Moderating Role of Strategic Ownership on Board Composition and <scp>ESG (Environmental, Social, and Governance)</scp> Performance in Global Airlines: Insights From Full‐Service and Low‐Cost Carriers

ABSTRACT This paper studies the effect of board composition in airline firms on their commitment to the environmental, social, and governance (ESG) approach. Accordingly, the moderating influence of strategic ownership of 34 international airlines is studied. The results of this research highlight several correlations between different influential factors. First, it is shown that including female directors can encourage ESG performance. Second, it is found that the environmental performance of the airlines can be improved with the presence of a dedicated corporate social responsibility (CRS) committee. Furthermore, board independence is identified as a positive driver of governance initiatives. Additionally, this study demonstrates that strategic investors can encourage the positive influence of female directors on ESG activities. Finally, the study sheds light on the difference between full‐service and low‐cost airlines, elucidating the impact of how strategic ownership on the correlation between board diligence and management activities. These findings provide crucial insights for the decision‐makers in the airline industry and contribute to environmental sustainability endeavors within the industry.