Governance Practices, Social Responsibility, and Financial Performance: Evidence from the Condor Group in Algeria

Abstract

To determine the effect of governance efficiency/quality on the financial success of Condor Group through a mediating influence of Corporate Social Responsibility (CSR).

A survey questionnaire utilizing a five-point Likert Scale was constructed to measure the impact of governance factors on financial performance. The survey instruments were derived from prior literature regarding governance and CSR. A mediation model was developed based upon the results of the surveys using the Sobel-Goodman test. The results of the study support the hypothesis that Governance increases Financial Performance; but once CSR is included as a mediator, the effect of Governance decreases. The evidence indicates that implementing Governance Principles creates the conditions for CSR to be more effective, which leads to improved Financial Performance. The research findings support the conclusion that CSR serves as a mediator between Governance and Financial Performance.