Board Gender Diversity and Corporate ESG
University of Edinburgh · Shareholder Value and ESG · July 2026
Across 2,270 US firms and 18,101 firm-years, greater board gender diversity is robustly associated with higher environmental and social (E&S) performance — but a California-law natural experiment finds no evidence the relationship is causal. The panel uses firm and year fixed effects (statistical controls that strip out anything constant within a firm or a year, isolating the year-to-year relationship) with clustered standard errors to isolate the association, then tests causality with a lead-lag design, propensity-score matching, and California SB 826's board-diversity mandate as a quasi-experiment.
Snapshot
Main result — coefficient forest
Effect of lagged board gender diversity (1 SD)
E and S rise 2.133 and 1.08 points per 1 SD of diversity — the real outcomes; the still-larger G coefficient flags mechanical inflation, not signal.
Points = FE coefficients; whiskers ≈ 95% CI (1.96 × SE). Green = primary outcomes (E, S).
Economic magnitude
Coefficient as % of pillar mean
E moves more relative to its mean than S; G is shown only for measurement context.
Hypotheses
| Prediction | Result | |
|---|---|---|
| H1 | Diversity ↑ → E, S ↑ | Supported (both ***) |
| H2 | G / composite inflated vs E, S | Supported (G largest) |
| H3 | If causal, SB 826 raises E, S | Not supported (diversity ↑; E/S RF n.s.) |
Reading: robust conditional association on E and S; diversity is better read as a marker of stakeholder-oriented firms than a stand-alone causal lever. Lead–lag flags reverse causality; SB 826 first stage is strong while reduced form on E/S is insignificant.
Process
Design note
Board gender is an input to the governance pillar. Primary outcomes are E and S only. Composite and G are reported to make mechanical inflation visible — not as the main claim.
Stack
Python / Refinitiv Codebook · WRDS Compustat (SAS) · Stata reghdfe · Typst write-up
Competencies
ESG measurement · panel FE · quasi-experiments · research integrity · Refinitiv/Compustat