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Do market investors value the directors’ expertise and independence of a corporate sustainability committee? Empirical evidence from Taiwan

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  • Sun, Wen-Chi
  • Huang, Hua-Wei

Abstract

This study examines whether market investors value the voluntary establishment of a sustainability committee and whether the sustainability committee directors’ characteristics drive the stock market reaction. This study uses 217 observations of Taiwanese firms for 2006–2023 and finds significantly negative cumulative abnormal stock returns (CAR) around the date of the public announcement of the sustainability committee establishment, supporting investors’ concerns over the high costs associated with establishing a sustainability committee. In addition, the committee director's expertise and independence effectively mitigated negative CAR, showing that investors reward the expertise and independence of such a sustainability committee despite the high costs.

Suggested Citation

  • Sun, Wen-Chi & Huang, Hua-Wei, 2024. "Do market investors value the directors’ expertise and independence of a corporate sustainability committee? Empirical evidence from Taiwan," Finance Research Letters, Elsevier, vol. 61(C).
    • Handle: RePEc:eee:finlet:v:61:y:2024:i:c:s1544612324000886
    DOI: 10.1016/j.frl.2024.105058
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    References listed on IDEAS

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    More about this item

    Keywords

    Market reaction; Sustainability committee establishment; Committee director's characteristics;
    All these keywords.

    JEL classification:

    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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