Board NGO Experience and Corporate ESG Performance: The Moderating Role of Organizational Psychological Capital

This study examines the association between directors with non‐governmental organization (NGO) experience and firms' environmental, social, and governance (ESG) performance, as well as the moderating role of organizational psychological capital (OPC). Using 1659 firm‐year observations from UK FTSE 350 companies between 2012 and 2021, we combine manually collected board data with natural language processing to measure OPC from annual‐report narratives. The results show that NGO‐experienced director representation is positively associated with ESG performance, particularly its environmental and social dimensions. We find limited evidence suggesting that OPC may strengthen the positive association between NGO‐experienced director representation and ESG performance. The study extends emerging research on NGO‐experienced directors by examining overall ESG performance and identifying OPC as a complementary organizational resource that may condition this association. The findings contribute to corporate governance, sustainability, and organizational psychology research and offer implications for boards, investors, and policymakers.