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E-PhD Seminar Series at NEU: Are co-opted boards socially responsible?

National Economics University

E-PhD Program Seminar Series


Are co-opted boards socially responsible?



Huy Viet Hoang

Faculty of Agribusiness and Commerce

Lincoln University, New Zealand, and

Faculty of Business Management

National Economics University, Vietnam


Cuong Nguyen

Faculty of Agribusiness and Commerce

Lincoln University, New Zealand, and

IPAG Business School, France


Khanh Hoang

School of Banking and Finance

National Economics University, Vietnam


Christopher Gan

Faculty of Agribusiness and Commerce

Lincoln University, New Zealand


  Time and venue:

Date: Friday, 10 December 2021

Time: 4.00PM – 5.00PM

Venue (onsite): Room 15.01, Building A1, National Economics University

Venue (online): MS Teams link to be sent upon registration



Research background: As the media and financial markets keep questioning businesses’ commitments to protecting the environment, Environmental, Social, and Governance (ESG) disclosure is attracting increasing international attention. However, not all firms are willing to disclose their ESG information voluntarily. The multiple objectives argument argues that it is logically impossible for a CEO to simultaneously maximize value in more than one dimension, thus there must be trade-offs (Jensen, 2001). Therefore, CEOs do not prefer disclosing ESG information unless the benefit gained from the disclosure exceeds the cost. The disclosure is even less likely if CEO power is augmented by board members. This study is motivated from the corporate social responsibility (CSR) attitude compromised by CEOs and the boards.

Purpose of the article: This study investigates the association between co-opted boards and corporate disclosure of ESG information using a sample of U.S. listed firms from 2007 to 2018. Current studies lean towards a negative association between CEO power and sustainability disclosure (Muttakin et al., 2018; Husted & Sousa-Filho, 2019). Instead of looking at the effect of CEO power, we approach this topic by introducing co-opted boards into the context as a transmission mechanism of CEO power.

Methods: We obtain annual panel data of a sample of U.S. listed firms from S&P 500, S&P MidCap, and S&P SmallCap from 2007-2018 that has been documented by Coles et al. (2014) as having board co-option. Our panel dataset consists of different firms at different times, thus allowing the application of panel data estimation methods. Having a sample of firms operating in different states and industries enables us to further investigate the cross-sectional effect of co-opted boards.

Findings & Value added: We document some captivating findings. Our results show that firms with a higher proportion of co-opted directors on board disclose less ESG information, although this relationship diminishes if firms are strong ESG reporters. This negative effect of board co-option holds after a battery of sensitivity and endogeneity tests. Further analyses reveal that long-tenure board chairs, high attendance rates at board and audit committee meetings, and independent chairs of audit committee mitigate this adverse effect. In addition, we document an increasing inverse relationship in firms locating in more corrupt and Democratic-leaning states, and operating in heavy-emitting industries. Our results support the premise that co-opted directors insulate CEOs from the dismissal threat, therefore curtail the need of CEOs to engage in ESG reporting.


About presenter

Huy Viet Hoang has been a lecturer at the Faculty of Business Management, National Economics University (NEU), Vietnam since 2017. He had experiences working in banks and Vietnam Chamber of Commerce and Industry before starting his academic career. He is currently a Ph.D. Candidate and Teaching/Research Assistant at Lincoln University, New Zealand. His current research interests are on corporate finance, corporate governance and corporate social responsibility.


About series

This seminar series is part of the E-PhD Program at National Economics University. It targets PhD students, early-career researchers, and senior faculty who are interested in doing research in the areas of economics, business, management, and other inter-disciplinary fields of social science. The series is a platform for the wider research community to exchange ideas, networks and collaborations.



Contact details

Bach Ngoc Thang

Seminar series coordinator

Room 15.04, Building A1

Institute for Sustainable Development

National Economics University

207 Giai Phong Road, Hanoi, Vietnam

M: +84 35 443 1750

E:  bnthang@gmail.com, or thangbn@neu.edu.vn

W: http://isd.neu.edu.vn/