Board gender diversity and ESG performance: evidence from gender diversity reforms in the MENA region

Abstract

Purpose As sustainability and ethics become key drivers of business growth, boardroom composition extends beyond governance considerations. This paper aims to examine the impact of audit quality of board gender diversity on Environmental, Social and Governance (ESG) performance operating in MENA countries, focusing on how reforms promoting women’s representation enhance ESG outcomes. Design/methodology/approach The analysis uses the Generalized Least Squares method with random effects, based on a sample of 95 listed companies across various sectors in the MENA region and Turkey from 2017 to 2021, resulting in 475 firm-year observations. To ensure robustness, alternative measures of gender diversity and a two-stage least squares approach are used. Findings The findings of this paper indicate that a higher proportion of women on the board is linked to improved ESG scores. Furthermore, this paper find a positive link between gender diversity and policies that support female representation. ESG performance is also greatly improved by these gender diversity reforms. Originality/value This study contributes significantly to the limited literature on board gender diversity and ESG in the MENA region. The findings contribute to academics, board members, regulators and investors. To the best of the authors’ knowledge, this study is the first to uncover the association between board gender diversity and related reforms on ESG performance in the MENA region and Turkey. The insights expand the literature by providing meaningful insights, highlighting the importance of advancing gender diversity on boards, both as a reinforcement of ESG efforts and as a practical means of aligning corporate practices to meet wider community demands.