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Women on Board and ESG Performance: Insights from the Italian Utilities Sector

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  • Elisa Menicucci
  • Guido Paolucci

Abstract

The purpose of this paper is to investigate the relationship between gender diversity and environmental, social and governance (ESG) performance in the Italian utilities sector. The study examines whether the presence of women on the board of directors (BoD) is related to ESG dimensions. We analyzed a sample of 482 utility companies for the period 2018-2022 and we developed an econometric model applying unbalanced panel regression data with firm fixed effects and controls per year. Within a multivariate regression model, the authors considered the ESG score provided by Refinitiv Eikon to test the research hypotheses. Findings show that the presence of women on board of directors improves ESG performance when a critical mass of female board members (at least three) is reached. A critical threshold of female directors also positively influences the scoring of environmental and social pillars. From a managerial perspective this study draws attention to BoD composition encouraging utility companies to define internal corporate governance mechanisms thoroughly. The overall findings support managers, policy makers and regulators on how to improve ESG performance through gender diversity on BoD. This paper offers an in-depth examination of the ESG practices of utility firms, and it attempts to bridge the gap in prior literature on the determinants of ESG performance in the Italian utilities sector. This study is the first that investigates the relationship between board gender diversity and ESG performance in such a context exploring how a critical mass of women on BoD affects ESG dimensions.

Suggested Citation

  • Elisa Menicucci & Guido Paolucci, 2024. "Women on Board and ESG Performance: Insights from the Italian Utilities Sector," International Journal of Business and Management, Canadian Center of Science and Education, vol. 19(3), pages 1-73, June.
    • Handle: RePEc:ibn:ijbmjn:v:19:y:2024:i:3:p:73
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    References listed on IDEAS

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    1. Johannes Slacik & Dorothea Greiling, 2020. "Coverage of G4-indicators in GRI-sustainability reports by electric utilities," Journal of Public Budgeting, Accounting & Financial Management, Emerald Group Publishing Limited, vol. 32(3), pages 359-378, June.
    2. Mariateresa Torchia & Andrea Calabrò & Morten Huse, 2011. "Women Directors on Corporate Boards: From Tokenism to Critical Mass," Journal of Business Ethics, Springer, vol. 102(2), pages 299-317, August.
    3. Adams, Renée B. & Ferreira, Daniel, 2009. "Women in the boardroom and their impact on governance and performance," Journal of Financial Economics, Elsevier, vol. 94(2), pages 291-309, November.
    4. Mauro Romano & Alessandro Cirillo & Christian Favino & Antonio Netti, 2020. "ESG (Environmental, Social and Governance) Performance and Board Gender Diversity: The Moderating Role of CEO Duality," Sustainability, MDPI, vol. 12(21), pages 1-16, November.
    5. McGuinness, Paul B. & Vieito, João Paulo & Wang, Mingzhu, 2017. "The role of board gender and foreign ownership in the CSR performance of Chinese listed firms," Journal of Corporate Finance, Elsevier, vol. 42(C), pages 75-99.
    6. Veltri, Stefania & Bruni, Maria Elena & Iazzolino, Gianpaolo & Morea, Donato & Baldissarro, Giovanni, 2023. "Do ESG factors improve utilities corporate efficiency and reduce the risk perceived by credit lending institutions? An empirical analysis," Utilities Policy, Elsevier, vol. 81(C).
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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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