Co-opted board and firm climate change risk

This paper examines whether a higher proportion of co-opted board members following a CEO's accession translates to greater climate change-related risk for the firm. Investigating 12,101 USbased firm-year observations from 2001 to 2014, we discover that firms with a higher level of coopted directors face higher climate risk. This conclusion survives a battery of tests addressing reverse causality, omitted variable bias, and sample selection bias. We touch on this result's implications and offer further ideas for advancing the discourse.

Automated summary

This paper examines whether a higher proportion of co-opted board members following a CEO's accession translates to greater climate change-related risk for the firm. Investigating 12,101 US-based firm-year observations from 2001 to 2014, we discover that firms with a higher level of coopted directors face higher climate risk. This conclusion survives a battery of tests addressing reverse causality, omitted variable bias, and sample selection bias. We touch on this result's implications and offer further ideas for advancing the discourse.