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Conference Programme

Overview and details of the sessions of this conference. Please select a date or location to show only sessions at that day or location. Please select a single session for detailed view (with abstracts and downloads if available). Note that the schedule is subject to changes.

Daily Overview

Session

Parallel Session 12: Corporate Responses to Societal Pressures
Location: Seminar Room 7 (Level 2)
Session Chair: Judith Walls, University of St.Gallen

Presentation 3

Personal Experience, Governance, and Corporate Policy: Evidence from Natural Disasters and Boards of Directors

Sehoon Kim¹, Bernadette Minton², Rohan Williamson³

1: University of Florida, United States of America; 2: The Ohio State University, United States of America; 3: Georgetown University and NBER, United States of America

We document that corporate directors’ past exposure to abnormally severe climatic natural disasters shape their prosocial preferences and governance outcomes. Using detailed data on director career histories and county-level natural disasters, we identify Directors with Abnormal Disaster Experiences (DADEs). DADEs are significantly more likely to be affiliated with nonprofit organizations, consistent with heightened prosocial preferences. Firms with more DADEs on their boards are more likely to implement climate-related policies, including board oversight of climate policies, emission targets, and managerial decarbonization incentives, and have lower Scope 1 and 2 GHG emissions. These effects are not explained by CEO influence, and are stronger when disaster experiences are more salient (i.e., larger and accumulated over longer histories), with DADEs serving on governance, audit, or ESG committees, and with DADEs in large or high-emission firms. Despite the role of prosocial preferences, firms with more DADEs do not exhibit worse financial or operational performance, lower investment or higher firm risk. We provide causal evidence using director deaths as plausibly exogenous shocks and placebo tests of directors who narrowly missed disasters. Our findings show that directors’ salient experiences heighten their prosocial preferences that lead them to influence corporate policy.