Forging a Greener Path: How Corporate Boards Impact Environmental Sustainability

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2018-08

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Abstract

A growing majority of large, publicly traded firms incorporate sustainability (environmentally-friendly innovations) into their business strategies. This dissertation seeks to understand how some firms can achieve more radical sustainability while other firms make only incremental achievements. Many firms have implemented organizational structures, such as sustainability-focused committees, among their board of directors. Uniting the resource dependence and organizational structure literatures, this study posits that the presence of a sustainability committee may or may not be instrumental in pushing firms toward the adoption of more radical sustainable developments, depending upon key attributes of the committee members and the uncertainty the firm faces. The panel dataset, which consist of green patents on more than 100 firms with sustainability committees, confirms that firms have a greater proportion of radical patents when they have dedicated rather than non-dedicated sustainability committees. Results also indicate that the impact of dedicated committees on the proportion of radical green patents is even stronger if the firm faces higher levels of uncertainties, and if the committee members carry specific attributes.

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Keywords

Sustainability, Organizational structure, Board of directors, Board committees

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