Board Characteristics and Environmental, Social and Governance Disclosure in Europe

ABSTRACT

This study examines how board characteristics are associated with environmental, social and governance (ESG) disclosure in Europe. Drawing on agency, stakeholder and resource dependence theories, it analyses 6260 firm‐year observations for 986 firms across 25 EU countries from 2011 to 2021. The study employs ordinary least squares, firm fixed‐effects, quadratic specifications, separate instrumental‐variable models, two‐step system‐GMM, interaction tests and board‐system analyses, complemented by a supplementary analysis of potential NFRD exposure. Board size and gender diversity are positively associated with ESG disclosure in the full‐sample baseline models. Independence is positive in ordinary least squares but insignificant in firm fixed‐effects estimation. Quadratic models indicate diminishing marginal associations for gender diversity in contemporaneous and lagged specifications. Independence curvature appears only contemporaneously, while board size shows no significant curvature. Positive size and gender‐diversity coefficients persist in instrumental‐variable and system‐GMM models, while independence is positive only in the former. CEO duality remains insignificant. The five interaction terms provide no significant evidence of complementarity or substitution. Board size is insignificant in the one‐tier subsample, while gender diversity is significant in its fixed‐effects models. Both attributes remain positive and significant after excluding two‐tier observations. The NFRD analysis provides suggestive evidence of a differential change in the gender‐diversity association across potential exposure groups, weakened by country‐by‐year effects. The findings distinguish positive baseline associations from nonlinear patterns and extend contextual governance–disclosure evidence through governance combinations, national board‐system frameworks and potential reporting exposure.