Corporate boards and environmental offence conviction: evidence from the United Kingdom

Abstract

Purpose

This paper aims to report the results of an investigation into the relationship between corporate boards and the likelihood of a firm being convicted of an environmental offence in the United Kingdom (UK).

Design/methodology/approach

The study uses binary logistics regression analysis to model the relationship between corporate boards and the likelihood of a firm being convicted of an environmental offence in the UK, controlling for firm size, financial leverage and profitability.

Findings

The results suggest that the likelihood of a firm being convicted of an environmental offence increases with board size but decreases with the presence of a woman on the board. No support is found for the authors’ hypotheses about the proportion of outside directors and the presence of a lawyer on the board. Marginal effects’ results also show that adding one member to the board increases the chance of a firm being convicted for an environmental offence by 4.2 per cent, while having a woman on the board decreases the likelihood of a firm being convicted of an environmental offence by 31.8 per cent.

Research limitations/implications

The sample size of 55 firms is small which could affect the generalisability of the study.

Originality/value

The study uses proprietary data obtained from the UK Environmental Agency to provide evidence for the first time how corporate boards affect the chances of a listed firm being convicted of an environmental offence in the UK.

Citation

Tauringana, V., Radicic, D., Kirkpatrick, A. and Konadu, R. (2017), "Corporate boards and environmental offence conviction: evidence from the United Kingdom", Corporate Governance, Vol. 17 No. 2, pp. 341-362. https://doi.org/10.1108/CG-05-2016-0105