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Board skill diversity and corporate environmental responsibility: the moderating effects of formal and informal pressures

Chunli Liu (School of Management, Hefei University of Technology, Hefei, China)
Jing Cheng (School of Management, Hefei University of Technology, Hefei, China)

Sustainability Accounting, Management and Policy Journal

ISSN: 2040-8021

Article publication date: 30 April 2024

173

Abstract

Purpose

This study aims to investigate the impact of board skill diversity (BSD) on corporate environmental responsibility (CER). In addition, this study explores the moderating effects of formal regulatory pressure and informal media pressure.

Design/methodology/approach

This study uses Chinese high polluting companies as the sample and uses regression analysis. Robustness checks, including instrumental variable regression, Heckman two-stage model and propensity score matching method, are performed to test the robustness of the results.

Findings

The findings suggest that BSD significantly improves CER performance. Both formal regulatory pressure and informal media pressure strengthen the positive impact of BSD on CER. Further channel analyses reveal that BSD improves CER performance by promoting corporate proenvironmental behaviors rather than by restricting environmental violations; skill diversity of executive directors has a more significant effect on CER than that of independent directors. Finally, the moderating effect of regulatory pressure is only significant after the implementation of the Environmental Protection Law, and the moderating effect of media pressure mainly concentrates on negative media coverage.

Practical implications

The involvement of directors with more diverse skills is essential to improve corporate proenvironmental behaviors. Companies should select qualified directors with different skills to further improve their performance on environmental protection and sustainable development.

Social implications

Regulators and standard-setters should develop efficient guidelines on corporate board governance to enhance the positive role of companies in environmental and sustainable development.

Originality/value

This study broadens the research on the determinants of CER by examining the influence of BSD on CER and the moderating roles of various stakeholder pressures, thereby providing a deeper understanding of corporate environmental performance and sustainable development.

Keywords

Acknowledgements

The authors would like to thank the editor and anonymous referees for their valuable comments. Chunli Liu acknowledges the research grant from the Anhui Social Science Research Project (No. AHSKY2022D133).

Funding: This work was supported by the Anhui Social Science Research Project (No. AHSKY2022D133).

Credit authorship contribution statement: Chunli Liu: supervision, conceptualization, writing-original draft, reviewing and editing. Jing Cheng: data collection, methodology, writing and editing. All authors read and approved the final manuscript.

Declaration of interests: The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.

Citation

Liu, C. and Cheng, J. (2024), "Board skill diversity and corporate environmental responsibility: the moderating effects of formal and informal pressures", Sustainability Accounting, Management and Policy Journal, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/SAMPJ-08-2023-0597

Publisher

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Emerald Publishing Limited

Copyright © 2024, Emerald Publishing Limited

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