Climate Boards: Do Natural Disaster Experiences Make Directors More Prosocial?
The role of individual experiences in corporate decision-making has long been a subject of interest for academics and practitioners. Our recently published NBER working paper (“Climate Boards: Do Natural Disaster Experiences Make Directors More Prosocial?”) delves into this relationship within the context of corporate climate policy. This study investigates whether the past experiences of corporate […]
Sehoon Kim is an Assistant Professor of Finance at The University of Florida, Bernadette A. Minton is a Professor of Finance at The Ohio State University, and Rohan Williamson is a Professor of Finance at Georgetown University. This post is based on their recent paper.
The role of individual experiences in corporate decision-making has long been a subject of interest for academics and practitioners. Our recently published NBER working paper (“Climate Boards: Do Natural Disaster Experiences Make Directors More Prosocial?”) delves into this relationship within the context of corporate climate policy.
This study investigates whether the past experiences of corporate directors with abnormally devastating natural disasters influence firms’ greenhouse gas emissions and the adoption of formal climate policies. Our findings suggest that directors who had experienced salient climatic disasters in the past are significantly more likely to be affiliated with nonprofit organizations, consistent with heightened prosocial preferences. Moreover, firms with more of these types of directors exhibit lower greenhouse gas (GHG) emission intensities and are more likely to implement robust climate policies. This research makes important contributions to our understanding of the drivers behind corporate sustainability initiatives, highlighting the role of personal, impactful experiences in shaping prosocial preferences that manifest in boardroom decisions.
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