An analysis of the influence of CEO duality on carbon emissions: Do board characteristics matter?

Purpose This study aims to investigate the relationship between CEO duality and carbon dioxide emissions, particularly examining whether board characteristics can mitigate the adverse effects of CEO duality on corporate environmental outcomes. Design/methodology/approach This study uses a fixed affect (FE) approach, analyzing 2112 firm-year observations from a sample of 342 firms over the period 2004-2022. To address potential endogeneity, the study employs the generalized method of moments (GMM) and propensity score matching (PSM) models. Mean centering is used to mitigate multicollinearity issues. Additionally, various dependent variables, including lagged CO2 emissions and the CO2 emissions-to revenue ratio, are applied to validate the findings. Findings The findings reveal that firms with CEOs holding dual positions—serving as both CEO and board chair—have higher carbon dioxide emissions. This effect is more pronounced in firms with larger board sizes, suggesting potential challenges in effectively monitoring CEO behavior in such cases. However, the study finds that the harmful influence of CEO duality on carbon emissions is weakened when boards have a higher proportion of female and independent directors. The effect of board meetings is inconclusive, showing mixed results. These findings indicate that gender diversity and board independence enhance board effectiveness in curbing CEO entrenchment and promoting responsible environmental decision-making. Social Implications The study underscores the critical role of board diversity and independence in enhancing corporate accountability and environmental responsibility. By highlighting the importance of female and independent directors in mitigating the adverse environmental impacts of CEO duality, the research supports calls for more inclusive and independent corporate governance structures. These insights can inform regulatory and policy frameworks aimed at promoting corporate governance practices that prioritize sustainability and social responsibility. Practical Implications For practitioners and policymakers, this study emphasizes the significance of strategic board composition as a tool to improve environmental outcomes. Organizations and regulators should consider policies that encourage greater board independence and gender diversity to strengthen board oversight and reduce negative environmental impacts associated with CEO entrenchment. This insight aligns with the United Nations (UN) agenda for sustainable development on climate change mitigation and offers valuable guidance for shareholders and other stakeholders seeking to promote sustainable business practices through improved corporate governance. Originality/Value This study contributes original insights into the governance-environmental performance nexus by empirically demonstrating the moderating role of board characteristics in the CEO duality-carbon emissions relationship. By focusing on board gender diversity and independence as mitigating factors, the research advances the understanding of how specific board features influence a firm's environmental impact, thereby filling a gap in corporate governance and sustainability literature.

Citation

Akhtar, T. and Abdullah, M. (2025) An analysis of the influence of CEO duality on carbon emissions: Do board characteristics matter? Sustainability Accounting, Management and Policy Journal, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/SAMPJ-10-2024-1163

Type

Journal article

Language

en

Description

This is an author's accepted manuscript of an article published by Emerald in Sustainability Accounting, Management and Policy Journal on 19/03/2025, available online https://doi.org/10.1108/SAMPJ-10-2024-1163. The accepted manuscript may differ from the final published version.

ISSN

2040-8021

Collections

Faculty of Arts, Business and Social Sciences