Examining the impact of composition of board on environmental, social, and governance disclosure

Objective Given the world’s complex and pressing environmental and social challenges, businesses must effectively represent their approach to sustainability by informing stakeholders about how they have decided to mitigate the effects of their actions and capitalize on opportunities related to sustainability issues. Stakeholders exert pressure on firms to make responsible decisions by adhering to excellent environmental, social, and governance (ESG) standards and reducing their impact on society and the environment. The board of directors plays a crucial role in revealing ESG factors, as it must incorporate this information into business strategy and provide adequate governance to support it. The board of directors is in charge of aligning corporate behavior with the demands of all stakeholders, guiding the organization toward long-term growth processes. The purpose of this paper is to look into how some corporate governance variables affect ESG disclosure in Italian listed companies. More specifically, the paper looks into how board composition affects ESG disclosure and whether gender diversity on boards has a positive impact on ESG disclosure. Sample and metholodology To fulfill the research goal, the sample investigated is all firms registered on the Italian stock exchange, excluding financials, from 2018 to 2022. In terms of methodology, a basic linear regression model that takes into account numerous properties of the BoD was performed. The ESG score was obtained using the Refinitiv database, while the other statistics were obtained from the individual corporations’ Corporate Governance Reports. Results The research findings allow us to highlight the impact of diversity on boards in ESG disclosure, confirming that there is a positive and significant relationship. Originality: As a result, the research contributes to a better practical and theoretical understanding of the critical role that gender diversity plays in boosting corporate governance and ESG best practices through increased corporate openness and accountability. Implications The study’s findings may serve as a motivation for policymakers and social regulators to continue to push initiatives and changes that promote gender equality on corporate boards. All because a diverse board of directors fosters better sustainable governance, leading investors to view companies engaged in ESG activities as a safer investment