ESG Performance–Stock Price Volatility Nexus: The Moderating Effect of Board Cultural Diversity in G20 Markets

Rami Salem, Musa Ghazwani and Waleed Alshaer

Business Strategy and the Environment, 2025, vol. 34, issue 7, 8172-8193

Abstract: This paper investigates the relationship between ESG performance and stock price volatility (SPV) in G20 countries, with a focus on the moderating influence of board cultural diversity (BCD) in this association. Using a comprehensive sample of 117,449 firm‐year observations from companies listed in G20 markets between 2005 and 2021, our analysis provides robust empirical evidence of a negative association between ESG performance and SPV. Furthermore, the findings indicate that BCD strengthens this negative link by serving as a mitigating factor, assisting firms in better managing ESG‐related risks and opportunities, resulting in higher sustainability performance and lower SPV. Our results contribute to existing literature by integrating legitimacy, resource‐based, and agency theories to explain how ESG practices, complemented by board diversity, contribute to corporate stability. This study extends the understanding of how governance structures, specifically board diversity, can influence the ESG performance nexus in global markets. Our study has implications for policymakers and investors, highlighting the strategic importance of ESG practices and diverse governance structures in promoting corporate resilience and market confidence. Encouraging the adoption of robust ESG reporting standards and fostering board diversity may enhance corporate stability and investor trust.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1002/bse.70024

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:bstrat:v:34:y:2025:i:7:p:8172-8193

Ordering information: This journal article can be ordered from
http://onlinelibrary ... 1002/(ISSN)1099-0836

Access Statistics for this article

Business Strategy and the Environment is currently edited by Richard Welford

More articles in Business Strategy and the Environment from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().