Do CEOs’ and board directors’ environmental governance experience, corporations’ age and financial performance influence adoption of green management practices? A study of energy-intensive industries in Malaysia

Abstract

Corporations operating in energy-intensive industries have faced increasing pressure to introduce green management practices (GMPs), while seeking to pursue profitability for the benefit of shareholders. Although chief executive officers (CEOs) and corporate boards with environmental governance experience are likely to seek the adoption of GMPs, it may not happen among young and low financial performance corporations owing to a lack of operational experience and financial constraints. Drawing from institutional theory, this study proposes that the influence of CEOs and corporate boards’ environmental governance experience on GMPs will depend on their age and financial position of the corporations. Four hypotheses were tested using panel data (2011–2015) from 209 publicly-listed corporations drawn from energy-intensive industries in Malaysia. The results reveal that CEOs with environmental governance experience among young and high financial corporations are likely to adopt GMPs, but not among old and low financial performance corporations. The results also reveal that corporate boards with environmental governance experience are likely to adopt GMPs among young and old corporations, and low and high financial performance corporations. The findings provide strong implications for government policy in general, and the emerging economies in particular to promote environmental governance for achieving sustainable development goals.