Chapter 17: Board Composition and ESG Performance in the UK Retail Market: Does Governance Matter?

Corporate governance plays a crucial role in firm performance and sustainability. In UK retail companies, board characteristics like diversity, independence, expertise and tenure are key institutional factors. The retail industry faces competitive pressures from customer demands, technology and regulations, necessitating governance structures that balance revenue targets with corporate business model viability and environmental, social and governance (ESG) performance. This chapter examines the impact of board composition on ESG performance in the UK retail sector, addressing a research gap in governance and ESG integration. The theoretical lenses underpinning this study are rooted on agency theory, stakeholder theory and resource dependency theory (RDT). Findings of this study reveal that larger boards, gender diversity and frequent meetings enhance ESG performance and financial outcomes. Governance practices promoting diversity and independence build stakeholder trust and financial sustainability. Managerial implications of the findings of this study include fostering gender diversity, optimising board size and strengthening independent directors’ roles. The study advances academic and practical insights. Future research could explore broader contexts to validate these findings and expand the applicability of governance strategies across industries in different context and settings.