Do Board Characteristics Impact Environmental, Social and Governance (ESG) Performance of Public Companies in the European Union?

The goal of this research is to look into the relationship between board of directors’ characteristics and the Environmental, Social and Governance (ESG) performance of public companies in the European Union (E.U.). Board’s characteristics included in this study are the board independency, size of the board, number of board meetings, and gender diversity. The ESG score is increasingly attracting the attention of investors when it comes to assessing sustainability as well as profitability. Control variable of this study is the return on the assets (ROA), and 146 public companies operating in the manufacturing sector in the E.U. for the fiscal year 2020 are used for the hypotheses testing. The analyses reveal that only gender diversity and board size are statistically significant linked to the ESG scores of public companies operating in the manufacturing sector in the E.U.