Boards And Firms’ Environmental Proactivity: Evidence From European Polluting Industries

The present paper addresses the relation between board size and composition and firms’ environmental proactivity. Specifically, it aims at exploring the relationship between firms’ board structure and their green proactivity, within the agency theory and resource dependence theory frameworks, in order to outline if particular types of board composition could act as a stimulating driver for firms’ proactive environmental strategies. The theoretical analysis is completed by an empirical exploration, performed by two linear regression models, on a sample of European firms, belonging to polluting industries, that were included in the Carbon Disclosure Project questionnaire 2012. The Score emerging from the questionnaire is considered as a proxy for firms’ environmental proactivity, while the industry choice is related to the increasing pressure for better environmental performance that polluting industries are nowadays experiencing because of the stakeholders’ and media requests. The results show that board composition matters in firms’ environmental proactivity. In particular, firms with a higher percentage of independent directors in the board and a two tier system of governance present superior environmental proactivity, while a greater percentage of non executive directors and of women or board size do not seem to be related with firms’ proactive environmental strategies.