ESG disclosure in G7 countries: Do board cultural diversity and structure policy matter?

Khaoula Aliani, Fadhila Hamza, Noha Alessa, Hela Borgi and Khaldoon Albitar

Corporate Social Responsibility and Environmental Management, 2024, vol. 31, issue 4, 3031-3042

Abstract: The aim of this paper is to investigate the impact of board cultural diversity (BCDIV) and board structure policy (BSP) on environmental, social, and governance (ESG) disclosure. The sample of this study includes 2988 companies from G7 countries during the 2015–2022 period. Our empirical results reveal that boards with heterogeneous cultural directors and the existence of BSP improve overall ESG scores. Further analysis shows that BSP is a crucial determinant of the governance dimension, one of the pillars of ESG disclosures, whereas BCDIV affects the social dimension more. The findings of this paper offer policy insights, highlighting the importance of BCDIV and BSP for better ESG disclosure. Policymakers should therefore establish regulations that encourage BCDIV and BSP and promote ESG disclosure. Corporate governance reforms that aim to improve the effectiveness and efficiency of boards are critical in order for companies to attain both financial and sustainable development.

Date: 2024
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https://doi.org/10.1002/csr.2733

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Persistent link: https://EconPapers.repec.org/RePEc:wly:corsem:v:31:y:2024:i:4:p:3031-3042

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