Board characteristics and sustainability performance: empirical evidence from emerging markets

Purpose This study aims to investigate the effects of board attributes, i.e. board independence, gender diversity, board size and board activity, on the sustainability performance of 439 publicly-listed non-financial companies across 20 emerging countries over the period of 2010–2019. Design/methodology/approach We use Refinitiv environmental, social and governance (ESG) performance scores and board attributes variables derived from Thomson Reuters Eikon database. We examined the relationship between board features and sustainability performance by using the dynamic panel two-step system generalized method of moments estimator. Findings Overall, our findings suggest that smaller, gender diverse and independent boards that convene frequently achieve better sustainability performance. The authors document a positive relationship between board gender diversity and sustainability performance across a broad spectrum of sustainability indicators. The authors also find evidence that board independence has a positive impact on two sustainability performance measures, i.e. environmental and governance performance. Although board size does not influence aggregate sustainability measures (ESG score, ESG controversies, and ESG combined score), the authors find a negative relation between board size and governance performance. Finally, board activity seems only relevant in explaining ESG controversies, i.e. other things being equal frequently held board meetings significantly reduce sustainability issues (ESG controversies). Practical implications The authors’ findings provide implications to support regulators and emerging market companies on how to improve sustainability performance through the design and use of specific governance mechanisms. These interventions will help resolve agency problems among different stakeholders and, in turn, benefit sustainability. Social implications This study also has social implications because it sheds light on how companies may change their attitudes towards sustainable practices through adjusting their corporate governance structures to increase the welfare of the society. Originality/value This study examines the behaviour of companies in emerging markets on sustainability performance by discussing a broad range of board characteristics and covering a large sample of emerging markets. Thus, it provides valuable insights to the companies for further growth opportunities in emerging markets.