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A Study on the Impact of Board Characteristics on the Environmental, Social, and Governance (ESG) Responsibilities of Listed Companies—Evidence from Chinese Listings

Author

Listed:
  • Haoming Ding

    (The Graduate School of Business Administration, Hoseo University, 12 Hoseodae-gil, Dongnam-gu, Cheonan-si 31066, Republic of Korea)

  • Zerui Wang

    (The Graduate School of Business Administration, Hoseo University, 12 Hoseodae-gil, Dongnam-gu, Cheonan-si 31066, Republic of Korea)

  • Hanyu Xu

    (Department of Architecture and Civil Engineering, City University of Hong Kong, Kowloon Tong, Hong Kong, China)

  • Zi Lin

    (Renmin Business School, Renmin University of China, Beijing 100872, China)

Abstract

Company boards play a critical role in ESG leadership by shaping strategy, ensuring accountability, and driving sustainability practices. However, ineffective board structures can hinder ESG goals, making the identification of board attributes that enhance ESG outcomes essential. Using data from 1931 A-share listed companies between 2009 and 2022, this study investigates how board characteristics, such as independence, independent directors’ overseas experience, board size, and gender diversity, affect environmental, social, and governance (ESG) performance. The analysis reveals that the combined influence of board characteristics positively impacts ESG outcomes. Among individual attributes, board independence and independent directors with overseas education backgrounds significantly enhance ESG ratings, emphasizing the value of independent oversight and global perspectives. In contrast, board size and gender diversity show no significant impact, suggesting that simply increasing board size or representation does not necessarily improve ESG performance. Unlike prior studies focusing on isolated board characteristics, this research comprehensively analyzes how various attributes influence ESG outcomes. This study fills a critical gap in the ESG literature by addressing these complex dynamics. It offers actionable insights for policymakers and corporate governance reformers to improve business practices’ accountability, transparency, and sustainability.

Suggested Citation

  • Haoming Ding & Zerui Wang & Hanyu Xu & Zi Lin, 2024. "A Study on the Impact of Board Characteristics on the Environmental, Social, and Governance (ESG) Responsibilities of Listed Companies—Evidence from Chinese Listings," Sustainability, MDPI, vol. 16(23), pages 1-16, November.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:23:p:10490-:d:1533036
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    References listed on IDEAS

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