Examining the effect of female directors on US firm ESG performance

This study revisits the effects of gender and racial board diversity on firms' corporate social responsibility measured using environmental, social, and governance (ESG) scores. We contribute to the corporate governance literature by using a panel of director-level data to conduct our analysis and by accounting for endogeneity using an instrumental variables (2SLS) approach when assessing the link between female board members and ESG scores. We find that women serve on boards with higher ESG scores when compared with similar men. Meanwhile, board members who identify as racial minorities serve on boards with higher ESG scores than their white counterparts. Gender does not moderate the minority effect as we find no significant difference in scores reported between minority men and women.