Does good governance moderate the relationship between CEO overconfidence and corporate environmental disclosure? International evidence

Purpose This paper aimed to shed light on the relationship between managerial overconfidence and corporate environmental disclosure and whether this relationship is moderated by good governance. Design/methodology/approach The sample includes 1395 international firms listed on the ESG index for the period 2010–2023. The feasible generalized least squares regression method is used to estimate the econometric models. Findings The findings reveal that CEO overconfidence promotes corporate environmental disclosure and strong governance enhances both disclosure and the impact of overconfidence, underscoring its key oversight function. Research limitations/implications The study highlights the interplay between CEO overconfidence and governance quality in shaping corporate environmental disclosure, offering a foundation for future research into the behavioral factors influencing nonfinancial reporting. Practical implications The findings indicate that CEO overconfidence increases environmental disclosure under strong governance, highlighting the need for boards, investors and policymakers to integrate executive behavioral traits with governance mechanisms to enhance ESG transparency and sustainable decision-making. Social implications The findings have societal implications by supporting greater transparency and accountability in corporate environmental disclosure, which can enhance public trust, inform climate-related decision-making and contribute to broader sustainability goals. Originality/value This study addresses a clear gap in the literature by reconciling inconclusive findings on the relationship between CEO overconfidence and environmental disclosure. Prior research has largely overlooked the moderating role of corporate governance and has treated environmental disclosure in a fragmented manner (e.g. voluntary vs mandatory). This study offers an integrated perspective by jointly examining these relationships in an international context and by conceptualizing environmental disclosure as a unified construct.