Title: Revisiting the impact of board characteristics on environmental, social and governance performance: lesson from European firms

Authors: Tahani Tahmid; Farjana Nasrin; Paolo Saona; Md. Abul Kalam Azad

Addresses: Department of Business and Technology Management, Islamic University of Technology, Gazipur 1704, Bangladesh ' Department of Business and Technology Management, Islamic University of Technology, Gazipur 1704, Bangladesh ' Richard A. Chaifetz School of Business, Saint Louis University, Madrid Campus, Av. Del Valle, 34, 28232, Madrid, Spain; Faculty of Economics and Business Administration, Universidad Pontificia Comillas, C/Alberto Aguilera, 23, 28015, Madrid, Spain; Faculty of Economics and Administrative Sciences, Universidad Católica de la Santísima Concepción, Alonso de Ribera 2850, Concepción, Chile ' Department of Business and Technology Management, Islamic University of Technology, Gazipur 1704, Bangladesh

Abstract: Stakeholders' concerns are no longer limited to firms' financial performance today. They are also concerned about the environmental, social and governance (ESG) performance which represents the non-financial performance of a firm. However, there are no consistent findings on how board characteristics can influence ESG performance. This study aims to revisit the impact of board characteristics on the ESG performance of a firm in the context of European firms, Europe being at the forerunner for ESG regulations globally. To test the study's hypothesis, a linear model with fixed effect GLS (generalised least squares) is used on a 12-year panel dataset from the year 2008 to 2020 of 180 listed firms categorised in ten economic sectors operating in 18 countries. It has been found that among other board characteristics, women on the board and the presence of CSR committee have a significant positive impact on ESG performance. However, board size, number of board meetings and board independence have a negative or insignificant impact.

Keywords: ESG score; women on board; board characteristics; firm performance.

DOI: 10.1504/IJSE.2024.141703

International Journal of Sustainable Economy, 2024 Vol.16 No.4, pp.452 - 486

Received: 22 Oct 2022
Accepted: 28 Dec 2022
Published online: 01 Oct 2024 *

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