Knowledge in the diversity-efficiency nexus: How board composition shapes sustainable resource use in emerging markets

Even though sustainable resource use has become a strategic priority, there remains limited empirical evidence on how board diversity influences water and energy efficiency, particularly in emerging economies such as those in Latin America. Accordingly, this study investigates the relationship between board diversity and resource efficiency, specifically water and energy consumption, within Latin American firms. Drawing on a sample of non-financial companies listed in Pacific Alliance countries (Chile, Colombia, Mexico, and Peru) from 2018 to 2023, we employ mixed-effects multiple linear regression to evaluate the influence of structural and demographic board characteristics on resource efficiency. The findings indicate that demographic diversity, particularly gender representation, female board leadership, director age, tenure, and international education, is significantly associated with improved resource efficiency. The presence of women on boards, especially in chair positions, is positively linked to water efficiency, suggesting that female leadership contributes strategically to sustainable resource management. Among structural variables, board independence exerts the strongest positive influence on both water and energy efficiency. These results underscore the critical role of board composition in advancing Sustainable Development Goals 6 and 7 while demonstrating that different dimensions of diversity may affect water and energy management through distinct mechanisms. This study contributes to the literature by developing diversity indices tailored to emerging markets, establishing empirical links between governance features and sustainability outcomes, and offering actionable insights for policymakers and corporate leaders in Latin America. The findings reinforce the importance of promoting diversity in top management to enhance organisational practices aligned with global sustainability goals.