Based on China’s mandatory requirement for listed firms to implement online voting in their annual general shareholder meetings, we investigate whether and how minority shareholders influence corporate environmental performance (CEP). We use the difference-in-difference approach and find that the implementation of online voting promotes minority shareholders’ participation in shareholder meetings, which, in turn, leads to improved CEP of listed firms. We discover that “local pollution” exposure and “the increasing awareness of listed firms’ environmental risks” are the main motives of minority (...) shareholders concerning listed firms’ environmental performance. Furthermore, we find that the minority shareholders improve CEP of listed firms through influencing groups with greater bargaining power. (shrink)

An important question in the business ethics literature concerns organizational response in the aftermath of an unethical business practice. This study examines factors affecting firms’ decision to take reparative action in the aftermath of an environmental violation. Specifically, we investigate environmental violators’ decision to undertake a Supplemental Environmental Project (SEP), which is an initiative that promotes restorative justice. To settle an environmental violation, the United States’ environmental regulator allows offenders the option of either paying the full penalty or a reduced (...) sum while spending additional effort and engaging in an environmental project. As predicted, we find that firms with poorer past environmental performance and greater shareholder environmental activism are more likely to engage and invest in a SEP. Additionally, there is a stronger association between shareholder activism and SEP investment when firms have poorer past environmental performance. Our findings inform regulators, stakeholders, and business ethics researchers on the factors that lead firms to undertake reparative action following unethical business practices. (shrink)