Top management team stability and ESG greenwashing: Evidence from China

Abstract

This study examines the relationship between top management team stability (STMT) and ESG greenwashing. Using a sample of Chinese listed companies for the period 2009–2022, we find that top management team stability has a negative effect on ESG greenwashing. Mechanism tests provide evidence that top management team stability reduces greenwashing by decreasing agency costs and improving the quality of information disclosure. Additional analysis reveals that this relationship is more pronounced for firms audited by non‐Big Four firms, non‐state‐owned enterprises, and firms with high executive shareholding. The study combines the characteristics of internal human capital with the efficiency of market information, offering a new perspective in the literature on ESG greenwashing.