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Do NEDs influence ESG corporate performance?

Author

Listed:
  • Andrew Clare
  • Carlos Manuel Pinheiro
  • Alberto Franco Pozzolo

Abstract

Being uninvolved in day-to-day management of a company, Non-Executive Directors (NEDs) are arguably well-suited to oversee the drive for more sustainable business practices. Our study explores the correlation between the professional capital of 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.

Suggested Citation

  • Andrew Clare & Carlos Manuel Pinheiro & Alberto Franco Pozzolo, 2024. "Do NEDs influence ESG corporate performance?," Development Working Papers 494, Centro Studi Luca d'Agliano, University of Milano.
    • Handle: RePEc:csl:devewp:494
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    More about this item

    Keywords

    ESG; Corporate Governance; Boards: Non-executive directors; Network Centrality;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • 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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