The Impact of Social Networks of SP1500 Companies Vision on Environmental Governance

Abstract

Recently we are witnessing an increasing consensus among corporate leaders that any decision model for a successful business should link to the climate change. On the other hand, existing research works indicate that social networking affects the way companies make decisions in relation to their performance. This paper explores the effects of social networking characteristics among companies and the characteristics of board of directors on environmental governance. Our paper looks at the extent by adopting data mining techniques that comprehensively discover the effects for a sample of SP1500 companies in year 2010. Our analysis shows that this relationship indeed exists. More specifically, we show that companies that are highly inter-connected tend to have formal structures for environmental governance, such as: pay as well as non-monetary incentives related to climate change, environment-responsible committees, voluntary climate change communications, and publishing of climate change reports. In addition, companies who are highly connected tend to have larger boards of directors comprising of more independent directors. The positive outcome of this evaluation clearly demonstrates the direct and indirect power of information flow provided by social network characteristics on environmental governance.

Keywords: Environmental Governance, Social Networking, Board Profile, Data Mining

DOI: 10.54941/ahfe100375