Does Board Gender Diversity Moderatively Affect the Relationship Between Business Characteristics and Corporate Sustainability Performance?

Abstract

Business sustainability is a process of increasing the positive impacts, while at the same time, is expected reducing negative effects of operations in order to achieve sustainable economic, social, and environmental performance. This study aims to examine how company characteristics, company size and indutry type, impact corporate sustainability performance refers to Triple Bottom Line concept. Further, whether the impacts are moderated by board gender diversity. Using partial least square – structural equation modeling (PLS-SEM) to asses the panel data consists of 18 Indonesian companies from participant of Asia Sustainability Reporting Rating (ASRR) extracted on National Center Sustainability Reporting (NCSR) website during observation period 2017–2019. The empirical finding reveals that company characteristics – size and industry type, both significantly impact the performance of corporate sustainability in different ways. This shows a solid evidence that stakeholder demands has shifted business behavior through implementation of sustanability practices. In moderating role, the low persentage women on board shows no influence on corporate sustainability performance, as presence of female directors on corporate boards level only compliance role as corporate governance mechanism. Hence, we should consider to increase the proportion of women on board level as female chairperson offers new perspectives and skills set in business decision making process to enhance sustainable value in the long run.