Do CEO attributes in the energy sector matter in sustainability performance? The moderating role performed by board gender diversity

Abstract

This study aims to check how Chief Executive Officers (CEOs) can influence the development of environmental, social, and governance (ESG) performance within the energy sector, considering female directors as a moderator. The study finds that CEO duality has a negative effect on ESG performance, while CEO board membership has positive effect. The results show that female directors negatively moderate the relationship between CEO duality and CEO board membership and ESG performance. This study also provides evidence that an ex-CEO board chair encourages environmental performance. Additionally, CEO board membership positively influences social performance and has a negative effect on governance performance. Furthermore, the results reveal that female directors negatively moderate the association between CEO duality and environmental and social performance. Finally, the moderating effect of female directors on the relationship between an ex-CEO board chair and CEO board membership and social and governance performance is negative. These results carry implications for policymakers and managers aiming to optimize corporate governance for improved ESG outcomes. Policymakers should consider regulations that discourage CEO duality and promote balanced leadership structures while simultaneously fostering environments where diverse board compositions can thrive without unintended negative effects. For managers, the findings suggest the need to design governance frameworks that capitalize on the benefits of CEO board membership while addressing the complexities introduced by diverse board dynamics, including the role of female directors. Tailored training and empowerment initiatives for female directors could help unlock their potential to positively influence ESG performance.