Task‐Based Board Diversity, Firm Performance, and the Mediating Role of Corporate Sustainability Practices

Um‐E‐Roman Fayyaz, Raja Nabeel‐Ud‐Din Jalal, Michelina Venditti and Gianluca Antonucci

Business Strategy and the Environment, 2025, vol. 34, issue 6, 6906-6924

Abstract: Task‐based diversity among corporate board members, based on specific functional attributes and experiences (age, tenure, and experience) can impact the firm according to both resource‐based view and agency theory. Following this, we explore the relationship between task‐based board diversity and corporate firm performance, analyzing a sample of 73 nonfinancial European sustainable firms over the period 2016–2020. Our findings reveal that the task‐based board diversity has a negative impact on firm performance. Furthermore, results show that corporate sustainability practices mediate the relationship between task‐based board diversity and firm performance. This counterintuitive effect may arise because diverse functional attributes can lead to frictions or misalignments in board decisions, especially when integrating sustainability practices, which complicates the strategy consensus needed for effective governance. These findings provide a nuanced understanding of the relationship between task‐based board diversity, corporate performance, and sustainability practices. Also, it highlights the inherent complexity and potential tensions in balancing these critical factors.

Date: 2025
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