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Do NEDs Influence ESG Corporate Performance?
Event Title
Essex Finance Centre (EFiC) 2024 Conference in Banking and Corporate Finance
Year (definitive publication)
2024
Language
English
Country
United Kingdom
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Abstract
The drive for more sustainable business practices is not one that forward-looking Boards of Directors can ignore. Being uninvolved in day-to-day management of a company, Non-Executive Directors (NEDs) are arguably well-suited to champion sustainable business practices, facilitate stakeholder engagement, and oversee risk mitigation – all crucial aspects of ESG performance. Our study explores the correlation between the professional capital of Non-Executive Directors (NEDs) and ESG performance for a sample of FTSE-350 listed companies spanning the years 2012 to 2022. Our findings reveal that board connectedness, particularly the simultaneous presence on boards of companies exhibiting superior ESG performance, significantly influences a company's overall ESG score. Our results highlight the relevance of board capital on corporate ESG performance, with practical implications for corporate governance.
Acknowledgements
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Keywords
Fields of Science and Technology Classification
- Economics and Business - Social Sciences
