Mandated Board Gender Diversity and ESG Performance: Evidence From the European “Women on Boards” Directive

Carlos Fernández‐Méndez and Shams Pathan

Corporate Social Responsibility and Environmental Management, 2025, vol. 32, issue 3, 3602-3620

Abstract: Using the 2022 European Union (EU) “women on boards” directive as a backdrop, we examine its wealth impact on firms in reference to their sustainability scores. Our analysis shows that investors respond positively to the EU gender quota, with a stronger effect on firms with low ESG scores. Particularly, we find that the abnormal returns on the announcement day are 0.5% higher on average for firms with weaker ESG performance, suggesting they have more to gain from the EU quota regulation. Our results reveal also that investors' expectations about the impact of the EU gender quota on ESG performance and firm value vary with differences in the institutional context across European countries. We observe more positive response in countries with strong regulatory environment characterized by high regulatory quality and strong legal enforcement and also in countries aligned with gender equality and sustainability values.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1002/csr.3147

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:wly:corsem:v:32:y:2025:i:3:p:3602-3620

Access Statistics for this article

More articles in Corporate Social Responsibility and Environmental Management from John Wiley & Sons
Bibliographic data for series maintained by Wiley Content Delivery ().