Board Turnover Likely to Increase after Climate-Change Relat

Board Turnover Likely to Increase after Climate-Change Related Protests, Study Finds


When boycotts or protests take place because of the stance a company takes on climate change or social issues, some directors end up quitting governing boards, new research finds. Firms that are boycotted experience a 7% increase in board director turnover, according to Academy of Management Insights published in Academy of Management Journals.
An increase in board turnover happens because corporate crises that arise after companies publicly take sides on contentious social issues also test the beliefs of its directors, and those beliefs influence how they behave during and after boycotts.
“Directors must believe in the values of the firms they represent,” says Mary-Hunter McDonnell of the University of Pennsylvania and co-author of the study. “While existing research has shown that boards of directors are most concerned with a company’s market performance, what we learned is that directors are also sensitive to social performance.”

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