This paper investigates the effect of female representation on the board of directors on corporate response to stakeholders' demands for increased public reporting about climate change-related risks. We rely on the Carbon Disclosure Project as a sustainability initiative supported by institutional investors. Greenhouse gas emissions measurement and its disclosure to investors can be thought of as a first step toward addressing climate change issues and reducing the firm's carbon footprint. Based on a sample of publicly listed Canadian firms over the period 2008-2014, we find that the likelihood of voluntary climate change disclosure increases with women percentage on boards. We also find evidence that supports critical mass theory with regard to board gender diversity. These findings reinforce initiatives being undertaken around the world to promote gender diversity in corporate governance while demonstrating board effectiveness in stakeholder management.
This paper examines the relationship between board of directors' effectiveness and voluntary climate change disclosures. Since risk management and reporting fall under the board's responsibility, we relate board effectiveness to the firm's decision to voluntarily respond to the Carbon Disclosure Project (CDP) annual questionnaire as well as the quality of disclosures about climate-change-related risks and strategies to mitigate them.Our results show a positive association between board effectiveness and the firm's decision to answer the CDP questionnaire as well as its carbon disclosure quality. The paper contributes to the ongoing debate on the determinants of voluntary climate change disclosures. Our findings highlight the importance of the board of directors' role in enhancing the transparency and relevance of voluntary disclosures of climate change business impacts.
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