Corporate governance & the environment: bad discretion, good discretion, and environmental (...)

Juan Santaló () and Carl Kock ()
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Juan Santaló: Instituto de Empresa
Carl Kock: Instituto de Empresa
Authors registered in the RePEc Author Service: Juan Santalo

Working Papers Economia from Instituto de Empresa, Area of Economic Environment

Abstract: This paper brings two important topics of corporate environmental management and corporate governance by exploring the impact of various governance mechanisms on the level of environmental performance that is realized by firms. We hypothesize that anti-takeover amendments and provisions that restrict managers´ personal liability create a sphere of "bad" discretion that allows managers to shirk by underinvesting in potentially financially beneficial levels of environmental performance. We suggest that corporate governance structures that emphasize higher levels of performance pay and lower degrees of monitoring create a degree of "good" discretion that enhances environmental firm performance.

Keywords: Corporate governance; Corporate environmental performance; Managerial discretion (search for similar items in EconPapers)
Pages: 36 pages
Date: 2005-06
New Economics Papers: this item is included in nep-acc
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Persistent link: https://EconPapers.repec.org/RePEc:emp:wpaper:wp05-24

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