Too much talk, too little truth? Corporate governance and greenwashing in Latin America’s leading firms

Purpose The purpose of this paper is to investigate whether corporate governance mechanisms influence greenwashing practices within the Latin American context. Design/methodology/approach The analysis draws on a sample of 376 companies across six Latin American countries, totaling 1,870 firm-year observations between 2016 and 2023. The study examines governance variables such as board size, board independence, board gender diversity, the presence of a CSR committee and ESG-based executive compensation. A multi-method approach is used, combining multiple linear regression for unbalanced panel data with necessary condition analysis. Findings The results show that larger boards and the presence of CSR committees are positively associated with greenwashing. These findings suggest that, in the Latin American context, certain corporate governance structures may unintentionally facilitate misleading sustainability communication toward stakeholders. Practical implications For practitioners, this study underscores the importance of aligning corporate governance with responsible sustainability communication. Limiting board size to approximately eight members may help reduce communication distortions. Originality/value By conceptualizing greenwashing as a form of strategic sustainability communication and empirically demonstrating that specific governance mechanisms influence its occurrence, the study challenges the implicit assumption − largely derived from evidence in developed economies − that formal governance structures uniformly constrain opportunistic behavior. Instead, the results show that governance mechanisms may operate differently in emerging markets, thereby enriching and contextualizing existing theoretical frameworks.