Women lead on corporate sustainability

Research in the International Journal of Corporate Governance suggests that the makeup of corporate boards can affect how companies approach sustainability, particularly in emerging economies where governance systems are still developing.

The study is based on observations amounting to almost 20000 firm-years across 25 emerging markets. A firm-year is a single observation representing one company’s data for one year in empirical business research. Thus, 20,000 firm-years consists of data collected for many companies over several years, where each company contributes one observation for each year it appears in the data.

The work shows that companies with more women on their boards tend to have better environmental, social, and governance (ESG) performance. The work also questions the received wisdom of governance that increasing the number of independent directors strengthens corporate responsibility.

Sustainability performance refers to how companies manage ESG issues. Environmental factors include carbon emissions, pollution, and resource use. Social factors relate to employee welfare, diversity, and community engagement. Governance concerns how firms are directed and controlled, including leadership accountability and board oversight. These various factors can be scored together to give investors and regulators a single metric with which they can assess long-term corporate risk and resilience.

A key feature of the current study is that it distinguishes between female executive directors who hold senior management positions and influence operational decisions and non-executive directors that provide oversight and strategic guidance but are not involved in the daily management of the company.

The works shows that the presence of women in both types of role is associated with better ESG scores. The researchers suggest that gender diversity broadens perspective in boardroom decision-making and encourages focus on long-term risks and stakeholder concerns.

The analysis also identifies an unexpected pattern regarding board independence. Independent directors—board members who are not part of company management—are widely viewed as essential for objective oversight. However, the study finds that a higher proportion of independent directors is linked to lower sustainability scores in the sampled emerging markets.

Elbayoumi, A.F., Elmoursy, H., Eljilany, S.M., Bouaddi, M. and Basuony, M.A.K. (2026) ‘Females on board and sustainability performance: evidence from the emerging markets’, Int. J. Corporate Governance, Vol. 16, No. 1, pp.67–89.