Board Gender Diversity and ESG: The Influence of the Varieties of Capitalism

Isabelle Allemand, Daniela Borodak and Xavier Hollandts

Finance, 2024, vol. 45, issue 2, 43-89

Abstract: The influence of board gender diversity on corporate social responsibility remains a puzzle. Suggesting that the varieties of capitalism (VoCs) play a role in this influence, we propose a fine-grained understanding of the mixed results across countries. Using a large European dataset (5,877 firm-year observations between 2004 to 2019 from 17 countries), we examine the relationship between board gender diversity and environmental, social, and governance (ESG) scores and the substitutive or complementary effect of the VoCs. Our results confirm the influence of female directors on the four scores (overall, governance, social, and environmental) and the impact of the national institutional context. In countries with more freedom, such as liberal market economies, female directors are complementary to the VoCs. The stakeholder and citizenship framework of mixed market economies appears to be the most substitutive to the influence of board gender diversity on ESG scores. Thus, our paper highlights the need to examine the intertwined relationships among board diversity, ESG, and national institutional contexts.

Keywords: corporate governance; board gender diversity; ESG scores; varieties of capitalism; European study. (search for similar items in EconPapers)
Date: 2024
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