The Role of Voluntary Corporate Governance Mechanisms on Environmental Risk Disclosure: Australian Evidence

35 Pages Posted: 31 Jan 2014

See all articles by Eswaran Velayutham

Eswaran Velayutham

University of Southern Queensland

Chandrasekhar Krishnamurti

University of South Australia

Ariful Hoque

Murdoch University

Multiple version iconThere are 2 versions of this paper

Date Written: January 31, 2014

Abstract

We examine the factors associated with the establishment of an environmental committee at the board level and its impact on the disclosure of environmental risks in an Australian context. Using a sample of Australian Stock Exchange firms disclosing their information to the Carbon Disclosure Project, we document a strong association between the existence of environmental committee and board independence, CEO duality, directors’ share ownership, and institutional shareholding. Firms that belong to environmentally sensitive industries are more likely to have environmental committees. Furthermore, we find that firms with environmental committees are more likely to disclose environmental risk information and this leads to mitigation in information asymmetry between managers and stakeholders.

Keywords: Environmental committee, corporate governance, Environmental risks, Australia

JEL Classification: G14, Q51, M14

Suggested Citation

Velayutham, Eswaran and Krishnamurti, Chandrasekhar and Hoque, Ariful, The Role of Voluntary Corporate Governance Mechanisms on Environmental Risk Disclosure: Australian Evidence (January 31, 2014). 2014 Financial Markets & Corporate Governance Conference. Available at SSRN: https://ssrn.com/abstract=2388489 or http://dx.doi.org/10.2139/ssrn.2388489

Eswaran Velayutham

University of Southern Queensland ( email )

P.O.Box 238 Darling Heights
Toowoomba, Queensland 4350
Australia

Chandrasekhar Krishnamurti (Contact Author)

University of South Australia ( email )

37-44 North Terrace, City West Campus
Adelaide, South Australia 5001
Australia

Ariful Hoque

Murdoch University ( email )

South Street
Murdoch 6150, Western Australia
Australia

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