Board Ancestral Diversity and Voluntary Greenhouse Gas Emission Disclosure
57 Pages Posted: 5 Jan 2022 Last revised: 2 Dec 2022
Date Written: December 2, 2022
This paper provides new insights into the determinants of the strategic decision to voluntarily disclose greenhouse gas (GHG) emissions – a decision that previous literature has shown to be value enhancing and demanded by stakeholders. We document that board ancestral diversity has a positive and statistically significant effect on a firm’s scope and quality of voluntary GHG emission disclosure. Ancestral diversity is a diversity aspect that is not subsumed by other common diversity measures. Our results are robust to controlling for several other dimensions of board diversity and addressing endogeneity and sample selection. Supplementary analysis suggests that board ancestral diversity has a stronger impact on GHG emission disclosure in complex firms and firms with low institutional ownership. In line with resource dependence, stakeholder, and (stakeholder-)agency theory, we interpret our findings as consistent with the view that board diversity enhances advising and monitoring.
Keywords: greenhouse gas emission disclosure, board of directors, board diversity, ancestry
JEL Classification: G30, G41, M14, M40, Q56
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