Does a Company’s Position within the Interlocking Director Network Influence Its ESG Performance?—Empirical Evidence from Chinese Listed Companies

In an era focused on deepening green sustainable development, improving corporate ESG performance has become a theoretical focal point. Starting from the positional attributes of the interlocking director network, this study investigates the influence of a company’s position within this network on its ESG performance among China’s A-share-listed companies from 2009 to 2022. It utilizes Huazheng ESG ratings from the Wind database and employs regression models, analyses, endogeneity, and propensity score matching tests via Stata15.0 to probe the internal mechanisms at play. Research findings indicate that corporations at the core of the interlocking director network exhibit significantly better ESG performance compared to those in peripheral positions. The interlocking director network enhances corporate ESG performance by improving internal control levels. Media attention positively influences the effect of the interlocking director network on corporate ESG performance. Further analysis reveals that the beneficial impact of the interlocking director network on ESG performance is more pronounced in highly marketized corporations, those outside of heavy pollution industries, and those with a higher proportion of female directors. Economically, the positive effect of the interlocking director network on ESG performance enhances both earnings per share and total factor productivity. This study offers a novel pathway for enhancing corporate sustainability in emerging economies through the lens of the interlocking director network, drawing on China’s experience. It aims to guide emerging markets in fostering ESG practices among corporations, thus offering theoretical insights for enhancing ESG performance.