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Board demographic, structural, and capital diversity, and corporate carbon performance: international evidence

Sohel Mehedi (Peter Faber Business School, Australian Catholic University, North Sydney, Australia)
Md Akhtaruzzaman (Peter Faber Business School, Australian Catholic University, North Sydney, Australia)
Rashid Zaman (School of Business and Law, Edith Cowan University, Joondalup, Australia)

Journal of Accounting Literature

ISSN: 0737-4607

Article publication date: 6 August 2024

342

Abstract

Purpose

We examine the relationship between board demographic diversity, board structural diversity, board capital diversity and corporate carbon performance (CCP). Additionally, we investigate how corporate sustainable resource use mediates these relationships.

Design/methodology/approach

We utilize unbalanced panel data from Refinitiv Eikon covering 9,960 global firms from 2002 to 2022. We conduct a panel regression analysis to examine the relationship between board demographic diversity, board structural diversity, board capital diversity and CCP. In addition, we estimate entropy balancing estimation and two-step system GMM to address endogeneity issues.

Findings

The results indicate that board demographic diversity (including tenure, gender, and cultural diversity), structural diversity (such as board independence, board size, CEO-chairman duality, board meetings, and board compensation), and capital diversity (comprising board member affiliation and specific skills) all have a positive and significant association with corporate carbon performance. Additionally, our findings reveal that corporate sustainable resource use fully mediates the relationship between board demographic diversity and CCP and partially mediates the relationship between board structural diversity, board capital diversity, and CCP.

Practical implications

Our study findings are based on a diverse range of global firms, ensuring that the results address the global challenges of firm-level climate change response and governance issues.

Originality/value

Our group diversity constructs offer new insights into the literature and further advance research on board group diversity. Additionally, for the first time, we explore the mediating role of sustainable resource use through the resource-based view (RBV) between-group diversity attributes and corporate carbon performance.

Keywords

Citation

Mehedi, S., Akhtaruzzaman, M. and Zaman, R. (2024), "Board demographic, structural, and capital diversity, and corporate carbon performance: international evidence", Journal of Accounting Literature, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JAL-05-2024-0104

Publisher

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Emerald Publishing Limited

Copyright © 2024, Emerald Publishing Limited

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