Evaluating board diversity and its importance in the environmental and social performance of organizations

Abstract

AbstractPast literature documenting the relationship between board diversity and organizational sustainability performance resulted in inconclusive findings. The study draws on the resource dependency theory to investigatehowboard gender diversity and age diversity influence the corporate social responsibility (CSR) performance of organizations. The qualitative data were collected through in‐depth interviews of 19 board directors from 14 organizations operating in Australia. Data were analyzed following the six‐phase process of thematic analysis. The findings indicate that board gender and age diversity enhance CSR investment and approach decisions, and, in turn, they improve the CSR performance of organizations. The effectiveness of these relationships depends on the number of women directors, organizational culture, industry regulations, and organizational life‐cycle stage. This study provides insights into the “black box” of boardroom dynamics. The findings suggest that efforts need to be made at the organizational and policy levels to increase board gender and age diversity for a sustainable performance.