Board gender diversity, corporate social commitment and sustainability

Building a sustainable organization is one of the most important goals in business. To build sustainability, firms need to have strong social commitment to establish value-creating stakeholder relationships. As boards of directors play a critical role in setting strategy, providing management oversight and monitoring, it is also their responsibility to ensure the firm's commitment to its social responsibilities. With the right composition, boards can be effective in driving long-term vision and creating good stakeholder relationships, contributing to firms' social capital. In this paper, we analyze board characteristics of publicly listed US firms and find evidence that support the diversity theory. In particular, that board gender diversity (proportion of female directors) is positively associated with firms' social commitment to human rights, product responsibility, and their community and workforce, evidencing female directors' contribution to firms' sustainability. To ensure the robustness of our analysis, we conduct additional analyses including propensity score matching, entropy balancing, and instrumental-variable analysis.