Green Governance: Boards of Directors’ Composition and Environmental Corporate Social Responsibility

TLDR

The study extends board‑composition research to environmental corporate social responsibility, examining how board makeup relates to ECSR by integrating literature on board composition, CSR, and individual environmental attitudes. Using disclosed company data and Kinder Lydenberg Domini (KLD) environmental ratings for 78 Fortune 1000 firms, the authors assess the link between board characteristics and ECSR outcomes. Analysis reveals that a higher proportion of outside directors, three or more female directors, and boards averaging about 56 years old with a larger share of Western European directors are associated with stronger ECSR and higher KLD strength scores, while also underscoring the limitations of single‑dimension KLD metrics.

Abstract

This study contributes to the work on board composition and firm corporate social responsibility by extending it to the environmental domain. It evaluates the relationship between boards of directors’ composition and environmental corporate social responsibility (ECSR) by integrating literatures on board composition, firm corporate social responsibility, and individual differences in attitudes toward and information about environmental issues. Using disclosed company data and the natural environment ratings data from Kinder Lydenberg Domini (KLD) Inc. for 78 Fortune 1000 companies, the study finds that a higher proportion of outside board directors is associated with more favorable ECSR and higher KLD strengths scores. Firms with boards composed of three or more female directors received higher KLD strengths scores. And, boards whose directors average closer to 56 years in age and those with a higher proportion of Western European directors are more likely to implement environmental governance structures or processes. Our results also reinforce growing concerns around unidimensional KLD measures.