Proceedings of World Business and Social Science Research Conference

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Proceedings of World Business and Social Science Research Conference
25-25 October, 2013, Novotel Bangkok on Siam Square, Bangkok, Thailand, ISBN: 978-1-922069-33-7
Internal Corporate Governance, Environmental Committee
and Environmental Risks Information: Australian Evidence
Eswaran Velayutham* , Chandrasekhar Krishnamurti and Ariful Hoque
We examine the associations between the existence of an environmental
committee and internal corporate governance and transparency of
environmental risks disclosure in an Australian context. Using a sample of
Australian Stock Exchange firms disclosing their information to the Carbon
Disclosure Project from 2006 to 2009, we document a strong association
between the existence of environmental committee and board
independence, CEO duality, directors’ share ownership, and institutional
shareholding. Furthermore, we find firms with environmental committee
are more likely to disclose transparent environmental risks information
which leads to mitigate information asymmetry between managers and
stakeholders. We find that the existence of environmental committee at
board level is positively associated with percentage of independent
directors on the board of directors and proportion of shares held by
institutional investors. In addition, we find that the existence of
environmental committee is negatively associated with CEO duality and
directors’ share ownership. Firms that belong to environmental intensive
industries are positively associated with the existence of environmental
committee. Finally, firms with an environmental committee are more likely
to disclose transparent environmental risks information which leads to
mitigate information asymmetry between managers and stakeholders.
Key words: Environmental committee, corporate governance, Environmental risks,
Australia
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Eswaran Velayutham*, School of Accounting, Economics and Finance, University of Southern
Queensland, Toowoomba, QLD 4350, Australia, Email: [email protected]
Professor Chandrasekhar Krishnamurti, School of Accounting, Economics and Finance, University of
Southern Queensland, Toowoomba, QLD 4350, Australia
Dr Ariful Hoque, Murdoch Business School, Murdoch University, Murdoch, Western Australia 6150,
Australia
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