The impact of board gender diversity on ESG scores in Finnish listed companies
Mähönen, Iiris (2025-04-23)
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi-fe2025042329915
https://urn.fi/URN:NBN:fi-fe2025042329915
Tiivistelmä
The growing awareness of sustainability has prompted companies to adapt their practices to respond to these emerging concerns, encouraging them to integrate sustainability into their organizational strategies and long-term goals. Investors and stakeholders are increas-ingly demanding greater corporate responsibility, while the EU's Corporate Sustainability Reporting Directive (CSRD) aims to enhance sustainability reporting by requiring compa-nies to disclose Environmental, Social, and Governance (ESG) data. As a result, greater at-tention is being given to the factors that drive ESG performance. One key factor gaining prominence is the composition of corporate boards, particularly the role of women in shaping ESG outcomes.
Women have been underrepresented on boards of directors, yet there is growing pres-sure for companies to address gender disparities and foster more inclusive governance structures. Over the years, companies have continued to rely on traditional recruitment practices for board appointments, often favoring similarity, while the potential benefits of diverse boards remain underappreciated or unknown. This too is heading for change, with the EU's growing commitment to closing the gender gap in leadership roles and raising awareness of the well-established benefits of gender diversity at the board level, includ-ing enhanced board effectiveness and improved company performance.
This thesis explores the relationship between the percentage of women on boards and ESG scores to determine whether women contribute positively to ESG performance in Finnish listed companies. This is accomplished by conducting correlation and regression analyses using data from companies of all sizes—small-cap, mid-cap, and large-cap—covering the years 2013 to 2023.
The findings reveal a statistically significant relationship between women on boards and improved ESG scores, although the impact is relatively modest. The significance level of the results indicates a highly significant relationship, with a minimal likelihood of random chance, though other factors also play a substantial role in shaping ESG performance. This suggests that promoting gender diversity on boards could be an effective strategy for im-proving ESG performance in Finnish listed companies. Beyond its evident business ad-vantages, the inclusion of women on corporate boards is not only a matter of moral and ethical responsibility but also a fundamental step toward creating a more just corporate environment.
Women have been underrepresented on boards of directors, yet there is growing pres-sure for companies to address gender disparities and foster more inclusive governance structures. Over the years, companies have continued to rely on traditional recruitment practices for board appointments, often favoring similarity, while the potential benefits of diverse boards remain underappreciated or unknown. This too is heading for change, with the EU's growing commitment to closing the gender gap in leadership roles and raising awareness of the well-established benefits of gender diversity at the board level, includ-ing enhanced board effectiveness and improved company performance.
This thesis explores the relationship between the percentage of women on boards and ESG scores to determine whether women contribute positively to ESG performance in Finnish listed companies. This is accomplished by conducting correlation and regression analyses using data from companies of all sizes—small-cap, mid-cap, and large-cap—covering the years 2013 to 2023.
The findings reveal a statistically significant relationship between women on boards and improved ESG scores, although the impact is relatively modest. The significance level of the results indicates a highly significant relationship, with a minimal likelihood of random chance, though other factors also play a substantial role in shaping ESG performance. This suggests that promoting gender diversity on boards could be an effective strategy for im-proving ESG performance in Finnish listed companies. Beyond its evident business ad-vantages, the inclusion of women on corporate boards is not only a matter of moral and ethical responsibility but also a fundamental step toward creating a more just corporate environment.