Advancing the 2030 agenda: the role of board characteristics in the achievement of SDGs in global banking
Marco Barone, Candida Bussoli, Ilenia Fraccalvieri, Nicola RaimoPurpose
The 2030 Agenda has increased attention toward the role of organizations in advancing sustainable development through the achievement of the sustainable development goals (SDGs). Within this context, the banking industry plays a crucial role given its ability to influence economic, social and environmental outcomes through financing and investment decisions. This study aims to examine the influence of board characteristics on banks’ SDG performance, addressing the limited evidence on the governance determinants of banks’ contribution to the SDGs.
Design/methodology/approach
Drawing on stakeholder-agency theory, this study investigates the effects of board size and board gender diversity on the SDG performance of 646 banks operating across 60 countries over the period 2018–2023. To address potential endogeneity concerns, the analysis uses a difference Generalized Method of Moments (GMM) estimator.
Findings
The results reveal that both board size and board gender diversity exert a positive and significant influence on banks’ SDG performance. The findings suggest that board composition represents an important governance mechanism through which banks can strengthen their contribution to sustainable development.
Originality/value
This study contributes to the literature by moving beyond SDG disclosure and examining the governance factors associated with banks’ SDG performance. Furthermore, it extends corporate governance research by identifying board size and board gender diversity as important determinants of SDG performance and provides additional support for stakeholder-agency theory in explaining how board characteristics facilitate the alignment of managerial decisions with broader stakeholder interests.