Renewable Governance: Good for the Environment?

ABSTRACT We conjecture that board renewal mechanisms—those substantive enough to renew the thinking of board—are required before investors can address mismatch between their preferences regarding environmental sustainability and what insiders at firms are actually doing. identify adoption majority voting for directors introduction a female director as two corporate governance mechanisms potentially strong board's on sustainability. Using sample 3,293 from 41 countries, along with quasi‐exogenous shocks in Canada France, we find both associated significantly higher future performance. Further tests provide suggestive evidence is more strongly performance settings better institutions motivated institutional investors. These results suggest importance alignment firm policies investor around world.