Journal of Business Ethics

, Volume 140, Issue 3, pp 423–438 | Cite as

The Role of Board Environmental Committees in Corporate Environmental Performance

  • Heather R. Dixon-FowlerEmail author
  • Alan E. Ellstrand
  • Jonathan L. Johnson


This study explores the relationship between board environmental committees and corporate environmental performance (CEP). We propose that board environmental committees will be positively associated with CEP. Moreover, we argue that the composition of the committee (i.e., stakeholder representation) as well as the presence of a sustainability manager will influence this relationship. Our results find support for a positive association between board environmental committees and CEP. Further, the presence of a senior-level environmental manager positively moderates this relationship, but is not effective in isolation. Unexpectedly, no support was found for the influences of stakeholder representation.


Corporate environmental performance Environmental governance Board committees Sustainability manager 


  1. Adams, R. B. (2003). What do boards do? Evidence from board committee and director compensation data (March 13). EFA 2005 Moscow Meetings Paper. (From the Social Sciences Research Network Website).
  2. Agle, B. R., Mitchell, R. K., & Sonnenfeld, J. A. (1999). Who matters to CEOs: An investigation of stakeholder attribute and salience, corporate performance, and CEO values. Academy of Management Journal, 42(5), 507–525.CrossRefGoogle Scholar
  3. Aiken, L. S., & West, S. G. (1991). Multiple regression: Testing and interpreting interactions. Newbury Park, CA: Sage.Google Scholar
  4. Anderson, C. A., & Anthony, R. N. (1986). The new corporate directors: Insights for board members and executives. New York: Wiley.Google Scholar
  5. Aragón-Correa, J. A. (1998). Strategic proactivity and firm approach to the natural environment. Academy of Management Journal, 41(5), 556–567.CrossRefGoogle Scholar
  6. Aragón-Correa, J. A., & Sharma, S. (2003). A contingent resource-based view of proactive environmental strategy. Academy of Management Review, 28(1), 71–88.Google Scholar
  7. Ayuso, S., & Argandona, A. (2007). Responsible corporate governance: Towards a stakeholder board of directors? Working Paper No. 701. IESE Business School, Barcelona.Google Scholar
  8. Backer, L. (2007). Engaging stakeholders in corporate environmental governance. Business and Society Review, 112(1), 29–54.CrossRefGoogle Scholar
  9. Bansal, P. (1997). Business strategy and the environment. In P. Bansal & E. Howard (Eds.), Business and the natural environment. Oxford: Butterworth-Heinemann.Google Scholar
  10. Bansal, P., & Roth, K. (2000). Why companies go green: A model of ecological responsiveness. Academy of Management Journal, 43(4), 717–736.CrossRefGoogle Scholar
  11. Baysinger, B. D., Kosnik, R. D., & Turk, T. A. (1991). Effects of board ownership structure on corporate R&D strategy. Academy of Management Journal, 34(1), 205–214.CrossRefGoogle Scholar
  12. Berle, A. A., Means, G. C., & Columbia University. (1932). Modern corporation and private property. Council for Research in the Social Sciences. New York, Chicago: Commerce Clearing House, Loose leaf service division of the Corporation Trust Company.Google Scholar
  13. Berman, S. L., Wicks, A. C., Koth, S., & Jones, T. M. (1999). Does stakeholder orientation matter? The relationship between stakeholder management models and firm financial performance. Academy of Management Journal, 42(5), 488–506.CrossRefGoogle Scholar
  14. Berrone, P., & Gomez-Mejia, L. R. (2009). Environmental performance and executive compensation: An integrated agency-institutional perspective. Academy of Management Journal, 52(1), 103–126.CrossRefGoogle Scholar
  15. Bilimoria, D., & Pederit, S. K. (1994). Board committee membership—effects of sex-based bias. Academy of Management Journal, 37(6), 1453–1477.CrossRefGoogle Scholar
  16. Boyd, B. (1990). Corporate linkages and organizational environment: A test of the resource dependence model. Strategic Management Journal, 11, 419–430.CrossRefGoogle Scholar
  17. Braiotta, L. Jr. & Sommer, A. A. (1987). The essential guide to effective corporate board committees. Englewood Cliffs, NJ: Prentice-Hall.Google Scholar
  18. Buzzelli, D. T. (1991). Time to structure an environmental policy strategy. Journal of Business Strategy, 12(2), 17–20.CrossRefGoogle Scholar
  19. Chen, M., & Hambrick, D. (1995). Speed, stealth and selective attack: How small firms differ from large firms in competitive behavior. Academy of Management Journal, 38(2), 453–482.CrossRefGoogle Scholar
  20. Christmann, P. (2000). Effects of “best practices” of environmental management on cost advantage: The role of complementary assets. Academy of Management Journal, 43(4), 663–680.CrossRefGoogle Scholar
  21. Clemons, B. (2006). Economic incentives and small firms: Does it pay to be green? Journal of Business Research, 59, 492–500.CrossRefGoogle Scholar
  22. Cohen, J. (1977). Statistical power analysis for the behavioral sciences. New York: Academic Press.Google Scholar
  23. Coombs, J. E., & Gilley, K. M. (2005). Stakeholder management as a predictor of CEO compensation: Main effects and interactions with financial performance. Strategic Management Journal, 26, 827–840.CrossRefGoogle Scholar
  24. Cyert, R. M., & March, J. G. (1963). A Behavioral Theory of the Firm. Englewood Cliffs, NJ: Prentice Hall.Google Scholar
  25. D’Amboise, G., & Muldowney, M. (1988). Management theory for small business: Attempts and requirements. Academy of Management Review, 13, 226–240.Google Scholar
  26. Daily, C. M. (1996). Governance patterns in bankruptcy reorganizations. Strategic Management Journal, 17(5), 355–375.CrossRefGoogle Scholar
  27. Daily, C., Dalton, D., & Cannella, A. (2003). Corporate governance: Decades of dialogue and data. Academy of Management Review, 28(3), 371–382.Google Scholar
  28. Daily, C. M., & Schwenk, C. (1996). Chief executive officers, top management teams, and boards of directors: Congruent or countervailing forces? Journal of Management, 22(2), 185–208.CrossRefGoogle Scholar
  29. Dalton, D. R., Daily, C. M., Ellstrand, A. E., & Johnson, J. L. (1998). Meta-analytic reviews of board composition, leadership structure, and financial performance. Strategic Management Journal, 19(3), 269–290.CrossRefGoogle Scholar
  30. Dalton, D. R., Daily, C. M., Johnson, J. L., & Ellstrand, A. E. (1999). Number of directors and financial performance: A meta-analysis. Academy of Management Journal, 42(6), 674–686.CrossRefGoogle Scholar
  31. Davis, G. F. (1991). Agents without principles: The spread of the poison pill through the intercorporate network. Administrative Science Quarterly, 36(4), 583–613.CrossRefGoogle Scholar
  32. Davis, J. H., Schoorman, D. F., & Donaldson, L. (1997). Toward a stewardship theory of management. Academy of Management Review, 22(1), 20–47.Google Scholar
  33. Dean, T. J., Brown, R. L., & Bamford, C. E. (1998). Differences in large and small firm responses to environmental context: Strategic implications from a comparative analysis of business formation. Strategic Management Journal, 19(8), 709–728.CrossRefGoogle Scholar
  34. Dixon-Fowler, H., Slater, D., Johnson, J., Ellstrand, A., & Romi, A. (2013). Beyond “Does it pay to be green?” A meta-analysis of moderators of the CEP-CFP relationship. Journal of Business Ethics, 112(2), 353–366.CrossRefGoogle Scholar
  35. Elkington, J. (1994). Towards the sustainable corporation—win-win-win business strategies for sustainable development. California Management Review, 36(2), 90–100.CrossRefGoogle Scholar
  36. Etzion, D. (2007). Research on organizations and the natural environment, 1992-present: A review. Journal of Management, 33(4), 637–664.CrossRefGoogle Scholar
  37. Fama, E. F. (1980). Agency problems and the theory of the firm. Journal of Political Economy, 88(2), 288–307.CrossRefGoogle Scholar
  38. Fama, E. F., & Jensen, M. C. (1983). Separation of ownership and control. Journal of Law and Economics, 26(2), 301–325.CrossRefGoogle Scholar
  39. Forbes, D. P., & Milliken, F. J. (1999). Cognition and corporate governance: Understanding boards of directors as strategic decision-making groups. Academy of Management Review, 24(3), 489–505.Google Scholar
  40. Freeman, R., & Evan, W. (1990). Corporate governance: A stakeholder interpretation. Journal of Behavioral Economics, 19(4), 337.CrossRefGoogle Scholar
  41. Gales, L. M., & Kesner, I. F. (1994). An analysis of board of director size and composition in bankrupt organizations. Journal of Business Research, 30(3), 271–282.CrossRefGoogle Scholar
  42. Govindarajan, V. (1988). A contingency approach to strategy implementation at the business-unit level—Integrating administrative mechanisms with strategy. Academy of Management Journal, 31(4), 828–853.CrossRefGoogle Scholar
  43. Gupta, A. K., & Govindarajan, V. (1984). Business unit strategy, managerial characteristics, and business unit effectiveness at strategy implementation. Academy of Management Journal, 27(1), 25–41.CrossRefGoogle Scholar
  44. Hair, J. F., Black, W. C., Babin, B. J., Anderson, R. E., & Tatham, R. L. (2006). Multivariate data analysis (6th ed.). Upper Saddle River, NJ: Pearson Prentice Hall.Google Scholar
  45. Harrison, J. R. (1987). The strategic use of corporate-board committees. California Management Review, 30(1), 109–125.CrossRefGoogle Scholar
  46. Hart, S. L. (1995). A natural-resource-based view of the firm. Academy of Management Review, 20(4), 986–1014.Google Scholar
  47. Hendry, J. R. (2006). Taking aim at business: What factors lead environmental non-governmental organizations to target particular firms? Business and Society, 45(1), 47–86.CrossRefGoogle Scholar
  48. Henriques, I., & Sadorsky, P. (1999). The relationship between environmental commitment and managerial perceptions of stakeholder importance. Academy of Management Journal, 42(1), 87–99.CrossRefGoogle Scholar
  49. Hill, C. W. L., & Snell, S. A. (1988). External control, corporate-strategy, and firm performance in research-intensive industries. Strategic Management Journal, 9(6), 577–590.CrossRefGoogle Scholar
  50. Hillman, A. J. (2005). Politicians on the board of directors: Do connections affect the bottom line? Journal of Management, 31, 464–481.CrossRefGoogle Scholar
  51. Hillman, A. J., Cannella, A. A. J., & Paetzold, R. L. (2000). The resource dependence role of corporate directors: Strategic adaptation of board composition in response to environmental change. Journal of Management Studies, 37(2), 235–255.CrossRefGoogle Scholar
  52. Hillman, A. J., & Dalziel, T. (2003). Boards of directors and firm performance: Integrating agency and resource dependence perspectives. Academy of Management Review, 28(3), 383–396.Google Scholar
  53. Hillman, A. J., & Keim, G. D. (2001). Shareholder value, stakeholder management, and social issues: What’s the bottom line? Strategic Management Journal, 22(2), 125–139.CrossRefGoogle Scholar
  54. Hillman, A. J., Keim, G. D., & Luce, R. A. (2001). Board composition and stakeholder performance: Do stakeholder directors make a difference? Business and Society, 40, 295–313.CrossRefGoogle Scholar
  55. Hutchinson, C. (1996). Integrating environment policy with business strategy. Long Range Planning, 29(1), 11–23.CrossRefGoogle Scholar
  56. James, P., Ghobadian, A., Viney, H., & Liu, J. (1999). Addressing the divergence between environmental strategy formulation and implementation. Management Decision, 37(4), 333–347.CrossRefGoogle Scholar
  57. Jensen, M. C., & Meckling, W. H. (1976). Theory of firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360.CrossRefGoogle Scholar
  58. Johnson, J. L., Daily, C. M., & Ellstrand, A. E. (1996). Boards of directors: A review and research agenda. Journal of Management, 22(3), 409–438.CrossRefGoogle Scholar
  59. Johnson, R. A., & Greening, D. W. (1999). The effects of corporate governance and institutional ownership types on corporate social performance. Academy of Management Journal, 42(5), 564–576.CrossRefGoogle Scholar
  60. Jones, T. M., & Goldberg, L. D. (1982). Governing the large corporation: More arguments for public directors. Academy of Management Review, 7(4), 603–611.Google Scholar
  61. Judge, W. Q., & Zeithaml, C. P. (1992). Institutional and strategic choice perspectives on board involvement in the strategic decision-process. Academy of Management Journal, 35(4), 766–794.CrossRefGoogle Scholar
  62. Kassinis, G., & Vafeas, N. (2002). Corporate boards and outside stakeholders as determinants of environmental litigation. Strategic Management Journal, 23(5), 399–415.CrossRefGoogle Scholar
  63. Kesner, I. F. (1988). Directors characteristics and committee membership—an investigation of type, occupation, tenure, and gender. Academy of Management Journal, 31(1), 66–84.CrossRefGoogle Scholar
  64. Klassen, R. D., & McLaughlin, C. P. (1996). The impact of environmental management on firm performance. Management Science, 42(8), 1199–1214.CrossRefGoogle Scholar
  65. Klein, A. (1998). Firm performance and board committee structure. Journal of Law and Economics, 41(1), 275–303.CrossRefGoogle Scholar
  66. Lam, K., & Li, Y. (2008). Does corporate governance matter?: The case of environmental and social responsibility committees in the board. Working paper. Toronto, ON: University of Toronto.Google Scholar
  67. Lane, P. J., Cannella, A. A., & Lubatkin, M. H. (1998). Agency problems as antecedents to unrelated mergers and diversification: Amihud and Lev reconsidered. Strategic Management Journal, 19(6), 555–578.CrossRefGoogle Scholar
  68. Lang, J. R., & Lockhart, D. E. (1990). Increased environmental uncertainty and changes in board linkage patterns. Academy of Management Journal, 33(1), 106–128.CrossRefGoogle Scholar
  69. Lenox, M., & King, A. (2004). Prospects for developing absorptive capacity through internal information provisions. Strategic Management Journal, 25(4), 331–345.CrossRefGoogle Scholar
  70. Lester, R. H. (2003). A road less traveled: Investigating the outside directors of America’s corporate boards. Dissertation, Texas A&M University, p. 212; AAT3104010.Google Scholar
  71. Lorsch, J. W., & MacIver, E. (1989). Pawns or potentates : The reality of America’s corporate boards. Boston, MA.: Harvard Business School Press.Google Scholar
  72. Lublin, J. S. (2008). Environmentalism sprouts up on corporate boards. Wall Street Journal, 11, B6.Google Scholar
  73. Luoma, P., & Goodstein, J. (1999). Stakeholders and corporate boards: Institutional influences on board composition and structure. Academy of Management Journal, 42(5), 553–563.CrossRefGoogle Scholar
  74. Mahoney, L. S., & Thorn, L. (2006). An examination of the structure of executive compensation and corporate social responsibility: A Canadian investigation. Journal of Business Ethics, 69(2), 149–162.CrossRefGoogle Scholar
  75. Main, B., O’Reilly, C., & Wade, J. (1995). The CEO, the board of directors and executive compensation: Economic and psychological perspectives. Industrial and Corporate Change, 4, 1–34.CrossRefGoogle Scholar
  76. Marcus, A., & Geffen, D. (1998). The dialectics of competency acquisition: Pollution prevention in electric generation. Strategic Management Journal, 19(12), 1145–1168.CrossRefGoogle Scholar
  77. McGuire, J., Dow, S., & Argheyd, K. (2003). CEO incentives and corporate social performance. Journal of Business Ethics, 45(4), 341–359.CrossRefGoogle Scholar
  78. McWilliams, A., & Siegel, D. (2000). Corporate social responsibility and financial performance: Correlation or misspecification? Strategic Management Journal, 21, 603–609.CrossRefGoogle Scholar
  79. Mitchell, R. K., Agle, B. R., & Wood, D. J. (1997). Toward a theory of stakeholder identification and salience: Defining the principle of who and what really counts. Academy of Management Review, 22(4), 853–886.Google Scholar
  80. Mizruchi, M. S., & Stearns, L. B. (1988). A longitudinal-study of the formation of interlocking directorates. Administrative Science Quarterly, 33(2), 194–210.CrossRefGoogle Scholar
  81. O’Reilly, C. A., Main, B. G., & Crystal, G. S. (1988). CEO compensation as tournament and social-comparison—a tale of two theories. Administrative Science Quarterly, 33(2), 257–274.CrossRefGoogle Scholar
  82. Odell, A. M. (2008). Getting on board with corporate social responsibility. Social Funds: Sustainability Investment News. SRI World Group. Aug. 25. Accessed Feb. 2014.
  83. Peterson, C. A., Philpot, J., & O’Shaughnessy, K. C. (2007). African-American diversity in the boardrooms of the US Fortune 500: Director presence, expertise and committee membership. Corporate Governance-an International Review, 15(4), 558–575.CrossRefGoogle Scholar
  84. Pettigrew, A. M. (1992). On studying managerial elites. Strategic Management Journal, 13, 163–182.CrossRefGoogle Scholar
  85. Pfeffer, J., & Salancik, G. R. (1978). The external control of organizations. New York: Harper and Row.Google Scholar
  86. Platts & Capgemini. (2008). Platts/Capgemini utilities executive study. Accessed Sept. 2011.
  87. Porter, M. E., & van der Linde, C. (1995). Toward a new conception of the environment-competitiveness relationship. Journal of Economic Perspectives, 9(4), 970118.CrossRefGoogle Scholar
  88. Post, J. E. (1991). Managing as if the earth mattered. Business Horizons, 34(1), 32–38.CrossRefGoogle Scholar
  89. Post, J. E., & Altman, B. W. (1994). Managing the environmental change process: Barriers and opportunities. Journal of Organizational Change Management, 7(4), 64–82.CrossRefGoogle Scholar
  90. Russo, M. V., & Fouts, P. A. (1997). A resource-based perspective on corporate environmental performance and profitability. Academy of Management Journal, 40(3), 534–559.CrossRefGoogle Scholar
  91. Saeverud, I. A., & Skjaerseth, J. B. (2007). Oil companies and climate change: Inconsistencies between strategy formulation and implementation? Global Environmental Politics, 7(3), 42–61.CrossRefGoogle Scholar
  92. Sharma, S., Pablo, A. L., & Vredenburg, H. (1999). Corporate environmental responsiveness strategies: The importance of issue interpretation and organizational context. Journal of Applied Behavioral Science, 35(1), 87–108.CrossRefGoogle Scholar
  93. Sharma, S., & Vredenburg, H. (1998). Proactive corporate environmental strategy and the development of competitively valuable organizational capabilities. Strategic Management Journal, 19(8), 729–753.CrossRefGoogle Scholar
  94. Shivdasani, A., & Yermack, D. (1999). CEO involvement in the selection of new board members: An empirical analysis. Journal of Finance, 54(5), 1829–1853.CrossRefGoogle Scholar
  95. Singh, H., & Harianto, F. (1989). Management-board relationships, takeover risk and the adoption of golden parachutes. Academy of Management Journal, 32(1), 7–24.CrossRefGoogle Scholar
  96. Slater, D., & Dixon-Fowler, H. (2009). CEO international assignment experience and corporate social performance. Journal of Business Ethics, 89(3), 473–489.CrossRefGoogle Scholar
  97. Spencer Stewart (2013). 2013 Spencer Stuart Board Index, available at
  98. Spira, L. F., & Bender, R. (2004). Compare and contrast: Perspectives on board committees. Corporate Governance: An International Review, 12(4), 489–499.CrossRefGoogle Scholar
  99. Stead, J. G., & Stead, E. (2000). Eco-enterprise strategy: Standing for sustainability. Journal of Business Ethics, 24(4), 313–329.CrossRefGoogle Scholar
  100. Storey, D. (1994). Understanding the small business sector. London: Routledge.Google Scholar
  101. Strike, V. M., Gao, J., & Bansal, P. (2006). Being good while being bad: Social responsibility and the international diversification of US firms. Journal of International Business Studies, 37(6), 850–862.CrossRefGoogle Scholar
  102. Turban, D. B., & Greening, D. W. (1997). Corporate social performance and organizational attractiveness to prospective employees. Academy of Management Journal, 40(3), 658–672.CrossRefGoogle Scholar
  103. U.S. Securities and Exchange Commission. (2014).
  104. Vance, S. C. (1983). Corporate leadership: Boards, directors, and strategy. New York: McGraw-Hill.Google Scholar
  105. Waddock, S., & Graves, S. (1997). The corporate social performance—financial performance link. Strategic Management Journal, 18, 303–319.CrossRefGoogle Scholar
  106. Waldman, D. A., Siegel, D. S., & Javidan, M. (2006). Components of CEO transformation leadership and corporate social responsibility. Journal of Management Studies, 43(8), 1703–1725.CrossRefGoogle Scholar
  107. Waldo, C. N. (1985). Boards of directors: Their changing roles, structure, and information needs. Westport, CT: Quorum Books.Google Scholar
  108. Walls, J. L., Berrone, P., & Phan, P. H. (2012). Corporate governance and environmental performance: Is there really a link? Strategic Management Journal, 33(8), 885–913.CrossRefGoogle Scholar
  109. Westphal, J., & Zajac, E. (1997). Defections from the inner circle: Social exchange, reciprocity, and the diffusion of board independence in US corporations. Administrative Science Quarterly, 42(1), 161–183.CrossRefGoogle Scholar
  110. Woo, C. Y. Y., & Cooper, A. C. (1981). Strategies of effective low share businesses. Strategic Management Journal, 2, 301–318.CrossRefGoogle Scholar
  111. Wood, D. J. (1991). Corporate social performance revisited. Academy of Management Review, 16(4), 691–718.Google Scholar
  112. Yu, T. (2001). Toward a capabilities perspective of the small firm. International Journal of Management Reviews, 3(3), 185–197.CrossRefGoogle Scholar
  113. Zahra, S., & Pearce, J. A. (1989). Boards of directors and corporate financial performance: A review and integrative model. Journal of Management, 15(2), 291–334.CrossRefGoogle Scholar
  114. Zahra, S., & Stanton, W. (1988). The implications of boards of directors composition for corporate strategy and performance. International Journal of Management, 5(2), 229–236.Google Scholar
  115. Zajac, E. J. (1988). Interlocking directorates as an interorganizational strategy: A test of critical assumptions. Academy of Management Journal, 31(2), 428–438.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media Dordrecht 2015

Authors and Affiliations

  • Heather R. Dixon-Fowler
    • 1
    Email author
  • Alan E. Ellstrand
    • 2
  • Jonathan L. Johnson
    • 3
  1. 1.Department of Management, Walker College of BusinessAppalachian State UniversityBooneUSA
  2. 2.Department of Management, Sam M. Walton College of BusinessUniversity of ArkansasFayettevilleUSA
  3. 3.Department of Management, Sam M. Walton College of BusinessUniversity of ArkansasFayettevilleUSA

Personalised recommendations