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Diversity in the board of directors and the social sustainability pillar of the firm: Evidence from countries with high environmental, social, and governance scores
(Common Ground Research Networks, 2022) Amiri, Misagh Haji; Kifo, Nour; Kuşakcı, Sümeyye; Yönetim Bilimleri Fakültesi, İşletme Bölümü
This study aims to empirically test the relationship between board demographic diversity and firms' social sustainability in countries with high Environmental, Social, and Governance (ESG) scores. The board demographic diversity was measured based on two dimensions: gender and cultural dimensions. Social sustainability was studied through four dimensions: workforce, human rights, community, and product responsibility. The panel data was attained through Thomson Reuters Eikon Database for 1491 firms from ten countries from 2014-2018. The empirical model was tested by two dynamic panel data methods: Generalized Least Squares (GLS) and Ordinary Least Squares (OLS). Findings suggest that gender diversity has a positive impact on all four dimensions of social sustainability. There is also a positive and significant relationship between cultural diversity and three dimensions of social sustainability: workforce, community, and product responsibility. However, cultural diversity has shown an insignificant and negative relationship with the human rights dimension.