Do Returnee Directors Induce Sustainable Performance? Evidence From an Emerging Market

ABSTRACT

This study examines the impact of returnee directors (RET), defined as local directors with overseas study or work experience, on sustainable performance (SUSP) in an emerging market context, with particular attention to the moderating role of directors' OECD experience (OECD). Using a High‐Dimensional Fixed Effects (HDFE) model, we examine Indonesian listed firms during mandatory sustainability disclosure (2019–2023) and find that the presence of RET within board structures positively contributes to improvements in SUSP. We further find that OECD exposure strengthens the positive relationship between RET and SUSP, although its direct association with SUSP is negative. These findings reinforce the growing link between corporate governance and sustainability in the postimplementation period of Regulation No. 51/POJK.03/2017, while extending imprinting theory by highlighting how the quality of international exposure shapes strategic imprints within firms. Overall, this study offers more nuanced implications for regulators on leveraging the contributions of professional diaspora to support domestic sustainability transformation.