Breaking the glass ceiling for a sustainable future: the power of women on corporate boards in reducing ESG controversies
International Journal of Accounting & Information Management
ISSN: 1834-7649
Article publication date: 27 June 2023
Issue publication date: 19 September 2023
Abstract
Purpose
This study aims to investigate the relationship between board gender diversity and environmental, social and governance (ESG) controversies and to determine if a critical mass of female directors has a significant impact on ESG performance.
Design/methodology/approach
The study analyzes a sample of non-financial companies from 13 European countries between 2004 and 2021. The primary method used to reach conclusions was the pooled ordinary least squares regression. Additionally, the study used supplementary techniques such as alternative measurement, sub-sample analysis and two-stage least squares to enhance its reliability.
Findings
The results indicate that a higher representation of women on boards is correlated with a reduction in the number of ESG controversies, particularly when there are three or more female directors. Furthermore, the relationship between board gender diversity and ESG controversies may be affected by factors such as industry, governance and a company’s environmental performance.
Practical implications
This study suggests that increasing women’s representation on boards may mitigate ESG controversies and improve firm reputation and performance, especially in industries with high ESG risks. Policymakers can support this through policies, targets, training and inclusive practices. The findings also inform investors and stakeholders of the relationship between board gender diversity and ESG controversies.
Originality/value
This study expands the understanding of the relationship between board gender diversity and sustainable accounting and finance. It focuses on the effect that having female board members has on corporate policies, which is significant for shaping global policies that promote diversity on boards.
Keywords
Acknowledgements
The authors would like to extend their sincere gratitude to Skyline University College for their support of this research project.
Funding statement: The authors declared that no grants were involved in supporting this work.
Conflict of Interest: The authors declare that they have no conflict of interest.
Citation
Issa, A. and Hanaysha, J.R. (2023), "Breaking the glass ceiling for a sustainable future: the power of women on corporate boards in reducing ESG controversies", International Journal of Accounting & Information Management, Vol. 31 No. 4, pp. 623-646. https://doi.org/10.1108/IJAIM-03-2023-0053
Publisher
:Emerald Publishing Limited
Copyright © 2023, Emerald Publishing Limited