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Board composition, sustainability committee and corporate social and environmental performance in Australia

Board composition, sustainability committee and corporate social and environmental performance in... The purpose of this study is to examine the impacts of board gender composition, board independence and the existence of a board sustainability committee on the corporate social and environmental performance of Australian firms.Design/methodology/approachThe dataset comprises 2,188 Australian Securities Exchange listed firm-year observations (407 individual firms) from 2004 to 2015. The ASSET4 environmental, social and governance database is used to measure corporate social and environmental performance and their sub-dimensions.FindingsOur results show that firms with higher board gender composition, greater board independence and sustainability committees tend to have better social and environmental performance. This paper also provides empirical evidence of the positive association of these variables on the sub-dimensions of social and environmental performance. The results are robust after controlling for self-selection and various forms of endogeneity.Originality/valueThis is the first study that examines the relationship between sustainability committees and corporate social and environmental performance in the context of Australia. This study also overcomes the relatively small sample size and shorter study period issues of similar studies in Australia that provide inconclusive evidence on the relationship between each of board gender composition, board independence and corporate social and environmental performance. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Pacific Accounting Review Emerald Publishing

Board composition, sustainability committee and corporate social and environmental performance in Australia

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
0114-0582
DOI
10.1108/par-12-2017-0107
Publisher site
See Article on Publisher Site

Abstract

The purpose of this study is to examine the impacts of board gender composition, board independence and the existence of a board sustainability committee on the corporate social and environmental performance of Australian firms.Design/methodology/approachThe dataset comprises 2,188 Australian Securities Exchange listed firm-year observations (407 individual firms) from 2004 to 2015. The ASSET4 environmental, social and governance database is used to measure corporate social and environmental performance and their sub-dimensions.FindingsOur results show that firms with higher board gender composition, greater board independence and sustainability committees tend to have better social and environmental performance. This paper also provides empirical evidence of the positive association of these variables on the sub-dimensions of social and environmental performance. The results are robust after controlling for self-selection and various forms of endogeneity.Originality/valueThis is the first study that examines the relationship between sustainability committees and corporate social and environmental performance in the context of Australia. This study also overcomes the relatively small sample size and shorter study period issues of similar studies in Australia that provide inconclusive evidence on the relationship between each of board gender composition, board independence and corporate social and environmental performance.

Journal

Pacific Accounting ReviewEmerald Publishing

Published: Nov 22, 2018

Keywords: Corporate social performance; Board independence; Board of directors; Corporate environmental performance; Gender diversity; Sustainability committee

References