The contingency role of female directors' structural power on ESG performance

The debates on sustainability and ESG agenda are associated with reheated discussions on how important human capital of female directors is in defining the future for businesses. The possibility to exploit the human capital of women directors is related to the ability of women to influence the members of the board. Building on social capital theory and the concept of structural power, we examine how women with structural power (i.e., women chairing the board or/and one of the committees), affects ESG corporate performance. Specifically, we examine whether structural power of women is a moderating factor between the critical mass of women on boards (i.e., with at least three women), and ESG corporate performance. With the adoption of a sample formed by FTSE-MIB Italian companies over the 2008 – 2017 period, our findings show that boards with a chairwomen (or/and a woman chairing a committee) perform better in terms of ESG. We also find that the critical mass of women has a positive effect on the ESG corporate performance. Interestingly, our results document a puzzling negative moderating effect of female board or committee chair on the association between women on boards and ESG performance. Results suggest that the board dynamics changes in boards with the critical mass of women and a female board chair.