Opposite effects of returnee and non-local independent directors on firm’s environmental disclosure and performance

ABSTRACT

Government programmes and policies in China have brought energy conservation and emission reduction issues into focus. Given the positive role of independent directors and media in corporate governance, the study explores the impact of independent director’s characteristics and media exposure on firm’s environmental disclosure and performance. We find that independent director’s overseas background is positively associated with environmental behaviour, whereas non-local independent director is negatively related to environmental behaviour. The split-sample analyses further support that media coverage plays a positive role both through itself directly and via its impact on independent directors. In supplementary analyses, media exposure has a more significant effect on state-owned than on non-state-owned enterprises. Additionally, non-independent director’s overseas experience also improves firm’s environmental behaviour. The findings enable us to identify a specific channel to improve environmental disclosure and corporate governance, which is through the impact of media on certain independent directors such as returnee-independent directors in state-owned enterprises.

KEYWORDS:

• Independent director
• overseas
• non-local
• media exposure
• environmental performance

JEL CLASSIFICATION:

• G34
• L22
• M14

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work was supported by the [‘111’ project funded by the Ministry of Education of China and the State Administration of Foreign Experts Affairs of China] under Grant [number B18043]