This paper aims to report the results of an investigation into the relationship between corporate boards and the likelihood of a firm being convicted of an environmental offence in the United Kingdom (UK).
The study uses binary logistics regression analysis to model the relationship between corporate boards and the likelihood of a firm being convicted of an environmental offence in the UK, controlling for firm size, financial leverage and profitability.
The results suggest that the likelihood of a firm being convicted of an environmental offence increases with board size but decreases with the presence of a woman on the board. No support is found for the authors’ hypotheses about the proportion of outside directors and the presence of a lawyer on the board. Marginal effects’ results also show that adding one member to the board increases the chance of a firm being convicted for an environmental offence by 4.2 per cent, while having a woman on the board decreases the likelihood of a firm being convicted of an environmental offence by 31.8 per cent.
The sample size of 55 firms is small which could affect the generalisability of the study.
The study uses proprietary data obtained from the UK Environmental Agency to provide evidence for the first time how corporate boards affect the chances of a listed firm being convicted of an environmental offence in the UK.
