Research conducted by Professor Khaled Hussainey from Bangor University, and his co-authors Hicham Sbai, Slimane Ed-Dafali, and Zahra Adardour from Chouaib Doukkali University (Morocco), found that board gender diversity positively and significantly affects Environmental, Social, and Governance (ESG).
ESG is a framework used by investors and businesses to measure a company's sustainability, ethical impact, and risk management beyond financial performance.
This includes how a company acts as a steward of nature, including climate change, carbon emissions, waste management, and energy efficiency, and how it manages relationships with employees, suppliers, customers, and communities.
The study, which was led by scholars from Chouaib Doukkali University in Morocco, relies on a sample of 95 firms across 10 countries in the Middle East and North Africa (MENA) region.
Khaled Hussainey, Professor in Accounting at Bangor University’s Albert Gubay Business School, said, “These findings demonstrate that female directors could bring valuable intangible resources such as diverse perspectives, skills, ethical orientation, and shared characteristics. Consequently, they provide unique cognitive perspectives, human capital with socio-emotional intelligence, and strategic governance-related connections with stakeholders, thereby leveraging female leadership as a strategic recourse, strengthening the advisory capacity of boards of directors and improving ESG performance in companies in the MENA region.”
The study highlights that it is essential to consider both ESG and gender diversity when designing strategies to address social needs. The researchers emphasise that their findings provide valuable insights for policymakers, business leaders, and scholars seeking to strengthen ESG performance by taking into account the specificities of gender diversity, particularly within the unique cultural context of the MENA region.
The researchers say that their findings highlight the importance of appointing female directors and also of creating a good environment, including a supportive corporate culture and governance structures, that enables them to exercise their influence effectively.
They add that the results underscore the need for policymakers to consider cultural context when designing governance reforms, suggesting that gender diversity initiatives may yield stronger ESG outcomes when complemented by mechanisms that enhance individual accountability and stakeholder responsiveness.
The study, published in the Journal of Accounting Literature, can be read here.