In the face of unprecedented global challenges, including the COVID-19 pandemic, wars, geopolitical unrest, spikes in energy and raw material prices, and economic volatility, businesses are increasingly recognizing the importance of sustainability and ESG (Environmental, Social, Governance) factors. This study focuses on Taiwan's semiconductor industry from 2014 to 2020, aiming to explore the impact of various initiatives on firm value and assess the role of distinct equity structures in mitigating agency problems and enhancing firm performance.

There are two primary strategies. Can create form value: economically-good initiatives (epor) and socially-good initiatives (ESG). Epor may not yield immediate returns and entail uncertainty, while ESG can potentially create firm value more rapidly than R&D. However, companies don't know how to do ESG because of the absence of standardized ESG criteria in Taiwan. Therefore, the agents should have risk aversion, and cause agency problems. Drawing on agency theory, we find that enhancing managerial cohesion has a limited impact on alleviating agency issues or promoting high-risk investments. Conversely, foreign shareholding enhances internal cohesion, amplifying the efficacy of ESG and epor. This underscores the critical role of corporate governance in fostering corporate social responsibility, particularly in the semiconductor industry, known for its emphasis on innovation and sustainability.

Moreover, we emphasize the importance of a holistic approach to socially-good initiatives, considering the interplay of Environmental (E), Social (S), and Governance (G) factors. Although our study does not directly establish a correlation between environmental practices and firm value, focusing on ESG activities, especially within the Governance (G) dimension, contributes to enhancing firm value by bolstering reputation, reducing operational risks, and attracting investors, thereby ensuring long-term competitive advantage.

Finally, governance-related disclosures exert stronger moderating effects compared to social or environmental factors, providing valuable insights into risk management, operational efficiency, and external perceptions across industries. Corporate governance emerges as an indispensable element of ESG assessment, underscoring its significance across all sectors.

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