ESG Issues and Career Prospects of Directors: Evidence from the International Director Labor Market

Gonul Colak*, Kent Hickman, Timo Korkeamäki, Niclas Meyer

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

Abstract

Using an international sample of firms, we investigate the career prospects of directors of firms experiencing negative ESG issues. By tracking the same director at the same firm over time, we document a significant drop in seats held at other public firms’ boards following intense negative media coverage of an ESG problem occurring at a given director's focal firm. Losses of seats at other firms are concentrated among executive directors, among directors of firms located in countries with high environmental and social norms, and among directors of firms located in countries with bank-based systems. Nonexecutive directors and directors of firms located in less stakeholder-oriented countries are not penalized for ESG issues by the director labor market.
Original languageEnglish
Peer-reviewed scientific journalFinancial Markets, Institutions & Instruments
Volume31
Issue number4
Pages (from-to)147-203
Number of pages57
ISSN0963-8008
DOIs
Publication statusPublished - 24.06.2022
MoE publication typeA1 Journal article - refereed

Keywords

  • 512 Business and Management
  • Director Career Prospects
  • Director Labor Market
  • Environmental, Social, and Governance (ESG)
  • Legal Origin
  • Shareholder Value
  • Stakeholder Orientation

Areas of Strength and Areas of High Potential (AoS and AoHP)

  • AoS: Financial management, accounting, and governance

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