Demographic diversity of boardroom and social sustainability: Evidence from high ESG countries

The purpose of this study is to empirically test the relationship between board demographic diversity and social sustainability in developed, advanced emerging and secondary emerging countries with high ESG score. The board demographic diversity was measured based on two dimensions that are gender and cultural one. On the other hand, social sustainability was investigated through four dimensions: workforce, human rights, community, and product responsibility. The panel data attained through Thomson Reuters Eikon involves totally 1491 observations of businesses from 10 countries for the years 2014-2018.The empirical model tested by two dynamic panel data methods which are Generalized Least Square (GLS) and Ordinary Least Squares (OLS). Findings suggest that gender diversity has a positive impact on all four dimensions of social sustainability. There also exists a positive and significant relationship between cultural diversity and three dimensions of social sustainability, which are workforce, community, and product responsibility. However, cultural diversity has shown an insignificant and negative relationship with the fourth dimension that is human rights. Keywords: Board Demographic Diversity, Gender Diversity, Cultural Diversity, Social Sustainability, Thomson Reuters Eikon, and ESG Score