Board Governance Policies and SDG Transformation 4 Performance: Evidence from the Agricultural Products & Services Industry

This study investigates how board-level governance policies shape corporate sustainability performance related to SDG Transformation 4, which encompasses sustainable food systems, land-use stewardship, water resource management, and ocean protection. Using a cross-country dataset of 620 firm-year observations in the Agricultural Products & Services industry (2019–2023), the analysis integrates governance policy scores from LSEG SDG Analytics with corporate sustainability disclosures. To account for potential endogeneity and implementation delays, we utilize baseline and one-year lagged fixed-effects panel regression models, controlling for firm characteristics such as size, leverage, and board gender diversity. The empirical results indicate a positive and statistically significant association between board governance policies and SDG 4 performance. These effects become stronger in lagged models, suggesting that the impact of board oversight requires time to materialize in sustainability outcomes. Additionally, board gender diversity positively correlates with stronger SDG Transformation 4. In contrast, executive- and shareholder-level governance policies exhibit no meaningful relationship with outcomes, implying that current sustainability-linked incentives and engagement mechanisms remain too weak to measurably affect ecological performance. Theoretically, this study advances governance literature by demonstrating that board-level institutionalization is the primary driver of ecological transitions, exposing structural weaknesses in current managerial and shareholder mechanisms. Practically, the findings urge boards to establish dedicated sustainability committees with ecological expertise and replace qualitative ESG bonuses with science-based long-term incentive plans (LTIPs) to align managerial behavior with sustainable agriculture.