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Institutional and Critical Mass Theories in Action: How Executive Diversity and Global Anti‐Corruption Initiatives Impact ESG Performance in G20 Firms

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  • Musa Ghazwani

Abstract

This paper examines the effect of executive cultural diversity (ECD) and executive gender diversity (EGD), besides the global anti‐corruption initiatives, on ESG performance among G20 firms. The paper investigates data extracted from Refinitiv Eikon of 117,305 observations ranging from 2005 to 2022. Distinctively applying ordinary least squares (OLS), fixed effects (FE) and random effects (RE) to examine this association. These methods support robustness tests, including FE and RE, and generalized method of moments (GMM) methods to address concerns such as heteroscedasticity, clustering, and endogeneity in cross‐country regressions. The results confirm that companies with executives from diverse cultural backgrounds who are committed to global anti‐corruption initiatives, such as the Organization for Economic Co‐operation and Development (OECD) Anti‐corruption Convention and the United Nations Global Compact, perform better on environmental, social, and governance (ESG) performance. The study's findings support theories such as institutional theory and critical mass theory, which state that diverse executives can enhance governance and promote sustainable business practices. Implications for corporate executives, policymakers, and investors include strategically promoting executive diversity and commitment to global anti‐corruption practices to improve ESG performance.

Suggested Citation

  • Musa Ghazwani, 2025. "Institutional and Critical Mass Theories in Action: How Executive Diversity and Global Anti‐Corruption Initiatives Impact ESG Performance in G20 Firms," Sustainable Development, John Wiley & Sons, Ltd., vol. 33(S1), pages 665-686, November.
    • Handle: RePEc:wly:sustdv:v:33:y:2025:i:s1:p:665-686
    DOI: 10.1002/sd.70016
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