Executive Team Characteristics, Environmental Performance And Corporate Value

The forest, the everglade and the spring, which once was visible at any time, now has become a luxury for us. In order to solve the plight of the serious environmental problems, strengthen environmental management have become inevitable tendency. If enterprises want to achieve sustainable development, they must strive to improve the environmental performance and reduce environmental pollution. So, what is the relationship between environmental performance and the enhancement of the companies ‘value which is the most importance to them? If there is a positive relationship between the company’s value and environmental performance,and it depends on the corporate ‘attitude and management, in which top management team plays a decisive role. Upper echelons theory hold that the characteristics of top management team can directly affect the specific implementation measures and decision-making. Then, how do they affect the value of the company through managing environmental performance further? What’s the relationship between environmental performance, characteristics of top management team and the company’s value ?In this article, through reviewing the domestic and foreign environmental performance evaluation standard and methods, we selected the environmental strategies and environmental protection investments from corporate’ annual reports and social responsibility reports as a measurement of environmental performance.This paper has been referencing articles on the basis of researched results, combining the sustainable development theory, upper echelons theory and resource dependence theory, discusses the relationship between top management team and environmental performance, environmental performance and the value of the company, as well as the regulation of top management team characteristics on the relationship between environmental performance and the value of the company. The main results are as follows:(1) The top management team average age and the environmental performance has significantly negative relationship, it could be because older executives expect a short tenure, it’s easy to be short-sighted. The longer average tenure the executive team have, the more companies will invest on environmental protection, the better environmental performance will be. Long term executives have a more profound feelings towards companies, thus more likely to make decisions which is advantageous to the enterprise’ long-term development. The average level of education did not significantly improve enterprises’ environmental performance. The proportion of women in executive team have a significant negative association with the environment performance, which is associated with female’ cautious, passive personality. Tenure heterogeneity is positively related to environmental protection strategy, and has a significant negative correlation to environmental investment. The relationship between heterogeneity of age and level of education has not been through the test of significance, it may be associated with the mediation role of process variables.(2) Environmental performance has a negative effect on the value of the company, but it isn’t significant. Enterprises’ environmental management activities are certain to consume much cost, resources utilization can influence other aspects of investment, and have negative influence on enterprises’ benefits. Enterprise’s environmental protection investment needs a specified time period to show its economic value, so the environmental performance must show a negative relationship with the value of the company in the short term. However, people have gradually realized the importance of good environmental performance for the long-term development of the enterprise, thus in hibite the environmental performance’ negative influence on the current value of the company to some extent. In addition, we can believe that, although some enterprises actively considered the environmental factors in strategy formulation, but didn’t implement the environmental performance management, so will not have much impact on the value of the company. The other reason may be that China’s environmental information disclosure system is not well developed, therefore there is not sufficent effective sample size, it can affect the empirical results to a certain extent.(3) The women’ proportion and age heterogeneity of the executive team increased the negative relationship between environmental protection strategy and the value of the company. The average age of top management team could significantly inhibit negative relationship of environmental protection investment and the value of the company. Other characteristics of top management team have limited influence on the relationship between the environmental performance and the value of the company.Finally, in view of the above research conclusion, this paper puts forward the following three suggestions, hoping to help solve the increasingly serious environmental problems in our country, perfecting the corporate governance, and realize sustainable development.(1) Perfect the national laws and regulations, encourage enterprises to actively fulfill the social responsibility.(2) Perfect the system of environmental information disclosure, establish effective environmental performance evaluation system.(3) Strengthen the human resource management, optimize the structure of top management team reasonably.