Internal corporate governance, environmental committee and environmental risks information: Australian evidence

We examine the associations between the existence of an environmental committee and internal corporate governance and transparency of environmental risks disclosure in an Australian context. Using a sample of Australian Stock Exchange firms disclosing their information to the Carbon Disclosure Project from 2006 to 2009, we document a strong association between the existence of environmental committee and board independence, CEO duality, directors’ share ownership, and institutional shareholding. Furthermore, we find firms with environmental committee are more likely to disclose transparent environmental risks information which leads to mitigate information asymmetry between managers and stakeholders. We find that the existence of environmental committee at board level is positively associated with percentage of independent directors on the board of directors and proportion of shares held by institutional investors. In addition, we find that the existence of environmental committee is negatively associated with CEO duality and directors’ share ownership. Firms that belong to environmental intensive industries are positively associated with the existence of environmental committee. Finally, firms with an environmental committee are more likely to disclose transparent environmental risks information which leads to mitigate information asymmetry between managers and stakeholders