Board Characteristics, Gender Diversity, and Green Innovation as Drivers of Firm Value

This study examines the role of board characteristics and gender diversity in shaping green innovation and firm value in Indonesian non-financial companies. The growing importance of sustainability in emerging markets has highlighted the need for effective governance structures that align corporate strategies with environmental and stakeholder expectations. Using purposive sampling, data were collected from 50 non-financial firms listed on the Indonesia Stock Exchange over the period 2019–2023. Board characteristics were measured through board size and female representation in both directors and commissioners, while green innovation was assessed through environmental disclosures aligned with international standards. Firm value was proxied by Tobin’s Q, capturing market perceptions of performance and growth potential. The results reveal that the board size of directors positively influences green innovation but negatively affects firm value, underscoring the trade-off between diverse expertise and decision-making efficiency. Female directors negatively affect green innovation but positively enhance firm value, reflecting their cautious approach to high-risk environmental investments alongside broader contributions to governance and market confidence. Female commissioners, however, do not show a significant impact on either green innovation or firm value. Furthermore, green innovation itself is found to have a positive and significant effect on firm value, although it does not mediate the relationship between board characteristics and firm value. These findings provide important implications for theory, practice, and policy. They suggest that board structures and diversity play complex roles in advancing sustainability while enhancing firm value. The study contributes to corporate governance literature in emerging markets and offers guidance for companies and policymakers seeking to optimize board composition for sustainable value creation.