Does National Governance Quality Moderate the Gender Diversity– ESG Disclosure Relationship? Cross‐National Evidence on Sustainable Development

ABSTRACT This study examines whether national governance quality shapes the relationship between board gender diversity and ESG disclosure quality among publicly traded firms. Despite growing evidence linking female board representation to sustainability outcomes, the institutional conditions under which this relationship holds remain poorly understood, and national governance quality has been largely absent as a theorized boundary condition in prior research. Drawing on institutional theory and human capital theory, we analyze 40,371 firm‐year observations from 7115 companies across 41 countries (2012–2022), employing hierarchical linear modeling to capture cross‐level interactions and two‐stage least squares estimation to address endogeneity. Results confirm that board gender diversity positively associates with ESG disclosure quality in general; however, this effect is significantly amplified under stronger national governance institutions, with governance effectiveness and political stability emerging as the most influential moderating dimensions. A critical mass threshold further qualifies this relationship: the positive effect of female board representation is statistically insignificant for skewed boards (female directors constituting 20% or less), becomes significant for tilted boards (20% to 40%), and strengthens further for balanced boards (40% or above), suggesting that a representational threshold of approximately 20% must be exceeded before gender diversity meaningfully influences ESG disclosure. These findings establish national governance quality as a theorized boundary condition that determines when gender‐diverse boards translate into better disclosure outcomes, with differentiated implications for regulators and nomination committees operating across varied governance contexts.