Panel data comprising 1,060 firm-years from 421 non-financial Thai listed firms in 2010-2012 showed lower profitability during the 2011 flood and continued weakness in the following year. Board size had no unconditional direct effect, but interaction results suggested that larger boards partially cushioned profitability during the acute crisis only, not during recovery.
Key findings
- Profitability declined in the flood year and remained weaker during recovery. Board size showed no unconditional direct performance effect, but the interaction suggested partial cushioning during the acute crisis and no comparable moderation in the recovery year.
Why this matters globally
Physical climate hazards are a global business risk. The findings suggest that governance value may be phase-dependent and that boards should be assessed for crisis-response capacity as well as routine monitoring.
Thai researcher contribution
A Chulalongkorn Business School researcher used Thai firm data and the 2011 flood to provide emerging-market evidence from a major physical climate shock.
Limitations to consider
The observational three-year window and board size as a governance proxy do not capture expertise, diversity, networks, or decision quality. Flood exposure may also differ by location, industry, insurance, and supply chain, limiting causal inference.
Verify the original sources
Business Strategy and the EnvironmentRead the original article↗DOI: 10.1002/bse.71264