The effect of co-opted boards on corporate carbon performance: Evidence from financially material industries

Abstract

We examine the relationship between co-opted boards and corporate carbon performance. Results show that co-opted boards decrease GHG intensity in financially material industries with no effect in non-financially material industries. For firms in financially material industries, this relationship is time-variant and positive when we interact GHG intensity with R&D investments. This result posits inefficient R&D allocation in the presence of co-opted boards. Our findings bring a more nuanced picture concerning the influence of co-opted boards on corporate carbon performance.