This study aims to investigate the relationship between corporate social responsibility (CSR) performance and corporate financial performance (CFP), with a focus on how gender diversity on boards moderates this link. It also aims to provide actionable insights for firms, investors and policymakers navigating sustainability and governance challenges.
The analysis is based on panel data covering 120 French firms listed on the SBF 120 index over the period 2010–2019. Following best econometric practices, environmental, social and governance (ESG) scores (a proxy for CSR) and gender diversity indices (Blau/Shannon) were mean-centered to reduce multicollinearity and facilitate the interpretation of interaction effects. Fixed-effects and random-effects models were used to control for unobserved heterogeneity, with standard errors clustered at the firm level to correct for heteroscedasticity. FP was measured using Tobin’s Q, while control variables included firm size and governance variables.
The findings reveal that CSR performance positively influences financial outcomes. However, gender diversity exerts a nonlinear moderating effect: at moderate levels of diversity (30–40% female representation), it strengthens the positive relationship between CSR and FP, whereas beyond this threshold, the effect diminishes, likely due to increased coordination costs and greater complexities in decision-making. This dynamic underscores the importance of achieving an optimal balance in board composition to maximize the value generated by CSR initiatives.
The sample’s focus on large French firms limits generalizability; causal claims are constrained by observational data. Future research should explore cross-cultural contexts and integrate qualitative insights to unravel mediating mechanisms.
Firms should target 30–40% female board representation to balance diversity benefits with cohesion. Complementing diversity with inclusive leadership training and transparent ESG reporting enhances strategic alignment and investor confidence.
Inclusive governance fosters equitable decision-making and stakeholder trust. Embedding diversity into ESG frameworks amplifies social impact, while investor emphasis on inclusive practices can drive broader corporate accountability.
Contrary to prior studies, this research identifies a negative moderating effect of excessive gender diversity on CSR–CFP outcomes, emphasizing the critical role of organizational context. It redefines diversity as a strategic asset only when paired with an inclusive culture, advancing theoretical debates on governance and sustainability.
