Beyond Compliance: The Role of Board Dynamics in Elevating Workforce Sustainability and CSR

This study investigates how internal workforce sustainability influences corporate social responsibility (CSR) strategies and how board characteristics shape this relationship in European firms. Positioned within the frameworks of stakeholder and resource dependency theories, the research explores why sustainable workforce practices encompassing employee well‐being, diversity, fair labor standards, and inclusion serve as critical drivers of responsible corporate conduct. Using a panel dataset of 4727 firm‐year observations from 682 European companies over the period 2013–2023, the study employs fixed and random effects regression models to examine both the direct and moderating effects of board attributes, including gender diversity, CEO–Chairman duality, board size, and board‐specific expertise. The findings reveal that firms with higher workforce sustainability scores exhibit stronger CSR performance, whereas board characteristics exert context‐dependent moderating effects. Board size exhibits a marginally positive association between workforce sustainability and CSR outcomes, whereas board gender diversity, despite its direct CSR benefits, exerts a negative moderating effect on the workforce CSR link, indicating process and engagement constraints. CEO‐Chair duality yields heterogeneous, sector‐specific effects, with role separation more salient in finance. Centralized leadership may strengthen how workforce sustainability drives CSR strategy. Subsample analyses for finance and realty industries confirm workforce effects but reveal distinct governance contingencies. The results provide actionable insights for corporate leaders and policymakers on aligning workforce sustainability with effective governance structures to advance responsible business conduct. Overall, this study extends the understanding of strategic governance by empirically linking board dynamics with workforce‐driven CSR outcomes in European contexts.