Sustainability practices, board’s gender diversity and quota regulations in European markets

Carlos Fernández-Méndez (), Rubén Arrondo-García and Ana Rosa Fonseca-Díaz
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Carlos Fernández-Méndez: University of Oviedo
Rubén Arrondo-García: University of Oviedo
Ana Rosa Fonseca-Díaz: University of Oviedo

Review of Managerial Science, 2025, vol. 19, issue 10, No 7, 3177-3227

Abstract: Abstract The ubiquitous debate on sustainability practices and the development of a uniform regulation on the use of gender quotas to be implemented in all EU countries by mid-2026 puts these matters in the spotlight. We link both topics by studying the effects board gender diversity and use of gender quota regulations on the firm’s adoption of sustainability practices. Using a panel of listed firms from 22 European countries over the period 2009–2018, we find that firms with gender diverse boards present higher Environmental, Social and Corporate Governance (ESG) scores while the use of quotas attenuates this positive role played by female directors. Our results are robust across econometric models that control for endogeneity. Contrarily to the notion of tokenism, we also find that that the positive effect of gender diversity is observable from the very first female board member. The positive effect of female directors on the firms’ ESG scores correspond to non-executives. Altogether, our results call for further debate on the implementation of positive gender diversity policies, specially concerning the use of quotas with sanctions for non-complaints.

Keywords: ESG performance; Women directors; Board gender quotas; Board gender diversity (search for similar items in EconPapers)
JEL-codes: G34 G38 J16 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s11846-025-00846-5

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