Diversified boards and the achievement of environmental, social, and governance goals

Asma Alawadi, Nada Kakabadse, Michael Morley, Nadeem Khan

Research output: Contribution to journalArticlepeer-review

Abstract

We explore the impact of board resources arising from diverse board members on the achievement of environmental, social, and governance (ESG) goals. Employing resource dependence theory as our frame and drawing on qualitative data from 41 interviews with board directors of publicly traded and privately held companies in the United Arab Emirates (UAE), we identify three key mechanisms underpinning the achievement of ESG goals, namely, the leveraging of particular connections, the deployment of different resources, and the harnessing of a range of diversity types. We find that the use of social resources is often related to environmental concerns and occasionally social goals, but rarely governance issues. We also find that financial motivations often drive environmental issues, while many of the social resources that added value occurred in the public sector. Importantly, the combining of both skill and social resources, rather than relying on each alone, was seen to increase the likelihood of achieving ESG goals. Our findings also point to the importance of board diversity in accomplishing the board's ESG goals, most especially functional diversity. We propose that such functional diversity, along with resources in the form of social resources and skills, needs to feature more prominently in order to improve ESG performance and outcomes. We highlight the implications of our work, especially regarding the establishment of board diversity policies beyond gender alone.

Original languageEnglish
Pages (from-to)331-348
Number of pages18
JournalBusiness Ethics, the Environment and Responsibility
Volume33
Issue number3
DOIs
Publication statusPublished - Jul 2024
Externally publishedYes

Keywords

  • board directors
  • diversity
  • environmental
  • governance
  • resources
  • social

Fingerprint

Dive into the research topics of 'Diversified boards and the achievement of environmental, social, and governance goals'. Together they form a unique fingerprint.

Cite this