A study of environmental policies and regulations, governance structures, and environmental performance: The role of female directors

Abstract

This paper seeks to contribute to the existing business strategy and the environment literature by examining the effect of governance structures on environmental performance within a unique context of improving environmental governance, policies, regulations and management. Specifically, we investigate the extent to which corporate board gender diversity, including the proportion, age and level of education of female directors, affect environmental performance of Chinese publicly listed corporations. Using one of the largest Chinese datasets to-date, consisting of a sample of 383 listed A-shares from 2011 to 2015 (i.e., observations of 1,674), our findings are threefold. First, we find that the proportion and age of female directors have a positive effect on the overall corporate environmental performance. Second, our findings indicate that the proportion and age of female directors also have a positive effect on the three individual environmental performance components, namely environmental (i) strategy, (ii) implementation and (iii) disclosure, respectively. Finally, and by contrast, we do not find any evidence that suggests that the level of education of female directors has any impact on environmental performance, neither the overall environmental performance measure nor its individual components. Our findings have important implication for regulators and policy-makers. Our evidence is robust to controlling for alternative measures, other governance and firm-level control variables, and possible endogeneities. We interpret our findings within a multitheoretical framework that draws insights from agency, legitimacy, neo-institutional, resource dependence, stakeholder, and tokenism theoretical perspectives.

Board gender diversity and environmental performance: An industries perspective

“…Therefore, we are unable to generalize our findings to other jurisdictions that would have different contexts regarding either corporate governance or environmental performance. However, our findings are consistent with recent research studying board structure/gender issues and environmental performance/policy in other countries such as Australia (Galbreath, ), China (Elmagrhi et al, ), Germany (Horbach & Jacob, ), Spain (Pucheta‐Martínez & Bel‐Oms, ), and United Kingdom (Jizi, ). Future research could investigate if the same findings occur in jurisdictions with different institutional settings, especially mandatory versus voluntary quota systems.…”

“…Two topics that are front of mind of many large firms today are gender diversity in the boardroom (Amran, Lee, & Devi, ; Bravo & Reguera‐Alvarado, ; Galbreath, ; Glass, Cook, & Ingersoll, ; Horbach & Jacob, ; Jizi, ; Pucheta‐Martínez & Bel‐Oms, ) and environmental performance (Boiral, Heras‐Saizarbitoria, & Brotherton, ; Danso, Adomako, Amankwah‐Amoah, Owusu‐Agyei, & Konadu, ; Elmagrhi, Ntim, Elamer, & Zhang, ; Henry, Buyl, & Jansen, ; Pucheta‐Martínez, Gallego‐Álvarez, & Bel‐Oms, ; Shahab, Ntim, Chengang, Ullah, & Fosu, ; Zou, Xie, Qi, & Yang, ). Through our research, we show how these two themes are related and that firms could improve their environmental performance with a gender diversified board, especially in more environmentally impacting (resource extractive) industries.…”

Exploring factors relating to extinction disclosures: What motivates companies to report on biodiversity and species protection?

“…Fourth, hypothesis testing is conducted via ordinary least squares (OLS) regression to estimate the influence of explanatory variables on providing disclosure on the B/E disclosure. Generally, OLS regression is well suited for describing and testing our hypotheses and in line with previous studies (Elmagrhi, Ntim, Elamer, & Zhang, ). The regression model is specified as where TOTAL Dis is total B/E disclosure score, Ass refers to assurance, Big4 refers to assured by four big accounting firms, EW refers to getting environmental awards, performance refers to performance (poor vs. better), sector refers to high‐risk vs low‐risk zones, country refers to country (developed vs. developing), NOS refers to number of species, HSW refers to how many specific words related to biodiversity disclosed, POP refers to the presence of biodiversity partners, NOP refers to the number of pages allocated for B/E disclosure, control variables of Size refers to the size of the company, ROA refers to return on assets, and LEV refers to leverage.…”

“…In this section, we carry out several additional tests to check the robustness of the main results from the previous section. First, we run Hausman as an extra test to tell us whether we will use random‐effects versus fixed‐effect regression analysis (Alnabsha, Abdou, Ntim, & Elamer, ; Elmagrahi, Ntim, Elamer & Zhang ) to investigate whether Global 200 companies features influence B/E disclosure. Hausman test statistic results suggested that the random‐effects model is recommended.…”

Board gender diversity and corporate environmental performance: The moderating role of family and dual‐class majority ownership structures

“…In a longitudinal analysis on U.S. firms, Kassinis et al () also showed that female representation impacts corporate environmental consciousness positively. Walls et al () found lower environmental performance when boards were more independent, larger, and less diverse, whereas Elmagrhi et al () reported a positive link between the proportion and age of female directors and corporate environmental performance. Overall, therefore, given these studies' findings, the inference of a positive association between gender diversity and corporate environmental performance appears reasonable.…”