Does nomination committee independence affect corporate environmental performance? Evidence from the European Union

Abstract

The environmental sustainability of business activities and operations is an increasingly relevant issue. The Board of Directors, by the means of its monitoring role, affects a firm’s achievement of both economic and non-financial objectives. The nomination committee defines the criteria for the selection of Board members and determines the most suitable profiles of the candidates. This paper studies the effect of the level of independence of the nomination committee on a company’s environmental performance. The study analyzes a sample of European non-financial listed firms for the period 2014–2022. Findings indicate that the level of independence of the nomination committee positively and significantly affects corporate environmental performance and the effect is mediated by the level of independence of the Board of Directors.