Board Diversity and Corporate Sustainability Performance: Do CEO Power and Firm Environmental Sensitivity Matter?

Augustine Donkor, Terri Trireksani and Hadrian Geri Djajadikerta ()
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Augustine Donkor: Murdoch Business School, Murdoch University, Perth, WA 6150, Australia
Terri Trireksani: Murdoch Business School, Murdoch University, Perth, WA 6150, Australia
Hadrian Geri Djajadikerta: School of Accounting, Economics and Finance, Curtin University, Perth, WA 6102, Australia

Sustainability, 2023, vol. 15, issue 23, 1-24

Abstract: The study assesses whether CEO power and firm environmental sensitivity matter to board diversity (i.e., board cultural (BCD) and board gender (BGD) diversity) and corporate sustainability performance nexus. Australian S&P/ASX300′s firm data for a period of ten years (2011–2020) were used in the study’s analysis. Although board diversity positively influences ESG performance, the presence of powerful CEOs and when firms operate in environmentally sensitive industries weaken the board diversity and sustainability performance nexus. Additionally, the study found that although board diversity is essential, the effect of BGD has a greater statistical power on sustainability than BCD, affirming the present focus on BGD.

Keywords: board cultural diversity; board gender diversity; corporate sustainability performance; CEO power; environmental sensitivity; Australia (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
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