Toward sustainable corporate behavior: The effect of the critical mass of female directors on environmental, social, and governance disclosure

Boards of directors have recently become more attentive to their stakeholders' concerns, providing more transparent information and adopting more sustainable business strategies. This study investigates the influence of a critical mass of women on boards on the environmental, social, and govern...

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Bibliographic Details
Published in:Business strategy and the environment 2021-05, Vol.30 (4), p.1865-1878
Main Authors: De Masi, Sara, Słomka‐Gołębiowska, Agnieszka, Becagli, Claudio, Paci, Andrea
Format: Article
Language:English
Subjects:
2-Methylisoborneol
board of directors
corporate governance
Critical mass
Directors
Environmental governance
environmental, social, and governance disclosure
ESG stakeholders transparency
Females
gender diversity
Governance
inclusion
Policy making
Stakeholders
Stockholders
Sustainability
sustainable development
Transparency
Women
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Summary:Boards of directors have recently become more attentive to their stakeholders' concerns, providing more transparent information and adopting more sustainable business strategies. This study investigates the influence of a critical mass of women on boards on the environmental, social, and governance (ESG) disclosure score and its three components separately. Using a sample of the FTSE‐MIB listed companies in the 2005–2017 period, we show that reaching a critical mass of female board members—going from one or two women to at least three—enhances the level of ESG disclosure. The results also show that the critical mass of female board members has a positive influence on every component of the ESG score, with the highest contribution of women reaching the governance score. These findings provide insights to shareholders and policymakers and suggest that a critical mass of female board members is particularly effective in improving transparency, and it can be seen as a mechanism to transit to stakeholder governance, fostering more sustainable behavior in firms.
ISSN:0964-4733
1099-0836
DOI:10.1002/bse.2721