Are benevolent directors more environmentally responsible?

Purpose - This research examines the relationship between board of director benevolence and corporate environmental performance (CEP). We also investigate how CEO benevolence moderates this relationship. Design/methodology/approach - Drawing from benevolent leadership, upper-echelon and enlightened stakeholder theories, we hypothesize a positive association between board benevolence and CEP. Director benevolence is measured by involvement in not-for-profit leadership positions simultaneously with their corporate directorships. Our sample is drawn from Australian listed firms from 2010 to 2019, and benevolence data is hand-collected from annual report director biographies. Findings - We find that boards with more benevolent directors are associated with higher CEP. This relationship is stronger in firms managed by benevolent CEOs. Our results are consistent across several robustness tests, including matched samples, two-stage least squares (2SLS) and firm fixed effect regressions. Research limitations/implications - Our findings have implications for regulatory bodies and environmental protection advocates in understanding the drivers of corporate environmental performance and are insightful for firms in structuring top leadership to enhance environmental initiatives. Originality/value - While prior research reveals connections between board characteristics and CEP, our research examines a moral characteristic of directors, an overlooked dimension. Our results show the importance of benevolent directors in enhancing CEP.