Director Appointments, Boardroom Networks, and Firm Environmental Performance

46 Pages Posted: 12 Jul 2021

See all articles by Mingyuan Chen

Mingyuan Chen

Lancaster University Management School

Dakshina G. De Silva

Department of Economics, Lancaster University Management School

Aurélie Slechten

Lancaster University

Date Written: July 8, 2021

Abstract

Using BoardEx (2000--2017), we create a dynamic network connecting firms and board directors for the United States. We use the Environmental Protection Agency's Toxic Release Inventory to measure environmental performance at the director and firm-level. We examine how a candidate's environmental performance and networks affect director appointments. This allows us to endogenize the effect of directors’ environmental experience when studying the impact on firms’ chemical releases. We show that firms are likely to appoint influential directors with good environmental records and similar characteristics. Further, boards with good environmental performance and with diverse environmental backgrounds improve firms' environmental performance.

Keywords: Network Formation, Firm Organization, Toxic Release, Board of directors

JEL Classification: D85, L21, Q5

Suggested Citation

Chen, Mingyuan and De Silva, Dakshina G. and Slechten, Aurélie, Director Appointments, Boardroom Networks, and Firm Environmental Performance (July 8, 2021). Available at SSRN: https://ssrn.com/abstract=3882645 or http://dx.doi.org/10.2139/ssrn.3882645

Mingyuan Chen

Lancaster University Management School ( email )

Economics Department, LUMS
Bailrigg
Lancaster, Lancashire LA1 4YX
United Kingdom

Dakshina G. De Silva (Contact Author)

Department of Economics, Lancaster University Management School ( email )

Lancaster LA1 4YX
United Kingdom

Aurélie Slechten

Lancaster University ( email )

Lancaster LA1 4YX
United Kingdom

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