The Effects of Board Diversity on Korean Companies’ ESG Performance

Ahmet Jeyhunov, Jong Dae Kim and Seong Mi Bae ()
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Ahmet Jeyhunov: Department of Sustainability Management, Inha University, Incheon 22212, Republic of Korea
Jong Dae Kim: College of Business Administration, Inha University, Incheon 22212, Republic of Korea
Seong Mi Bae: College of Business Administration, Inha University, Incheon 22212, Republic of Korea

Sustainability, 2025, vol. 17, issue 2, 1-26

Abstract: This paper explores the effect of board diversity on environmental, social, and governance (ESG) performance in Korean-listed firms using regression analysis. Our findings reveal that an increased board size significantly correlates with higher ESG scores when combined with other board diversity dimensions. The presence of female directors on boards was found to have a significant effect on environmental and social components of ESG performance. Age diversity exhibits a negative association with ESG scores, emphasizing potential disruptions from intergenerational differences. Foreign directors show no significant impact on ESG performance, suggesting that country-specific contextual factors may limit foreign directors’ influence on boards. The proportion of highly educated directors positively affects the overall ESG performance, aligning with resource dependence and agency theories. Overseas-educated directors play a crucial “bridging” role in adapting sustainable innovations overseas, positively influencing ESG performance. In conclusion, this study provides empirical evidence of the complex relationships between board diversity dimensions and ESG performance in the Korean context. These findings guide stakeholders in shaping inclusive and effective board structures for optimal corporate sustainability.

Keywords: board diversity; ESG; sustainability; CSR; sustainable development; board composition diversity; sustainable management (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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