ABSTRACT This study examines whether board governance mitigates the effect of physical climate risk on firm performance, using the 2011 Thailand flood as an exogenous shock. Drawing on agency theory and resource dependence theory, this study evaluates whether board size enhances firm resilience during the crisis year and the immediate recovery period. Using panel data of 1060 firm‐year observations from 421 non‐financial firms listed on the Stock Exchange of Thailand (SET) during 2010–2012, the results show that firm profitability declines during the flood year and remains weaker in the subsequent recovery year. Board size does not exhibit a direct unconditional effect on performance, but the interaction evidence suggests that larger boards partially cushion profitability during the acute crisis phase, while no comparable moderating effect is observed in the recovery year. The findings contribute to the literature by showing that the value of board structure is contingent on the timing and nature of the shock, and by providing evidence from a major physical climate disaster in an emerging‐market setting. The results imply that governance design should be evaluated not only in terms of routine monitoring, but also in terms of crisis‐response capacity and organizational resilience.
Kanyarat Sanoran (Mon,) studied this question.