Board Characteristics and Corporate Environmental Performance: A Meta-Analysis

Abstract

Beyond the shareholder value maximization perspective, the board of directors’ role has broadened to consider other firm performance dimensions that can affect its stakeholders. This includes a firm’s environmental performance, which faces increasing stakeholder pressures and demands. Accordingly, we conducted a quantitative meta-analysis examining the relationship between board characteristics and corporate environmental performance. We organize our hypotheses according to three main functions of the board, i.e., monitoring the management, providing resources, and providing strategic counsel. Separate meta-analytic reviews were performed for three different operationalizations, namely environmental strengths, environmental concerns, and environmental disclosures. Our findings show that CEO duality and director interlocks are positively associated with environmental concerns, while board size and board gender diversity are positively associated with environmental strengths. Moreover, board independence and board gender diversity are positively associated with environmental disclosures. Interestingly, we find that board independence and the presence of an environmental committee have positive associations with both environmental strengths and concerns. This may be due to the board fulfilling its monitoring role by highlighting the firm’s environmental concerns, or potentially the result of legitimizing the firm environmentally. This highlights the need to examine corporate environmental performance as a disaggregate construct instead.