Female Directors on Audit Committees and Corporate Environmental Decoupling

Patrick Velte

Business Strategy and the Environment, 2025, vol. 34, issue 8, 10278-10295

Abstract: Analyzing the connection between female directors on audit committees and corporate environmental decoupling, this study recognized the moderator effect of sustainability assurance on this link. Based on stakeholder agency theory, we used a sample of listed firms on the STOXX Europe 600 index (2178 firm‐year observations) from the business years 2017–2022 and conducted correlation and regression analyses. We found that gender diversity on audit committees and corporate environmental decoupling were statistically negatively related. Moreover, in contrast to the existence of sustainability assurance, the choice of a big four audit firm as the sustainability assuror strengthened this relationship. Our results were robust to various robustness and endogeneity checks. To the best of our knowledge, this is the first study on the impact of audit committees and sustainability decoupling. Our study contributes mainly to prior research on the link between audit committees and sustainability outputs. In view of the ambitious sustainability regulations on the European capital market, businesses, regulators, and researchers should strengthen the connectivity between audit committees, sustainability assurors, and related corporate outputs.

Date: 2025
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