Natural disaster risk salience and the strategic appointment of directors with sustainability expertise
Natural disaster risk salience and the strategic appointment of directors with sustainability expertise
This article examines how salient sustainability risks from near-miss natural disasters influence board composition. Using a difference-in-differences design, I find that firms located in counties neighboring disaster-affected areas significantly increase the presence of directors with sustainability expertise following the disaster. The effect is stronger for firms with greater institutional ownership and responsible investor ownership, suggesting that these governance changes are driven by investor expectations and preferences. Further analysis shows that these board changes are not short-lived, do not crowd out directors with other qualifications, and contribute to improvements in sustainability performance and firm value. Collectively, these findings highlight risk salience as a catalyst for strategic board restructuring.
Wang, Bo
dc1fccae-55e8-4d28-8eb9-1c539247e940
Wang, Bo
dc1fccae-55e8-4d28-8eb9-1c539247e940
Wang, Bo
(2026)
Natural disaster risk salience and the strategic appointment of directors with sustainability expertise.
Journal of Financial Research.
(doi:10.1111/jfir.70045).
Abstract
This article examines how salient sustainability risks from near-miss natural disasters influence board composition. Using a difference-in-differences design, I find that firms located in counties neighboring disaster-affected areas significantly increase the presence of directors with sustainability expertise following the disaster. The effect is stronger for firms with greater institutional ownership and responsible investor ownership, suggesting that these governance changes are driven by investor expectations and preferences. Further analysis shows that these board changes are not short-lived, do not crowd out directors with other qualifications, and contribute to improvements in sustainability performance and firm value. Collectively, these findings highlight risk salience as a catalyst for strategic board restructuring.
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Disaster risk & sustainability directors
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J of Financial Research - 2026 - Wang - Natural disaster risk salience and the strategic appointment of directors with (1)
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Accepted/In Press date: 26 January 2026
e-pub ahead of print date: 2 February 2026
Identifiers
Local EPrints ID: 509675
URI: http://eprints.soton.ac.uk/id/eprint/509675
ISSN: 1475-6803
PURE UUID: 2b44e687-edc5-4ff2-a1ad-70b34ae568e3
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Date deposited: 02 Mar 2026 17:37
Last modified: 07 Mar 2026 04:08
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