A Study of Environmental Policies and Regulations, Governance Structures and Environmental Performance: The Role of Female Directors

Abstract

This paper seeks to contribute to the existing business strategy and the environment literature by examining the effect of governance structures on environmental performance within a unique context of improving environmental governance, policies, regulations and management. Specifically, we investigate the extent to which corporate board gender diversity, including the proportion, age and level of education of female directors, affect environmental performance of Chinese publicly listed corporations. Using one of the largest Chinese datasets to-date, consisting of a sample of 383 listed A-shares from 2011 to 2015 (i.e., observations of 1,674), our findings are three-fold. First, we find that the proportion and age of female directors have a positive effect on the overall corporate environmental performance. Second, our findings indicate that the proportion and age of female directors also have a positive effect on the three individual environmental performance components, namely environmental (i) strategy, (ii) implementation and (iii) disclosure, respectively. Finally, and by contrast, we do not find any evidence that suggests that the level of education of female directors has any impact on environmental performance, neither the overall environmental performance measure nor its individual components. Our findings have important implication for regulators and policy-makers. Our evidence is robust to controlling for alternative measures, other governance and firm-level control variables, and possible endogeneities. We interpret our findings within a multi-theoretical framework that draws insights from agency, legitimacy, neo-institutional, resource dependence, stakeholder, and tokenism theoretical perspectives.