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AbstractMoving from the ongoing debate on the benefits of mandating environmental reporting, this paper provides an analysis of the role of narrative information quality in enhancing environmental reporting, considering the moderating effect of firm‐level and country‐level incentives. We examine an international sample of listed firms belonging to an environmental‐sensitive industry and construct disclosure indices based on a content analysis of the company's reporting. Results reveal that mandatory narrative information quality is positively associated with the quality of environmental reporting displaying a credibility effect beyond earnings quality. Country‐level factors that increase the demand for environmental information weaken this relation by reducing the marginal benefit of disclosing environmental information. Our approach advances existing literature on the link between CSR and financial reporting and highlights the unintended consequences of mandating environmental reporting.

AbstractWe study whether environmental reporting serves as a transparency tool to communicate sound environmental policies to stakeholders or rather as a manipulation tool of stakeholders' perceptions. In particular, we focus on the relationship between environmental disclosure tone and future environmental performance and we furthermore explore the role of the board of directors' monitoring and stakeholder orientation in shaping this relationship. Using a sample of 288 US oil and gas firms, we find that the bias towards positive language does not reflect purely opportunistic managerial reasons, but rather is a transparency tool to signal future environmental performance. In addition, we document that the stakeholder orientation of the board plays a transparency role in communicating the firm's superior performance. Our findings contribute to the debate on whether discretionary strategies in environmental reporting are more about increased transparency or about stakeholder manipulation. Moreover, they help investors and policymakers to interpret managers' language choices. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment.

AbstractManuscript TypeThe manuscript is of an empirical nature.Research Question/IssueThe current ecological crisis requires boards of directors to tackle environmental concerns and manage dependencies with the external environment in highly dynamic conditions. Proactive environmental strategies (PESs) seek to establish alternative and innovative processes and products that create new market opportunities. By mobilizing the notion of board demographic faultlines, we investigate their link with PESs and the influence of the internal board dynamics and environmental factors on this relationship.Research Findings/InsightsThe multilevel regression analysis of a 7‐year sample of UK boards reveals that demographic faultlines hinder their information processing in adopting PESs. The results also show that the negative relationship between demographic faultlines and PESs is attenuated by the social similarity of the CEO and chair in the same subgroup and by the financial materiality of the natural environment.Theoretical/Academic ImplicationsThis study draws on faultline theory to analyze how the structure of board diversity through the alignment of multiple directors' demographic attributes affects board dynamics by creating polarized boards that shape sustainability decisions. This study underscores the disruptive effect of having socially distanced subgroups within the board and the salience of board leaders' social similarity and environmental factors in attenuating their dysfunctional effects.Practitioner/Policy ImplicationsBoard diversity is considered key to improving board decision‐making. By situating our empirical investigation in a country with a corporate governance model that fosters diversity in a dual leadership board structure that has influenced other countries' governance models, this study provides insights for policymakers and market participants on the unintended effects of the global call for board diversity on firms' proactive environmental stance. Our results call for establishing procedures to incentivize board socialization and facilitate directors' information processing.

AbstractDrawing on resource dependency and upper echelons theories, we examine the relationship between directors' international orientation (IO) and the scope of non‐financial disclosures (NFD) in a two‐tier board structure. Evidence from a regression analysis on a sample of non‐financial firms listed on the Warsaw Stock Exchange for the 2014–2018 period shows that the IO of supervisory board members significantly and positively impacts the scope of NFD. We also find that women with IO influence the scope of NFD, whereas accounting and finance experience decreases the focus on NFD elements, especially environmental information. The results imply that both the IO of the supervisory board and the bundle of characteristics facilitate the move toward sustainable development. The findings of our study should be of interest to companies, regulators and policymakers to integrate sustainability practices into their corporate strategies.

Purpose– This paper aims to provide insights on the gender-performance relationship, this paper studies the impact of board gender diversity on firm performance, by taking into account the "critical mass" of women directors and their educational level.Design/methodology/approach– The hypotheses are tested on a unique dataset of 211 European Union publicly listed companies in 2012 belonging to the construction industry from 28 different countries through a set of ordinary least squares regressions.Findings– The evidence shows that the "critical mass" rather than the simple presence of women has an incremental benefit on firm performance. In addition, results show that the educational level of women directors negatively affects firm performance, as it might impact the dynamics within the boardroom.Research limitations/implications– The quantitative nature of the study does not allow drawing strong inferences on behavioral processes and dynamics in and around the boardroom. Nevertheless, this study will open new research insights on exploring the educational level on board.Practical implications– Regulators and policymakers that should be aware of the influence of women as a group on firm performance and that this role is differential across industries.Originality/value– The novelty of this paper is that it investigates the role of women in a high masculine gender-specific industry and explores a still poorly understood demographic variable (i.e. the educational level) of women directors.