TY - JOUR
T1 - Carbon emissions, corporate governance, and staggered boards
AU - Tanthanongsakkun, Suparatana
AU - Treepongkaruna, Sirimon
AU - Jiraporn, Pornsit
N1 - Funding Information:
This project is funded by National Research Council of Thailand (NRCT): N42A640326. Open access publishing facilitated by The University of Western Australia, as part of the Wiley - The University of Western Australia agreement via the Council of Australian University Librarians.
Funding Information:
This project is funded by National Research Council of Thailand (NRCT): N42A640326. Open access publishing facilitated by The University of Western Australia, as part of the Wiley ‐ The University of Western Australia agreement via the Council of Australian University Librarians.
Publisher Copyright:
© 2022 The Authors. Business Strategy and The Environment published by ERP Environment and John Wiley & Sons Ltd.
PY - 2023/1
Y1 - 2023/1
N2 - Carbon emissions have been identified as a major cause of global warming and are harmful to the environment. Given the seriousness of climate changes, businesses are encouraged to adopt corporate strategies to improve environmental performance. Staggered boards (or classified boards) are one of the controversial corporate governance devices being employed by corporations that protect managers from the market for corporate control. This paper explores whether staggered boards can be a useful business strategy to improve carbon emissions. Relying on a novel data set in which the presence of a staggered board is identified through advanced machine learning algorithms and textual analysis, we find that staggered boards bring about significantly worse emission performance by 10.67%. Our results corroborate the premise that staggered boards insulate self-interested managers from market discipline and thus exacerbate agency problems, resulting in more unfavorable outcomes. Further analysis validates the results, that is, propensity score matching, entropy balancing, instrumental-variable analysis, and generalized method of moments (GMM) dynamic panel data estimation. Importantly, we include firm fixed effects to account for unobserved heterogeneity. Our findings indicate that de-staggered boards may help improve emission performance.
AB - Carbon emissions have been identified as a major cause of global warming and are harmful to the environment. Given the seriousness of climate changes, businesses are encouraged to adopt corporate strategies to improve environmental performance. Staggered boards (or classified boards) are one of the controversial corporate governance devices being employed by corporations that protect managers from the market for corporate control. This paper explores whether staggered boards can be a useful business strategy to improve carbon emissions. Relying on a novel data set in which the presence of a staggered board is identified through advanced machine learning algorithms and textual analysis, we find that staggered boards bring about significantly worse emission performance by 10.67%. Our results corroborate the premise that staggered boards insulate self-interested managers from market discipline and thus exacerbate agency problems, resulting in more unfavorable outcomes. Further analysis validates the results, that is, propensity score matching, entropy balancing, instrumental-variable analysis, and generalized method of moments (GMM) dynamic panel data estimation. Importantly, we include firm fixed effects to account for unobserved heterogeneity. Our findings indicate that de-staggered boards may help improve emission performance.
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U2 - 10.1002/bse.3174
DO - 10.1002/bse.3174
M3 - Article
AN - SCOPUS:85131739629
SN - 0964-4733
VL - 32
SP - 769
EP - 780
JO - Business Strategy and the Environment
JF - Business Strategy and the Environment
IS - 1
ER -