How corporate board characteristics affect environmental, social, and governance performance

Abstract

This study examines whether and how corporate board characteristics affect firms’ environmental, social, and governance (ESG) performance. Although prior studies have identified various external and firm-level determinants of ESG performance (Liang & Renneboog, 2017), relatively limited attention has been devoted to the role of board characteristics as key internal governance mechanisms shaping corporate sustainability. Using a panel dataset of 1,722 non-financial firms listed on the Taiwan Stock Exchange (TWSE) and the Taipei Exchange (TPEx) over the period 2016–2024, this study employs correlation analysis and multiple regression to investigate the effects of board independence, board size, female director representation, directors’ professional expertise, educational attainment, and board tenure on firms’ ESG performance. The empirical results indicate that board characteristics exert heterogeneous effects across the environmental, social, and governance dimensions. Specifically, larger boards and directors with higher educational attainment and longer tenure are generally associated with superior ESG performance, whereas independent directors, female directors, and directors with finance, law, or accounting expertise exhibit mixed effects across individual ESG pillars.