The Relationship of Board Characteristics and Carbon Management Strategy of Listed Companies in Malaysia

Abstract

There has been overwhelming scientific evidence that climate change presents severe risks to humanity, requiring an urgent global response to avoid its catastrophic impact. Board characteristics are critical in deciding a company's carbon management strategy since the board's makeup, competence, and dedication to sustainability have a substantial impact on the strategic decisions and policies implemented for environmental management. Diverse and competent boards are more likely to prioritise and effectively implement carbon-reduction plans and promote sustainable practices. The study's main objective was to investigate the relationship between board characteristics in terms of board size, board gender, board independence, educational level of board members and, nationality of board members, and carbon management strategy (CMS). 288 samples of publicly listed companies in Bursa Malaysia for the year 2016 had been examined. The data were collected from both annual reports and company websites. The results show that board characteristics don't impact carbon management strategy, challenging the idea that factors like gender diversity or independence directly drive sustainability efforts. Future research should look into other factors influencing CMS adoption. Companies need to expand their approach to integrating sustainability into board decisions, considering factors like stakeholder engagement and organizational incentives alongside board composition to improve commitment to initiatives like carbon management.