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Board interlocks and greenhouse gas emissions

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  • Jing Lu
  • Dongning Yu
  • Fereshteh Mahmoudian
  • Jamal A. Nazari
  • Irene M. Herremans

Abstract

Using resource dependence theory, we analyze board interlocks, their industry origin, and their relationship to firms' greenhouse gas (GHG) emissions. Interlocks create connections by having board members from one firm sit on other firms' boards, providing an avenue for sharing information and resources to aid in knowledge transfer and capability development. As firms face challenges for improved GHG emissions performance, they may look to their board members' connections to other firms to acquire needed resources. Using a sample of US Standard & Poor's (S&P) 1500 firms for years 2009 to 2018, we find that firms with a greater number of board interlocks achieve lower GHG emissions intensity. We also find that boards for the best performing companies have interlocks in the same industry, in other industries, and with firms leading in GHG emissions intensity, especially for firms in higher environmentally impacting industries, as they face greater emissions challenges.

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  • Jing Lu & Dongning Yu & Fereshteh Mahmoudian & Jamal A. Nazari & Irene M. Herremans, 2021. "Board interlocks and greenhouse gas emissions," Business Strategy and the Environment, Wiley Blackwell, vol. 30(1), pages 92-108, January.
    • Handle: RePEc:bla:bstrat:v:30:y:2021:i:1:p:92-108
    DOI: 10.1002/bse.2611
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