Board Composition’s influence on Environmental Innovation: How can Boards Drive Sustainability Transitions?
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2024-07-08
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en
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This paper explores the influence of board composition on the degree to which firms shift their innovative direction toward the development of environmental innovation. The paper aims to explore how the composition of boards can support firms to drive sustainable transitions. The study focuses on the automotive industry, which is placed in the context of severe environmental pressure to develop environmental innovations while sacrificing the development of products that impose environmental harm. Using a sample of 128 unique firms in the automotive industry, this study finds that diverse boards are positively associated with firms’ transitioning to the development of environmental innovation. Empirical findings from two regression analyses find support for the positive effect between surface-level board diversity and environmental innovation. The study thereby challenges certain prior studies that indicate the negative effects of social categorization and coordination failure due to diversity in demographics. The study also describes the moderating role of board tenure, in which long-tenured boards enable diverse boards to leverage their variety of perspectives, skills, and experiences into transitioning to the development of environmental innovation.
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Faculteit der Managementwetenschappen