Can Independent Directors with Industry Managerial Experience More Effectively Curb Corporate Greenwashing? Evidence from Chinese Listed Companies

In sustainable finance practices, greenwashing behavior of listed companies can trigger misallocation and inefficient delivery of financial services. Furthermore, if greenwashing is not promptly contained, it may incentivize firms to carry out environmentally destructive activities, which is harmful to environmental protection and sustainable economic development. In this context, we empirically study the effect of independent directors’ industry managerial experience on the greenwashing behavior of Chinese listed companies based on 15,107 firm-year observations of Chinese A-share listed companies from 2008 to 2024. We find a significant negative association between independent directors’ industry managerial experience and corporate greenwashing. Our evidence suggests that industry managerial experience of independent directors is a governance attribute with potential monitoring value for mitigating greenwashing.