Resumo

Increasingly, there is a growing political and social awareness of the need to develop eco-innovations (Rhaiem & Doloreux, 2022). Environmental innovation is the production, exploitation, or assimilation of a product developed or adopted by the organization that results throughout its life cycle in reducing environmental risk (Kemp & Pearson, 2007). Gender diversity campaigns in top management teams are gaining momentum because the lack of executive gender diversity has ethical and financial implications for the company's stakeholders (Saeed, Baloch, et al., 2022).

The objectives of this paper are to explore the effect of the executive gender diversity on environmental innovation and examine the moderating effect of sustainable compensation policy on this relationship

Hambrick and Mason (1984) suggest that organizational outcomes reflect the cognitive bases and values of the organization's powerful actors. In other words, the characteristics of the top management team influence organizational outcomes (Hambrick, 2007). According to upper echelons theory, executive team members' heterogeneity and personal characteristics reflect their values and perceptions (C. Wu et al., 2019). Freeman (1984) defined stakeholders as any group or individual that can affect or is affected by an organization.

The final sample comprises 811 firm-year observations from unique 101 Brazilian firms from 2010-2020. We used Feasible Generalized Least Squares (FGLS) with the heteroscedasticity and panel-specific AR1 autocorrelation. FGLS method deals with heteroscedasticity and autocorrelation (Reed & Ye, 2011). FGLS estimation results in a more efficient estimator and more powerful tests than OLS (Hansen, 2007).

Our results suggest that executive gender diversity does not influence environmental innovation and that sustainable compensation policy strengthens the nexus of executive gender diversity and environmental innovation. These findings are consistent with stakeholder theory which indicate that companies with a sustainable compensation policy tend to serve stakeholder interests.

This study examined the impact of executive gender diversity for a sample of 101 Brazilian companies from 2010 to 2020. The study uses upper echelon and stakeholder theory, and the dependent variable of the study is the environmental innovation score from the Refinitiv database. As an independent variable, the study used the percentage of female executives and as a moderating variable the study used the presence of sustainable compensation policy. This study employed FGLS.

Adu, D. A., Flynn, A., & Grey, C. (2022). Executive compensation and sustainable business practices: The moderating role of sustainability-based compensation. Business Strategy and the Environment, 31(3), 698–736. https://doi.org/https://doi.org/10.1002/bse.2913 Flammer, C., Hong, B., & Minor, D. (2019). Corporate governance and the rise of integrating corporate social responsibility criteria in executive compensation: Effectiveness and implications for firm outcomes. Strategic Management Journal, 40(7), 1097–1122. https://doi.org/10.1002/smj.3018.