESG, and the moderating roles of these factors on the relationship between board characteristics and firm value. Drawing on agency and stakeholder theories, the study emphasizes the importance of governance mechanisms, performance-linked incentives, and sustainability practices in shaping firm performance. Using quantitative analysis of Thai listed firms, the findings reveal that among board characteristics, only the presence of directors with accounting and finance expertise significantly enhances firm value. Other structural features, including board size, proportion of independent directors, frequency of board meetings, and CEO–Chairman non-duality, do not directly affect firm value. Executive compensation alone does not exhibit a direct influence, whereas ESG practices show a negative direct effect on firm value, reflecting early-stage adoption challenges in Thailand. However, both executive compensation and ESG demonstrate significant moderating effects. Executive compensation strengthens the positive impact of independent directors on firm value, while ESG practices enhance the effectiveness of boards with accounting and finance expertise and those that meet regularly. These findings highlight the critical interplay between board competence, incentive structures, and sustainability engagement in improving corporate performance. The study contributes to the understanding of corporate governance in emerging markets and provides practical insights for regulators, investors, and managers regarding board composition, performance-linked incentives, and ESG integration. Policy and managerial implications suggest the strategic appointment of skilled directors, alignment of compensation with performance, and embedding ESG into corporate decision-making to enhance long-term firm value. The study also identifies avenues for future research, including exploring additional board characteristics, dissecting ESG components, and conducting comparative analyses across industries and countries.
