The Impact of Environmental, Social, and Governance (ESG) Practices on Firm Value: The Moderating Role of Board Characteristics

This paper investigates the impact of environmental, social, and governance disclosure (ESGD) on firm value (FV) within the Egyptian context, further exploring the moderating effect of board characteristics on this relationship. The analysis is based on a sample of 56 listed companies during the period from 2015 to 2022. The findings reveal that firms with higher ESG disclosure scores exhibit a greater firm value, supporting the value creation theory. Furthermore, there is a significant positive impact of board size and board gender diversity on ESG disclosure for Egyptian listed firms. In contrast, a curvilinear relationship exists between board independence and ESG disclosure. Moreover, both board size and board independence positively moderate the effect on the relationship between ESGD and FV. However, board gender diversity does not impact this relationship when firm value is measured using Tobin’s Q (TQ).