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<p>As global scrutiny of corporate environmental accountability intensifies, the presence of foreign board members is expected to promote climate change disclosure (CCD). However, their presence may create a governance paradox due to differing mechanisms across countries. Accordingly, this study addresses two research questions: (1) whether foreign board representation is associated with climate change disclosure, and (2) whether financial performance moderates this relationship. The study was conducted on conventional banking companies in five countries in Southeast Asia during the observation period of 2018–2025, and the final sample of this study was 480 observation units. Data were analyzed using ordinary least squares and Moderated Regression Analysis (MRA). The findings reveal that foreign board representation is negatively associated with climate change disclosure, while financial performance serves as a mitigating factor that weakens this negative association. Robustness checks using alternative financial performance measurement, random effect estimation, Coarsened Exact Matching (CEM), heckman two-stage, and lagged regression confirm the validity of the results. This study provides novel empirical evidence on the nuanced role of foreign board members and financial performance in shaping climate-related disclosures, contributing to the unexplored relationship between international board composition and environmental accountability. The findings suggest that strengthening climate-related governance requires not only foreign board representation, but also adequate financial capacity and a supportive regulatory framework.</p>

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Foreign boards and climate change disclosure: governance paradox in southeast Asian banking

  • 期刊论文

  • 发表日期：

    2026年8月3日

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  • Riskon Ginting,
  • Arif Santoso,
  • Husnil Barry,
  • Ratri Kurniasari,
  • Adilah Permananingrum

摘要

As global scrutiny of corporate environmental accountability intensifies, the presence of foreign board members is expected to promote climate change disclosure (CCD). However, their presence may create a governance paradox due to differing mechanisms across countries. Accordingly, this study addresses two research questions: (1) whether foreign board representation is associated with climate change disclosure, and (2) whether financial performance moderates this relationship. The study was conducted on conventional banking companies in five countries in Southeast Asia during the observation period of 2018–2025, and the final sample of this study was 480 observation units. Data were analyzed using ordinary least squares and Moderated Regression Analysis (MRA). The findings reveal that foreign board representation is negatively associated with climate change disclosure, while financial performance serves as a mitigating factor that weakens this negative association. Robustness checks using alternative financial performance measurement, random effect estimation, Coarsened Exact Matching (CEM), heckman two-stage, and lagged regression confirm the validity of the results. This study provides novel empirical evidence on the nuanced role of foreign board members and financial performance in shaping climate-related disclosures, contributing to the unexplored relationship between international board composition and environmental accountability. The findings suggest that strengthening climate-related governance requires not only foreign board representation, but also adequate financial capacity and a supportive regulatory framework.