Director Expertise and Corporate Sustainability*

Peter Iliev and Lukas Roth

Review of Finance, 2023, vol. 27, issue 6, 2085-2123

Abstract: We show that US firms increase their sustainability performance when their directors acquire expertise through their exposure to sustainability reforms in foreign countries where they serve as directors. Our results suggest that a board that gains sustainability expertise increases a firm’s overall sustainability performance by 7.1%. The increase in sustainability comes both from improvements in environmental and social practices. Directors also consider the tradeoffs between sustainability improvements and firm characteristics, with boards having a stronger impact on sustainability in firms from clean industries and firms that face fewer operational and financial constraints.

Keywords: Sustainability; Environmental; Social; E&S; Directors; Boards; Regulation (search for similar items in EconPapers)
JEL-codes: F30 G15 G34 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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