How board of directors networks impact on the environmental score of European non-financial companies
Author(s)
Ortolano, Alessandra
Date Issued
2025
Type
article
Start Page
1
End Page
19
Journal
Abstract
Abstract
Purpose –
This study aims to explore how the composition and connectedness of a firm’s board of directors influence its environmental sustainability efforts, particularly in relation to climate risk. By analyzing a sample of European non-financial firms from 2012 to 2021, the paper addresses an important gap in the literature regarding the role of board networks in driving corporate social responsibility, especially in the absence of sustainability committees. The goal is to understand how board centrality affects environmental performance and the role of female CEOs in this context.
Design/methodology/approach –
The authors assess board connectedness using centrality measures and environmental sustainability through the ‘‘Environmental score’’ (E score). The impact of board networks on environmental outcomes is estimated using feasible generalized least squares (FGLS) panel regressions with time-fixed effects, controlling for firm-level characteristics.
Findings –
The results show that boards with greater connectedness positively impact a firm’s environmental performance. In addition, the presence of female CEOs significantly drives sustainability in firms without sustainability committees, highlighting the value of diversity in leadership.
Originality/value –
This research contributes to understanding how a board network influences sustainability outcomes. It offers new insights into the role of board centrality in enhancing environmental performance and underscores the importance of female leadership in advancing sustainability, particularly in the absence of formal governance structures. Future research could explore further the relationship between board diversity, governance and environmental, social and governance performance.