The role of board environmental committees in corporate environmental and financial performance.

This study explores the influence of board environmental committees in corporate environmental and financial performance. While empirical results have failed to find consistent evidence of an association between the board of directors and firm outcomes, the present study argues that to better understand the governance process we must gain a fuller understanding of the role of board committees. I propose board environmental committees are positively associated with corporate environmental performance (CEP). Further, that by increasing corporate environmental performance, board environmental committees will have a positive effect on firm financial performance. Moreover, I argue that the committee's scope and the composition of the committee (i.e., stakeholder representation, key directors), as well as the presence of a firm sustainability manager can influence the relationship between environmental committees and corporate environmental performance. The analysis was performed on a sample of S&P 500 firms for 2003. The results find support for a positive association between board environmental committees and CEP. Further, the presence of a senior level environmental manager moderates this relationship. Unexpectedly, no support was found for the influence of the committee's scope or other composition variables.