Abstract
The purpose of this study is to investigate the effect of the main Corporate Governance (CG) characteristics on the corporate environmental performance. In addition, it focuses on global food companies as this sector is distinguished by specific characteristics. The sample of the study employs 174 food companies from the Thomson Reuters Global Food & Beverages Price Return Index for 2017. The Environmental Score as calculated by Thomson Reuters is adopted in the proposed model as a proxy of corporate Environmental Performance (EP). A regression analysis is developed in order to investigate the Board Size, the Board Independence and the Board gender composition of Board of Directors (BoD) on EP. The results revealed that the size of the BoD and the presence of women directors on Board have a positive effect on environmental performance. The study assists corporate managers to implement the appropriate Board characteristics in order to enhance their EP and socially responsible investors to identify companies with higher level of EP. This study extends the scope of previous studies by investigating the food and beverage sector and understanding of CG characteristics on EP taking into account innovating index as a proxy of EP.
Highlights
The concept of Corporate Social Responsibility (CSR) increases its awareness among different corporate stakeholders, such as corporate managers, investors, consumers, academic community and suppliers (Galvão et al, 2019)
Even if independent directors on Board are significant for companies, the results showed that the increased percentage of independent directors has no impact on environmental performance consistent with Allegrini and Greco (2013)
Since environmental concerns are crucial for companies, the study intends to investigate the role of corporate governance characteristics on corporate environmental performance
Summary
The concept of Corporate Social Responsibility (CSR) increases its awareness among different corporate stakeholders, such as corporate managers, investors, consumers, academic community and suppliers (Galvão et al, 2019). The environmental aspect is one of the most important aspects of CSR and it has attracted the interest of scientific community to investigate the main factors that affect the environmental performance and its relationships with other corporate aspects such as economic one The Organization for Economic Co-operation and Development states that corporate governance is the system that a company is directed and controlled by defining the rights and the responsibilities of different parties of a company such as BoD, shareholders and managers (Organisation for Economic Co-operation and Development, 2004). Due to recent corporate scandals such the ones of Enron and Worldcom, the BoD attracts the attention as it is considered accountable for (Alanazi, 2019)
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