Munich Personal RePEc Archive

The role of women on boards in corporate environmental strategy and financial performance: A global outlook

Xie, Jun and Nozawa, Wataru and Managi, Shunsuke (2020): The role of women on boards in corporate environmental strategy and financial performance: A global outlook. Published in: Corporate Social Responsibility and Environmental Management (3 April 2020)

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Abstract

This study examines the impact of board gender diversity on corporate environmental strategy and financial performance. Based on 12 corporate environmental policies in 3389 firms worldwide, we identified four types of corporate environmental strategies by using the latent class regression model: an inactive strategy, a reactive strategy, a pollution prevention strategy and a sustainable development strategy. The empirical evidence shows that women on boards contribute to the promotion of proactive environmental strategies, including the pollution prevention strategy, which is found to bring about sustained competitive advantage in both short-term and long-term financial performance, and the sustainable development strategy, which is positively associated with long-term financial performance. Following the natural-resource-based view of the firm, these findings indicate that women on boards can be seen as a key resource in the organizational process, which provides a shared vision of the future and strong moral leadership to the top management team.

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