As an important corporate governance mechanism, independent directors have the responsibility to promote a high standard of carbon information disclosure (CID) by firms. The purpose of this study is to investigate the effect of independent director network on CID.
The authors establish the independent director network of Chinese A-share listed firms and evaluate the extent of CID by using text analysis methods on corporate annual reports and corporate social responsibility reports.
The authors discover a positive effect of the independent director network on CID. Mechanism tests show that this effect is associated with the advisory and monitoring roles of independent directors. Further analysis shows that firms with higher adjacent companies’ CID and stricter government environmental regulation can better leverage independent director network to promote CID.
This study enhances the current research by offering empirical evidence regarding the determinants of CID and social network of independent directors. This study also provides novel insights into the advisory and monitoring roles of independent directors.
