Kizys, R. and Mamatzakis, Emmanuel and Tzouvanas, Panagiotis (2023) Does genetic diversity on corporate boards lead to improved environmental performance? Journal of International Financial Markets, Institutions and Money 84 (101756), ISSN 1042-4431.
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Abstract
Elsevier Journal of International Financial Markets, Institutions and Money Volume 84, April 2023, 101756 Journal of International Financial Markets, Institutions and Money Does genetic diversity on corporate boards lead to improved environmental performance? Author links open overlay panelRenatas Kizys a, Emmanuel C. Mamatzakis b, Panagiotis Tzouvanas c Show more Outline Share Cite https://doi.org/10.1016/j.intfin.2023.101756 Get rights and content Under a Creative Commons license open access Highlights • We examine the effect of boards’ genetic diversity (GENETICD) on corporate ESG performance. • ESG performance and disclosures are higher in more genetically diverse firms. • The positive GENETICD effect on ESG performance is driven by the environmental pillar. • Corporate carbon performance significantly improves with increases in GENETICD. We study the effects of boards’ genetic diversity on corporate environmental performance. Using a multidimensional information set for 3690 US firms during the period from 2005 to 2019, and three different measures of genetic diversity, we find that, pursuant to the diversity theory, which posits that diversity improves the quality of management decisions and business ethics, genetic diversity leads to improved environmental performance. We also find that genetic diversity improves carbon and governance performance, and ESG disclosure. Particularly, a one percentage point increase in boards’ genetic diversity will increase the carbon performance, measured by the inverse of the carbon emissions to total assets ratio, and environmental performance by 3.54% and 5.57%, respectively. Our results remain robust to different model specifications, while also controlling for endogeneity. In terms of policy implications, results suggest that the key to tackling climate challenges is to promote boards’ genetic diversity.
Metadata
| Item Type: | Article |
|---|---|
| School: | Birkbeck Faculties and Schools > Faculty of Business and Law > Birkbeck Business School |
| Research Centres and Institutes: | Accounting and Finance Research Centre, Research in Environment and Sustainability, Centre for |
| Depositing User: | Emmanuel Mamatzakis |
| Date Deposited: | 17 Apr 2023 12:39 |
| Last Modified: | 09 May 2024 05:00 |
| URI: | https://eprints.bbk.ac.uk/id/eprint/51026 |
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