Research On The The Impact Of Board Faultlines On Corporate Environmental Performance

As an important institution that supervises and guides management to improve environmental performance,the composition of board has also been widely concerned under the background of increasing attention to environmental performance.In practice,enterprises will hire diversified directors to gain resource advantages and strengthen supervision over management.However,existing studies have found that differences in age,gender and other characteristics of directors tend can make the board split into multiple groups and result in board fracture zones.With the gradual internationalization of directors,faultlines generally exist in enterprises and become a research hotspot in academic circles.However,for environmental performance,the research on the influencing factors is still focused on board diversity.The board of directors is responsible for monitoring and guiding management to improve environmental performance.How does the board faultlines affect environmental performance when it appears? It is worth further exploring whether the faultlines are "sharp tools" to improve substantive environmental performance or "hidden dangers" to management’s symbolic environmental governance.The questions are worthy of further inquiry.Based on the samples of listed companies in Shanghai and Shenzhen A-share heavy pollution industries from 2010 to 2020,this paper divides environmental performance into process performance and result performance,and explores whether the faultlines will affect management self-interest,and then affect corporate environmental performance.Furthermore,this paper explores the difference between surface faultlines and deep faultlines.In addition,it is also discussed that the heterogeneity of board faultlines on corporate environmental performance under different board shareholding propotion and environmental regulation levels.The results show that the board faultlines significantly improves the environmental process performance,but does not significantly promote the environmental outcome performance.When the faultlines exist,the enterprise only symbolically implements environmental protection behavior.After distinguishing the types of faultlines,it is found that the influence mainly comes from the fault zones formed by deep characteristics such as tenor and member background.Further research shows that the level of management self-interest plays an intermediary role.The grouping of governance environment shows that the faultlines is more likely to lead to management self-interest under the condition of low board shareholding and low level of environmental regulation,thus significantly improving environmental process performance.The study also found that the environmental process performance could not significantly improve the market share and enterprise value,which further proved that the board faultlines may become a hidden danger of enterprises and is not conducive to the long-term development of enterprises.From the perspective of the faultlines,this paper further reveals the impact of board of directors on corporate environmental performance.The result is conducive for the government and enterprises to pay attention to board faultlines and promote the application of board faultlines in the establishment of board of directors.Secondly,this paper explores the impact of management’s self-interested behavior on environmental performance and provides a theoretical basis for strengthening management’s supervision.Finally,the paper proves that board shareholding propotion and environmental regulation can alleviate the hidden danger caused by board faultlines,and provides policy suggestions on improving board’s equity incentive and strengthening the level of government environmental regulation.