Board Tenure, Sustainability Committees and CEO Duality: Evidence on ESG Performance

Abstract

ABSTRACT This study examines the association between board tenure, sustainability committees, CEO duality and environmental, social and governance (ESG) performance among Hong Kong‐listed firms from 2007 to 2024. Drawing on stakeholder–agency and resource dependence theories, we argue that board experience, formal sustainability governance structures and leadership configuration are associated with firms' ESG performance. Using firm‐ and year‐fixed effects models, supplemented by a series of robustness analyses, we investigate the relationship between corporate governance mechanisms and ESG performance. The results indicate that board tenure and the presence of a sustainability committee are positively associated with ESG performance, whereas CEO duality is negatively associated with ESG performance. Further analysis reveals a significant negative interaction between board tenure and sustainability committees, suggesting that the positive association between sustainability committees and ESG performance weakens as board tenure increases. Additional analysis identifies an inverted U‐shaped relationship between board tenure and ESG performance, indicating that while director experience initially enhances ESG performance, its benefits diminish beyond a certain level of tenure. These findings contribute to the governance–sustainability literature by demonstrating that governance mechanisms may operate interdependently rather than independently in shaping ESG performance. The study provides evidence from Hong Kong, an important Asian financial centre undergoing significant sustainability‐related regulatory developments.