Co-opted board and firm climate change risk

Abdul Ghafoor, Mirzet Šeho and Imtiaz Sifat

Finance Research Letters, 2023, vol. 52, issue C

Abstract: This paper examines whether a higher proportion of co-opted board members following a CEO's accession translates to greater climate change-related risk for the firm. Investigating 12,101 US-based firm-year observations from 2001 to 2014, we discover that firms with a higher level of co-opted directors face higher climate risk. This conclusion survives a battery of tests addressing reverse causality, omitted variable bias, and sample selection bias. We touch on this result's implications and offer further ideas for advancing the discourse.

Keywords: Board co-option; Climate change risk; Agency; Corporate governance (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:52:y:2023:i:c:s1544612322006845

DOI: 10.1016/j.frl.2022.103508

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