ESG Performance, Board Gender Diversity, and Dividend Policy: Evidence from Australian-Listed Firms

This paper examines whether board gender diversity conditions the association between ESG performance and dividend policy in Australian-listed firms. We employ an unbalanced panel of 127 ASX-listed companies over 2013–2023, and firm fixed-effects models with Driscoll–Kraay standard errors. The findings reveal that ESG performance is positively associated with dividends per share (DPS). Moreover, female board representation has no direct association with DPS, although it is positively associated with ESG performance. Further analysis shows that the ESG–dividend association strengthens with female representation and is concentrated in boards that have reached a critical mass of women; the marginal effect of ESG on DPS is statistically indistinguishable from zero on boards with fewer than 30% women, but positive and significant once female representation reaches about 30%, where a one-standard-deviation higher ESG score is associated with A$ 0.13 higher DPS (28% of the sample mean). This critical-mass pattern is robust to year fixed effects, winsorisation, and additional governance controls, but it is weaker under firm-clustered standard errors and specific to dividends per share rather than the payout ratio or the dividend yield. Investors and boards should therefore evaluate ESG performance and board composition jointly when assessing dividend capacity.