Does board diversity drive ESG performance?: analysing the influence of women, independent members, and board expertise

This study investigates the extent to which ESG performance is associated with the proportion of women and independent members on corporate boards, with board-specific skills and board-background skills disclosure examined as potential moderating variables. Using panel data analysis, the research covers 285 firm-year observations, drawing on data from Refinitiv Eikon from 2015 to 2023. The regression models were first estimated using the standard fixed effect estimation with lagged independent variables and firm-level clustered standard errors. To complement the baseline analysis, the double-demeaned interaction effect models were also employed to avoid spurious interaction caused by the potential correlation between moderators and time-invariant unobserved heterogeneity. The findings indicate that gender diversity on corporate boards is positively associated with ESG performance, particularly in the environmental dimension. The proposed moderating mechanisms are not supported, as board-specific skills do not consistently strengthen the influence of gender diversity, and board-background skills disclosure does not enhance the effects of either gender diversity or board independence. The study contributes to corporate governance and sustainability research by incorporating board-specific skills and background skills disclosure as moderating factors within a two-tier governance structure.