Board leadership attributes greatly influence a firm's sustainability performance. However, the impact of these attributes depends on the board's structure: Unitary, Two-tier or Mixed. The specific attributes of each structure may affect sustainability oversight. They can enable or constrain corporate sustainability, depending on the board's leadership effectiveness. The primary objective of this research is to examine how board leadership attributes impact environmental, social and governance (ESG) performance across different board structures.
This study examines the relationship between board leadership and ESG performance across companies in Europe, Asia and America. It uses data on about 8,094 companies from Refinitiv Ikon (2016–2021) and conducts panel-data analysis using fixed- and random-effects models.
Board size affects ESG performance differently across structures: larger boards improve ESG in Unitary and Mixed boards but reduce it in Two-tier boards. Board independence, expertise and gender diversity all boost ESG scores across structures. Larger companies score better on ESG, but leverage has little effect on ESG across structures.
The findings matter for legislators, board members, academicians, and investors. Policy should promote board attributes tailored to each board structure. ESG subcommittees can fix structural gaps because boards differ. Companies should review their board evaluation criteria to determine whether their boards integrate leadership into sustainability strategy, especially in family-owned or state-influenced firms – so skilled board members can contribute more effectively.
This research offers a new global view of how corporate governance practices and board structures shape sustainability performance. It builds on existing work by showing that board attributes interact with their structural context. The study reveals how board attributes matter differently across structures, explaining why past studies produced mixed results.
