TY - JOUR
T1 - Board demographic, structural diversity, and eco-innovation
T2 - international evidence
AU - Zaman, Rashid
AU - Asiaei, Kaveh
AU - Nadeem, Muhammad
AU - Malik, Ihtisham
AU - Arif, Muhammad
N1 - Publisher Copyright:
© 2023 The Authors. Corporate Governance: An International Review published by John Wiley & Sons Ltd.
PY - 2024
Y1 - 2024
N2 - Research question/issue: We examine whether and how board diversity, measured by demographics (i.e., board gender, cultural diversity, tenure, social capital, expertise, and age) and structural diversity (i.e., board independence, size, board seat accumulation-chair, board compensation, and board meeting frequency), influence corporate eco-innovation. Research findings/insights: Utilizing a global sample of publicly listed companies for the period 2004–2019, we find that a one-standard deviation increase in demographic and structural diversity translates into 4.66% and 7.11% higher corporate eco-innovation, respectively. Furthermore, we discover that demographic and structural diversity promotes eco-innovation by offsetting the negative effects of political risk. In an additional analysis, we find evidence that, in the absence of greater external monitoring (institutional investors and analyst following), organizations benefit more from the monitoring role of board diversity. Theoretical/academic implications: By adopting the concept of “bundling the governance mechanisms,” our study adds to the ongoing discourse about the function of board diversity in addressing corporate climate footprints by offering original evidence that board diversity heterogeneity—demographic and structural diversity—matters for corporate eco-innovation. Practitioner/policy implications: Given the increasing pressure on companies to manage their environmental impacts and carbon footprints, our paper has significant ramifications for those involved in promoting eco-innovative business practices, such as policymakers, regulators, and practitioners.
AB - Research question/issue: We examine whether and how board diversity, measured by demographics (i.e., board gender, cultural diversity, tenure, social capital, expertise, and age) and structural diversity (i.e., board independence, size, board seat accumulation-chair, board compensation, and board meeting frequency), influence corporate eco-innovation. Research findings/insights: Utilizing a global sample of publicly listed companies for the period 2004–2019, we find that a one-standard deviation increase in demographic and structural diversity translates into 4.66% and 7.11% higher corporate eco-innovation, respectively. Furthermore, we discover that demographic and structural diversity promotes eco-innovation by offsetting the negative effects of political risk. In an additional analysis, we find evidence that, in the absence of greater external monitoring (institutional investors and analyst following), organizations benefit more from the monitoring role of board diversity. Theoretical/academic implications: By adopting the concept of “bundling the governance mechanisms,” our study adds to the ongoing discourse about the function of board diversity in addressing corporate climate footprints by offering original evidence that board diversity heterogeneity—demographic and structural diversity—matters for corporate eco-innovation. Practitioner/policy implications: Given the increasing pressure on companies to manage their environmental impacts and carbon footprints, our paper has significant ramifications for those involved in promoting eco-innovative business practices, such as policymakers, regulators, and practitioners.
KW - board demographic diversity
KW - corporate governance
KW - eco-innovation
KW - political risk
KW - stakeholder-agency theory
KW - structural diversity
UR - http://www.scopus.com/inward/record.url?scp=85161588724&partnerID=8YFLogxK
U2 - 10.1111/corg.12545
DO - 10.1111/corg.12545
M3 - Article
AN - SCOPUS:85161588724
SN - 0964-8410
VL - 32
SP - 374
EP - 390
JO - Corporate Governance: An International Review
JF - Corporate Governance: An International Review
IS - 3
ER -