The Board of Directors’ Social Capital and Construction Firms’ Environmental Profiles

New research by Association for Project Management (APM) takes the first step in providing data-driven evidence for the power of social networks to enhance organisational performance around achieving environmental sustainability goals in a project-intensive industry sector. 

Conducted by Azar Shahgholian and David Bryde (Liverpool Business School, Liverpool John Moores University), the research aims to show how the social capital of people working at a board level in construction companies is utilised in different ways when carrying out practices that maximise environmental performance.

The findings of the study, which has been published with support from APM’s Research Fund, provide evidence to answer the question: ‘What are the relationships between the social capital of board of directors and firms’ environmental profile?’ There is clear and strong evidence from the research that the social networks of individual directors influence environmental sustainability related practices, in terms of environmental management and disclosure through the managerial influence and information collection ability that individual people can access through their social networks.

This influence and ability ultimately impact the environmental performance of the company, which, in the case of project-intensive industry sectors such as construction, is manifested in the practices that take place at the project level.

Key findings of the report include:

• Environmental performance is positively and significantly related to the board of directors’ managerial influence capability and information collection ability.
• Disclosure of environmental information has a positive and significant relationship with environmental performance.
• The existence of a formal group responsible for environmental issues is positively and significantly related to environmental performance.

The research report’s intended audiences are:

• Individuals responsible for appointing boards of directors, the board members themselves and those with overall responsibility for ensuring that projects meet environmental sustainability-related performance targets.
• Practitioners working at the project level in organisations responsible for delivering against the sustainability-related performance targets.

Daniel Nicholls, Research Manager at APM, said: “The concept of environmental sustainability has been a hot topic in recent years and is becoming an increasingly important aspect of our everyday lives due to UN and UK government initiatives such as Net Zero.  

“Our latest study helps shed light on just how different characteristics of those at the highest levels in project intensive companies in the construction sector results in variations in sustainability-related activities of their organisations.  The findings draw on some valuable insights for those operating at this level.”

Read the full report: The Relationship Between The Board of Directors’ Social Capital and Construction Firms’ Environmental Profiles.