Does Board Diversity Drive Sustainability? Evidence from UK-Listed Companies

Abstract

The board diversity is a vital factor influencing corporate sustainability by incorporating varied perspectives and expertise into environmental, social, and governance (ESG) practices. This study examines the impact of board diversity—gender, age, educational background, and nationality—on sustainability performance in UK-listed companies. Grounded in Stakeholder Theory, Resource Dependence Theory, Critical Mass Theory, and Institutional Theory, and using quantile regression, this research explores these relationships across sensitive and non-sensitive industries over a 20-year period (2002–2021) using data from 1814 companies. The sample is segmented into high-, medium-, and low-sustainability companies to assess the heterogeneous effects of diversity. Findings reveal industry-specific patterns: In sensitive industries, gender diversity negatively affects ESG scores in low- and medium-sustainability companies, while nationality diversity consistently improves ESG outcomes across all levels. In non-sensitive industries, age diversity enhances ESG scores in medium- and high-sustainability companies, whereas educational diversity shows mixed effects—negative in medium and positive in high-sustainability companies. Nationality diversity also positively impacts ESG outcomes in medium-sustainability companies. This research adds to the literature by looking at how board diversity impacts sustainability performance across industries and sustainability levels by combining a multi-theoretical approach and applying quantile regression, as well as practical guidance for companies looking to improve board diversity for better sustainability performance.