The Role of Board Composition and Board Attendance in Enhancing ESG Performance

Environmental, social, and governance (ESG) performance is critical for all companies. Boards of directors play a critical role in overseeing ESG performance, and board composition and governance practices were proven to have a significant impact on ESG outcomes. The two main board characteristics associated with improved ESG performance are Board Size (BS) and Board Independence (BI). Larger boards with a higher proportion of independent directors are generally better able to provide oversight and guidance on ESG issues. However, the relationship between BS, independence, and ESG performance is complex and may be influenced by other factors. One potential moderator is Board Management Attendance (BMA) which refers to the extent to which board members regularly attend board meetings. Boards with higher levels of board member attendance are generally better able to provide effective oversight and guidance on ESG issues. This is because board members who regularly attend board meetings have greater exposure to a company’s ESG performance and are better able to identify and address ESG risks and opportunities. This conceptual paper examines the moderating effect of management board attendance on the relationship between Board Size (BS) and Board Independence (BI) on ESG performance.