Board Risk Oversight and Environmental and Social Responsibility

77 Pages Posted: 26 Sep 2020 Last revised: 21 Oct 2020

See all articles by Hami Amiraslani

Hami Amiraslani

INSEAD

Carolyn Deller

University of Pennsylvania - The Wharton School

Christopher D. Ittner

University of Pennsylvania - Accounting Department

Thomas Keusch

INSEAD

Date Written: September 19, 2020

Abstract

Risk oversight has emerged as an important responsibility of corporate boards. At the same time, firms are increasingly recognizing the risks that social and environmental issues pose to investors and stakeholders. In this study, we examine the relation between board risk oversight and firms’ environmental and social (E&S) ratings. Using proprietary data on the board risk oversight practices of firms from 29 countries, we show that firms with more robust risk oversight have higher E&S ratings, are more likely to integrate E&S issues into their strategies and executive compensation contracts, and ultimately experience better E&S outcomes.

Keywords: corporate boards; corporate social responsibility; environmental and social ratings; risk management

JEL Classification: G15, G23, G32

Suggested Citation

Amiraslani, Hami and Deller, Carolyn and Ittner, Christopher D. and Keusch, Thomas, Board Risk Oversight and Environmental and Social Responsibility (September 19, 2020). Available at SSRN: https://ssrn.com/abstract=3695535 or http://dx.doi.org/10.2139/ssrn.3695535

Hami Amiraslani

INSEAD ( email )

1 Ayer Rajah Avenue
Singapore, 138676
Singapore

Carolyn Deller

University of Pennsylvania - The Wharton School ( email )

1311 Steinberg Hall - Dietrich Hall
3620 Locust Walk
Philadelphia, PA 19104-6365
United States

Christopher D. Ittner (Contact Author)

University of Pennsylvania - Accounting Department ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States
215-898-7786 (Phone)
215-573-2054 (Fax)

Thomas Keusch

INSEAD ( email )

Boulevard de Constance
77305 Fontainebleau Cedex
France

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