Corporate Governance and Sustainability Disclosure in Environmentally and Socially Sensitive Industries

This study examines how corporate governance relates to environmental and social sustainability disclosure in environmentally and socially sensitive industries and whether these relationships differ from low‐impact industries. Drawing on stakeholder–agency and resource dependence theories, we analyze 3276 firm‐year observations from 503 European Union‐listed firms during 2011–2021 using OLS, instrumental‐variable, and two‐step system‐GMM estimations. Board size and gender diversity are positively associated with both disclosure dimensions. Board independence is positively associated with social disclosure, whereas CEO duality is negatively associated with social disclosure. Supplementary analysis of 6097 observations from 965 firms shows that most relationships between governance and disclosure do not differ significantly by industry sensitivity. However, CEO duality has a significantly more negative association with social disclosure in sensitive industries than in low‐impact industries. These findings identify industry sensitivity as a selective boundary condition and underscore the need to distinguish environmental from social disclosure when evaluating board effectiveness.