Sustainability and Stability: Examining the Impact of ESG Controversies and Executive Diversity on Financial Distress
Document Type
Article
Source of Publication
Business Strategy and the Environment
Publication Date
3-9-2026
Abstract
This study investigates the relationship between environmental, social, and governance (ESG) controversies, executive gender diversity, and financial distress. Using a UK sample covering the period 2011–2022, the analysis reveals a positive association between ESG controversies and financial distress, indicating that negative ESG perceptions can exacerbate firms' financial challenges. In contrast, executive gender diversity is found to have a negative relationship with financial distress, suggesting its potential protective role in mitigating financial risks. Furthermore, the results reveal a substitution effect between gender diversity and ESG controversies in influencing financial distress. Overall, this research contributes to the academic literature on the financial implications of ESG practices and provides valuable insights for companies and policymakers by emphasizing the critical interplay among ESG performance, executive gender diversity, and financial stability.
DOI Link
ISSN
Publisher
Wiley
Disciplines
Business
Keywords
corporate governance, ESG, ESG controversies, financial distress, gender diversity, sustainability
Scopus ID
Recommended Citation
Aboud, Ahmed and Elmaghrabi, Mohamed, "Sustainability and Stability: Examining the Impact of ESG Controversies and Executive Diversity on Financial Distress" (2026). All Works. 7820.
https://zuscholars.zu.ac.ae/works/7820
Indexed in Scopus
yes
Open Access
no