Director appointments, boardroom networks, and firm environmental performance

Abstract

Using BoardEx (2000BoardEx ( -2017, we create a dynamic network connecting firms and board directors for the United States. We use the Environmental Protection Agency's Toxic Release Inventory to measure environmental performance at the director and firm-level. We examine how a candidate's environmental performance and networks affect director appointments. This allows us to endogenize the effect of directors' environmental experience when studying the impact on firms' chemical releases. We show that firms are likely to appoint influential directors with good environmental records and similar characteristics. Further, boards with good environmental performance and with diverse environmental backgrounds improve firms' environmental performance.