Do Women on Boards Drive Corporate Sustainability? Evidence From the European Union

ABSTRACT Gender diversity in corporate governance plays a pivotal role in enhancing ethical decision‐making, transparency, and corporate sustainability. Despite ongoing policy efforts, gender disparities persist in leadership structures across the European Union, raising critical questions about the extent to which female participation influences sustainability practices and corporate accountability. This study examines the relationship between female board representation, executive gender diversity (EGD), and corporate sustainability reporting, focusing on publicly traded firms across 15 EU member states (excluding the United Kingdom) from 2016 to 2023. Using panel data from 4329 firm‐year observations, the study employs descriptive statistics, correlation analysis, multiple regression models, and two‐stage least squares estimation to assess the impact of gender diversity on sustainability disclosures while controlling for financial performance, ESG metrics, and firm‐specific governance factors. The findings reveal that female board representation positively influences corporate sustainability reporting, supporting the view that gender‐inclusive boards foster stronger ESG transparency. However, women in managerial and executive roles exhibit a negative association with sustainability disclosures, suggesting that institutional barriers, tokenism, and limited decision‐making power constrain their effectiveness. Additionally, firms with higher ESG scores and greater profitability demonstrate stronger sustainability disclosures, while larger firms (Log‐assets) face challenges in maintaining consistent reporting standards. These findings underscore the need for policy reforms that go beyond gender quotas to ensure substantive leadership opportunities for women. The study provides critical insights for policymakers, investors, and organizations, emphasizing the importance of inclusive governance and ESG‐driven corporate strategies to enhance sustainability performance.