The role of gender diversity in shaping green collaborations and firm financial success

Abstract

Purpose This study aims to explore the relationship between gender diversity (GD) in leadership, green collaborations (GC) and firm financial success within FTSE 350 nonfinancial companies in the UK, shedding light on how GD moderates the impact of GC on firm financial success. Design/methodology/approach Quantitative methods are used to analyze data from 2,280 firm-year observations, offering insights into the correlation between GD, GC and firm financial success metrics such as returns on assets (ROA), returns on equity (ROE) and earnings per share (EPS). Findings The empirical analysis conducted in this study uncovers a compelling correlation between GD on the board and the financial success of firms involved in GC. The findings illuminate a positive association, indicating that companies boasting higher levels of GD among their leadership tend to outperform their counterparts with less diverse leadership teams regarding financial success (ROA, ROE and EPS). This suggests that including women in leadership roles can introduce fresh perspectives, innovative ideas and strategic priorities that prioritize sustainability and environmental stewardship by facilitating GC. Moreover, the study underscores the critical role of GD as a practical, valuable resource and a catalyst for driving financial success within sustainable business practices. Practical implications These findings reinforce the strategic importance of cultivating GD as a pivotal resource for organizations aiming to excel in sustainability-driven initiatives, such as GC. By assembling diverse leadership teams, firms can benefit from broader perspectives, innovative thinking and a more profound commitment to environmental stewardship, ultimately enhancing their financial performance. Consequently, corporate leaders, policymakers and investors are encouraged to recognize GD as a moral obligation and a key driver of sustainable success and a competitive advantage in today’s marketplace. Social implications Embracing GD and actively participating in GC carry profound social implications that extend beyond firm financial success metrics. By promoting GD, organizations signal a commitment to inclusivity, equality and diversity in corporate leadership, thereby fostering a more inclusive and equitable work environment. Furthermore, the engagement in GC underscores a dedication to social and environmental responsibility, aligning with the expectations of diverse stakeholders, including employees, customers, communities and regulatory bodies. Such initiatives contribute to broader societal goals by addressing pressing environmental challenges and promoting sustainable business practices that prioritize the well-being of both present and future generations. This highlights the pivotal role of GD as a crucial resource in driving positive social change and advancing sustainable business practices. Originality/value The study contributes to both academic research and practical understanding by empirically examining the relationship between GD in leadership and firm financial success within GC; it addresses a critical void in existing literature, offering insights valuable to scholars, practitioners, policymakers and investors. Moreover, the study implications extend beyond traditional GD studies by emphasizing its strategic importance in driving sustainable business practices and enhancing firm value. This underscores the need to recognize GD as a crucial resource for financial success in pursuing sustainability goals through GC.