Board Interlocks and ESG Misconduct: How Do Board Interlocks Influence Organizational ESG Misconduct?
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2025-07-07
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en
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This study examines the relationship between board interlocks and environmental, social, and governance (ESG) misconduct, thereby addressing a significant research gap in the social network literature. While prior research has emphasized the positive effects of board interlocks on ESG performance, their potential to facilitate misconduct remains unaddressed. Therefore, this study aims to explore whether direct and indirect board interlocks contribute to ESG misconduct and whether strong governance mechanisms can mitigate these effects. Using a quantitative research design, panel data from 1,631 publicly listed organizations in the European Union from 2015 to 2024 were analyzed. The data on board interlocks and governance was obtained from BoardEx, while the data for ESG misconduct was extracted from the LSEG database. Multiple regression models, including time-lagged regression, were employed to assess inferential relationships and moderation effects. The results indicate that both direct and indirect board interlocks are positively associated with ESG misconduct. However, interaction effects reveal that firm governance, measured through board independence, CEO-chair separation, and smaller board size, can significantly weaken this relationship.
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Faculteit der Managementwetenschappen