Revisiting the Corporate Governance-ESG Performance Nexus: Insights from the CEE Companies

Abstract This study examines how board characteristics shape environmental, social and governance (ESG) performance in Central and Eastern European (CEE) listed companies. Using a panel of 50 firms from four CEE countries over 2017–2023 (323 firm-years), the analysis assesses board size, gender diversity, tenure, CEO duality and independence using generalized least squares panel regressions with firm-clustered robust standard errors, complemented by robustness checks with lagged and alternative specifications. Larger boards are associated with lower ESG performance, while board independence is positively related to ESG performance. There is weak evidence that longer board tenure leads to higher ESG performance, but this association is not robust to lagged specifications. Gender diversity and CEO duality show no systematic effects. The study provides unique contributions. First, it offers context-specific evidence for the CEE region, an underexplored setting where post-transition governance, concentrated ownership and evolving EU enforcement may condition board effectiveness, hence clarifying the validity of findings largely derived from mature markets. Second, it advances theory by specifying mechanisms consistent with a stakeholder-governance perspective. The negative size effect highlights coordination-capacity limits, while the independence underscore the role of oversight.