Board Governance Mechanisms and Corporate Environmental Performance: Evidence from Global Firms Using Direct Environmental Indicators

Abstract

This study investigates how the structure of corporate boards influences companies’ environmental performance. It asks the central question: what is the relationship between board attributes (i.e., board size, board independence, CEO duality, and the presence of CSR committees) and direct measures of environmental outcomes such as greenhouse gas emissions, water use, and energy consumption?

To answer this question, the study applies a quantitative methodology, using a balanced panel of 4184 firms worldwide spanning the period 2015 to 2024. The data were sourced from Refinitiv Eikon and analysed through pooled Ordinary Least Squares regressions with two-way fixed effects (industry and year) and robust standard errors (HC1). By relying on revenue-adjusted environmental indicators rather than broad ESG scores, the research provides a more precise assessment of firms’ actual environmental outcomes.

The findings show that board independence consistently improves all three environmental measures, supporting the argument that strong, independent oversight enhances accountability. In contrast, CSR committees are linked to poorer outcomes, suggesting that they often serve symbolic purposes rather than leading to real improvements. Board size is positively related to greenhouse gas emissions but shows no effect on water use or energy consumption, while CEO duality is largely insignificant, with a small and unexpected benefit for energy efficiency.

These results imply that not all widely promoted governance structures are effective, and that boards, regulators, and ESG analysts should focus more on the quality and authority of governance mechanisms rather than their mere presence. The study therefore provides both theoretical insights into the governance–environment relationship and practical recommendations for strengthening sustainability oversight at the board level.