ESG and board characteristics – an Australian study. How does audit tenure moderate the relationship between ESG performance and gender diversity?

Purpose This study aims to examine the impact of audit committee (AC) independence, board gender diversity and chief executive officer (CEO) duality on the environmental, social and governance (ESG) performance of Australian listed firms over the period 2017–2023. Design/methodology/approach To examine the association between corporate governance characteristics and ESG performance, this study draws on stakeholder–agency theory and resource dependence theory. Empirically, the authors use fixed effects regression, controlling for both firm and year effects, to estimate the relationship between governance variables and ESG performance. To ensure the robustness of the results, the authors conduct additional analyses using two-stage least squares, generalised least squares and entropy balancing. These approaches address potential endogeneity, heteroskedasticity and autocorrelation concerns, thereby strengthening the reliability of the findings. Findings The results indicate that AC independence and board gender diversity are positively and significantly associated with ESG performance. In contrast, CEO duality is negatively associated with ESG performance. Furthermore, the moderation analysis reveals that audit tenure weakens the positive relationship between board gender diversity and ESG performance. Specifically, the interaction between gender diversity and longer audit tenure is negative and significant, suggesting that extended auditor–client relationships may reduce the effectiveness of gender-diverse boards in promoting ESG outcomes. Originality/value This study addresses a gap in the ESG literature by examining the role of AC independence, board gender diversity and CEO duality in influencing ESG performance among Australian listed firms. In addition, it investigates the moderating effect of audit tenure on the relationship between board gender diversity and ESG performance. From a theoretical perspective, the findings support the applicability of stakeholder–agency theory and resource dependence theory in explaining the governance–ESG relationship, gender diversity, AC, CEO duality, ESG, resource dependency theory and stakeholder–agency theory.