THE ROLE OF CORPORATE GOVERNANCE IN MEDIATING THE RELATIONSHIP BETWEEN CSR AND FIRM VALUE IN THE MANUFACTURING SECTOR

Abstract

This study explores the role of corporate governance in mediating the relationship between Corporate Social Responsibility (CSR) and firm value in the manufacturing sector. As CSR activities gain importance in enhancing a company's reputation and financial performance, this research examines how governance mechanisms such as board independence and transparency affect the effectiveness of CSR in driving firm value. A qualitative literature review was conducted, analyzing peer-reviewed studies and case reports from the past 15 years. The results indicate that CSR has a positive impact on firm value, but the extent of this effect is contingent upon strong corporate governance. Firms with robust governance structures are better positioned to achieve financial returns from their CSR investments. Corporate governance was found to play a significant mediating role, ensuring that CSR aligns with the firm’s long-term goals. These findings contribute to existing literature by highlighting the importance of governance in optimizing CSR outcomes. Practical implications suggest that manufacturing firms should integrate CSR into their core business strategies while ensuring effective governance. Future research should focus on identifying specific governance mechanisms that most effectively enhance CSR outcomes and conduct longitudinal studies to assess long-term impacts on firm value.