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Co-opted board and firm climate change risk

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  • Ghafoor, Abdul
  • Šeho, Mirzet
  • Sifat, Imtiaz

Abstract

This paper examines whether a higher proportion of co-opted board members following a CEO's accession translates to greater climate change-related risk for the firm. Investigating 12,101 US-based firm-year observations from 2001 to 2014, we discover that firms with a higher level of co-opted directors face higher climate risk. This conclusion survives a battery of tests addressing reverse causality, omitted variable bias, and sample selection bias. We touch on this result's implications and offer further ideas for advancing the discourse.

Suggested Citation

  • Ghafoor, Abdul & Šeho, Mirzet & Sifat, Imtiaz, 2023. "Co-opted board and firm climate change risk," Finance Research Letters, Elsevier, vol. 52(C).
    • Handle: RePEc:eee:finlet:v:52:y:2023:i:c:s1544612322006845
    DOI: 10.1016/j.frl.2022.103508
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    Cited by:

    1. Ghafoor, Abdul & Gull, Ammar Ali, 2024. "Do co-opted boards protect CEOs from ESG controversies?," Finance Research Letters, Elsevier, vol. 63(C).
    2. Ghafoor, Abdul & Zhichuan, Frank Li & Yousaf, Imran, 2024. "Co-opted Boards and Corporate Cash Holdings," CAFE Working Papers 27, Centre for Accountancy, Finance and Economics (CAFE), Birmingham City Business School, Birmingham City University.
    3. Song, Yanheng & Xian, Rui, 2024. "Institutional investors' corporate site visits and firm-level climate change risk disclosure," International Review of Financial Analysis, Elsevier, vol. 93(C).

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