Do CEO and board characteristics matter in the ESG performance of their firms?

Purpose This study investigates the impact of chief executive officers (CEOs’) and board members’ personal characteristics on their firms’ environmental, social and governance (ESG) performance. Design/methodology/approach Using a sample of 120,834 firm-year observations, this study used fixed-effect ordinary least squares regression analysis to empirically identify which characteristics of the CEO and board members are linked to ESG performance. Findings The results from analyzing archival data of privately held Finnish firms show that education level positively influences ESG performance, while age and income negatively affect total ESG performance. Research limitations/implications The findings highlight the importance of these characteristics in promoting ESG practices in private firms. Therefore, it will enable regulators to encourage diversity among the board members and the CEO, thereby helping to identify potential areas for improvement in corporate governance and leadership practices. The results also provide insights into how organizations can better align their actions with their values and goals. Originality/value This study adds to existing literature on corporate governance and ESG performance by identifying the specific personal characteristics of the directors, such as previous conviction, age, income and marital status, and their influences on ESG performance in privately held firms in Finland.