Breaking barriers: the role of female executives in mitigating ESG controversies

Purpose This study aims to examine the role of female executives in mitigating Environmental, Social and Governance (ESG) controversies and the moderating effect of the World Governance Indicators (WGI) on this relationship. Design/methodology/approach Using a large international sample of 54,327 firm-year observations from 44 countries over the period 2007–2023, the study uses panel data analysis to explore the association between female executives and ESG controversies. Findings The results indicate that firms with more female executives engage in fewer ESG controversies. The impact is more pronounced in countries with high WGI scores, emphasizing the importance of robust governance frameworks. Additional analysis reveals that female executives are associated with both a lower likelihood of engaging in ESG controversies and a reduction in their severity when they occur. Practical implications This study highlights the need for regulatory frameworks to promote gender diversity on corporate boards and emphasizes the role of strong governance structures in enhancing ethical corporate behavior. Originality/value This research contributes to the literature by shifting the focus from board gender diversity to executive gender diversity, providing new insights into how female leadership can reduce ESG controversies, particularly in well-governed environments.