Environmental Concern, Regulations and Board Diversity

Do, Quynh; Cao, Ngan Duong; Gounopoulos, Dimitrios; Newton, David

doi:10.1561/114.00000037

Cited by 10 publications

(2 citation statements)

References 241 publications

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“…To do so, we follow the existing literature and explore the monitoring and executive power channels (Continues) (i.e., independent vs. female executive directors). Female independent directors are expected to impact strategic decisions, such as relationships with creditors and stakeholders via the monitoring channel, because of their independent status and advisory role; female executive directors may influence strategic decisions as they are directly involved in management and policy implementation (Atif et al, 2019(Atif et al, , 2020Chen et al, 2017;Do et al, 2023). We report the results of this analysis in Table 5 (columns 1-3), finding that female independent directors (FOBIND) have a significantly negative impact on the probability of loan covenant violations.…”

Section: Which Female Director Type Influences Loan Covenant Violatio...mentioning

confidence: 95%

The impact of board gender composition on loan covenant violations

Alam,

Atif,

Cumming

et al. 2023

Corporate Governance

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Research Question/IssueWe examine the role of board gender diversity in attenuating loan covenant violations. We also investigate whether the relationship is influenced by female independent directors. Finally, we examine the channels of this relationship.Research Findings/InsightsDrawing on gender socialization and diversity theories, our findings show that firms with gender‐diverse boards are less likely to violate loan covenants. We also find that boards with more female directors have a stronger impact on loan covenant violations than those with fewer female directors, consistent with critical mass theory. Our results also suggest that the negative relationship stems from female independent directors rather than from female executive directors. Our channel analyses indicate that the relationship is routed through covenant strictness, the financial performance of firms, and better corporate governance. Our further analysis demonstrates that the relationship is pronounced in female‐dominated industries and financially distressed firms, as well as in firms whose directors have greater experience. Our results are robust across a series of sensitivity and endogeneity tests.Theoretical/Academic ImplicationsWe contribute to an emerging strand of literature that examines the link between board gender diversity and loan covenants. We fill a gap in this stream of literature by providing the first empirical evidence that female directors in the boardroom reduce loan covenant violations through their greater integrative bargaining skills during loan deals, improving firm financial performance, and ensuring good corporate governance. Our study also contributes to the growing literature on the differential effects on corporate policies of female directors (independent and executive) and critical mass.Practitioner/Policy ImplicationsThis finding offers significant policy implications for managers, investors, and policymakers. Given the growing frequency of loan covenant violations, the presence of a gender‐diverse board should serve as a potent indicator to creditors who have a concern regarding loans. In addition, our study adds to the ongoing debate regarding the business case of board gender diversity.

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Section: Which Female Director Type Influences Loan Covenant Violatio...mentioning

confidence: 95%

The impact of board gender composition on loan covenant violations

Alam,

Atif,

Cumming

et al. 2023

Corporate Governance

View full text Add to dashboard Cite

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“…Higher representation of women on boards reduces the frequency of breaches of environmental laws (Liu, 2018). A recent study by Do et al (2023) claimed that boards with higher women representation in the American context react favorably to voluntary environmental reporting initiatives, which results in better environmental enforcement also. Additionally, Ben‐Amar et al (2017) also found that women directors in the boardrooms improve the voluntary disclosures related to climate change concerns.…”

Section: Theoretical Perspective and Literature Reviewmentioning

confidence: 99%

Nexus between corporate environmental disclosures and gender diversity: Interaction effects of board independence

Arora,

Aliani

2023

Bus Strat Env

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This study examines the impact of gender diversity (GD) in the board of directors on corporate environmental disclosures (ED). It develops an integrative theoretical framework to explore diverse facets of the nexus of GD and ED. Using Indian‐listed firms for a sample period of 2015 to 2021, panel models have been used to validate the theoretical assumptions of the study. The empirical results reveal that women directors improve ED. Moreover, the role of women in driving environmental disclosure becomes evident only after achieving a critical mass of three directors. Our research contributes to the literature using board independence as moderator, for the first time in this context, and it was found that it moderates GD–ED relationship significantly. The findings could be beneficial for policymakers and regulators to recognize how GD is vital to firms to achieve best environmental practices. More initiatives may be deployed to reinforce women's representation in boardrooms for enhancing ED. Our study is one of the foremost studies to examine the impact of board GD on ED based on gender socialization, critical mass, and resource dependency theoretical framework.

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Gender diversity and climate disclosure: a tcfd perspective

Dias,

Pinheiro,

Fernandes

2024

Environ Dev Sustain

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The paradigm of corporate environmental disclosures aimed at investors developed in 2017 with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. Existing literature on social responsibility disclosures points to gender diversity on the board of directors as an influencing factor. This study aims to assess the influence of gender diversity in climate-related financial disclosures, as recommended by the TCFD based on a sample of 27 companies operating within the sectors of electricity, oil, coal and gas, water, and alternative energy that have announced their adherence to the recommendations from 2017 to 2021. By applying a linear regression model, the results indicate the presence of a positive association between the level of TCFD disclosures and board gender diversity, as well as other factors, such as company size, CEO duality, and general liquidity. However, the influence of board gender diversity on corporate reporting based on the TCFD recommendations suggests that the commitment of boards to the reporting of climate change risks and opportunities is not significantly dependent on gender diversity, as the presence of women in the Boards is favorable for the reporting but without a significant impact on the level of disclosures. This research offers insights into sustainability reporting practices, focusing on a relatively new perspective of reporting climate-related financial topics and their determinants. The findings hold implications for organizational leaders and stakeholders, mainly investors, as these recent sustainable reporting practices are challenging but also bring new opportunities related to transparency towards climate-related issues.

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Environmental Concern, Regulations and Board Diversity

Cited by 10 publications

References 241 publications

The impact of board gender composition on loan covenant violations

The impact of board gender composition on loan covenant violations

Nexus between corporate environmental disclosures and gender diversity: Interaction effects of board independence

Gender diversity and climate disclosure: a tcfd perspective

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