Influence of independent female directors on green commitment
| Date | 25 July 2023 |
| Pages | 1301-1323 |
| DOI | https://doi.org/10.1108/ER-11-2022-0527 |
| Published date | 25 July 2023 |
| Subject Matter | HR & organizational behaviour,Industrial/labour relations,Employment law |
| Author | Junkai Wang,Baolei Qi,Yaoxiang Nie |
Influence of independent female
directors on green commitment
Junkai Wang and Baolei Qi
School of Management, Xi’an Jiaotong University, Xi’an, China, and
Yaoxiang Nie
Simon Business School, University of Rochester, Rochester, New York, USA
Abstract
Purpose –With increasing environmental issue and problems, this study aims to explore how the female
directors’foreign experience and corporate green commitment in emerging economics like China from 2008
to 2020.
Design/methodology/approach –The authors draw data of all ‘A’share listed firms listed on Shanghai and
Shenzhen stock exchanges from 2008 to 2020 from the renowned Chinese database China Stock Market and
Accounting Research (CSMAR). The study’s data collection start from 2008, because data about green
commitment are not available on CSMAR before 2008 and final year is 2020 because data about green
commitment is available at the time of data collection. After dropping observations with missing data, the
study’s final sample contains 20,255 firm year-observations. Finally, in accordance with prior studies, the
authors classified enterprises according to the “China Securities and Regulatory Commission”(2012) to
categorize firms.
Findings –The authors find that female directors’foreign experience enhances the green commitment in
Chinese listed companies. In additional analysis, the authors find this relationship is more pronounced when
one or more foreign directors. The study’s findings are robustness to different economic techniques and
alternative measure of dependent variables and endogeneity concerns. Overall, the study’s findings show that
female directors with foreign experience transmit environmental and sustainable knowledge and practices to
Chinese companies.
Originality/value –First, the authors believe that this is the first study to analyze the impact of the
overseas experience of female directorsoncorporategreencommitment. Most previous studies have
examined the influence of the presence of female directors or different attributes such as age, education and
independence of female directors on board decisions, in order to protect the interests of multiple
stakeholders (Elmagrhi et al., 2019; He and Jiang, 2019; McGuinness et al., 2017). This study finds that, in
addition to other different attributes, the foreign experience of female directors also has a significant role in
promoting corporate green commitment. By pushing corporate green commitment, these women directors
leverage their experiencein advanced economies abroad to add to the Chinese government’s environmental
and sustainability goal of achieving net zero carbon by 2060. As such, this is one of the first studies to
highlight the experiences of femaledirectors in transferring environmental and sustainability practices to
Chinese companies. Second, the authors add to the literature by integrating two important board
perspectives, such as gender diversity and the impact of foreign experience on corporate green
commitment. Previous research has explored the presence or absence of female directors on board or
foreign experience. However, this study adds to the literature by introducingimportant attributes of the
influence of female directors’foreign experience on decision making.Third,thisstudyprovides evidence
on the impact of foreign independent directors on the board. The authors document foreign independent
directors enhance the relationship between female directors’foreign experience and corporate green
commitment. The study’s findings complement previous research by Liang and Renneboog (2017),
showing that female directors with foreign experience transfer advanced levels of environmental and
sustainable practice knowledge to Chinese companies.
Keywords Female directors’foreign experience, Green commitment, Knowledge transmission,
Environmental issue, Emerging economies
Paper type Research paper
1. Introduction
The rapid growth of the Chinese economy has been achieved in large part through a large
amount of manufacturing and production of goods and services. However, this growth has
had a significant negative impact on the environment, particularly in terms of increase in
Influence of
independent
female
directors
1301
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/0142-5455.htm
Received 26 November 2022
Revised 16 February 2023
15 April 2023
Accepted 20 April 2023
Employee Relations: The
International Journal
Vol. 45 No. 6, 2023
pp. 1301-1323
© Emerald Publishing Limited
0142-5455
DOI 10.1108/ER-11-2022-0527
waste gas emissions, wastewater discharge, industrial soot and dust emissions, industrial
solid waste, noise and light pollution, energy consumption, energy emissions and
environmental damage (Elmagrhi et al., 2019;Hussain et al., 2022a,b,c;Hussain et al.,
2022a,b,c;Shahab et al., 2018). China, for example, is the world’s largest energy consumer,
accounting for more than 23% of global energy consumption. In addition, China is the largest
coal producer and consumer, accounting for more than 60% of the global total industrial coal
consumption in 2018. These activities have made China the world’s largest emitter of carbon
dioxide, accounting for about 30% of total global emissions. Air pollution from these
activities also has a serious impact on public health, causing billions of Yuan in losses and
more than 1 million deaths (Kao, 2018). In response, the Chinese government has implemented
various laws and guidelines aimed at promoting environmentally friendly practices.
However, the implementation of these policies remains a challenge, hindering the spread of
the green commitment in the country (Nguyen et al., 2021;Shahab et al., 2018). Strengthening
internal governance structures in Chinese listed firms is key to enhancing green commitment
and reducing environmental damage. This study aims to explore the impact of corporate
internal governance structures on green commitment in Chinese listed firms. By identifying
effective strategies to strengthen environmental practices, this study can provide insights to
promote sustainable economic growth and environmental protection in China. The results of
this study can inform policies and practices aimed at achieving these goals.
The voluntary commitment of corporations to environmentally friendly activities can be
driven by various factors, including the desire to gain competitive advantages and obtain the
approval of the wider community (Haque and Ntim, 2020). These reasons are supported by
agency, resource dependence, legitimacy and stakeholder theories. Specifically, agency
theory suggests that good governance structures, including boards with diverse perspectives
and skills, can improve managerial monitoring and board independence, leading to better
corporate environmental performance (Hussain et al., 2022a,b,c;Shahab et al., 2020).
Resource dependence theory indicates that good governance can improve corporate
reputation and image by providing better connections with powerful stakeholders and
gaining access to crucial resources (Hillman et al., 2007;Pfeffer and Salancik, 2003).
Legitimacy theory suggests that large, diverse and frequent meeting boards can increase
pressure on corporations to comply with good practices to meet the values and expectations
of the broader community and legitimize their activities (Hussain et al., 2022a,b,c;Ntim and
Soobaroyen, 2013). Stakeholder theory predicts that increased commitment to good
environmental practices can improve corporate reputation and image by balancing the
conflicting demands of various stakeholders (Dixon et al., 2005;Welford, 2007). In this
context, female directors’with foreign experience and green commitment can be important in
enhancing a corporation’s voluntary commitment to environmentally friendly activities.
Female directors with internat ional experience may bring uniq ue perspectives and
knowledge of environmental policies and practices from other countries, while a strong
green commitment among female direct ors may provide additional motivation an d
leadership to push for corporate environmental responsibility (Ullah et al., 2022). Overall,
corporate commitment to environmentally friendly activities not only benefits the
corporation but also contributes to reducing air pollution, energy emissions and health
hazards while promoting energy efficiency (Nguyen et al., 2021).
Previous studies examining green commitment and its determinants are not only limited
and also have several shortcomings (Shahab et al., 2018). Firstly, while good governance
practices and top management structures can significantly influence corporate strategic
decisions related to the environment, existing studies have primarily focused on the impact of
corporate board structure variables on governance disclosures (Elmagrhi et al., 2016;Nguyen
et al., 2020;Shahab et al., 2020), corporate social responsibility (Hussain et al., 2022a,b,c;
McGuinness et al., 2017;Khan et al., 2022a,b) and environmental innovation (Hussain, 2022;
ER
45,6
1302
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