Boardroom gender diversity and corporate sustainability practices: Evidence from Australian Securities Exchange listed firms

Recent regulatory changes in Australia require listed companies to implement policies for increasing board diversity and corporate sustainability practices and to report thereon. In this study the impact of boardroom gender diversity on corporate sustainability practices is investigated, by applying a well-developed dynamic panel generalized method of moments (GMM) estimator to control for endogeneity, on a sample of all Australian Securities Exchange (ASX) listed firms over the period of 2010-2014. The study findings reveal a significant positive relationship between women's representation on boards and corporate sustainability practices. The findings remained robust when two alternative proxies for gender diversity (Blau Index, women dummy) were employed. The findings highlight that corporate sustainability practices with the presence of female directors on board remarkably increased between 2010, when ASX amended principles came into effect, and 2014. These findings are important for two aspects. The first is for firms' management, the regulators and for policy implications in promoting gender diversity and corporate sustainability practices. Secondly the policy debate is informed by providing empirical evidence supporting a board diversity case for corporate sustainability performance.