Do NEDs influence ESG corporate performance?

Andrew Clare, Carlos Manuel Pinheiro and Alberto Franco Pozzolo

No 494, Development Working Papers from Centro Studi Luca d'Agliano, University of Milano

Abstract: Being uninvolved in day-to-day management of a company, Non-Executive Directors (NEDs) are arguably well-suited to oversee the drive for more sustainable business practices. Our study explores the correlation between the professional capital of NEDs and ESG performance for a sample of FTSE-350 listed companies spanning the years 2012 to 2022. Our findings reveal that board connectedness, particularly the simultaneous presence on boards of companies exhibiting superior ESG performance, significantly influences a company's overall ESG score. Our results highlight the relevance of board capital on corporate ESG performance, with practical implications for corporate governance.

Keywords: ESG; Corporate Governance; Boards: Non-executive directors; Network Centrality (search for similar items in EconPapers)
JEL-codes: D22 G34 M14 Q56 (search for similar items in EconPapers)
Date: 2024-08-06
New Economics Papers: this item is included in nep-cfn, nep-env, nep-inv and nep-net
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Persistent link: https://EconPapers.repec.org/RePEc:csl:devewp:494

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