Do Directors Drive Corporate Sustainability?

58 Pages Posted: 24 Apr 2020 Last revised: 7 Aug 2020

See all articles by Peter Iliev

Peter Iliev

Pennsylvania State University - Department of Finance

Lukas Roth

University of Alberta - Department of Finance and Statistical Analysis

Date Written: April 14, 2020

Abstract

We use exogenous variation in the exposure of U.S. firms’ directors to the staggered introduction of sustainability reforms in foreign countries to study the role of the board of directors in shaping firms’ sustainability performance. Using a difference-in-differences design, we document that the board has a strong impact on U.S. firms’ CSR performance. We find that the board plays a stronger sustainability role in firms with less concentrated institutional ownership. The CSR performance improvements are larger for firms in ‘clean’ industries and firms with lower financial risk. Firms exposed to sustainability shocks have greater subsequent firm performance and productivity.

Keywords: Environmental, Social, E&S, CSR, Sustainability, Directors, Boards, Shocks

JEL Classification: F30, G15, G34

Suggested Citation

Iliev, Peter and Roth, Lukas, Do Directors Drive Corporate Sustainability? (April 14, 2020). Available at SSRN: https://ssrn.com/abstract=3575501 or http://dx.doi.org/10.2139/ssrn.3575501

Peter Iliev

Pennsylvania State University - Department of Finance ( email )

348 Business Building
University Park, PA 16802
United States

Lukas Roth (Contact Author)

University of Alberta - Department of Finance and Statistical Analysis ( email )

2-32E Business Building
Edmonton, Alberta T6G 2R6
Canada
780-492-4431 (Phone)
780-492-3325 (Fax)

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