A study of environmental policies and regulations, governance structures, and environmental performance: The role of female directors

TLDR

The study examines how corporate board gender diversity—proportion, age, and education of female directors—affects environmental performance of Chinese publicly listed firms, aiming to enrich business strategy and environmental governance literature. The authors analyze 383 Chinese A‑share firms from 2011‑2015 (1,674 observations) and interpret results through a multitheoretical framework including agency, legitimacy, neo‑institutional, resource dependence, stakeholder, and tokenism perspectives. The analysis shows that higher proportions and older female directors improve overall environmental performance and its strategy, implementation, and disclosure components, while director education level has no significant impact; results are robust and suggest policy implications.

Abstract

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, affects environmental performance of Chinese publicly listed corporations. Using one of the largest Chinese data sets to date, consisting of a sample of 383 listed A‐shares from 2011 to 2015 (i.e., observations of 1,674), our findings are threefold. 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 (a) strategy, (b) implementation, and (c) disclosure. 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 policymakers. 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 multitheoretical framework that draws insights from agency, legitimacy, neo‐institutional, resource dependence, stakeholder, and tokenism theoretical perspectives.