Board attributes, ESG practices, and firm performance and sustainability: A mediation approach

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Abstract

The study examines the moderating role of selected NIFTY 50 index companies’ board characteristics, which comprises board strength, board meetings, number of independent directors, and the board’s gender diversity, in relation to the inclusion of female directors on the board, to analyze the relationship between firm financial performance and environmental, social, governance (ESG) performance rating. A total of 50 companies listed in the NIFTY 50 index covering eight years from 2015 to 2022 constitute the panel data sample. The board’s characteristics, along with its composition plays an integral role in ESG leadership to ensure sustainable business practices. The present study may produce contributing factors that can fill the gap in the lack of literature available in terms of factors that can moderate the relationship between ESG and the financial performance of firms. The study has been applied to analyse the data and perform a robustness check. Return on equity (ROE) is used as a proxy variable for the firm’s financial performance and is considered a dependent variable. ESG is denoted as an independent variable, while the number of directors, the number of meetings, the number of independent directors, and gender diversity in terms of including female directors on the board are proxies as moderators. As a result, an unfavourable and marginally significant relationship was found between ESG and ROE in the base model (Model 1). In Model 2 marginally significant interaction between board size and ESG was found; neither board independence (Model 4) nor board meetings (Model 3) shows any moderating effects. Lastly, in Model 5, gender diversity as a moderator shows positive but marginally significant results and indicates, as a major moderator among all, that the result of the study may contribute to the existing literature and value addition, suggesting the scope of the selected firms of the NIFTY 50 index companies of India to improve their financial payoff of ESG.

Keywords: ESG Performance, Financial Performance, NIFTY 50, Independency, Board Diversity, Board Independency

Authors’ individual contribution: Conceptualization — M.A.I. and E.H.; Methodology — M.A.I. and N.C.; Software — M.A.I.; Validation — M.A.I.; Formal Analysis — M.A.I. and E.A.; Data Curation — V.S.; Writing — Review & Editing — N.K. and A.K.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G34, L25, Q56

Received: 14.10.2025
Revised: 23.11.2025; 04.12.2025; 03.03.2026
Accepted: 11.03.2026
Published online: 16.03.2026

How to cite this paper: Intezar, M. A., Haque, E., Ahmad, E., Sagir, V., Chaudhary, N., Khatoon, A., & Khan, N. (2026). Board attributes, ESG practices, and firm performance and sustainability: A mediation approach. Corporate Governance and Sustainability Review, 10(2), 91–101. https://doi.org/10.22495/cgsrv10i2p8