The Impact of Female Board Members on ESG Performance: An Empirical Analysis

This study investigates the impact of female board representation on ESG performance within the German two-tier corporate governance system. Using OLS regression analysis on a sample of 157 DAX, MDAX, and SDAX companies over a two-year period, the findings reveal a positive and significant relationship between the presence of women on both management and supervisory boards and improved ESG performance, regardless of whether measured by percentage or absolute number. Contrary to the critical mass theory, even the presence of a single woman on a board was found to significantly enhance ESG outcomes. No statistically significant effect was observed for female CEOs, although this is likely to be attributed to the low number of female CEOs in the sample. The study highlights both the ongoing underrepresentation of women on boards and the limited scope of current gender quota regulations (FüPoG I & II), suggesting the need for stronger legislative measures to support gender diversity as a driver of corporate sustainability. Keywords: board gender diversity; board structure; critical mass; corporate governance; ESG performance