The globalised board of directors and corporate environmental performance: evidence from China

Abstract

This study examines the association between the globalised board of directors and corporate environmental performance, and then investigates the moderating effect of regional green development on the above association. Using a sample from the Chinese stock market during the period of 2008-2016, the findings reveal that the globalised board of directors is significantly positively associated with corporate environmental performance, suggesting that the globalised board of directors can play an important role in strengthening the moral and strategic motivations of corporate environmental responsibility, and enhance corporate environmental performance. Further, regional green development attenuates the positive relation between the globalised board of directors and corporate environmental performance. Above findings are robust to a variety of sensitivity tests and our main conclusions are still valid after controlling for the potential endogeneity between the globalised board of directors and corporate environmental performance. Interestingly, additional tests reveal that the positive effect of foreign directors on corporate environmental performance is more pronounced for those from the countries (regions) with shorter time zone difference, stronger investor protection and better performance in environmental responsibilities.

A new broom sweeps clean? Evidence from CEO tenure and global reporting initiative adoption in China

“…Similar to directors with foreign experience, CEOs with foreign experience may be more familiar with superior management and corporate governance practices (Cumming et al, 2017). In addition, CEOs with foreign experience may be more concerned about CSR reporting and ethical issues related to CSR (Du et al, 2020). Last, CEOs with foreign experience may be more likely to agree with directors with foreign experience on CSR issues.…”

The Influence of Corporate Executives’ Overseas Experience and Background on Corporate Behavior

“…If a board of directors in China is globalized, it is positively related to corporate environmental performance, meaning that the board of directors can strengthen the moral and strategic motivation of corporate environmental responsibility and improve corporate environmental performance, but regional green development will stifle this positive relationship. Furthermore, the favorable influence of a board of directors with foreign directors on a company's environmental performance is more visible in nations or regions with minimal time zone differences, strong investor protection, and stronger environmental responsibilities [14]. Therefore, directors with international experience can successfully boost corporate social responsibility involvement, and the improvement is much greater in corporations with a high proportion of managers with international experience or CEOs with long-term international experience.…”

Do foreign directors reinforce better waste management? The moderating role of eco‐innovation

“…Our study contributes to the existing literature in several ways. First, we extend the research that examines the impact of the nationality diversity of corporate boards on firms' social and environmental practices (e.g., Che Ahmad & Osazuwa, 2015; Du et al, 2020; Martínez‐Ferrero et al, 2021). We also advanced a handful of recent empirical studies that focus on board attributes and waste management practices (Gull et al, 2023; Shahab et al, 2022).…”

“…Corporate boards can influence corporate environmental performance through their supervisory and advisory roles (Du et al, 2020; Post et al, 2011; Shaukat et al, 2016; Walls et al, 2012). The board of directors should be sufficiently representative to drive effective strategies and influence decision‐making related to specific environmental issues such as waste production and recycling (Gull et al, 2023; Konadu et al, 2022).…”

“…However, board diversity also includes other aspects that are equally vital, such as nationality diversity (Martínez‐Ferrero et al, 2021). Few studies have examined the association between nationality diversity and social and environmental practices (e.g., Che Ahmad & Osazuwa, 2015; Du et al, 2020; Martínez‐Ferrero et al, 2021; Muttakin et al, 2015; Rao & Tilt, 2016; Zaid et al, 2020; Zhang et al, 2018). These studies show that board nationality diversity is likely to promote firms' commitment to sustainability issues and lead to higher social and environmental performance.…”