Optimizing board structure for ESG integrity: Nonlinear size effects and diversity moderation on greenwashing

Jingzhuo Yu and Yong-Sik Hwang

PLOS ONE, 2026, vol. 21, issue 1, 1-26

Abstract: This study examines the nonlinear relationship between board size and Environmental, Social, and Governance (ESG) greenwashing and explores how board diversity moderates this association. Using panel data from Chinese A-share listed firms between 2009 and 2023, we employ quadratic fixed-effects regression models to test for an inverted U-shaped relationship. The results indicate that medium-sized boards (10–13 directors) exhibit the highest propensity for greenwashing. Further analyses reveal heterogeneous moderating effects across four dimensions of board diversity—gender, functional background, nationality, and age. Specifically, reaching a critical mass of at least two female directors or increasing functional diversity strengthens the inverted U-shaped relationship, whereas greater age or nationality diversity attenuates it. Drawing on fraud triangle theory, this study uncovers a previously overlooked nonlinear mechanism underlying board size and ESG greenwashing. Moreover, it identifies two distinct diversity-driven pathways: resource-based mechanisms (gender and functional diversity) and supervision-based mechanisms (nationality diversity). These findings extend existing literature on board governance and greenwashing and provide practical insights, suggesting that firms should avoid the “danger zone” associated with medium-sized boards and adopt targeted diversity strategies to mitigate ESG greenwashing risks.

Date: 2026
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0335803 (text/html)
https://journals.plos.org/plosone/article/file?id= ... 35803&type=printable (application/pdf)

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:plo:pone00:0335803

DOI: 10.1371/journal.pone.0335803

Access Statistics for this article

More articles in PLOS ONE from Public Library of Science
Bibliographic data for series maintained by plosone ().