Board Governance as a Risk Management Tool: Insights from Carbon Emission Disclosure in ASEAN Firms

Abstract

This study examines how internal board governance influences carbon emission disclosure (CED), conceptualized as both a key dimension of ESG transparency and a mechanism for managing disclosure-related risks. Using panel data from 175 listed firms across six ASEAN countries during 2014–2021, we develop a composite Board Effectiveness Score (BES) that integrates five governance attributes: gender diversity, board size, board independence, meeting frequency, and the presence of an environmental committee. Unlike prior single-attribute studies, the BES captures governance complementarities and the interactive effects of board structures. Applying a multi-method empirical framework—including fixed-effects estimation, quantile regression, two-step system GMM, Heckman selection correction, Propensity Score Matching (PSM), and Two-Stage Least Squares (2SLS)—we find that gender-diverse boards, environmental committees, and higher BES values significantly enhance carbon emission disclosure. The results remain robust across alternative disclosure measures and additional econometric specifications, with the strongest effects observed among low- and mid-level disclosing firms. These findings highlight the role of internal board governance as a potential substitute for weak institutional oversight in emerging markets. The study offers practical implications for regulators and investors seeking to strengthen climate transparency, ESG accountability, and governance-based risk management in ASEAN economies.