Board Gender Diversity, Gender Pay Equality, And Esg Performance In Australia

Abstract

This study examines the impact of certain board qualities, such as gender diversity and equal pay for men and women, on a company's environmental, social, and governance (ESG) performance. ESG performance is determined using an ESG score. This research aims to examine the factors that can exert beneficial as well as adverse impacts on a company's environmental, social, and governance (ESG) performance. Gender diversity on the board, gender pay parity, size of the board, number of independence members on board, frequency of board meetings, presence of female executive members, CSR reporting, women managers score, net income after taxes, and total assets are some of the factors that were chosen for this research. Utilizing a representative sample of all Australian firms listed in the S&P/ASX 200 index, spanning the timeframe from 2014 to 2023. The research takes use of secondary data gathered from the Eikon dataset and employs statistical analysis of panel data in order to explore the influence that these variables have on ESG (environmental, social, and governance) performance. This is done in order to determine the extent to which these elements have an impact. According to the data, there is a significant and favorable connection between the diversity of board members in terms of gender and both gender equal wages and ESG (environmental, social, and governance) performance. This relationship is shown to be particularly beneficial. First, we discuss broad facts regarding the board's diversity by gender, equality between men and women in the workplace in particular, and gender equality globally, as well as sustainability performance (demonstrate through ESG index). Following that, existing research on the issue is reviewed to offer a comprehensive understanding of the definition of each variable and the implications it has on the environment, society, and governance output. As a result, we use a variety of econometric methods, such as Fixed ix effect models, Random effect designs, and the Pooled Ordinary Least Squares model, to investigate the relationship between independent and dependent variables. The Hausman test is carried out in order to determine which of the three models proposed in the two way connection exhibits the highest level of efficiency. Additionally, we carry out a critical mass test in order to ascertain the particular percentage of women that must be present on the board (at least 30%) in order to have an effect on the dependent variable, such as gender pay equity and environmental, social, and governance performance. Each and every one of these explanatory variables exerts a significant amount of influence on ESG performance, except board size and net income after taxes. Finally, we will examine several consequences of this research and provide suggestions for the industry and future studies as well. We provide fundamental suggestions, including the improvement of workplace policies pertaining to gender equality.