The Role of Board Characteristics and Strong Governance in Environmental Innovation and Emissions Control: Evidence From the UK FTSE 350

ABSTRACT

Rising environmental and regulatory challenges require companies to integrate sustainability into their corporate governance frameworks. In this respect, the purpose of this paper is to examine the impact of certain board characteristics on environmental performance, with a focus on environmental innovation and emissions control. Using a longitudinal sample of FTSE 350 companies covering the period 2006–2023, we employ fixed‐effects regression models to analyze the effects of board size, independence, gender, and national diversity. The study also compares companies with and without corporate social responsibility (CSR) committees, as well as companies operating with strong or weak governance arrangements. Drawing on agency theory, stakeholder theory, and resource dependence theory, the results reveal that board gender diversity and board size are positively associated with both environmental innovation and emissions control. Board independence is positively associated with environmental innovation, while national diversity is negatively associated with overall environmental performance. Further analysis suggests that CSR committees and strong governance reinforce these effects, particularly in relation to environmental innovation. Overall, this research provides a comprehensive view of how board composition shapes environmental outcomes and provides practical insights for companies and policymakers to leverage governance to promote sustainability.