Association Between Directors With Foreign Experience and Firms’ Environmental Disclosure

Abstract

Environmental concerns garner global attention, with firms in developing nations responsible for addressing these issues effectively. Environmental disclosure is a prominent aspect of this responsibility, which has become crucial to corporate practice in these nations. This study explores directors’ foreign experience’s influence on a firm’s environmental information disclosure. Data from listed firms in China, a developing country, are employed for this analysis. Using an empirical model, we investigate the proposed hypotheses. The results indicate a trend among firms to favor directors with foreign experience, given their apparent inclination toward environmental information disclosure. However, it’s been observed that corporate governance tends to weaken the positive correlation between hiring directors with foreign experience and environmental information disclosure. This positive association is particularly evident in firms with weak financing constraints, those subjected to strict environmental regulations, and state-owned enterprises. Our study offers valuable insights for managers and decision-makers in developing countries, particularly regarding managing corporate social responsibility and facilitating green transitions in response to environmental regulations. It aids top-tier management in bolstering their internal strategies to optimize their contribution to environmental sustainability. This study, therefore, presents a valuable exploration into the role of directors with foreign experience in influencing firms’ environmental information disclosure.

The divergence and driving factors of corporate environmental information disclosure in China

“…The three variables with the lowest influence are the degree of openness to the outside world (FDI), the percentage of executives studying abroad (Overseas), and the percentage of financial background executives (Finance). Well-resourced, well-governed and experienced firms are better equipped and motivated to cope with EDI requirements, while internationalization and executive background have a weaker direct effect on EID (Su et al 2023). Through the relative importance analysis, it can be found that the internal factors of enterprises will affect the level of EID more profoundly, providing a focus point for enterprises to enhance EID further.…”