Do Board Expertise and Networked Boards Affect Environmental Performance?

60 Pages Posted: 25 Nov 2016 Last revised: 15 Nov 2017

Date Written: November 2017

Abstract

We analyze the role of board expertise in environmental issues (measured by the presence of non-executive directors with previous experience in environmental issues, EEDs) and director networks on GHG emissions. Using emission data of FTSE 350 firms, we show that presence of EEDs on the board reduces GHG emissions. Also boards with better networked directors have better environmental performance. These associations are robust to alternative explanations - endogenous matching of firms and directors, general technical expertise of the board, and pro-active stacking in board composition. The results are consistent with the view that director skills and information spillovers through director networks add value.

Keywords: Director Expertise, Director Networks, Emissions, Environmental Performance

JEL Classification: G34, G39, L14, L25, Q50

Suggested Citation

HomRoy, Swarnodeep and Slechten, Aurélie, Do Board Expertise and Networked Boards Affect Environmental Performance? (November 2017). Available at SSRN: https://ssrn.com/abstract=2873760 or http://dx.doi.org/10.2139/ssrn.2873760

Swarnodeep HomRoy (Contact Author)

University of Groningen ( email )

Nettlebosje 2
Department of Economics, Econometrics and Finance
Groningen, Groningen 9747 AE
Netherlands

Aurélie Slechten

Lancaster University ( email )

Lancaster LA1 4YX
United Kingdom

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