The Nonlinear Effect of Board Size and the Moderating Role of Gender Diversity on Corporate Social Responsibility Performance in Europe

ABSTRACT This study contributes to the literature by examining the nonlinear effect of board size on environmental and social performance and CSR controversies in European firms, and the role of gender diversity as a moderating mechanism between this relationship. Using data from STOXX Europe 600 Index listed companies from 2007 to 2023 and applying a fixed effects model, empirical results reveal an inverted U‐shaped relationship between board size and environmental and social performance, with an ideal size of 22 members for environmental and 18 for social issues. Gender diversity reduces the negative effects of excessively large boards. Results remain unchanged across robustness tests. The study suggests specific policies for policymakers and corporate managers, including the adoption of European guidelines on optimal board size, financial incentives, and educational programs for female executives.