Board demographic, structural diversity, and eco‐innovation: International evidence

Rashid Zaman; Kaveh Asiaei; Muhammad Nadeem; Ihtisham Malik; Muhammad Arif

doi:10.1111/corg.12545

journal article Open Access Jun 06, 2023

Board demographic, structural diversity, and eco‐innovation: International evidence

Rashid Zaman

Kaveh Asiaei

Muhammad Nadeem

Ihtisham Malik Muhammad Arif

Corporate Governance: An International Review Vol. 32 No. 3 pp. 374-390 · Wiley

View at Publisher Save 10.1111/corg.12545

Abstract

AbstractResearch question/issueWe examine whether and how board diversity, measured by demographics (i.e., board gender, cultural diversity, tenure, social capital, expertise, and age) and structural diversity (i.e., board independence, size, board seat accumulation‐chair, board compensation, and board meeting frequency), influence corporate eco‐innovation.Research findings/insightsUtilizing a global sample of publicly listed companies for the period 2004–2019, we find that a one‐standard deviation increase in demographic and structural diversity translates into 4.66% and 7.11% higher corporate eco‐innovation, respectively. Furthermore, we discover that demographic and structural diversity promotes eco‐innovation by offsetting the negative effects of political risk. In an additional analysis, we find evidence that, in the absence of greater external monitoring (institutional investors and analyst following), organizations benefit more from the monitoring role of board diversity.Theoretical/academic implicationsBy adopting the concept of “bundling the governance mechanisms,” our study adds to the ongoing discourse about the function of board diversity in addressing corporate climate footprints by offering original evidence that board diversity heterogeneity—demographic and structural diversity—matters for corporate eco‐innovation.Practitioner/policy implicationsGiven the increasing pressure on companies to manage their environmental impacts and carbon footprints, our paper has significant ramifications for those involved in promoting eco‐innovative business practices, such as policymakers, regulators, and practitioners.

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Details

Published: Jun 06, 2023
Vol/Issue: 32(3)
Pages: 374-390
License: View

Authors

R

Rashid Zaman

School of Business & Law Edith Cowan University Perth Western Australia Australia

K

Kaveh Asiaei

School of Business Monash University Bandar Sunway Malaysia

M

Muhammad Nadeem

UQ Business School University of Queensland Brisbane Queensland Australia

I

Ihtisham Malik

UQ Business School University of Queensland Brisbane Queensland Australia

M

Muhammad Arif

Department of Business Administration Shaheed Benazir Bhutto University Karachi Pakistan

Cite This Article

Rashid Zaman, Kaveh Asiaei, Muhammad Nadeem, et al. (2023). Board demographic, structural diversity, and eco‐innovation: International evidence. Corporate Governance: An International Review, 32(3), 374-390. https://doi.org/10.1111/corg.12545

Board demographic, structural diversity, and eco‐innovation: International evidence

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