Does managerial ability matter for corporate climate change disclosures?

Article


Daradkeh, Hussein, Shams, Syed, Bose, Sudipta and Gunaskerage, Abeyratna. 2023. "Does managerial ability matter for corporate climate change disclosures?" Corporate Governance (Oxford): an international review. 31 (1), pp. 83-104. https://doi.org/10.1111/corg.12436
Article Title

Does managerial ability matter for corporate climate change disclosures?

ERA Journal ID33012
Article CategoryArticle
AuthorsDaradkeh, Hussein (Author), Shams, Syed (Author), Bose, Sudipta (Author) and Gunaskerage, Abeyratna (Author)
Journal TitleCorporate Governance (Oxford): an international review
Journal Citation31 (1), pp. 83-104
Number of Pages22
Year2023
PublisherJohn Wiley & Sons
Place of PublicationUnited Kingdom
ISSN0964-8410
1467-8683
Digital Object Identifier (DOI)https://doi.org/10.1111/corg.12436
Web Address (URL)https://onlinelibrary.wiley.com/doi/10.1111/corg.12436
Abstract

Research Question/Issue: This study examines the association between managerial ability and the extent of firm-level climate change disclosures and the moderating role of corporate governance in this association.
Research Findings/Insights: Results based on a sample of 2298 firm-year observations from the United States (US) from 2005 to 2019 suggest that firms with more capable managers tend to make more climate change disclosures. This significant positive association is weakened when firms suffer from weak corporate governance. These findings remain robust after addressing omitted time-invariant variable bias, observable heterogeneity bias, sample selection bias, and reverse causality and when using alternative climate change disclosure proxies. Further analysis shows that climate change disclosures have a mediating role in the association between managerial ability and firm valuation.
Theoretical/Academic Implications: Given the growing importance of integrating climate change-related information into a firm's operations and the pressure exerted by various stakeholders, understanding the drivers of climate change disclosures has emerged as an important area of research in the accounting and finance literature. To the best of our knowledge, this is the first study to examine any link between managerial ability and climate change disclosures.
Practitioner/Policy Implications: Considering the recent pressure imposed on companies by regulatory authorities for more climate change disclosures, our study's findings have important implications for regulators, policy makers, investors, financial analysts, researchers, and firms.

KeywordsClimate change disclosures; Managerial ability; Governance; Firm value
Related Output
Is part ofThe impact of CEO attributes on firm-level climate-change disclosure: Evidence from United States
ANZSRC Field of Research 2020350201. Environment and climate finance
Public Notes

File reproduced in accordance with the copyright policy of the publisher/author.

This article is part of a UniSQ Thesis by publication. See Related Output.

Byline AffiliationsSchool of Commerce
University of Newcastle
Monash University
Institution of OriginUniversity of Southern Queensland
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