[ACC Research Seminar] Institutional Investors and Environmental Expertise on Corporate Boards
October 2nd, 2025
2:30pm – 4pm in Village Building (B252) & on Zoom
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Speaker: Philip JOOS, Tilburg University
abstract
This paper investigates how institutional ownership influences the presence of directors with environmental expertise on corporate boards, and the subsequent impact on environmental risk and performance. Using a sample of S&P 1500 firms from 2010 to 2023, we find that ownership by passive investors with diversified holdings and blockholdersis positively associated with the presence of environmental directors, while ownership by short-term investors shows a negative association. We also analyze how firms benefit from appointing environmental directors. Specifically, we document that such firms manage environmental risks more effectively, as evidenced by fewer environmental shareholder proposals and increased discussion of environmental risks during conference calls. In addition, we find that environmental directors have an immediate impact on reducing carbon emissions. Our findings suggest that environmental directors function as an effective governance mechanism through which passive investors with diversified portfolios and blockholderscan delegate the oversight of environmental risk management.