Impact of Board of Directors on Funds Raising: Evidence for Green Bonds

Abstract

The present paper attempts to reveal influence of characteristic features of the board of directors (BD) on fund raising using green bonds. The research involved a sample of 87 public companies which issued green bonds in 2021. We analyzed influence of such factors as the proportion of women and independent directors on the BD, CEO duality and the number of the BD members by the share of green bonds in the total debt of the company. The share of debt in the assets, the natural logarithm of total assets (company size) and return on equity (ROE) were used as control variables.

The logarithmic specification of the classical linear regression model was chosen as the optimal one. So, heteroscedasticity, autocorrelation and multicollinearity were not detected in the model with the dependent variable logarithm (the share of green bonds in the total debt). The least squares method (LSM) was applied to evaluate this model. As long as the initial sample of companies which issued green bonds in 2021 comprises both financial and non-financial companies we verified the validity of the obtained results for two types of companies. Assessment of the optimal model for two subsamples of financial and non-financial companies yielded results somewhat different from the ones obtained from analysis of the total sample. Evaluation of the regression for financial and non-financial companies showed a reduction in significance of influence exerted by women’s representation and the size of the BD. However, in case of non-financial companies the significance of such factor as presence of the sustainable development committee increases. According to the obtained results the companies with the CSR committee attract relatively larger financing using green bonds.